WASHINGTON-WorldCom Inc.’s proposed $144 million sale of fixed wireless assets to Nextel Communications Inc. potentially faces far more obstacles than initially thought, a situation that a federal bankruptcy judge is set to address at a hearing in Manhattan on Tuesday.
U.S. Bankruptcy Judge Arthur Gonzalez was to have held a hearing on the WorldCom-Nextel deal last week, but consideration of the matter was pushed back until tomorrow morning at the U.S. Bankruptcy Court for the Southern District of New York.
First, there was the outcry from educational TV licensees that fear instructional programming will be disrupted if spectrum leases with WorldCom are not honored by the scandal-plagued long-distance carrier. WorldCom and Nextel seemed to address those concerns in the asset purchase agreement filed with the court on July 8.
But the list of parties with one grievance or another is larger than a collection of schools and colleges in California and Maryland.
A court document submitted last Monday indicated there was feedback on the WorldCom wireless sale from Northwest Communications Inc., North American Catholic Educational Programming Foundation, Sprint Corp., SBC Communications Inc., the State of Washington, Preston Tower Condominium Association, Becker Broadcasting and KJMJ TV, Blakeney Communications Inc., Black Warrior Telecommunications Consortium Inc. and Panhandle Area Educational Consortium and its 12 twelve member school districts.
The degree to which the WorldCom-Nextel asset purchase agreement will resolve issues raised by all the various parties is unclear. The transaction is complicated by the many spectrum lease agreements WorldCom has with Instructional Television Fixed Service licensees, mostly schools and churches around the country.
Educational TV licensees in California and Maryland that lease spectrum to WorldCom had complained that instructional programming for schools and colleges would be interrupted if WorldCom walked away from the leases. That’s precisely what WorldCom and BellSouth Corp., which saw its $65 million bid for the long-distance carrier’s wireless properties eclipsed by Nextel last month, planned to do.
WorldCom bought equipment for educational TV licensees from whom it leased 2 GHz frequencies for high-speed wireless Internet service that fell short of expectations. Terminating leases with schools and colleges initially included selling the educational TV transmission gear, which would have effectively shut licensees down.
A secondary issue for educational TV licensees that contract out frequencies to WorldCom is the loss of revenue if leases are broken in bankruptcy court.
Nextel has declined to comment on what it plans to do with WorldCom’s fixed wireless frequencies, which are subject to flexible regulatory rules that permit mobile-phone operations.
Nextel, which could soon be an influential member of the fixed wireless family if the WorldCom sale is approved, nonetheless finds itself at odds with the wireless Internet sector because the 1.9 GHz it seeks as part of the 800 MHz reorganization plan happens to be the home of choice for 2.1 GHz fixed wireless licensees being relocated to make room for third-generation wireless systems.
The momentum in policy circles these days is clearly with Wi-Fi and other fixed-wireless technologies, which are helping to bring mobility to the Internet.
The Wireless Communications Association, which represents wireless Internet service providers and vendors, attracted an impressive showing of attendees, exhibitors and policy makers two weeks ago here.
The U.S. delegation to the World Radiocommunication Conference returned from Geneva earlier this month with an international agreement to make a large chunk of 5 GHz available for unlicensed wireless broadband service around the world. The Federal Communications Commission is working on a proceeding to write rules for new unlicensed frequencies at 5 GHz.
In addition, the FCC is restructuring the 2.5 GHz band to foster greater wireless Internet opportunities. WCA has been an influential voice in crafting the new band plan.
“They’re buying into a lot of what we’ve done,” said Paul Sinderbrand, outside counsel to WCA.
Sinderbrand said the FCC wants to improve the commercial potential of the band, while guarding interests of existing license holders. Sinderbrand said differences between WCA and the FCC are only around the edges.
Federal policy-makers are keen on making more spectrum available for wireless Internet access.
