Native wireless company petitions FCC for redress

$550 million refund sought

Posted: Thursday, January 10, 2002

ANCHORAGE (AP) -- Alaska Native Wireless wants the Federal Communications Commission to refund about $550 million the company paid last year after successfully bidding on wireless licenses now mired in the courts.

With the government holding the corporation's money interest-free, and with the licenses in limbo, Alaska Native Wireless and 12 other successful bidders are losing $3 million every week in interest payments, according to a petition filed with the FCC.

The carriers have asked the commission to return a total of $3.1 billion in down payments no later than Jan. 18. Any delay would cause the companies to suffer continued ''irreparable harm,'' the petition states.

Alaska Native Wireless is a joint venture of AT&T Wireless and three Alaska Native corporations -- Sealaska Corp. of Juneau, Arctic Slope Regional Corp. of Barrow and Doyon Ltd. of Fairbanks.

The venture bid $2.9 billion for wireless licenses in a federal auction last January. At the time, the joint venture planned to roll out wireless telephone, high-speed Internet and other services in major markets including New York and Los Angeles.

After Alaska Native Wireless won the licenses a year ago, the company hailed it as a major step forward for the Alaska companies' 40,000 Native shareholders.

''The licenses hold tremendous promise for the years ahead,'' said Jacob Adams, president and chief executive of Arctic Slope Regional Corp., last January.

But the celebrating was soon overshadowed by the dark cloud of litigation.

The licenses had belonged to NextWave, a Hawthorne, N.Y.-based company that defaulted on payments to the FCC. After NextWave filed for Chapter 11 bankruptcy protection, the FCC repossessed and reauctioned the licenses.

But last June a federal appeals court decided NextWave still owned the licenses under bankruptcy law and ordered the FCC to return them. The FCC has asked the U.S. Supreme Court to reverse the appeals court ruling but Alaska Native Wireless isn't banking on a reversal.

''Right now the odds are it's not going to change,'' said Allen Todd, an attorney for Doyon, referring to the appeals court ruling.

For a while there was hope a settlement would compensate NextWave while allowing Alaska Native Wireless and the other firms to retain the licenses. The Justice Department and the FCC crafted a deal that would give NextWave $5.8 billion in exchange for allowing the others to keep the spectrum. While the various parties, including NextWave, agreed to the settlement, it was contingent on congressional approval, which didn't come.

With no clear outcome to the dispute, much depends on what the Supreme Court and Congress ultimately do and whether the parties can come up with another settlement, Todd said. One way or another, the Native corporation plans to stick with its vision for a future in wireless.

''It'll be a smaller operation,'' Todd said. ''But we still view it as a profitable operation.''

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