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Several major wireless carriers could avoid paying $16.3 billion that they bid for airwaves licenses — deals now snarled in legal challenges — under a proposal offered by federal regulators. The Federal Communications Commission announced Thursday that it is seeking public comment on how to proceed. The options being considered include allowing the companies to cancel some or all of their applications for the licenses and refunding about $490 million held by the government as a deposit. The FCC has already refunded about $2.8 billion in down payments. The agency said its proposal came after many requests from wireless carriers, who said the hampered bids were making things worse amid the struggling telecommunications industry. FCC Chairman Michael Powell said that by offering the companies the option of withdrawing from the auction, “we can dramatically increase the purchasing power of these companies and help stimulate the economic growth and investment that is sorely needed in this sector.” The companies that bid in the auction include Verizon Wireless and affiliates of Cingular Wireless, VoiceStream Wireless and AT&T Wireless Services Inc. Tom Wheeler, president of the Cellular Telecommunications & Internet Association, which represents wireless carriers, said the proposal would provide “much-needed relief” to the industry. “Today’s action promises to provide a boost to every wireless carrier, whether they participated in the auction or not,” he said. He added that the FCC proposal could free billions of dollars for projects, creating thousands of jobs. The delayed licenses concern a large chunk of the wireless spectrum that could give clear, uninterrupted service and advanced wireless options to cellular phone users in several large cities. In 1996, Hawthorne, N.Y.-based NextWave Telecom Inc. won part of the spectrum in an auction with a $4.7 billion bid. After the company failed to keep up with payments and filed for bankruptcy, the FCC awarded the same licenses to several large U.S. mobile telephone companies, which bid about $16 billion in a second auction. A federal appeals court ruled last year that the FCC did not have the authority to repossess the licenses while NextWave was under bankruptcy protection. The FCC appealed to the U.S. Supreme Court to uphold the second auction; oral arguments are scheduled for next month. The FCC has argued that the lower court decision, if allowed to stand, would undermine the auction process that regulators have determined is the best way to select the licensees that are most able to quickly put scarce spectrum to use. “We are still and 100 percent committed to the case that we have in the Supreme Court,” Powell said. He called the situation an “entangled mess.” NextWave issued a statement approving of the FCC proposal, but adding that the government should now allow the company to pay its auction bid and complete its reorganization. The winners of the second auction had 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 down payment. 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. “We appreciate that the commission recognizes the tremendous turmoil in the wireless and telecom marketplace,” Verizon Wireless President Denny Strigl 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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