The Federal Communications Commission (FCC) has given final
approval to Cingular Wireless’ $1.4 billion purchase of spectrum licenses from bankrupt
NextWave Telecom, dismissing objections from Nextel that the deal would costtaxpayers more than $700 million.
Hawthorne, N.Y.-based NextWave declared bankruptcy in 1998 after it defaulted on
$4.7 billion due on spectrum wireless licenses awarded to the company
FCC in 1996. The FCC revoked NextWave’s spectrum rights, arguing that
company had paid only a fraction of the $4.7 billion, and re-auctioned
rights to companies including Verizon and VoiceStream. The auction
But NextWave’s lawyers filed suit, contending that U.S. bankruptcy laws
protected the company from the FCC license revocation. The dispute
Supreme Court in January of last year, with the court ruling that the
improperly seized more than 200 wireless licenses from NextWave. The
FCC was forced to refund the proceeds of the spectrum auction of
By August, NextWave annmounced the deal with Cingular Wireless, the
venture of BellSouth Corp.
and SBC Communications
. Once the deal went public, Nextel filed its objections,
NextWave was unfairly profiting from a bankruptcy proceeding.
In Thursday’s decision, the FCC said it was ultimately in the public
to allow the license sale to Cingular since the prospect of continuing
litigation over the matter would only result in substantial delays of
collecting any revenue.
“There is no guarantee that the value recovered through the bankruptcy
will ultimately be any greater than that which has been negotiated
settlement reached [between NextWave and Cingular] and it is entirely
that it could be less and will take far longer to obtain,” The FCC
therefore believe that under these unique circumstances, granting a
entirely consistent with our statutory obligations.”