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US telcos demand FCC cough up for duff 3G licensing deal

Courts hold-up payback...
Written by Heather McLean, Contributor

Courts hold-up payback...

US telco companies are demanding that the government return $3.2bn in down-payments on broadband wireless licenses held by the bankrupt Nextwave Telecom. The 13 telcos including Verizon Wireless, VoiceStream Wireless, plus partners of AT&T and Cingular Wireless requested the refund last Friday. Congress failed to agree, before the telcos' license contracts ended on 31 December 2001, on whether broadband licenses could be released from Nextwave and sold to the government for $5.85bn. Following Congress' lack of action, the telcos are now able to walk away from the deal to purchase the licenses from the government for a grand total of $15.85bn, agreed by congress last January. But the telcos claim the payback delays are costing them around $3m in interest each week. Last January a federal appeals court refused to allow the Federal Communications Commission (FCC) - the government body responsible for the licenses - to repossess the broadband licenses from Nextwave after the government deal took place, despite the company going bankrupt. The appeals court said Nextwave's lack of timely payments on the $4.74bn it had agreed to pay for the licenses was not a good enough reason to allow the FCC to take them back. The telcos have asked the FCC to pay up before 18 January 2002. The matter is currently under review.
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