Spectrum licence deal in danger

The chairman of the US Senate Commerce, Science and Transportation Committee intends to oppose the $16bn (£11bn) settlement deal...

The chairman of the US Senate Commerce, Science and Transportation Committee intends to oppose the $16bn (£11bn) settlement deal made over disputed spectrum licences between wireless carriers, the US Federal Communications Commission (FCC) and NextWave Telecom.

Opposition from Senator Ernest Hollings, the commerce committee chairman, could jeopardise the deal because the settlement is contingent on Congress passing legislation that establishes a judicial review process, after which there cannot be further litigation in the matter.

NextWave defaulted on its payments for $4.74bn worth of C and F block spectrum licences, then filed for bankruptcy protection in June 1998. The FCC repossessed the licences and re-auctioned the spectrum in January to other wireless carriers, including Verizon, AT&T and Cingular.

In June 2001, a US appeals court agreed with NextWave that bankruptcy laws protect it from the FCC licence revocation. Since then, the carriers, the FCC and NextWave have been wrestling over the disposition of the valuable spectrum.

Under the deal's terms, the US government would receive about $10bn and NextWave would receive about $6bn from a consortium of wireless carriers in exchange for NextWave's C and F block spectrum licences. This could help fill the gaps in their service areas and potentially be used in third-generation (3G) advanced wireless services.

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