Nextel Could Gain Licenses in Wake of Ruling

In a decision that could pave the way for wireless carrier Nextel Communications Inc. to acquire valuable licenses to offer service in such areas as Los Angeles, the U.S. 2nd Circuit Court of Appeals in New York reversed a Bankruptcy Court ruling that had favored Nextel competitor NextWave Telecom Inc. The appeals court sent the case back to the Bankruptcy Court, which is presiding over the reorganization of NextWave, a Hawthorne, N.Y., wireless carrier. NextWave had bid $4.7 billion in a 1996 government auction for the PCS spectrum licenses, but filed for bankruptcy in 1998 after paying just $474 million of what it owed. The Bankruptcy Court valued the licenses at just over $1 billion, leading the Federal Communications Commission to appeal when Nextel stepped forward in August with a proposal to pay $2 billion. Then in October, Nextel revealed it would be willing to pay at least $6 billion, according to a Wall Street Journal report based on a transcript of the Bankruptcy Court proceedings. NextWave said it would examine the opinion before reviewing the company’s options. A Nextel spokeswoman said the company is prohibited from discussing the case under a Bankruptcy Court gag order. Separately, Nextel said Daniel Akerson will remain chairman through 2000, a year longer than previously announced. Nextel’s shares soared $17.31 to close at $115.06 on Nasdaq.