Verizon, a joint venture between Verizon Communications and Vodafone, won the auction with an $8.7 billion bid and agreed to give $1.7 billion as a down payment. However, the legality of the FCC’s auction has been questioned, keeping the airwaves out of Verizon’s use. The company claims to be losing $250,000 a day because the FCC is not paying interest on the down payment.
The suit signals a strategic turnaround. Verizon had sided with the US government in the attempt to settle the long-running legal battle. Now, Verizon is asking the court to nullify the results, arguing the license is no longer worth the price.
Verizon last week said it would run out of spare capacity by 2004. If it pulls out of the action, it will need to move ahead with private deals to acquire the additional spectrum it needs to improve and expand its US services.
