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Seeking to rally support on Capitol Hill, three parties to the $16 billion NextWave Telecom Inc. settlement urged lawmakers to pass legislation implementing the deal by a Dec. 31 deadline. “The big picture for the wireless industry and our economy has been missing from the dialogue,” said Denny Strigl, CEO of Verizon Wireless, a unit of Verizon Communications Inc., which wants to buy wireless licenses now held by NextWave. “This settlement and the authorizing legislation can avoid several more years of legal limbo for these licenses that can be working for the American people. Putting to use almost $16 billion worth of spectrum across 40 states now, rather than later, is a pretty good day’s work.” The testimony by Strigl, Federal Communications Commission Chairman Michael Powell and NextWave general counsel Frank A. Cassou before a subcommittee of the House Energy & Commerce Committee appeared to sway several lawmakers. “This is not the prettiest, cleanest or easiest way,” House Energy and Commerce Committee Chairman Billy Tauzin, R-La., said. “But it puts these issues to rest. This settlement ought to be approved as rapidly as we can.” Despite the support, enough lawmakers remain opposed to the settlement that enacting legislation authorizing the deal by Dec. 31 remains unlikely. “The public interest has not yet been fully served,” Rep. Edward J. Markey said. The Massachusetts Democrat complained that under the federal budget scoring rules, the settlement will cost taxpayers $4.5 billion rather than yield a $10 billion windfall, as proponents argue. That is because the Congressional Budget Office already assumed that the wireless spectrum would produce $11 billion in additional revenue, while the settlement brings in only an additional $6.5 billion. NextWave bid $4.9 billion in 1996 for 63 wireless licenses, but it paid only $500 million before going bankrupt. The FCC re-auctioned the licenses, but NextWave persuaded a federal appeals court that the spectrum is an asset that is part of the bankruptcy estate. Though the case is on appeal to the U.S. Supreme Court, the FCC and NextWave agreed to a settlement. The agency will sell the licenses to Verizon and other carriers for $16 billion. Of that, about $10 billion would go to the Treasury and the rest to NextWave. The Justice Department can settle a case without consent of Congress. But this case is different because the FCC wants to divert part of the fee Verizon is paying. That constitutes an appropriation requiring congressional authorization. Lawmakers are not expected to remain in session for more than another week, so prospects for enactment of the special appropriation are slim. With the deadline looming, supporters of the deal made their second trip in five days to Capitol Hill to argue the deal is a winner for taxpayers and the telecommunications industry. “This is a rare case in which the resolution, while not the outcome any party would unilaterally select, is one that benefits all parties,” Cassou said. Powell said Congress needs to consider the government’s weak position. NextWave won claim to the licenses in federal appeals court. That means the government is not entitled to the combined $16 billion that other wireless providers bid for the NextWave licenses in Auction 35, as the procedure was called, he said. “We must ask if this settlement nonetheless salvages substantial value for the American taxpayer,” Powell said. “The government concluded that it does, putting the licenses to work and recovering two-thirds of the proceeds it would have gotten had Auction No. 35 not been undermined by the court ruling.” Copyright (c)2001 TDD, LLC. All rights reserved.

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