NextWave, FCC settle spectrum dispute

NextWave and the FCC today agreed to settlement over the bankrupt carrier’s PCS spectrum, divvying up the $15.85 raised during the January reauction and placing the spectrum in the winning bidders hands.

The agreement gives $5.85 billion to NextWave, which originally bid $4.7 billion for the licenses in 1995, and $10 billion to the FCC.

The settlement must still receive Congressional approval before it’s finalized, and the biggest of the auction winners, Verizon Wireless, immediately began lobbying to get the resolution to Capitol Hill.

“It’s too early to pop the champagne corks, but with the Bush administrations leadership on Capitol Hill to enact legislation that will support the recently announced settlement, we are encouraged that the NextWave situation will be fully resolved soon,” Verizon Wireless CEO Denny Strigl said in a statement issued shortly after the settlement was announced.

NextWave won the C-block and F-block PCS licenses in a 1996 auction but only paid $500 million of its $4.7 billion bill before declaring bankruptcy. The FCC reclaimed the licenses but encountered resistance from NextWave, which said the licenses were assets protected by bankruptcy--an opinion shared by an appeals court, which returned the licenses to NextWave in a move that forced the settlement.

With the settlement, Verizon Wireless and the other auction winners are now free to use the PCS spectrum. FCC Chairman Michael Powell said the deal is ultimately in the public’s best interest, because it puts the licenses into the market and $10 billion into the federal government’s coffers. However, Powell warned that, without any decision from the Supreme Court on the matter, the FCC’s auction policies are in jeopardy.