FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT:

March 27, 2002 Meribeth McCarrick at (202) 418-0654

### FCC ANNOUNCES IT WILL REFUND A SUBSTANTIAL PORTION 

### OF CERTAIN AUCTION #35 DOWN PAYMENTS

Washington, D.C. -- The Federal Communications Commission (FCC) has
announced that it will refund a substantial portion of down payments
made by winning bidders in Auction No. 35 for licenses previously issued
to NextWave Personal Communications Inc., NextWave Power Partners Inc.
(NextWave) and Urban Comm-North Carolina, Inc. (Urban Comm). The FCC
will return approximately \$2.8 billion, or 85 percent, of the down
payments currently held. The Commission will maintain the pending status
of the applications for these licenses. This action will give the
bidders access to the bulk of their money while at the same time
preserving the results and integrity of Auction No. 35.

[Background]{.underline}:

In Auction No. 35, the FCC auctioned licenses to use spectrum previously
licensed to NextWave and Urban Comm, both of which previously defaulted
on their payment obligations. Nets bids for those licenses totaled
approximately \$16.3 billion, and the FCC collected downpayments
totaling approximately \$3.3 billion. The United States Court of Appeals
for the D.C. Circuit subsequently ruled in *NextWave v. FCC* that
Section 525 of the Bankruptcy Code forbade the FCC from canceling
licenses held by NextWave. The United States and the Commission
petitioned the Supreme Court to review the case, and the Petition was
granted on March 4, 2002. Prior Public Notices had made Auction 35
contingent on the final outcome of litigation over the NextWave and
Urban Comm licenses.

In January 2002, a coalition of winning bidders (Petitioners) jointly
requested full refund of their down payments.

[Specifics of Today's Action]{.underline}:

The Commission affirmed that winning Auction No. 35 bidders continue to
be bound by their bid obligations. The FCC recognized, however, that it
has some discretion with respect to the amount of down payments it
maintains on deposit. The Commission found that petitioners, many of
whom are small businesses, may require access to their funds to continue
to operate their businesses. At the same time, the Commission must
protect the integrity of Auction No. 35 in the event the Commission is
ultimately successful in its litigation and a bidder subsequently
defaults on its payment obligations. 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.

To effectuate the partial refund, the Commission waived its rules
requiring that down payments equal to 20 percent of winning bidders'
total net bids be held by the FCC until resolution of the licensing
process. Instead, the FCC will retain an amount, for each bidder, equal
to three percent of that winning bidder's total net bids for the
licenses. Three percent represents the minimum amount of money a bidder
must pay if it defaults on its bid obligation. The FCC set out specific
procedures companies must follow in order to receive refunds.

The Commission will maintain the pending status of the applications for
these licenses. Should the Commission prevail in the NextWave
litigation, winning bidders in Auction No. 35 will be required to pay
the full amount of their winning bids or be subject to default under the
Commission's rules.

The Commission also rejected the claim of Verizon Wireless (Verizon)
that the delay in licensing entitles it to avoid its obligation to pay
the full amount of its winning bids. The Commission stated that by
participating in the auction, Verizon assumed a known risk of
litigation-related delay and thus continues to be bound by the auction
rules. Those rules require all bidders to pay their full bid in the
event the Commission is ultimately successful in its litigation and the
licenses are issued.

Action by the Commission on March 26, 2002, by Order (FCC 02-99).
Chairman Powell, Commissioners Abernathy, Copps and Martin.

FCC Contact: Leora Hochstein at (202) 418-1022 or lhochste@fcc.gov.