Verizon Wireless spokesman confirmed late Fri. that carrier is in business relationship with Valley Communications, which has reportedly made bid of close to $3 billion for part of NextWave’s licenses. Verizon Wireless spokesman couldn’t confirm timing of offer. NextWave Deputy Gen. Counsel Michael Wack said he “hasn’t seen the offer” and didn’t believe carrier had received it as of late Fri. afternoon. Meanwhile, NextWave plans to file long- awaited revised plan of reorganization today (Mon.)in U.S. Bankruptcy Court, White Plains, N.Y. It plans to assure payment of all valid claims against it, including govt.’s claim plus applicable interest. Plan would reinstate govt.’s claim, which calls for payments to be made in installments ending in 2007. Govt. would receive all money immediately due up to this point in full, about $1 billion, source said. Rest would be paid in installments for C- and F-block licenses. Installment payments for C-block licenses would start again in 2003. U.S. Appeals Court, D.C., in June ordered remand of FCC’s cancellation of NextWave licenses for nonpayment. Revised plan of reorganization has been closely watched in terms of new investors that NextWave has lined up since D.C. Circuit ordered that its licenses be returned. Details of total dollar value of financing package weren’t available at our deadline, although NextWave has said that plan would provide for billions of dollars in new financing. New equity is expected to be supplied principally by original group of investors, which include Global Crossing and Liberty Media. Plan would furnish full funding for build-out of NextWave’s planned wireless network, which would be based on CDMA technology. Meanwhile, other than apparent proposal involving Verizon, rumors continued to swirl Fri. that NextWave was in talks with carriers on potential partnerships or equity stakes, with Nextel among names mentioned. (Nextel spokeswoman declined comment). Source at NextWave said that as part of putting together updated plan of reorganization, company had talked with many companies, including incumbent wireless carriers, about potential strategic relationships and equity investments.
Country of origin cases
Less than 2 weeks before General Services Administration (GSA) is set to open cross-competition between Metropolitan Area Acquisition (MAA) and FTS 2001 long distance programs, carriers want GSA to put in place safeguards for competition. Several IXCs and Bell companies asked GSA Fri. how past performance of vendors would be factored into agency decisions to let MAA contractors compete for federal long distance business, and vice versa. WorldCom Dir.-FTS 2001 Programs Rick Slifer urged GSA not to allow holders of MAA local service contracts to vie for long distance business unless they could provide “ubiquitous” national service. Move effectively would shut RBOCs holding MAA contracts out of FTS 2001 long distance market until they received Sec. 271 approval in each state in-region. Taking different tack, Qwest Contracts Dir. Audrey Hallett told GSA that minimum revenue guarantees for Sprint and WorldCom on $1.5 billion FTS 2001 contracts continued to stymie competition.
Verizon Wireless said it’s altering terms of its original, $2.06 billion agreement to buy Price Communications pending delay of its initial public offering. Last Nov., Verizon had said it would buy Price to boost its wireless footprint in southeastern U.S. Deal consisted of $1.5 billion in Verizon Wireless common stock with balance represented by assumption or redemption of Price debt. Verizon had said when deal was announced that it was conditioned on completion of its planned IPO. Verizon Wireless had initially planned IPO for Oct. timeframe of last year, but postponed it based on market conditions. Since then, Verizon Wireless officials have said they still plan to take carrier public later this year, although as recently as last week CEO Denny Strigl declined to provide details on exact date of when that would happen. Both Price and Verizon said they still plan to complete transaction but are exploring alternative terms. Possibilities include new forms of consideration other than stock. Price networks cover 3.4 million population in Ga., Ala., S.C., Fla.
David Baumann joins Mintz, Levin, Cohn, Ferris, Glovsky & Popeo as partner while retaining position of CEO of TechNexxus consultancy… Ilona Hogan, ex-Venable, Baetjer, Howard & Civiletti, named global program manager, Bechtel Telecommunications… Changes at Disney Channel: Gary Marsh named exec. vp-original programming and production; Andrea Taylor, ex- ABC Cable Networks Group, appointed senior vp-mktg.; Jill Casagrande, ex-ABC Cable Networks Group, named senior vp- programming; Susette Hsiung promoted to senior vp-production; Nancy Kanter, ex-Bluecow.com, named vp-original programming, Playhouse Disney; Adam Bonnett appointed vp-original programming, Zoog Disney series; Michael Healy will continue vp-original movies… Sheryl Wilkerson, ex-FCC, named vp-legislative affairs, ArrayComm… Nancy LaPerla promoted to senior vp-advertising and sponsorships sales, American Movie Classics Networks.
Characterizing challenge to its licenses as “frivolous,” NextWave asked FCC Mon. to dismiss petition questioning its eligibility to receive PCS licenses returned to it last month by U.S. Appeals Court, D.C. In recent petition (CD July 20 p2), Alaska Native Wireless, Verizon Wireless and VoiceStream cited foreign ownership issues involving NextWave, its designated entity status and its financial qualifications to meet licensee requirements. NextWave told FCC that petitioners incorrectly labeled it as “applicant” trying to get back its C-block licenses. “No known legal standard requires NextWave to reapply for the licenses that were the subject of litigation,” NextWave said. “The FCC granted the licenses to NextWave in 1997 and the court’s unanimous June 22 decision returns them to the company by operation of law.” Carriers pursuing challenge all were successful bidders in FCC’s Jan. re-auction of PCS licenses, most of which had belonged to NextWave before Commission cancelled them for nonpayment.
“True motivation” of Network Affiliated Stations Alliance (NASA) in asking FCC to investigate TV network practices (CD March March 9 p2) was attempt “to persuade the Commission to dictate contract terms” that favor affiliates over networks, according to NBC. Big 4 TV networks all have now responded to NASA petition -- and they all claimed there was no substance to affiliates’ charges. Original NASA filing (since amended twice) was “replete with unfounded charges that presented a distorted view” of network-affiliate business relations, NBC said.
Decision by U.S. Appeals Court, D.C., directing FCC to return NextWave licenses may have repercussions for handful of other C- block bidders enmeshed in similar bankruptcy proceedings, according to sources and recent court filings. While other operators that may feel repercussions own fewer licenses then NextWave, similar legal issues are at stake. Meanwhile, FCC Wireless Bureau granted 62 C- and F-block PCS licenses Fri. that weren’t involved in NextWave litigation, fraction of total of 422 that fetched $16.8 billion in Jan. re-auction. Latest round of license grants, contingent on final payment, are in addition to 17 PCS licenses from re-auction that agency approved in May.
Lucent won 3 year, $161 million contract to provide 3rd generation wireless systems and services to MetroPCS. Lucent said all-cash agreement didn’t entail vendor financing. Lucent will deploy CDMA-based network in MetroPCS’s 14 markets, including Atlanta, Ft. Lauderdale, Miami, Sacramento, San Francisco. MetroPCS Pres.-CEO Roger Linquist said carrier planned to start wireless service “early next year.” Lucent said it would install equipment that had CDMA2000 capabilities. In Oct., 5th U.S. Appeals Court, New Orleans, handed down decision siding with MetroPCS, former General Wireless. Court agreed on U. S. Bankruptcy Court’s $166 million valuation of licenses, fraction of carrier’s original auction bid of $1.06 billion. U.S. Supreme Court recently turned down FCC request to review 5th Circuit decision.
“For AOL to buy AT&T Broadband would be like Napoleon going to Moscow,” Legg Mason analyst Blair Levin said of latest rumored suitor of AT&T’s cable assets: “It’s a battle they should not fight and ultimately could not win.” A Legg Mason report co- authored by Levin and fellow analyst Michael Balhoff said such a deal “would raise numerous problems, entail a lengthy review that would be enormously painful and might not succeed.” FCC and antitrust regulators would cause serious problems, Levin and Balhoff said. In past, FCC wouldn’t even permit AT&T to be tied to AOL Time Warner through its 25% interest in Time Warner Entertainment. Any sort of approval would require “protracted government micromanagement” of AOL Time Warner to ensure that company offered nondiscriminatory treatment to competitors including broadcasters, telecoms, ISPs and satellite companies. “It could also lead to the devaluing of the very synergies upon which AOL Time Warner sold its original merger to Wall Street,” report said, and approval probably would require divestitures. While estimating that likelihood of an AOL purchase of AT&T Broadband was “low,” report said “in the wake of the Comcast offer, it is safe to assume that everyone is talking to everyone.” At briefing with reporters, FCC Cable Services Bureau Chief Kenneth Ferree acknowledged that AOL purchase of AT&T Broadband would have more vertical ownership issues than Comcast, but said “it’s pure speculation at this time that one would be more problematic than the other.”
Ill. Commerce Commission (ICC) delayed for 6 weeks implementation of emergency rule requiring Ameritech and other incumbent telcos to issue credits to customers for late repairs or installations. Emergency rule was to have been effective Aug. 1 but ICC moved implementation date to Sept. 15 after telcos complained original schedule left them insufficient time to train employees and make changes in their billing systems. ICC told telcos to file their customer credit plans by Sept. 7 and tariffs by Sept. 10, to take effect Sept. 15. Service complaints received after Aug. 1 would be paid retroactively between Sept. 15 and Oct. 31. ICC Chmn. Richard Mathias said delay was acceptable because customers still would get benefits as of Aug. 1 while companies would get time they needed for implementation. Emergency rules were adopted to fulfill mandate of Ill. Telecom Act of 2001, passed in May.