Cingular Wireless and NextWave filled in details of a $1.4-billion spectrum deal, including a pact with the FCC on the financial obligations associated with the 34 PCS licenses that would guarantee the agency $714 million. The companies asked U.S. Bankruptcy Court, White Plains, N.Y., to approve proposed bidding procedures to ascertain whether there were better offers. The proposal provided the first look at NextWave’s plan to repay the govt. for these licenses, although negotiations continue on the 80% of its spectrum not involved in the deal.
Country of origin cases
The NAB said it planned to file an appeal of portions of the FCC’s new ownership rules today (Wed.), as soon as the U.S. Appeals Court, D.C., opened for business. By filing first, NAB would become the lead party in the case, with the Network Affiliated Stations Alliance (NASA) scheduled to file shortly afterward. Appeals by citizens’ groups and others in opposition to the broadcasters’ positions also are expected to be filed, but not on Wed., according to Andrew Schwartz of Media Access Project. “We are in the advanced stages of working out appeals,” he told us, and conference calls are being held on the subject. Several public interest groups have banded together and opened a Web site (www.mediareform.net/petition) in attempt to collect one million signatures, calling the new rules “a blatant power grab by media industry lobbyists… The public demands -- indeed our democracy demands -- a total rollback” of the FCC rules changes. The NAB will ask the court to overturn the Commission’s new definition of radio markets and the restrictions placed on TV duopolies (CD July 29 p10), and will express support for the NASA petition seeking a rollback of the TV station ownership cap to the original 35% of TV households from the FCC increase to 45%. The FCC’s new rules, adopted June 2 (CD June 3 p1), were published in the Federal Register Tues. and are scheduled to become effective Sept. 4 unless stayed by the court or the agency.
The launch of the U.S. Air Force defense satellite communications system (DSCS) satellite, DSCS 3-B6, has been delayed indefinitely, Boeing said. The launch, originally scheduled for Aug. 3, was postponed for additional testing of the launch vehicle, Boeing’s Delta 4 (CD Aug 4 p12). Now, an additional delay is needed to replace an antenna on the vehicle as a part of its flight termination system. The last available launch date was today (Aug. 5), but the work won’t be completed in time, so a new launch date must be set.
In separate orders, the FCC granted 2 applications by EchoStar to modify 2 fixed satellite service (FSS) applications. The company had received authorization in 1996 to launch and operate a Ku-band FSS satellite at 121 degrees W and in 1997 for a Ka-band satellite at 83 degrees W and 121 degrees W, the Commission said. Later, EchoStar asked to merge all 3 applications into a single application for a Ku/Ka-band hybrid, EchoStar 9, to be located at 121 degrees W for “local-into-local broadcast services and other video programming.” The FCC agreed, granting the applications with an admonition to EchoStar to operate within the 29.5-29.7 GHz and 29.8-30 GHz bands for uplinks and 19.7-19.9 GHz and 20- 20.2 GHz for downlinks. The Commission addressed compliance briefly in the order, saying that although the company was ahead of milestones for the original Ka-band satellite at 121 degrees W, it was unclear whether EchoStar was in compliance at 83 degrees W. Since the launch of EchoStar 9 is imminent, the Commission said, it simply waived the milestones. The 2nd order dealt exclusively with milestone compliance, which the Commission waived, saying that although EchoStar hadn’t provided “good cause” for missing its Sept. 1999 launch date, it had filed an extension application in time and completed the satellite. The Commission cancelled EchoStar’s authorization for intersatellite links and said the authorization for the C-band payload to be operated by Loral (Telstar 13) wouldn’t be affected. Meanwhile, EchoStar announced that the launch of its hybrid EchoStar 9 was scheduled for Thurs. evening via a Sea Launch rocket.
An internal review of MCI/WorldCom’s access charge practices shows the company is complying with legal and regulatory requirements, it told U.S. Bankruptcy Judge Arthur Gonzalez, N.Y., in a report filed Mon. The report was in response to AT&T’s July 28 filing with the court that outlined concerns about the fraud charges and asked the court to make changes in MCI’s reorganization plan to assure AT&T could file racketeering and fraud charges against MCI/WorldCom.
Five wireless carriers asked the FCC to review a Wireless Bureau letter last month that provided guidance on wireless local number portability (LNP) implementation issues. AllTel, AT&T Wireless, Cingular Wireless, Nextel and Sprint said they weren’t asking the full Commission to derail a Nov. 24 wireless LNP deadline. But they said the letter created more uncertainty and “upset carriers’ legitimate expectations, hindering efforts to finalize LNP implementation plans.”
Cingular confirmed Fri. it was in talks with NextWave on a spectrum acquisition, but only after an outside PR firm of the bankrupt PCS bidder inadvertently issued a news release on a purported $1.4 billion deal. Hill & Knowlton retracted the release, attributing its erroneous distribution to a clerical error, but only after stirring even more of an industry buzz that had been mounting about the terms of a pending agreement expected to cover 20% of NextWave’s licenses.
The Senate Commerce Committee approved a permanent Internet tax moratorium Thurs., although a few senators expressed concern that the definition of Internet access needed to be more precise. The Committee passed on voice vote a substitute bill (S-150) that was supported by Sens. Allen (R-Va.), Wyden (D-Ore.), Stevens (R-Alaska), Sununu (R- N.H.), Brownback (R-Kan.) and Dorgan (D-N.D.). But Dorgan also emphasized that language in the bill needed to be tweaked so it couldn’t be interpreted to apply to telecom services as well as Internet access. And the bill included provisions supported by rural telecoms that would protect the universal service fund (USF.)
U.S. Dist. Court Judge Jed Rakoff, N.Y., issued a $4.26 billion judgment against a Turkish family found guilty of perpetrating massive fraud against Motorola. The judgment stems from litigation that Motorola and Nokia mounted against the Uzan family in 2001, in which the companies contended the family made fraudulent loan arrangements. The lawsuit centered on fraud from vendor financing arrangements put together in the late 1990s by Motorola, Nokia and Telsim, which is Turkey’s 2nd-largest wireless operator and is backed by the Uzans. Rakoff found the Uzan family in contempt of court and ordered that they would be immediately arrested if found in the U.S. “Under the guise of obtaining financing for a Turkish telecommunications company, the Uzans have siphoned more than a billion dollars of plaintiffs’ money into their own pockets and into the coffers of other entities they control,” Rakoff wrote. The Uzan family and companies they control were ordered to pay Motorola $2.13 billion in compensatory damages and $2.13 billion in punitive damages for fraudulently inducing Motorola to loan $1.8 million to Telsim. The court order also requires the family to deposit 73.5% of Telsim’s stock into the court’s registry. Rakoff said the scheme had been advanced by the Uzan family through “an almost endless series of lies, threats and chicanery,” including filing criminal charges against top U.S. and Finnish executives. Under the original agreements with Telsim, Motorola had provided the Turkish carrier with equipment financing, financing to buy a GSM cellular license from the govt. of Turkey and major supply parts for a GSM network. Total financing came to $2 billion, Motorola said. At the same time, Telsim and the Uzan family had reached similar financing and supply agreements with Nokia, which weren’t disclosed to Motorola. “Today’s judgment confirms our belief of wrongdoing against Nokia and proves the activities against us were fraudulent and intentional,” said Olli-Pekka Kallasvuo, Nokia chief financial officer: “We will now use this ruling as part of our continued effort of recovering the funds.” Motorola Chmn. Christopher Galvin said his company looked forward to “recouping the billions of dollars that were diverted by the Uzans.” Telsim CEO Hakan Uzan reportedly said Thurs. that he planned to appeal Rakoff’s ruling to the U.S. 2nd Court of Appeals.
An FCC spokesman confirmed Wed. that the agency planned to investigate allegations that MCI had engaged in access charge fraud (CD July 29 p1). The spokesman wouldn’t elaborate other than to say the Commission would share the results of its Enforcement Bureau investigation with the House Commerce Committee. The Committee sent a letter to the FCC Wed. asking whether the agency planned to investigate the allegations “and enforce the FCC’s rules.”