WASHINGTON-The Federal Communications Commission gave NextWave Telecom Inc. extra time to reorganize its ownership structure in light of anticipated commission changes in foreign-investment rules that could result from an upcoming rulemaking.
The FCC’s Wireless Telecommunications Bureau granted only part of NextWave’s waiver request regarding foreign ownership. In two related orders, the commission’s International Bureau granted requests by American Personal Communications Inc. and Map Mobile Communications Inc. to exceed the 25-percent foreign-ownership benchmark.
NextWave originally was given six months to reorganize to comply with existing commission rules. The C-block personal communications services winner was told that it would be “in the public interest to extend NextWave’s obligation to restructure until 90 days following the effective date of the commission’s rulemaking proceeding regarding implementation of the World Trade Organization agreement,” which goes into effect Jan. 1.
The commission also concluded that “such a deferral is in the public interest because it will allow NextWave to build out its infrastructure without having to undertake a costly restructuring that may ultimately prove to be unnecessary.”
NextWave still must be in compliance with all licensing conditions 90 days following the WTO date of effect. “It must have either restructured in accordance with its restructuring plan or have filed a petition with the commission demonstrating that it is in the public interest to allow it to exceed the statutory benchmark … pursuant to any new rules.” NextWave also must provide the bureau with any documents that pass between itself and the Securities and Exchange Commission regarding movement on its initial public offering; that IPO has been in a holding pattern since Dec. 30.
What the order did not do was grant NextWave a blanket approval to pursue increased foreign capital investment. “Should NextWave want to increase the level of its foreign investment above that which existed at the time of the NextWave licensing order, or change the composition of its foreign investment, it must first file a proper request with the commission, identifying the source of the investment and demonstrating why grant of the request would be in the public interest,” the bureau wrote.
In a written statement issued by the company, Executive Vice President Janice Obuchowski commented, “The order opens a path for us to access world capital markets. We expect to pursue in the immediate future all the opportunities the order provides.”
However, attorney David Kaufman, who represents Antigone Communications L.P. and PCS Devco Inc., is not pleased with the commission’s decision; his clients have a petition for review regarding NextWave’s PCS license grants. His clients had questioned NextWave’s foreign-investment waiver request, saying most of NextWave’s capital came from South Korea. The FCC dismissed this, saying the source of NextWave’s investments was not in question in this procedure. However, should NextWave petition for an increase in foreign ownership, the FCC at that time would consider the source of such new funding.
“Obviously, I’m very disappointed in this FCC decision. It is wrong, and I’m going to appeal it to the full commission as soon as I can,” Kaufman said. “It gives short shrift to the problems of the integrity of the auction process, and it gives short shrift to the problems of the fact that South Korea is a priority foreign country. I’m not letting this lay. One day, we’re going to get to the appeals court with this.”
Australian-owned Map Mobile Communications, which operates nationwide and local paging services, will be allowed to participate in the upcoming narrowband PCS and commercial mobile radio services auctions, according to the International Bureau’s order released on the same day. Because Australia has opened its markets to foreign competitors and because it is a signatory to the WTO, the commission found it to be in the public interest to allow Map continued access to U.S. markets.
APC had sought a waiver of the foreign-investment rules to allow Deutsche Telekom MobilNet GmbH to increase its indirect ownership to 25 percent, thus kicking up APC’s total foreign ownership to 34 percent. MobilNet’s parent company currently holds a 16-percent interest in APC’s co-owner Sprint Spectrum Holding Company L.P. The International Bureau granted APC’s waiver based on the same facts cited in the Map order.
