F.C.C. offers new options on wireless; cash-short licensees are given four choices
Article Abstract:
The FCC approved a plan that offers wireless-communications licensees a choice of four options to handle their cash shortages. Companies that participated in the C-block PCS license auction have the option of resuming license payments starting in Mar 1998. Another option consists of returning the licenses in exchange for forfeiting a 10% down payment and erasing their debt. A third option would allow companies to return 50% of their licenses and lower their debt proportionately. A fourth option allows companies to apply 70% of their down payment toward buying as many licenses as possible upfront while forfeiting 30% of their down payments. The 3-1 FCC vote took place over the sharp objections of outgoing Chmn Reed E. Hundt, who believed the fourth option would punish the largest wireless bidders and force them into bankruptcy. FCC Commissioner Susan Ness, who along with Rachelle Chong and James H. Quello voted in favor of the plan, said the FCC was obligated to enforce its rules.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
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Latest effort to schedule new auctions for wireless licenses fails
Article Abstract:
Outgoing FCC Chmn Reed E. Hundt has been unsuccessful in lobbying for new wireless communications license auctions, while companies that hold the licenses may default on more than $10 billion in payments. Hundt's plan would have allowed the struggling small companies to forfeit their existing PCS licenses and re-apply for the new licenses while avoiding a severe financial penalty. The Hundt amnesty plan has been rejected by the other three FCC commissioners, Susan Ness, James H. Quello and Rachelle B. Chong, who support a stricter proposal requiring the companies to forfeit their entire upfront deposits, which amount to millions of dollars. William E. Kennard, whom Hundt has nominated to succeed him, will have to resolve the situation. The problem stems from the 1996 auction that failed to raise an announced $10.1 billion for the Treasury. Companies shortly thereafter encountered financial difficulties, as their stock-market values plummeted.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
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Critics doubt Nextwave's leap of faith in wireless market
Article Abstract:
The FCC's granting of PCS licenses to Nextwave Telecom may prove to be the company's undoing, according to many industry analysts. Nextwave's aggressive bidding for a total of 63 licenses has brought it $4.2 billion in debt. Although Nextwave Chmn and CEO Allen B. Salmasi insists that the company will raise $650 million to pay the debt and finance network construction, one of its stock offering has been delayed repeatedly because of weak market conditions. The FCC only granted Nextwave its licenses after ordering the company to reduce its foreign ownership. Nextwave has been financed primarily by Asian investors, such as Sony and Pohang Iron and Steel. Salmasi attributes pessimism about Nextwave's success to critics of its code division multiple access technology.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
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