Another Try for a Piece of the Airwaves

For the FCC, it was an embarrassing episode that spanned three chairmen and cost taxpayers dearly in time spent by government lawyers on the case.

"You could put so many different kinds of price tags on it," said Blair Levin, who was chief of staff for FCC Chairman Reed E. Hundt in the controversy's early days. It wasn't so much the cost to the Treasury, he said, "but the cost to the economy."

Despite the epic dispute, Salmasi never gave up his dream.

This year, through AWS Wireless, he sought permission to bid in the latest spectrum auction. AWS put up a $142.8 million deposit to qualify, ninth-highest among applicants.

In the application, AWS Executive Vice President Frank A. Cassou promised that the company had never defaulted on any "non-tax debt owed to any federal agency." Despite all the ties to the old NextWave and all the familiar names (including Cassou's, who was NextWave's executive vice president and general counsel during the dispute), AWS swore it was not connected to the old company.

AWS is "not affiliated with and has no ties of control with NextWave Personal Communications Inc., NextWave Power Partners Inc. and NextWave Telecom Inc. Those companies were sold to Verizon Wireless in 2005," the company said in its application to bid.

It goes on to explain that Salmasi owns 28.8 percent of AWS Wireless and that his current company, NextWave Wireless LLC, holds a "100 percent indirect ownership interest in AWS Wireless Inc."

Two messages left at NextWave's Connecticut offices were not returned, nor was a call to the company's marketing vice president in San Diego.

In regulatory filings with the FCC and the Securities and Exchange Commission, the company states that it has the financial backing it needs and a forward-looking business plan that takes advantage of the latest wireless technology.

The FCC issued a statement saying AWS was able to bid because it filed its application and submitted its upfront payments "in a timely manner." The agency also says any winning bidder must also submit a longer application in which "ownership interests are further reviewed and its eligibility to hold a particular license is decided."

Since the NextWave debacle, the agency has changed some of its rules. It has ended the practice of allowing bidders to pay for its licenses in installments. In addition, the agency requires that "winning bids be fully paid within weeks of the close of the auction."

"The government can't act both as regulator and creditor," explained Levin, who is now a telecommunications industry analyst for Stifel, Nicolaus & Co.

Meanwhile, the current auction, which was predicted by the Congressional Budget Office to raise $10 billion to $15 billion, can already be deemed a success.

On Monday, through 35 rounds, bids had exceeded $12.5 billion -- including $83 million from AWS Wireless.