WASHINGTON-The Justice Department, already embroiled in controversy over a secret wireless licensing pact with Nextel Communications Inc. and the Federal Communications Commission, last week urged a federal court here to reject challenges to the proposed relaxation of the 1995 Nextel antitrust consent decree.
Justice also continued efforts to block the main opponents of the DOJ-Nextel antitrust settlement from fully participating in the case.
The department’s Sept. 14 court filing would have the effect of significantly muting major critics of proposed decree modifications.
In last week’s filing, Justice brushed off protests against proposed decree modifications lodged by top creditors of bankrupt Geo-tek Communications Inc. (Wilmington Trust Co. and Hughes Network Systems Inc.) and by the Alliance for Radio Competition.
ARC is a coalition of small- and medium-sized dispatch operators.
DOJ wants Judge Thomas Hogan to approve changes to the 1995 decree that would give Nextel immediate access to previously prohibited 900 MHz frequencies and that would end the decree on Oct. 30, 2000-five years ahead of time.
“Neither submission [from ARC nor Geotek’s creditors] supports a conclusion that the proposed modifications are outside of the zone of settlements that are consistent with the public interest-the only issue that is before the court at this time,” said Donald Russell, chief of DOJ’s telecommunications task force.
Under the 1995 decree, Nextel was barred from holding 900 MHz dispatch licenses in major markets because of its dominance in the 800 MHz dispatch business. Nextel needs more spectrum to accommodate current demand and to be able to provide next-generation, Internet-friendly wireless services.
Justice maintains neither ARC nor Geotek creditors have legal standing to intervene in the case.
A modified decree would keep Nextel from closing this year on a deal to buy Geotek’s 191 900 MHz dispatch licenses, purchased last year in bankruptcy auction for $150 million. At the same time, Nextel could repurchase Geotek’s specialized mobile radio permits next year.
Justice vigorously opposed Nextel’s lawsuit to vacate the decree, but agreed to relax it as part of a deal struck with Nextel on the eve of the antitrust trial in June.
The only thing ARC and Geotek creditors have in common is their disdain for the DOJ-Nextel antitrust pact.
Geotek creditors want Justice to lift the decree altogether so they can collect $150 million from Nextel. The creditors claim the proposed decree modifications discriminate against them, arguing Justice should not differentiate between Geotek’s 900 MHz licenses and other 900 MHz spectrum that Nextel would be free to obtain.
ARC and other SMRs, for their part, do not want the decree either removed or liberalized.
“The [Justice] department admits that the dispatch market is concentrated and it cannot predict with precision when competitive entry will occur. Yet, the department fails to prevent the further concentration of this market, and instead exacerbates this situation by promoting a settlement agreement that enables the monopolist to gain even more spectrum,” stated ARC.
