WASHINGTON-The Federal Communications Commission gave the green light for bankrupt NextWave Telecom Inc. to sell spectrum in 34 markets to Cingular Wireless L.L.C. for $1.4 billion.
“Obtaining FCC regulatory approval of our agreement with Cingular represents a major step forward in our reorganization process. The proceeds of the deal will enable us to satisfy a significant portion of our obligations to the government and to other creditors. The transaction strengthens NextWave’s capitalization and positions the company to complete its reorganization,” said Allen Salmasi, NextWave chief executive officer.
The FCC rejected an argument from Nextel Communications Inc. that Cingular did not deserve to buy the licenses because it was not cooperating in trying to solve 800 MHz band public-safety interference in Anne Arundel County, Md.
“We find that Cingular has the requisite character qualifications to acquire the designated licenses. First, the FCC has already reviewed Cingular’s conduct regarding interference in the county and found no problem warranting the denial of applications or the revocation of licenses. Second, the FCC’s Wireless Telecommunications Bureau has found Cingular to be qualified to acquire licenses numerous times prior and subsequent to the initiation and resolution of the inquiry into interference issues in the county. Third, Nextel provides no evidence that Cingular has made any misrepresentations or acted with a lack of candor in any of the proceedings before the commission, or has a pattern of willful violations of the Communications Act or the FCC’s rules,” said the commission.
NextWave and Cingular announced the proposed sale last summer. Bankruptcy Judge Adlai S. Hardin Jr. approved the sale last fall.
As part of their contract, Cingular will pay the FCC $714 million of $4.3 billion NextWave still owes the government for the licenses it won at auction in 1997 and then were subject to a bankruptcy saga that was finally settled last year by the U.S. Supreme Court.
The licenses will give Cingular spectrum in major markets including Los Angeles, Chicago, San Francisco, Dallas, Houston, Washington, D.C., Atlanta, Boston, San Diego and Baltimore. The licenses-some of which are slices of the 30-megahertz licenses won by NextWave in 1997-cover 83 million potential customers.
NextWave still holds the rights to spectrum in 81 markets.
