WASHINGTON-Continuing its strategy to get some of Pocket Communications Inc.’s personal
communications services licenses, National Telecom PCS Inc. last week offered to pay $13 million for the 12 C-block
licenses.
NatTel sent a reorganization plan to Judge E. Stephen Derby, seeking the licenses owned by DCR PCS
Inc., the Pocket subsidiary holding the licenses. DCR and Pocket have filed for bankruptcy and Derby is reviewing the
case.
Pocket has returned to the government all but 12 of the 43 licenses it bid more than $1 billion for in the C-
block auction. Pocket was the second-largest winner in the auction.
Pocket must sell the 12 remaining licenses to
liquidate its assets.
NatTel has been a thorn in the side of Pocket since the C-block auction ended in 1996. The
company has a $1.2 billion antitrust claim against Pocket. “Pocket’s actions during the original C-block auction
caused NatTel substantial harm,” said NatTel President Jack Robinson. NatTel has a pending application review
with the Federal Communications Commission, as well as the antitrust case in federal court in New York.
There is
some dispute whether NatTel’s bid has any legs. Pocket owner Daniel Riker said he doesn’t believe NatTel has the
backing of any of Pocket’s creditors. Robinson says such backing isn’t necessary because it is a reorganization of DCR-
not Pocket.
According to Robinson, DCR has only three creditors: his antitrust claim for $1.2 billion, a $12
million claim from Ericsson Inc. and a $4 million claim from LCC International.
However, parent company Pocket
has other creditors, which could oppose NatTel’s plan. In fact, Robinson said he expects Pocket’s creditors committee
“to raise a stink because they know they will be left holding the bag.”
NatTel’s proposal would have
DCR use the $13 million purchase price to repay the $5.4 million loan from the debtors-in-possession lenders. The DiP
lenders are Ericsson, Pacific Eagle Investments Ltd., Masa Telecom Asia Investment, and Siemens Information and
Communications Network Inc. Ericsson and LCC would get 25-cents-on-the-dollar for their claims.
Robinson
believes Ericsson and LCC will like the plan, but he has not yet contacted them. If they don’t, Robinson said he plans to
ask the judge to “cram it down their throats,” by saying it is the best deal for DCR creditors, regardless of
the other creditors. “This kind of stuff happens all of the time in bankruptcy,” Robinson
commented.
Robinson expects to file a disclosure statement in April, listing in “plain English,” NatTel’s
assets and ownership structure. Robinson said the judge could make a decision by June.
The markets NatTel would
acquire in the reorganization include a 30 megahertz license for Kansas City and 15 megahertz licenses in Las Vegas,
Omaha, New Orleans, Detroit and Cleveland.
The Las Vegas market could be valuable. Las Vegas boasts a
penetration rate of more than 25 percent, and only has two wireless competitors-cellular carriers AT&T Corp. and
Alltel Corp. AT&T also owns a PCS license there.
The other PCS license holders are NextWave Telecom Inc.,
which has not launched service because it is also in bankruptcy proceedings, and Rivgam Communicators L.L.C.,
which also hasn’t launched service.
