NextWave Wins 63 Permits for Cellular Phone Service
Regulators on Friday granted 63 licenses to the top bidder at last year’s high-flying wireless phone auction, but on the condition that the company reduces its level of foreign ownership.
NextWave Personal Communications Inc. in May bid $4.2 billion at a Federal Communications Commission auction for 56 licenses to offer a new generation of cellular phone service throughout the country.
The auction of personal communications service, or PCS, licenses raised a record $10.2 billion for the federal government.
NextWave--a unit of privately held NextWave Telecom Inc. of San Diego--in July won seven other PCS licenses worth $543 million. The FCC had re-auctioned the permits after the winning bidders defaulted on payments.
NextWave was the No. 1 bidder at both sales. But the winning bids in the first auction were challenged by two unsuccessful bidders, Antigone Communications and PCS Devco Inc. They argued that foreign ownership of Nextwave exceeded a 25% federal cap.
The FCC approval was conditioned on NextWave’s restructuring its finances within six months so the company no longer exceeds the foreign ownership limit.
A variety of foreign conglomerates extended financing to NextWave, including Sony Corp. and Nippon Telegraph & Telephone of Japan and several big corporations from South Korea, such as Pohang Iron and Steel Co. Ltd.
“Having reviewed all the evidence, we believe that the decision to award these licenses on a conditional basis best serves the public interest and encourages new competition,” said Michele Farquhar, head of the FCC’s wireless bureau.
A spokeswoman for NextWave said the company’s current ownership structure is about 3 percentage points over the 25% limit, based on an FCC review.
NextWave has submitted a plan to the agency to raise more domestic capital, possibly through a stock offering. It also could restructure its convertible debt.
PCS technology is expected to make the wireless phone a mass-market product, giving consumers several different communications services--such as phone, paging, fax and Internet access--through a hand-held device.
