FCC to Return Wireless Deposits

Verizon Wireless Inc. and other major mobile telephone carriers will get back $2.8 billion, or 85%, of down payments they made to the government for disputed wireless licenses, the Federal Communications Commission said Wednesday.

Thirteen carriers who bid for the licenses last year wanted the down payments back because they were not able to acquire and use the airwaves, have lost millions in interest and could use the money to expand and improve services.

“This action will give the bidders access to the bulk of their money while at the same time preserving the results and integrity” of the 2001 sale, the FCC said in a statement.

Although it agreed to return the funds, the FCC warned that if it wins a pending court case over whom the licenses belong to, the mobile telephone companies will be responsible for the down payments and the entire amount bid for the various licenses.

The carriers made $3.3 billion in down payments for licenses the FCC tried to repossess from NextWave Telecom Inc. and UrbanComm-North Carolina Inc.

The FCC sold the various wireless licenses from the two carriers to the others for about $16.3 billion in January 2001, but that sale was thrown into jeopardy when an appeals court ruled that the agency could not repossess the licenses from NextWave because it had not paid for them on time.

The Supreme Court has agreed to review the dispute, with a decision expected next year, but in the meantime, the agency acquiesced to a request by the carriers to get back most of their down payments, offering them 85% of the amount they deposited with the government.

The 13 carriers, including Verizon, VoiceStream Wireless Corp. and partners of AT&T; Wireless Services Inc. and Cingular Wireless, asked for the money back so it could be used to expand and improve services.

The FCC will keep 3% of the total amount bid by the carriers, which is the penalty assessed if all the carriers were to withdraw their winning bids.