Wireless Execs Place NextWave Blame on Feds

According to new survey results released Tuesday, wireless executives believe that U.S. spectrum policy is flawed and that federal regulators are to blame for the current dispute involving NextWave Telecom. The survey results come in the wake of Monday’s decision by the Supreme Court to hear the long-running case between NextWave and federal regulators over $16 billion in airwave licenses.

E-mail publisher FierceWireless surveyed more than 670 U.S. wireless executives in order to shed light on their perspective on spectrum policy and the NextWave case. More than 80 percent of the respondents said the U.S. policy is flawed with 61 percent squarely placing the blame for the NextWave case on government regulators. Only 27 percent placed the blame on NextWave.

In June of 1996, NextWave declared bankruptcy and defaulted on $4.7 billion due on spectrum wireless licenses awarded to the company by the Federal Communications Commission (FCC). The FCC seized NextWave’s spectrum rights, arguing that the company had only paid on a fraction of the $4.7 billion, and re-auctioned the rights last January to companies including Verizon and VoiceStream. The auction raised $16 billion.

NextWave’s lawyers filed suit, contending that U.S. bankruptcy laws protected the company from the FCC license revocation. In June, the U.S. Court of Appeals for the District of Columbia agreed with NextWave.

Meanwhile, throughout the second half of last year, NextWave, the FCC and the Department of Justice attempted to broker a deal over the disputed licenses. That fell through when Congress killed a proposed a deal that would have paid NextWave $5.8 billion and transferred the spectrum rights to the new owners.

Frustrated by court actions and FCC rulings, Verizon and other carriers last month began seeking a refund of their deposits, seeking approximately $3.2 billion.

The Bush administration has been lobbying the Supreme Court to establish a ruling in the complicated case, asking the justices to determine what options are available to the government when a telecommunications company fails to pay for FCC spectrum licenses.

“People in the wireless industry are frustrated by the NextWave case,” said Jeff Giesea, publisher of FierceWireless. “The NextWave case puts the wireless industry in spectrum purgatory. Wireless executives want resolution, but they’re going to have to wait.”

Giesea said the issue is tied to the future of the Internet.

“Yesterday’s bandwith is today’s spectrum,” said Giesea. “We need airwaves for 3G, and we need 3G to deliver on the promise of wireless Internet access.”

Other results from the survey included:

  • 63 percent said that the dispute over the NextWave spectrum is very significant or critical to the wireless industry. Another 34 percent said it is moderately critical, and only 2 percent believe it is not significant;
  • 38 percent believe the disputed spectrum should be returned to NextWave. (62 percent believe it should not be returned to NextWave.)
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  • 34 percent said that the NextWave spectrum issue affects their business
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  • When asked about the most likely outcome of the dispute, 52 percent believe it will result in a settlement; 26 percent believe the spectrum will be re-auctioned; and 19 percent believe the spectrum will be returned to NextWave
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