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The government said Wednesday it is giving back most of the $3.3 billion in down payments made by some of the nation’s largest mobile telephone companies after they won a now-disputed auction of wireless licenses. Hawthorne, N.Y.-based NextWave Telecom Inc. won the coveted spectrum in a 1996 auction with a $4.7 billion bid. But after the company failed to keep up with payments and filed for bankruptcy, the Federal Communications Commission resold the licenses for about $16 billion to other companies at a second auction. That sale, however, was nullified last June by a federal appeals court, which said the FCC could not repossess the licenses while NextWave was under bankruptcy protection. The U.S. Supreme Court agreed earlier this month to hear the FCC’s appeal of that ruling; a decision is expected next year. A settlement between all the parties collapsed after Congress failed to endorse it. As a result, the winners of the second auction, which include Verizon Wireless and affiliates of Cingular Wireless, VoiceStream Wireless and AT&T Wireless Services Inc., asked the FCC to return their deposits. Verizon Wireless, which won the largest chunk of spectrum, sued the FCC in federal court for the return of its $1.74 billion downpayment. The FCC said Wednesday the companies continue to be bound by the second auction results, and would have to pay their full bids if the Supreme Court upholds the sale. Verizon had claimed the delay in transferring the licenses voided the auction and released the company from potentially having to pay its entire $8.7 billion bid. But instead of keeping 20 percent of the companies’ bids as deposits, the agency decided it needed to keep just 3 percent. That means the government now will return a total of $2.8 billion to the companies, the FCC said. That allows the companies access to the bulk of their money, while preserving the auction results, FCC spokesman David Fiske said. Verizon Wireless spokesman Jeffrey Nelson said the announcement is a step in the right direction, but noted the government will still hold $260 million of Verizon’s money while the company has lost $115 million in interest. Verizon will consider its options for resolving the situation, he said. “We need the slate wiped clean,” Nelson said in a statement. Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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