VZ Wireless Clears More Spectrum

Opening its coffers to improve its coverage, Verizon Wireless said it will pay $3 billion in cash for all of NextWave Telecom's spectrum licenses.

The move will boost Verizon Wireless' network capacity in 22 markets, including Baltimore, Boston, Los Angeles, New York and Washington, D.C. It also expands the Bedminster, N.J., firm's coverage into the Tulsa, Okla., area.

"We need it for both voice communications and data communications," Nancy Stark, a Verizon Wireless spokeswoman, told internetnews.com.

The purchase of the 10 megahertz and 20 megahertz licenses is expected to be funded through cash flow from operations and inter-company loans. Verizon Wireless is owned by regional carrier Verizon Communications and British telecom giant Vodafone

The transfer should be complete by mid-2005, pending approval by U.S. Bankruptcy Court, the Federal Communications Commission and antitrust regulators.

NextWave filed for bankruptcy protection six years ago after it was unable to produce nearly $5 billion for spectrum licenses it won in a government auction.

Today's spectrum deal follows an agreement between Verizon Wireless and rival Nextel . After months of vitriol, Verizon Wireless dropped its objection to Nextel's controversial spectrum swap agreement with the federal government.

In return, Nextel agreed to forego trademark rights to the phrase "push-to-talk," "PTT," and all related "push" names in relation to walkie-talkie technology. There were additional settlement terms that were not disclosed.

Tim O'Regan, a Nextel spokesman, said it was too soon to say if the company had any concerns about Verizon's spectrum acquisitions. "We're taking a look at the matter," he said.