Settlement could help Alaska Native Wireless

PHOTO/Courtesy John Immel
The Federal Communications Commission and several U.S. wireless companies have agreed to a settlement that liberates spectrum licenses from litigation and allows Alaska Native Wireless LLC and others to improve cell phone service in major markets.

The $16 billion deal would require approval from Congress, the Justice Department, a New York bankruptcy judge and no further legal challenges.

Alaska Native Wireless was a successful bidder on wireless licenses including major markets in Los Angeles and New York during a January spectrum auction conducted by the FCC. However, a U.S. appeals court decision in mid-June disputed results that included spectrum licenses previously owned by a company, NextWave Telecom Inc., that later went bankrupt.

The move tied up the licenses rather than releasing them for service.

Arctic Slope Regional Corp. of Barrow, Doyon Ltd. of Fairbanks and Juneau-based Sealaska Corp. formed Alaska Native Wireless to bid on wireless licenses auctioned by the FCC. The spectrum auction, which began Dec. 12, was completed Jan. 26.

According to The Associated Press, the settlement, announced Nov. 16, follows weeks of negotiations for the parties to agree on how to resolve the court dispute.

"The settlement means ANW will be able to get the licenses it bid for and has partially paid for," said Conrad Bagne, head of ASRC Wireless, the managing partner for Alaska Native Wireless. "Congress must approve the settlement by calendar year end."

Bagne did not say when or in what markets Alaska Native Wireless would first build infrastructure to provide service.

Alaska Native Wireless with its partner AT&T Wireless was the high bidder on almost $2.9 billion in wireless licenses covering 43 markets with a population of 71 million. Markets include Los Angeles, New York City, Denver, Tampa, Cleveland, Jacksonville, Fla., Minneapolis, New Haven, Conn., and Portland, Ore.

However, NextWave sued the FCC for seizing the licenses, which were re-auctioned in January, according to The Associated Press reports. NextWave had won the airwaves in a 1996 government auction, but paid just $500 million of its $4.7 billion bid before seeking protection from creditors, largely the FCC, in a New York bankruptcy court.

A U.S. Court of Appeals for the District of Columbia Circuit ordered the FCC to return the licenses, contending the agency could not seize the property of NextWave, which was reorganizing under bankruptcy protection.

Under the settlement, carriers from the second spectrum auction would be expected to pay the amounts of their winning bids to the FCC, a total of $15.8 billion.

The FCC would transfer about $9.6 billion of the carriers’ money to NextWave. After paying taxes and other fees back to the government, investors in the company would net more than $5 billion.

"At bottom, it is a deal that serves the public interest, for it will get licenses out from under litigation and into the market, where the public will benefit," FCC Chairman Michael Powell said in a statement.

NextWave still plans to build its network in other licensed markets including Detroit and Madison, Wis., and hopes to launch commercial service in the first half of 2002.

Updated: 
12/02/2001 - 8:00pm