The FCC reached an agreement with NextWave Communications regarding the company’s broadband personal communication service (PCS) licenses, which have been in dispute since 1996. Specifically, the agreement:
- provides for the immediate return of spectrum licenses that will account for at least 90% of NextWave’s spectrum when licenses already sold to Cingular Wireless are taken into account;
contemplates total cash recovery (including NextWave’s down payment) of $1.6 billion if anticipated sales occur; - results in a total cash and spectrum recovery of at least $4 billion based on NextWave’s original purchase price;
- requires additional cash payments to the U.S. Treasury if there is a dramatic increase in value and sale of the spectrum that NextWave retains;
- extinguishes any potential claims for damages against the FCC and the U.S. government;
- builds in safeguards to ensure prompt and timely payment by NextWave; and
- avoids the use of debt instruments, which could be subject to further default and delay.
The deal will require approval of the U.S. Bankruptcy Court for the Southern District of New York. http://www.fcc.gov
- Last week, Cingular Wireless closed its transaction of 34 PCS licenses from NextWave Telecom. The licenses, covering approximately 83 million potential customers, are for spectrum primarily in markets where Cingular currently has voice and data operations.
- Under terms of the deal, Cingular paid $1.4 billion in cash, and obtained FCC licenses to operate on 10 MHz of broadband PCS (1900 MHz) spectrum in 32 of the markets and of spectrum of 20 MHz in the 1900 MHz band in Tampa and El Paso (Texas).