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Technology Stocks : Nextwave Telecom Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (804)	5/18/2002 10:12:27 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 1088

Bill unveiled to let carriers out of NextWave sale biz.yahoo.com By Jeremy Pelofsky WASHINGTON, May 16 (Reuters) - Several lawmakers unveiled a measure late on Wednesday that would allow Verizon Wireless and other mobile telephone carriers to withdraw from buying expensive wireless licenses they won in an auction but are tied up in lengthy litigation. Verizon Wireless and other companies bid $15.9 billion in early 2001 for licenses a court later said belonged to bankrupt NextWave Telecom Inc. (Other OTC:NXLC.PK - News) and still have about $400 million on deposit with the Federal Communications Commission. The U.S. Supreme Court has agreed to rule on whether the FCC could repossess the licenses from NextWave because it failed to pay for them on time but a decision is not expected for about a year and other legal challenges could emerge. Verizon Wireless and VoiceStream Wireless Corp. are trying to void their participation in the 2001 auction for the licenses, because it is taking too long to get the airwaves and they want to use the money elsewhere to expand service. The latest move came from Rep. Cliff Stearns of Florida and five other members of the U.S. House of Representatives who introduced a measure that would allow the carriers to withdraw from the FCC's attempt to resell the NextWave licenses without any penalty. "While this issue is mired in litigation, these wireless companies are denied the use of these deposits for new investments or to improve customer service," he said in a statement. "They are entitled to the licenses or to their deposits." The FCC agreed to give back most of the downpayments made by the carriers for the airwaves but held 15 percent to keep the auction alive. Verizon Wireless and VoiceStream want out and the rest of their downpayments back, plus interest. The agency has refused to invalidate the auction or allow the carriers to void their participation, citing its rules that said those who bid in the auction would be held to their obligations pending the end of litigation over the airwaves. The auction was conducted at a time when the U.S. economy was still roaring, so they paid hefty prices for the licenses. Verizon Wireless Chief Executive Denny Strigl recently said he was unwilling to pay what the firm bid a year ago. "What public interest is being served by holding these guys to the auction?" said Blair Levin, a former FCC official and now an analyst at Legg Mason. "They have an overhang on their capital investment, that's clearly not in the public interest." APPETITE FOR LEGISLATION? Whether there is an appetite for Stearns' legislation remains to be seen. One attempt to get Congress to codify a deal to settle the legal dispute over the licenses failed last year though there are efforts to potentially resurrect it. "There's not going to be a rush to judgment on the (Stearns) measure," said Ken Johnson, a spokesman for the chairman of the House Energy and Commerce Committee Rep. Billy Tauzin, through which the bill will have to go. "We want to give the FCC, Verizon and Nextwave some additional time to work out these problems," Johnson said. "But if there's not a fair resolution, Chairman Tauzin is prepared to weigh in at some point in the near future." Staff for Sen. Ted Stevens, an Alaska Republican, recently met with officials from NextWave and the other bidders to see if a settlement could be revived. However, a person familiar with the talks said no progress was made. "I am perfectly willing to explore (a settlement) and I think it should be explored because I think it's a lose lose proposition to continue the litigation on into the next decade," Stevens told Reuters earlier this week. "I'm hopeful that we may be able to get some people to come to the table on that," he said. "If we can get a general consensus here in the Senate that is timely, I think we might be able to put together" a settlement. Sen. Ernest Hollings, chairman of the Commerce Committee, which would deal with any settlement legislation, has opposed a settlement and backs the FCC's attempt to wrestle the licenses from NextWave. NextWave, based in Hawthorne, N.Y. filed for bankruptcy protection in 1998 after only paying $500 million of the $4.7 billion it owed for valuable wireless licenses. The FCC tried to repossess them but last summer an appeals court said that move violated bankruptcy law. The FCC's failed settlement attempt would have included NextWave giving up its rights to the wireless licenses in exchange for almost $6 billion, the carriers receiving the airwaves and the government getting about $10 billion. Verizon Wireless is a joint venture of Verizon Communications (NYSE:VZ - News) and Vodafone Group Plc (London:VOD.L - News). VoiceStream is owned by Deutsche Telekom AG. (XETRA:DTEGn.DE - News)