House Telecom Subcommittee Vice Chmn. Stearns (R-Fla.) introduced...

Verizon Wireless should continue for now to be held to nearly $16 billion in potential auction obligations until pending Supreme Court review played out (CD March 28 p1). Stearns bill would: (1) Require FCC within 15 days of passage of legislation to return full amount of re-auction deposits “for licenses that the Commission has not by that date delivered to such winning bidders.” That would amount to $400 million for 13 winning bidders. (2) Let each bidder wipe out its license rights under NextWave re-auction so it would be free of all remaining payment obligations. Bill’s co-sponsors include Reps. Boucher (D-Va.), Terry (R-Neb.), Pickering (R-Miss.), Towns (D-N.Y.), Rush (D-Ill.). “This is a matter of fairness,” Stearns said. “The successful bidders on Auction No. 35 have not received the spectrum they bid on and they have not received their total deposits back.” Verizon Wireless sued U.S. in April to obtain remaining deposit and sought ruling from U.S. Court of Federal Claims that auction “contract” for disputed licenses was void (CD April 9 p1). Lawsuit, also filed in U.S. Appeals Court, D.C., centered on $8.4 billion in auction prices for which Verizon bid in Jan. 2001 and for which it technically still would be liable should FCC prevail in Supreme Court case and be able to return licenses from NextWave to re-auction winners. Supreme Court earlier this year granted FCC request that it hear challenge to D.C. Circuit ruling that overturned agency decision to cancel NextWave’s licenses for missed payment. Verizon has argued that it has been harmed by its continuing debt obligation to FCC and that overhang from bid prices has affected its credit rating and ability to borrow. Carriers have contended that even if high court reverses D.C. Circuit, there’s likely to be further litigation on remand there. “The result is that there is not likely to be a final resolution of the status of the NextWave licenses, and the FCC therefore will not be in a position to deliver licenses to the winners of Auction No. 35, until 3 or more years from the time the auction was concluded,” bill said. It said FCC position was that winning bidders remained obligated to pay full amount of their bids on 10 days’ notice if Commission established its right in court to deliver those licenses. PCS licenses were returned to NextWave following D.C. Circuit decision last year. Several re-auction winners, including representatives of Salmon PCS, VoiceStream, NextWave and Verizon Wireless, recently met with staff of Sen. Stevens (R- Alaska) on possibilities of settlement in case. Settlement agreement last year reached by U.S., re-auction winners and NextWave expired Dec. 31 after Congress failed to pass legislation backing it up.