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NEXTWAVE PROPOSES SALE OF LICENSES IN 6 MARKETS

NextWave asked the bankruptcy court overseeing its reorganization for permission to sell at auction its FCC license rights in 6 markets outside its Northeast “footprint,” including 10 MHz of its 30 MHz in N.Y., the company said Mon. The other licenses are for Denver, Portland, Ore., Sarasota, Fla., Tampa, and Tulsa. The reserve price of the 6 licenses offered at auction is $1.083 billion, according to publicly available records. NextWave said it would sell only its C2 block spectrum in N.Y. It planned to retain 20 MHz in other bands that would allow it to file a plan in answer to a request for proposal by the N.Y. Dept. of Information Technology & Telecom for design and construction of a citywide wireless network.

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NextWave’s strategy as laid out in documents could clear the way for the company to remain in business in some form. NextWave expects to release a reorganization plan in July. It filed its latest document at the court late Fri.

If NextWave gets the full reserve price it would be left with more than $500 million in cash, the remaining spectrum in N.Y., as well as spectrum in Boston, Philadelphia, D.C.- Baltimore, Detroit, and L.A., after paying off the FCC and taking care of other debts. In April, NextWave completed the sale of PCS licenses to Cingular for $1.4 billion. The company still has $450 million in reserves after that sale.

NextWave Chmn. Allen Salmasi said keeping the licenses wasn’t central to the company’s plans to remain a going concern. “The six licenses we intend to auction are valuable properties, but they're not essential to our strategic plans,” he said.

Salmasi also said the sale is consistent with NextWave’s long-term strategy. “Our recently approved global resolution agreement with the FCC specifically contemplates that a few licenses, including four of the licenses being auctioned, would be sold by the end of this year,” he said. “The auction advances that goal, and lays the groundwork to file a plan of reorganization in July that will describe the operational plan for our remaining spectrum assets.”

NextWave bought dozens of wireless spectrum licenses in FCC auctions for about $4.8 billion 1996-97, giving the company control of a huge block of spectrum coveted by other wireless carriers. The company made a single payment of $500 million for the licenses before filing for bankruptcy protection in 1998.

“Following a sale of the designated licenses, NextWave will still retain an attractive footprint focused in the Northeast, representing the 6th largest wireless footprint in the United States,” the company said in its filing. “The NextWave-retained footprint will be comprised of 24 10 MHz licenses in 20 markets, covering a population of over 65 million people, a coverage area exceeded only by national carriers such as T-Mobile and Nextel.”