More than 200 airwave licenses may be up for grabs
It's a story that Kafka would have loved. In 1996, the FCC granted more than 200 airwave licenses to a company called NextWave Telecom in a $4.74 billion bid. At the time, NextWave was touting itself as a nationwide carrier's carrier with plans to provide wireless services on a wholesale basis at low rates.
Then in 1998, NextWave was forced to cut operations and file for Chapter 11 bankruptcy, owing more than $400 million to creditors. Since then, the FCC has been mired in a legal battle with NextWave, which fought to retain ownership of the licenses even though it had only made one $474 million payment to the government. In the past few weeks, the Justice Department and the FCC signed a $6 million settlement agreement with NextWave so the licenses could be auctioned off to Verizon Wireless and other carriers willing to pay $16 billion for ownership. But that fell through in December, when legislators cried "tax giveaway" and prevented approval of legislation to complete the deal.
The case will now go back to a federal bankruptcy court in New York. The government can try again next year to push the legislation through, but many variables could change. Least of all, Verizon and the other carriers may want back the $3 billion in deposits the government is holding.