HAWTHORNE, NY, August 18—A public relations team including international powerhouse Hill & Knowlton and New York media relations specialist Rubenstein & Associates are stepping into the middle of a political battle involving an upstart wireless telecommunications company, some of the industry’s largest players, and the powerful Federal Communications Commission.
Five years ago, under a plan designed to encourage greater competition in the telecommunications arena, NextWave Telecom bought 63 radio spectrum licenses at an auction managed by the FCC, bidding $4.74 billion. The company paid just 10 percent up front and agreed to pay the remainder over 10 years, but it faced a complaint from some losing bidders, who claimed NextWave had too many overseas investors, and so the licenses were not actually awarded until 1997.
By then, the company was in serious financial trouble, and in 1998 it filed for protection in federal bankruptcy court in Manhattan. The FCC sought to reclaim the licenses on the grounds that NextWave had reneged on its obligation to pay. After two unsuccessful appeals, the company finally received the verdict it was looking for in June, when the United States Court of Appeals for the District of Columbia ruled the government had confiscated the licenses improperly—setting the stage for further wrangling between the company and its foes.
“It’s a big technology story, a big business story, and a big litigation story,” says Jim Cox, senior managing director at Hill & Knowlton and one of the account leaders at the agency.
Telecommunications giants including Verizon Wireless and VoiceStream, which own licenses in 90 markets around the country, are among those opposing NextWave. Verizon has retained law firm Griffin Johnson Dover & Stewart, while other foes are working with the Cassidy Companies unit of Interpublic. The FCC, meanwhile, is appealing to the Supreme Court, claiming the company should be forced to surrender the licenses, which it recently auctioned off to other companies for around $17 billion.
The Hill & Knowlton team on the account includes chairman Howard Paster, Paul Clarke of the firm’s Washington office, and several staffers who joined the agency when it acquired Washington technology PR specialist The ProMarc Agency. In time, it is likely the firm’s west coast technology practice will get involved.
Howard Rubenstein is heading his firm’s involvement in the assignment personally.
Cox says the two firms have already collaborated on media training and on a technology briefing attended by about 75 major media and financial analysts in New York last week.