Supreme Court to rule on wireless auction

FROM THE ARCHIVE

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TUESDAY, MARCH 5, 2002

Three Alaska Native corporations whose billion dollar investment in the wireless technology market has been in limbo for several months claimed victory on Monday when the Supreme Court agreed to review their stalled case.

Surprising the telecommunications industry, the nation's highest court accepted an appeal by the Federal Communications Commission and several private companies. Among the group is Alaska Native Wireless (ANW), a joint venture of Sealaska Corp., Doyon Ltd., Arctic Slope Regional Corp. and AT&T.

As part of an auction held by the FCC, ANW spent $2.9 billion to purchase licenses to operate wireless networks in several highly lucrative markets, including New York, Los Angeles and Washington. The deal fell through when a federal appeals court last June ruled the licenses properly belonged to NextWave Telecom Inc., a company in bankruptcy proceedings.

But ANW is now expressing hope that their high-priced gamble will pay off. Managing partner Conrad Bagne, who is an executive with the Inupiat Eskimo-owned Arctic Slope, said he was confident the Supreme Court will side in his company's favor.

"The Supreme Court’s decision to hear this case is a victory," he said. "We believe that when the Supreme Court reviews this case, it will . . . preserve the results of the FCC’s auction."

In a statement, FCC Chairman Michael Powell added that he was "gratified" the case will be reviewed. He said a decision will "clarify" existing law.

NextWave, on the other hand, said it was "disappointed that there will be additional litigation." Senior vice president Michael Wack said the company still plans on taking the licenses to the market even though it hasn't paid off the $4.7 billion it owes the FCC.

In all, several companies are involved in the appeal. Like ANW, they participated in the 2001 auction that the District of Columbia Circuit Court of Appeals said was illegal.

The ruling sent Powell scrambling to find a fix. He proposed a settlement that would have refunded money to the Native corporations and other bidders but Congress balked at the end of the year.

The agreement was supported by Alaska's Congressional delegation but other lawmakers questioned why NextWave would make out with $6 billion when it only made a $500 million down payment on the disputed licenses. The FCC took in $15.8 billion in the failed auction, of which it would have retained about $10 billion.

Subsequently, it was reported the FCC would refund the money to the companies involved. If the Supreme Court upholds the lower court decision, the government would be spurred to act, an issue Powell didn't immediately address yesterday.

A decision isn't expected until 2003.

Get the Decision:
NEXTWAVE PERSONAL COMMUNICATIONS INC. v. FED. COMMUNICATIONS COMM'N, No 00-1402 (D.C. Cir June 22, 2001)

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Relevant Links:
Federal Communications Commission - http://www.fcc.gov
Arctic Slope Regional Corp - http://www.asrc.com
Sealaska Corp - http://www.sealaska.com
Doyon Ltd - http://www.doyon.com
NextWave Telecom - http://www.nextwavetel.com