Verizon Wireless emphasized to FCC why it thought Commission shou...

to consider deferring grant of C-block licenses until U.S. Court of Appeals, D.C., makes decision in NextWave case. Most licenses up for bid in auction had been reclaimed from NextWave after FCC cancelled its licenses for nonpayment. Verizon Wireless won largest single block of licenses in auction, purchasing nearly $8.8 billion (CD Jan 29 p1). Last month, NextWave also asked FCC to delay spectrum awards until D.C. Circuit issued opinion (CD March 13 p4). “Requiring payment now would be premature because the money would have to be held in reserve for possible return to the high bidders,” Verizon wrote in supplemental comments filed with Commission this week. “It would create significant problems without any countervailing benefits.” Verizon said that in past auctions, bidders were able to make final payments and immediately start building out spectrum. “Here, however, some bidders may determine that it is financially imprudent to invest still more funds until the cloud on the licenses they won are removed,” carrier said. “Lenders who are already committed to fund a bidder’s payment may balk at supplying still more funding without any certainty that they are secured by unconditioned licenses.” Verizon also argued that “litigation uncertainties” could increase borrowing costs. Without clear signal from FCC on repayment date, auction participants could have to secure financing arrangements that were more expensive or impose breakage costs for early repayment. If Commission decides to move ahead on granting licenses, Verizon proposed plan that would allow high bidders to either pay for NextWave spectrum immediately or defer payment but agree to pay interest on final payments. Under proposal, applicants would have to make final payments for all licenses that weren’t tied up in NextWave litigation within 10 days of public notice granting licenses. Applicants that won NextWave licenses could also make entire final payment within 10 business days or wait until 10 days after D.C. Circuit issued decision affirming cancellation of licenses. In latter case, applicants would be required to pay interest. NextWave spokesman said: “Verizon is absolutely right to say that requiring companies to pay billions of dollars for those contested licenses before the court rules is contrary to the public interest and violates basic, common sense.”