FCC to return $2.8 billion to wireless license bidders

Wireless carriers will get back most of the US$3.3 billion given to the U.S. Federal Communications Commission (FCC) in down payments made for spectrum licenses previously awarded to NextWave Telecom Inc.

The FCC announced Wednesday that it will return $2.8 billion, or 85 percent, of the down payments made by Verizon Wireless Inc., VoiceStream Wireless Corp., AT&T Wireless Services Inc. and other cellular carriers for the spectrum. The bidders won the spectrum after NextWave defaulted on its payments to the FCC in 1996.

NextWave recovered the spectrum in bankruptcy court in June after the FCC had already re-auctioned the spectrum for about $17 billion, more than three times the original $4.74 billion price. Legal and political wrangling failed to settle the matter between NextWave, the FCC and the jilted carriers, and in January the auction winners petitioned the FCC to return their 20 percent down payments and to formally annul the auction results.

The FCC maintains the validity of the auction, according to a written statement from the commission. The U.S. Supreme Court agreed earlier this month to hear the FCC's case against NextWave over the license ownership.

Until the Supreme Court rules in the case, the FCC intends to keep part of the down payments to preserve the auction results. The approximately $500 million retained by the FCC equals the 3 percent minimum penalty it would require from carriers defaulting on their auction obligations.

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