Deal Is in the Works for NextWave’s Wireless Licenses
Federal regulators and NextWave Telecom Inc., which is in bankruptcy protection, are negotiating a complex deal that would transfer $17 billion worth of wireless licenses from NextWave to rival carriers and end a bitter five-year battle for the coveted spectrum.
The potential deal was widely reported Friday to be worth $10 billion to $15 billion, but details were sketchy and are subject to change. Parties to the negotiations, including the Federal Communications Commission and Hawthorne, N.Y.-based NextWave, would not confirm the reports.
A deal between the two sides could include a multibillion-dollar lump-sum payment to NextWave in return for the company giving up its claim to the licenses. The FCC would be paid about $10 billion for the licenses--more than what NextWave bid for them in 1996, but far less than their current market value.
The licenses could be reissued to Verizon Communications and other U.S. carriers, which pledged billions of dollars for the disputed licenses earlier this year.
NextWave issued a statement Friday reiterating its intention to keep the licenses and build out a national wireless network but added that NextWave will “explore ideas that might lead to a consensual resolution.”
A Washington communications lawyer close to NextWave said company officials were pushing for a settlement that would allow them to keep a portion of the airwaves the company won.
It was unclear Friday whether the Federal Communications Commission would agree to the proposal.
NextWave and the FCC have been in a years-long battle for wireless licenses that the company pledged to buy in 1996 for $4.7 billion. The company later filed for bankruptcy protection after making only a down payment on the licenses.
Despite doubts about its legality, the FCC took back the licenses and in January re-auctioned them to Verizon and other carriers for an estimated $17 billion. A few months later, an appeals court ruled that the FCC broke bankruptcy laws when it confiscated the licenses and ordered that they be returned to NextWave.
The licenses cover 95 major markets nationwide and are considered the most valuable batch of airwaves available for the foreseeable future. AT&T; Wireless, Verizon and others want the spectrum to fill in coverage gaps and to augment holdings in other areas in preparation for high-bandwidth wireless services.
NextWave’s shares jumped more than 50% to $9.75 in over-the-counter trading Friday.
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Times staff writer Jube Shiver contributed to this report.
