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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: techreports who wrote (17158)	12/6/2001 8:42:55 PM
From: cfoe	Respond to of 197035

Didn't see this posted yet. Lawmakers Balk at Dec. 31 Deadline To Approve NextWave Settlement By MARK WIGFIELD Dow Jones Newswires WASHINGTON -- A House panel on Thursday raised questions about whether it could approve a controversial settlement of the NextWave Telecom Inc. spectrum dispute by the end of the year. In the first hearing on the proposed settlement since it was announced late last month by the Bush administration, Rep. Melvin Watt (D., N.C.) questioned how the parties engaged in a legal battle for more than five years can "expect the wheels of Congress to move in a matter of days. I'm not sure we will have time to give the deal the scrutiny it needs to approve or not approve it." NextWave purchased for $4.7 billion a nationwide string of valuable wireless-telecommunications licenses in 1996, but the Federal Communications Commission reauctioned those licenses in January to major wireless carriers for nearly $16 billion after NextWave declared bankruptcy. However, the U.S. Court of Appeals in June overturned the reauction and gave the licenses back to NextWave. In a settlement to resolve the ongoing litigation over the licenses, NextWave agreed to sell the licenses to the major wireless providers which will net the company more than $6 billion and the government $10 billion. Part of the settlement includes legislation Congress must pass to insulate the deal from further challenges. The deal allows parties to withdraw if Congress doesn't act by Dec. 31. Members at Thursday's hearing raised numerous questions about the constitutionality of the settlement and questioned whether NextWave abused the system. "I'm very concerned about how the process worked out," said Rep. Ed Bryant (R., Tenn.). "I don't like this, I am opposed to this." Other House panel members simply questioned whether Congress could approve the deal before Congress adjourns for the holidays. "This is really an exciting situation," quipped Rep. John Conyers (D., Mich.). "So what's the plan" if Congress doesn't act? FCC General Counsel John Rogovin said "we are not asking Congress to abdicate its role" in reviewing the deal. "But because of [the deal's] fragility, there is no guarantee that after Dec. 31 there will be a settlement." One witness at the hearing asked that Congress change the deal to compensate NextWave's rivals in the 1996 auction, charging that NextWave didn't play by the rules in filing for bankruptcy. Stephen Roberts, managing director of Eldorado Communications LLC, a Tennessee wireless company, said that $1 billion should be taken out of the settlement to reimburse nearly 80 rival bidders from 1996. He also asked that the government give those companies an additional $3 billion in credits for bidding in future auctions. Another member at the NextWave hearing, Rep. Maxine Waters (D., Calif.) questioned why the settlement shouldn't be extended to another company that, like NextWave, declared bankruptcy. Called Urban Communications PCS, the venture was backed by a large number radio stations owned by black broadcasters. "You should get rid of these at the same time," Ms. Waters said. "This won't be resolved by the 31st, I don't think," she added. The FCC's Mr. Rogovin said the agency recognized that the Urban Communications case also could be settled. But the government officials resisted the idea of reopening the NextWave settlement to accommodate Urban. The panel's chairman, Rep. Bob Barr (R., Ga.), asked both Mr. Rogovin and Justice Department counsel Jody Hunt if there were any evidence that NextWave had unjustly enriched itself through the bankruptcy filing and other legal maneuvers. Both said that wasn't the case. "The Justice Department has no information or evidence that anyone is gaming the system," said Mr. Hunt. "The attorney general would not have submitted this legislation if there were evidence of gaming the system." And NextWave counsel Donald Verrilli seemed to make headway with his testimony showing how NextWave wasn't enjoying a windfall with the settlement, but had given up lots. FCC decisions had cost NextWave the opportunity to run a wireless company that could now be worth far more than the settlement, he said. It will surrender spectrum at roughly one-third of its going price, and would give up future opportunities to make money running a wireless company. But Rep. Chris Cannon (R., Utah) still questioned how the settlement could affect auctions going forward. It seems to set an example, he said, that a company is better off filing for bankruptcy than complying with FCC rules to pay off its auction debts. NextWave's $6 billion gain "are profits that make the dot-com boom look silly," he said. Write to Mark Wigfield at mark.wigfield@dowjones.com ----- Obviously, the "fat lady" hasn't sung on the Nextwave settlement in either the House or the Senate.