NextWave deal runs into Senate friction

The chairman of the U.S. Senate Commerce, Science, and Transportation Committee intends to oppose the US$16 billion settlement deal made over disputed spectrum licenses between wireless carriers, the U.S. Federal Communications Commission (FCC) and NextWave Telecom Inc., the senator announced in a statement Thursday.

Opposition from Senator Ernest "Fritz" Hollings, the commerce committee chairman, could jeopardize 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. The legislation must pass through his committee before going to the full Senate. The parties can walk away from the settlement if legislation isn't passed by Jan. 1 and the upcoming holiday recess cuts the time short to consider the bill.

Hollings, a South Carolina Democrat, and Senator John McCain of Arizona, the committee's ranking Republican, have scheduled a press conference Thursday at 2:30 p.m. to discuss their opposition to the NextWave settlement legislation.

Hollings and McCain think that the substance of the deal and related legislation are not in the public's interest and that is why they intend to oppose its passage, according to a congressional source.

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

In June of this year, the U.S. Court of Appeals for the District of Colombia agreed with NextWave that bankruptcy laws protect it from the FCC license revocation. Since then, the carriers, the FCC and NextWave have been wrestling with each other over the disposition of the valuable spectrum.

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

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