Senior executives at five wireless telecommunications carriers on Wednesday sent an open letter to FCC Commissioner Michael Powell and U.S. Attorney General John Ashcroft, proposing a means of settling a dispute over the allocation of coveted radio spectrum.
NextWave Telecom originally won the spectrum for $4.74 billion dollars in a 1996 auction held by the Federal Communications Commission. The government later repossessed the licenses, after NextWave filed for bankruptcy protection, and re-auctioned them to carriers such as Verizon Wireless and VoiceStream for over $15 billion. In June, a court of appeals ruled that the FCC had violated bankruptcy laws by seizing the spectrum licenses and re-auctioning them, a decision that effectively handed the licenses back to NextWave. The FCC is expected to appeal the ruling.
In the letter, the executives urge the government to pay NextWave Telecom between $4 billion and $5 billion, in exchange for which NextWave would renounce all claims to a set of disputed wireless spectrum licenses.
"We are at a fork in the road. The government can continue to litigate this case, possibly for several years more. Or, you can negotiate a resolution now," reads the open letter. "This litigation, however, is tying up substantial blocks of precious spectrum, in markets across the country, forcing it to lie wasted and unused. The public is gaining no benefits – either in auction revenues or wireless services – from this spectrum."
The execs who signed the letter are Dennis Strigl, president and CEO of Verizon Wireless, the country's largest wireless carrier; John Stanton, CEO of VoiceStream; Conrad Bagne, identified as a managing member of Alaskan Native Wireless, which is affiliated with AT&T Wireless; George Crowley Jr., president and CEO of Salmon PCS, which is affiliated with Cingular Wireless; and Everett Dobson, CEO of Dobson Communications.
The carriers argue that the radio spectrum in question is desperately needed in order to satiate the nation's growing demand for wireless services. According to the Cellular Telecommunications Industry Association, the number of Americans with cell phones has grown from 33,000,000 in 1995 to more than 118,000,000 today.
But Nextwave rejected the latest offer from the carriers. "Consumers are waiting for this spectrum to be put into use to deliver them the next generation of wireless services," says Nextwave deputy general counsel Michael Wack. "It's time to stop litigating and start building out. Competition should be carried out in the marketplace, not in the courts or through inappropriate use of the regulatory process."
