Verizon and Nextel Drop Lawsuits, Clearing Way for Spectrum Swap

Verizon Wireless and Nextel Communications have announced that they plan to drop their lawsuits against each other, paving the way for Nextel to receive final approval for a spectrum swap that Verizon Wireless had previously opposed. This decision comes as the two companies prepare to face the growing threat of Cingular Wireless, the joint venture of BellSouth and SBC that has become the industry leader following the approval of its purchase of AT&T Wireless. The move is seen as a significant shift in focus for the companies, as they seek to capitalize on the opportunities and challenges presented by the merger.

Key Takeaways:

• Verizon Wireless and Nextel Communications have dropped their lawsuits against each other, clearing the way for Nextel to receive final approval for a spectrum swap.
• The Federal Communications Commission (FCC) had previously ordered Nextel to give back part of its 800-megahertz spectrum due to concerns over interference with public safety communications.
• In return, Nextel will receive 1.9-gigahertz spectrum and pay $4.8 billion to swap the appropriate licenses.
• Verizon Wireless had argued that any spectrum Nextel acquired should be obtained through an auction, rather than a private sale of public assets.
• Nextel dropped its claim that Verizon Wireless infringed on its trademark by using similar phrases to promote its walkie-talkie phone service.
• The move is seen as a significant shift in focus for Verizon Wireless and Nextel, as they seek to respond to the growing threat of Cingular Wireless.

Statistics:

• $4.8 billion: The amount Nextel will pay to swap licenses with the federal government.
• 1.9 gigahertz: The frequency of spectrum Nextel will receive as part of the swap.
• 800 megahertz: The frequency of spectrum Nextel will return to the federal government.
• 63%: The percentage of Verizon Wireless's shares price increase.
• $40: The price of a share of Verizon Communications.
• 3.1%: The percentage of Nextel's shares price increase.

Sources:

• "Verizon, Nextel Agree to Drop Lawsuits", The New York Times.