"Verizon Wireless and other major mobile telephone carriers will get back $2.8 billion, or 85 percent, of down payments they made to the government for disputed wireless licenses, the U.S. Federal Communications Commission (news - web sites) said on Wednesday.
"Thirteen carriers that bid for the licenses last year wanted the money back because they were not able to acquire and use the airwaves, have lost millions in interest and could instead use the funds to expand and improve services.
"This action will give the bidders access to the bulk of their money while at the same time preserving the results and integrity" of the 2001 sale, the FCC (news - web sites) said in a statement.
"While agreeing to return the funds, the FCC warned that if it wins a pending court case over who the licenses belong to, the mobile telephone companies will be responsible for the down payments and the entire amount bid for the various licenses.
"The carriers made $3.3 billion in down payments for licenses the FCC tried to repossess from bankrupt NextWave Telecom Inc. and another bankrupt carrier UrbanComm-North Carolina Inc.
"The FCC sold the various wireless licenses from the two carriers to the others for about $16.3 billion in January 2001 but that sale was thrown into jeopardy when an appeals court ruled that the agency could not repossess the licenses from NextWave because it had not paid for them on time.
"The Supreme Court has agreed to review the dispute, but in the meantime, the agency acquiesced to a request by the carriers to get back most of their down payments, offering them 85 percent of the amount they deposited with the government.
"The Commission therefore struck a public interest balance between the hardship that would be imposed by continued retention of the down payments and the need to protect the integrity of the auction by authorizing refund of a substantial portion of the down payments," the agency said in a statement.
"The 13 carriers, including Verizon, VoiceStream Wireless and partners of AT&T Wireless Services Inc. and Cingular Wireless , in January asked for the money back so it could be used to expand and improve services.
"At present, NextWave has possession of its licenses and has activated its network in 60 markets. The company, still in bankruptcy proceedings, plans to operate a high-speed wireless data network and act as a wholesale provider of air time.