US spectrum dispute sees NextWave walk away with $11bn

NEWS The long-running dispute in the US over ownership of the wireless spectrum has seemingly ended with NextWave, an initial licence holder currently under Chapter 11 bankruptcy protection, set to emerge around $11bn better off. Five years ago - in a scenario perhaps worryingly familiar for a number of European telcos now holding 3G licences - NextWave bid $4.7bn for spectrum rights. However, it filed for bankruptcy in 1998 after only having paid $500m of the money it owed the US government. After several rounds of politicking, the regulator in charge, the Federal Communications Commission (FCC), eventually reclaimed the licences and auctioned them to other operators for close to $16bn at the end of last year. That action was ruled illegal by an appeals court this year, a move which worried giant operators such as AT&T Wireless, Cingular, Voicestream and Verizon Wireless, part-owned by the UK's Vodafone, anxious to obtain the necessary spectrum for future 3G services. The compromise that has now been tentatively agreed to should involve NextWave handing the licences back to the government, together with an interest payment the government dropping any further legal actions against the company and a number of companies paying NextWave - resulting in the net gain of about $11bn. Reports in the US stress any agreement has yet to be finalised, and quote sources saying it may yet fall apart. However, the hope is that it will set the foundation for US operators to get on with rolling out 3G.