WASHINGTON-Geotek Communications Inc. creditors blasted the proposed antitrust settlement between the Justice Department and Nextel Comm-unications Inc., while government lawyers continued to fight to limit the creditors’ participation in the matter.
Unlike small- and medium-sized dispatch radio operators, which claim the DOJ-Nextel deal does not go far enough to limit Nextel market power, Geotek creditors argue Justice went too far.
“The court’s entry of the proposed modifications to the consent decree would wholly impair the Geotek creditors’ ability to protect interests that neither party to this action represents at all,” Wilmington Trust Co. (for Merrill Lynch Global Allocation Fund Inc. and S-C Rig Investments III L.P.) and Hughes Network Systems told the U.S. District Court for the District of Columbia late last month.
Since then, Justice and Geotek creditors have been sparring over whether the creditors should be permitted to intervene in the antitrust case.
Late last week, Justice was set to respond to comments filed on the Nextel-DOJ deal. The proposed settlement has received strong opposition. Judge Thomas F. Hogan will rule on the matter after considering Justice’s pleas. Hogan is expected to approve the DOJ-Nextel arrangement.
The Nextel-DOJ plan would modify a 1995 consent decree, which bars Nextel from operating 900 MHz specialized mobile radio systems in major U.S. cities for 10 years because of its 800 MHz SMR dominance.
Nextel sued in February to have the decree lifted, but had to settle for a modification because of industry and government opposition.
The proposed decree modification sought by Nextel and Justice would allow Nextel to substantially increase its 900 MHz SMR holdings immediately, but prevent it from closing the $150 million purchase of Geotek. Most of Geotek’s 191 SMR licenses are covered by the 1995 consent decree.
However, by agreeing to sunset the decree five years early as part of the deal, Justice has opened the way for Nextel to purchase Geotek as soon as October 2000.
For that reason and others, such as alleged Nextel violations of the 1995 consent decree that Justice has yet to address, many SMR companies say the DOJ-Nextel deal is a sham.
Nextel has been working with Justice on two fronts. In addition to securing Justice’s blessing to modify the 1995 consent decree, Nextel recently got Justice approval to pursue mobile phone licenses of bankrupt NextWave Telecom Inc.
In making its case for NextWave licenses before backing off, Nextel said Aug. 11, it “believes that its existing spectrum position is ample to meet the needs of its current business plan,” but that it needs broadband licenses to provide next-generation wireless services.
However, Nextel earlier told the court it needs more 900 MHz spectrum for its SMR business.
