Sun, Aug 05, 2001 - Page 11 News List

Verizon Wireless venture bids US$3bn for airwaves

BLOOMBERG , WASHINGTON

Valley Communications, a partnership Verizon Wireless Inc formed to get access to mobile-phone frequencies reserved for small businesses, offered bankrupt NextWave Telecom Inc US$3 billion for parts of 50 airwave licenses.

The bid was made within the last two days for spectrum in markets such as New York, Boston and Los Angeles, Verizon Wireless spokesman Jeffrey Nelson said.

At issue is a portion of frequencies that a federal appeals court returned to NextWave in June after the Federal Communications Commission sold them to Verizon and 20 other companies in January for almost US$16 billion.

Verizon had bid almost US$9 billion, more than any other company, in the January sale and was the company set back most by the federal appeals court ruling. It formed the Valley Communications venture with James Dwyer, who used to serve as president of Wireless One Network in Florida, Nelson said. He declined to say when the venture was created.

Valley Communications has made a "serious and sound offer," Nelson said. "It is my understanding the offer is not for all of the licenses that NextWave may hold in those markets."

"Many companies have expressed interest in investing in us, forming strategic alliances, and joint venturing," NextWave Deputy General Counsel Michael Wack said in a statement. "We've listened to everyone" and the company will file a plan of reorganization tomorrow.

The FCC took the licenses from NextWave last year after it defaulted on US$4.2 billion it owed the government from a 1996 airwaves sale. The Hawthorne, New York-based company fought the move in court, and in June the US Appeals Court for the District of Columbia said the FCC violated bankruptcy law when it repossessed the frequencies.

January auction winners including Verizon Wireless and companies backed by Cingular Wireless and AT&T Wireless Services Inc. have pressed the US government to settle the case instead of challenging it to the Supreme Court. The companies are eager to get the frequencies to deploy advanced services and fill gaps in their coverage areas.

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