Just when US cellular operators thought that the allocation of future wireless spectrum couldn’t get any more complicated it seems that there are now doubts over licences that have already been allocated. On Friday the US Federal Appeals Court ruled that the FCC had illegally seized and re-auctioned wireless spectrum held by bankrupt mobile operator NextWave Telecom. The ruling in theory returns more than 200 tranches of mobile frequency to NextWave, leaving 21 cellular operators including Verizon Wireless and AT&T Wireless with a series of holes in their national coverage plans.

The NextWave concessions made up the bulk of the 252 PCS concessions auctioned by the FCC in December and until the ownership of the licences is finally resolved companies such as Verizon Wireless, which paid US$8.78 billion for 113 of the PCS licences, will have to put their network rollouts on hold.

The FCC is expected to ask the Federal Court to re-hear the case and may take its case to the US Supreme Court. If the decision against it is upheld the most likely solution is for the FCC to compensate NextWave for the licences. However that may not be the end of the story as according to Bloomberg other bankrupt cellular operators including General Wireless have similar cases against the FCC pending.

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last updated: January 12, 2004

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