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The deal struck Nov. 16 between NextWave Telecom Inc. and the Federal Communications Commission to free up blocks of wireless spectrum leaves just a few, but important, hurdles for the settlement. Congressional action and bankruptcy court approval are the final pieces outstanding in a $16 billion arrangement involving the leading U.S. wireless companies, Verizon Wireless, Cingular Wireless and AT&T Wireless, which will pick up valuable spectrum space in exchange for a $16 billion payment to the U.S. Treasury. The companies and the FCC were confident Friday that action on Capitol Hill to authorize a roughly $6 billion payment to NextWave, the original winning bidder for the licenses, would not delay NextWave’s efforts to secure approval for reorganization. “It’s too early to pop the champagne corks, but … we are encouraged that the NextWave situation will be resolved very soon,” said Denny Strigl, president and CEO of Verizon Wireless, in a statement. “It’s a winning solution for all parties” that puts the end of litigation within reach, said Allen Salmasi, NextWave chairman and CEO. “This has been a long and arduous process involving many different parties and divergent interests,” FCC chairman Michael Powell said in a statement. “Some will argue that the result is not perfect, but I believe that it is the best that can be achieved under the circumstances to maximize the benefit for the public.” Powell also said the $10 billion the government will net in the deal represents “more than twice the amount that would have been received had NextWave kept the licenses in accordance with recent court rulings.” Justice Department approval is expected before Congress scrutinizes the deal, according to the FCC. NextWave’s attorney, Deborah Schrier-Rape, said Nov. 8 that legislation would establish a time period for contesting the agreement. “The purpose of a time frame isn’t to safeguard anyone but simply to insure an expedited review process,” Schrier-Rape told U.S. Bankruptcy Court Judge Adlai S. Hardin Jr. of the Southern District of New York. The deal surely will get attention in Congress, mostly for its sheer size and peculiarity, said Paul J. Brenman, a bankruptcy attorney. “It’s very unusual that something goes before Congress that is so company-specific,” Brenman said. “Because of the dollars, this is not insignificant.” Brenman, a partner at Wolf Block Schorr and Solis-Cohen in Philadelphia, said Congressional dissenters might ask why the government has to pay the bankrupt NextWave anything at all, but that argument is countered by the FCC’s record of fighting NextWave in court and by the FCC’s support of the deal. “The FCC lost the last time the court looked at it,” when the U.S. Court of Appeals for the D.C. Circuit ruled the FCC improperly reauctioned the company’s licenses in January, Brenman said. “The biggest proponent [of the settlement] is saying we’re lucky to get anything here.” The multicarrier deal means NextWave will surrender all the C and F licenses it won in return for $6 billion. The FCC will turn them over to the January auction winners, including Dobson Communications Inc., Leap Wireless International Inc. and Alaska Native Wireless, 39 percent owned by AT&T Wireless, which all together will pay the government $16 billion. NextWave bid $4.7 billion for the licenses in two 1996 auctions. The Hawthorne, N.Y.-based company was able to pay only $500 million and ended up in Chapter 11 in June 1998, when it fought with the FCC to hold on to the licenses. In early 2000, the FCC stripped NextWave of the spectrum and reauctioned the licenses for $16 million. Though the FCC had said it would ask the U.S. Supreme Court to hear an appeal of the D.C. Circuit court decision, the wireless companies urged the government throughout the summer to find a way to avoid prolonging the lengthy and costly proceedings. NextWave plans to file a motion of approval with the bankruptcy court in White Plains, N.Y., within 15 days. The next hearing date for the Chapter 11 case is Dec. 28. Copyright (c)2001 TDD, LLC. All rights reserved.

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