ORAL ARGUMENT IS SCHEDULED FOR MARCH 15, 2001
IN THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
___________
Nos. 00-1402 and 00-1403
___________
NEXTWAVE PERSONAL
COMMUNICATIONS INC. and
NEXTWAVE POWER PARTNERS INC.,
Petitioners/Appellants,
v.
FEDERAL COMMUNICATIONS COMMISSION
and UNITED STATES OF AMERICA,
Respondents/Appellees.
___________
On Appeal from, and Petition for Review of, Orders of the
Federal Communications Commission
___________
BRIEF OF PETITIONERS/APPELLANTS
___________
Theodore B. Olson Donald B. Verrilli, Jr.
Douglas R. Cox Ian Heath Gershengorn
Thomas G. Hungar Robin M. Meriweather
Gibson Dunn & Crutcher LLP Lara M. Flint
1050 Connecticut Avenue Jenner & Block
Suite 900 601 Thirteenth Street, NW
Washington, DC 20036-5306 Washington, DC 20005
(202) 955-8500 (202) 639-6000
Attorneys for NextWave Personal Communications Inc.
and NextWave Power Partners Inc.
December 11, 2000 (additional counsel on inside cover)
G. Eric Brunstad, Jr.
Bingham Dana LLP
One State Street
Hartford, CT 06103
(860) 240-2700
ORAL ARGUMENT IS SCHEDULED FOR MARCH 15, 2001
IN THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
___________
Nos. 00-1402 and 00-1403
___________
NEXTWAVE PERSONAL
COMMUNICATIONS INC. and
NEXTWAVE POWER PARTNERS INC.,
Petitioners/Appellants,
v.
FEDERAL COMMUNICATIONS COMMISSION
and UNITED STATES OF AMERICA,
Respondents/Appellees.
___________
On Appeal from, and Petition for Review of, Orders of the
Federal Communications Commission
___________
BRIEF OF PETITIONERS/APPELLANTS
___________
CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
Pursuant to D.C. Circuit Rules 15(c)(3) and 28(a)(1), the undersigned counsel for petitioners/appellants
NextWave Personal Communications Inc. and NextWave Power Partners Inc. (collectively,
"NextWave") state as follows:
A. Parties and Amici.
Petitioners/appellants in this case are NextWave Personal Communications Inc. ("NPCI") and
NextWave Power Partners Inc. ("NPPI"). NPCI and NPPI were created to own and operate certain
Federal Communications Commission ("FCC" or "Commission") licenses to provide personal
communications services to the public. NPCI is a wholly-owned subsidiary of NextWave Telecom Inc.
NPPI is a wholly-owned subsidiary of NextWave Partners, Inc., which is a wholly-owned subsidiary
of NextWave Telecom Inc. None of these entities is a publicly traded company.
Respondents are the Federal Communications Commission and United States of America.
Intervenors are
BellSouth Corporation
BellSouth Cellular Corporation
Cellco Partnership dba Verizon Wireless
VoiceStream Wireless Corporation
AT&T Wireless Services, Inc.
Cellular Telecommunications Industry Association
Dobson Communications Corporation
Sprint Spectrum L.P. dba Sprint PCS
TeleCorp PCS, Inc.
Nextel Communications, Inc.
Arctic Slope Regional Corporation
Council Tree Communications, LLC
Professor Kenneth N. Klee has participated as amicus curiae.
A.Ruling Under Review.
NextWave seeks review of (1) the decision of the FCC that NextWave’s licenses for personal
communications services ("PCS") spectrum have purportedly canceled pursuant to 47 C.F.R. §
1.2110(f)(4), see Auction of C and F Block Broadband PCS Licenses, Public Notice, 15 F.C.C.R. 693
(2000); and (2) the order in In re Public Notice DA 00-49; Auction of C and F Block Broadband PCS
Licenses; NextWave Personal Communications, Inc. and NextWave Power Partners Inc. Petition for
Reconsideration, Order on Reconsideration, FCC 00-335 (rel. Sept. 6, 2000) ("Order"), denying
NextWave’s petition for reconsideration of that decision.
C. Related Cases.
This case was previously before this Court as NextWave Personal Communications Inc. v. FCC, Nos.
00-1045 and 00-1046. This Court dismissed those cases as "incurably premature" in light of
NextWave’s then-pending petition for reconsideration at the FCC. See NextWave Personal
Communications Inc. v. FCC, 2000 WL 1093322 (D.C. Cir. June 22, 2000).
In re FCC, 217 F.3d 125 (2d Cir. 2000), cert. denied, No. 00-447, 2000 WL 1377133 (U.S. Nov. 27,
2000), involved the same parties and the same Public Notice that are involved in this case. FCC v.
NextWave Personal Communications Inc., 208 F.3d 43 (2d Cir. 1999), cert. denied, 121 S. Ct. 298
(2000), reh’g denied, No. 99-1980, 2000 WL 1737481 (U.S. Nov. 27, 2000), involved substantially the
same parties and related issues.
The following cases are currently pending in the FCC, courts of appeals, or District of Columbia
courts and are related to this case, or involve some of the same or similar issues: In re Airadigm
Communications, Inc., DA 00-368, (pending before the FCC); GWI PCS Inc. v. FCC, 230 F.3d 788
(5th Cir. 2000); U.S. AirWaves v. FCC, No. 98-1266, __ F.3d __, 2000 WL 1694418 (D.C. Cir. Nov. 21,
2000).
STATEMENT REGARDING DEFERRED APPENDIX
A deferred appendix will not be used.
CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and D.C. Circuit Rule 26.1,
NextWave Personal Communications Inc. ("NPCI") and NextWave Power Partners Inc. ("NPPI")
submit the following corporate disclosure statement:
NPCI and NPPI were created to own and operate certain FCC licenses to provide personal
communication services to the public. NPCI is a wholly owned subsidiary of NextWave Telecom Inc.
NPPI is a wholly owned subsidiary of NextWave Partners, Inc., which is a wholly-owned subsidiary
of NextWave Telecom Inc. None of these entities is a publicly traded company.
JURISDICTION
The FCC decision purporting to cancel NextWave’s PCS licenses was issued on January 12, 2000.
NextWave’s timely petition for reconsideration was denied in an order released on September 6, 2000.
On September 15, 2000, NextWave filed a petition for review (No. 00-1402) and a notice of appeal
(No. 00-1403) of those decisions. Jurisdiction is proper pursuant to 47 U.S.C. §§ 402(a) and 402(b),
and 28 U.S.C. §§ 2342 and 2344. Because the judicial review provisions in §§ 402(a) and 402(b) are
"mutually exclusive," Freeman Eng’g Assocs., Inc. v. FCC, 103 F.3d 169, 177 (D.C. Cir. 1997),
NextWave respectfully requests that this Court dismiss the filing that relies on the incorrect
jurisdictional provision. See Tribune Co. v. FCC, 133 F.3d 61, 66 n.4 (D.C. Cir. 1998).
STATEMENT OF ISSUES
(1) Whether the FCC’s decision to retroactively cancel NextWave’s licenses for failure to make timely
interest payments while in Chapter 11, and to deny NextWave any opportunity to cure, violates the
Bankruptcy Code.
(2) Whether the FCC’s retroactive cancellation of NextWave’s licenses, which the bankruptcy court
found "conflicted with countless written and oral utterances and acts of the FCC throughout the past
year," violates the fair notice requirement established by due process and fundamental principles of
administrative law.
(3) Whether the FCC’s retroactive cancellation of NextWave’s licenses is otherwise arbitrary and
capricious and contrary to law.
STATUTES AND REGULATIONS
The text of relevant statutes and regulations are set forth in the Addendum to this Brief.
STATEMENT OF THE CASE
At issue here is the lawfulness of one of the largest forfeitures, and potentially one of the largest
monetary penalties, ever imposed by the federal government. In the action under review, the FCC
retroactively canceled licenses worth $5 billion that authorized NextWave to use the electromagnetic
spectrum to provide personal communications services ("PCS"). The Commission purported to do so
because NextWave did not make interest payments to the Commission for the licenses in 1998, even
though NextWave was then under the protection of Chapter 11 of the Bankruptcy Code (which
suspends such payment obligations). Although the Commission now claims the licenses canceled in
October 1998 as a result of nonpayment, the Commission first made that claim on January 12, 2000 –
more than a year later, and just nine days before the bankruptcy court’s scheduled confirmation of a
plan of reorganization that would have made the Commission whole, and would have allowed
NextWave to emerge as a healthy competitor. As will be shown, the cancellation of NextWave’s
licenses violates unambiguous Bankruptcy Code provisions forbidding government entities from
revoking a Chapter 11 debtor’s license in these circumstances, and guaranteeing the debtor’s right to
cure any default notwithstanding any nonbankruptcy law. 11 U.S.C. §§ 525, 1123, 362.
But that is only part of the story. The FCC’s purported cancellation also violates bedrock requirements
of fair notice and square dealing. See Trinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618 (D.C. Cir.
2000). From the moment NextWave filed for Chapter 11 protection in June 1998, the Commission
made clear in word and deed that it believed NextWave’s licenses had not canceled, and could not
cancel automatically, merely because NextWave deferred an interest payment while reorganizing. In its
very first submission to the bankruptcy court, the Commission acknowledged that the Bankruptcy
Code suspended certain regulatory conditions and assured NextWave that it would "enjoy bankruptcy
protection from collection of . . . license payments pending reorganization of its business affairs."
Thereafter, in repeated statements to the bankruptcy court and in repeated actions in that court and
elsewhere, the Commission consistently reaffirmed that NextWave could defer interest payments while
reorganizing. Those assurances were entirely consistent with the Bankruptcy Code, which both forbade
the FCC from canceling NextWave’s licenses, 11 U.S.C. §§ 525, 1123, 362, and forbade NextWave
from making interest payments to the FCC prior to reorganizing, id. § 549. Nothing in the Bankruptcy
Code, the Communications Act, or the Commission’s regulations gave the slightest hint that the normal
protections of bankruptcy would not apply to NextWave in these circumstances.
In light of the FCC’s conduct, and the dictates of the Bankruptcy Code, NextWave could not have
known with "ascertainable certainty" in October 1998 that the Commission would subsequently reverse
itself and decide that deferring interest payments would trigger cancellation notwithstanding the
bankruptcy laws. See Trinity Broadcasting, 211 F.3d at 632. Thus, on January 12, 2000, due process
and the APA precluded the Commission from retroactively interpreting and applying its regulations to
require cancellation, thereby inflicting grievous harms that NextWave could have avoided had it been
given fair notice. What is worse, by waiting more than a year after the purported default to act, and
peremptorily denying NextWave any opportunity to cure the default, the Commission has punished
NextWave for relying the bankruptcy court’s enforcement of Code provisions that barred cancellation
of the licenses.
As a result of this denial of due process, NextWave has been forced to the brink of liquidation, its
creditors, investors and lenders stand to lose over $700 million (which they would have received under
the plan of reorganization), and the Commission could keep as a penalty a deposit of $504 million
NextWave made when it first received the licenses. The FCC’s conduct thus went far beyond
arbitrariness – it was a confiscatory ambush.
STATEMENT OF FACTS
A.The Spectrum Auctions.
In 1993, Congress authorized competitive bidding to auction "blocks" of the electromagnetic spectrum
used for PCS. 47 U.S.C. § 309(j). Section 309(j) of the Communications Act required the FCC to
design any such auction to "ensure that small businesses, rural telephone companies, and businesses
owned by members of minority groups and women are given the opportunity to participate in the
provision of spectrum-based services." 47 U.S.C. § 309(j)(4)(D). Implementing that directive, the FCC
reserved the C and F Blocks of PCS spectrum for small businesses, entrepreneurs, and other
"designated entities." Order ¶ 2 (JA4-5).
The Commission chose to establish an installment payment plan for successful bidders in the C and F
Block auctions. See 47 C.F.R. § 1.2110(f) (1998). Winning C Block bidders were required to pay five
percent of the bid within five days of the close of the auction, an additional five percent at the time of
the license grant, and the remainder in installments over a ten-year term, with no principal due for the
first six years. See Order ¶ 2 n.4 (JA4-5). In effect, the Commission loaned licensees ninety percent of
their bid obligations at an appropriate rate of interest, with licensees signing promissory notes
obligating them to make installment payments at fixed intervals. Nothing in the Communications Act
required the FCC to adopt such a plan, and nothing in the Act or the Commission’s regulations
suggested that the installment plan was exempt from the normal operation of the Bankruptcy Code.
B. NextWave’s Initial Efforts.
NextWave was formed in 1995 by a group of experienced telecommunications executives, including
the former President of the wireless business at QUALCOMM, Inc., to participate as a designated entity
in the auctions and implement an innovative business plan as a nationwide "carrier’s carrier,"
providing wireless services and airtime on a wholesale basis. Cassou Decl. ¶ 4 (JA1183). At C Block
auctions in May and July 1996, NextWave was the high bidder for 63 licenses costing $4.74 billion in
total – amounts consistent with spectrum values implied by contemporaneous valuations of
comparable publicly traded wireless companies such as Omnipoint Corporation. (JA1184). NextWave
timely made its $474 million down payment on the C Block licenses. The FCC, however, did not issue
the licenses until March 1997. NextWave then executed promissory notes for the balance. Following
the procedures of a normal creditor, the Commission insisted on security agreements with NextWave,
took a lien on the licenses, and filed statements under the Uniform Commercial Code to perfect its
claims – procedures designed to protect the Commission’s interests in the event of a bankruptcy.
NextWave moved quickly to implement its business plan and raised more than $600 million to finance
down payments and initial buildout. (JA1184). By early 1997, NextWave had hired over 600 employees
and contractors, and had opened 22 offices across the country. (JA1184-85). NextWave also secured
more than $2 billion in financing commitments from major vendors such as Lucent, Hughes, and
Nortel, for deployment of network equipment. (JA1185). Within months, NextWave had ninety
percent of the microwave links needed to launch service, and had acquired seven switch sites,
designed more than 1300 cell sites, signed more than 300 site leases, and negotiated an additional 900
leases. (JA1185). NextWave expected to begin commercial service in four markets (including
Washington, D.C.) by late 1997, and it had completed network engineering designs for 22 of its major
markets, including New York, Los Angeles, Chicago, and Boston. (JA1185). NextWave had airtime
purchase commitments from companies such as MCI to purchase in excess of 35 billion minutes of
use. (JA1185).
Unfortunately, market conditions deteriorated during 1997, at the very time NextWave was attempting
to launch service. Prior to the grant of NextWave’s licenses, from August 1996 through January 1997,
the FCC held auctions for nearly 1500 additional licenses in the D, E, and F Blocks. This flood of
licenses prematurely released into the market dramatically depressed spectrum value; bids averaged
less than 25 percent of the high C Block bids. C Block companies such as NextWave went from the
darlings of Wall Street to the brink of insolvency, and could not secure needed financing. By October
1997, two major licensees – Pocket Communications, Inc. ("Pocket") and General Wireless, Inc.
("GWI") – declared bankruptcy.
In response to these market changes, the Commission in March 1997 temporarily suspended the
payment obligations of C Block licensees. In October 1997 and March 1998, the Commission issued
orders offering limited restructuring options to licensees. It set June 8, 1998 as the date to elect one of
the restructuring options, and July 31, 1998 as the date interest payments would resume (to be
followed by an automatic 90-day grace period). See Order ¶ 4 (JA5-6); U.S. Airwaves, Inc. v. FCC,
No. 98-1266, __ F.3d __, 2000 WL 1694418 (D.C. Cir. 2000). As then-Chairman Hundt observed in
dissent, however, the Commission failed to "adopt a comprehensive plan for addressing the financial
situation of the C block," resulting in "a substantial risk of bankruptcies that Congress and any
commercially reasonable enterprise would have us eliminate."
Unlike other major C Block bidders, NextWave did not seek bankruptcy protection in 1997. Between
November 1997 and June 1998, NextWave’s officers and shareholders lent the company millions of
dollars while it continued the build-out of its network at a reduced level and sought permanent
financing that would enable it to meet its FCC obligations. (JA1187). NextWave also retained
Prudential Securities to seek financing to take advantage of the restructuring options. (JA1186).
NextWave’s efforts were thwarted, however, by developments in the bankruptcy courts, which made
potential investors unwilling to fund NextWave’s licenses at their full bid price. In March 1998, the
FCC announced a proposed deal in the Pocket bankruptcy which reduced by 40 percent the purchase
price of Pocket’s licenses. See Jeff Bounds, Out of Pocket: Creditors Plan New Wireless Firm, Dallas
Bus. J., Apr. 10, 1998. In April 1998, a bankruptcy court (acting under 11 U.S.C. §§ 544, 548) reduced
GWI’s obligations to the FCC by 80 percent to equal the value of the licenses on the date of grant. See
United States v. GWI PCS 1, Inc., 245 B.R. 59, 61 (N.D. Tex. 1999), aff’d, 230 F.3d 788 (5th Cir.
2000).
Despite its efforts to remain solvent, NextWave was forced to curtail its operations, laying off more
than 500 employees and contractors. By this time, NextWave owed (in addition to its FCC obligations)
more than $400 million to creditors, and faced attachment proceedings and other litigation across the
country. (JA1187). To preserve assets for the benefit of creditors, and to sustain the company as an
ongoing venture, NextWave’s Board of Directors decided unanimously to have NextWave file for
bankruptcy protection on June 8, 1998.
C. Bankruptcy Proceedings.
Upon filing, NextWave was subject to the jurisdiction of the bankruptcy court and was required as a
debtor-in-possession to abide by the Bankruptcy Code, including Code provisions that prohibit
payment to any creditors, including the FCC, absent a plan of reorganization.
Initial Avoidance Proceedings. Relying on the GWI precedent, and seeking to ensure that no creditor’s
claim exceeded fair value, NextWave challenged the FCC’s claim of $4.3 billion for the C Block
licenses. Specifically, NextWave initiated an avoidance proceeding under § 544 of the Code seeking to
adjust the FCC’s claim to reflect the value of the licenses on the date NextWave received them. See In
re NextWave Personal Communications Inc., 244 B.R. 253, 258 (Bankr. S.D.N.Y. 2000). The FCC
contended that it was owed the entire $4.7 billion auction obligation and that the bankruptcy court
lacked jurisdiction to alter that obligation. This issue remained pending in the bankruptcy court until
April 1999.
The Status of NextWave’s Payment Obligations During the Proceedings. Between NextWave’s initial
filing in June 1998 and the eventual resolution of the avoidance issue, the Commission vigorously
disputed the bankruptcy court’s power to reduce NextWave’s ultimate financial obligation for the
licenses. But it did so only on the ground that reducing the full payment obligation would interfere
with the Commission’s decision to allocate licenses to those willing to pay the most for them. Before
January 12, 2000, the Commission never disputed the power of the bankruptcy court to suspend
NextWave’s financial obligations, including its obligations under the FCC installment payment plan, to
give it the breathing space needed to reorganize and cure its defaults. In other words, the Commission
contested NextWave’s avoidance claim because it maintained that NextWave must pay its full bid price
for the licenses after it emerged from Chapter 11, but never indicated that NextWave would lose its
licenses if it availed itself of the temporary protections Chapter 11 provides and deferred interest
payments while it reorganized.
To the contrary, the Commission made clear its view that the Bankruptcy Code tolled the obligation to
make timely payments. The Commission’s first submission to the bankruptcy court expressly
acknowledged that the Bankruptcy Code deferred regulatory deadlines imposed by FCC regulations.
Citing 11 U.S.C. § 108(b)(2), the Commission noted that NextWave’s Chapter 11 filing "automatically
postpon[ed] . . . for an additional sixty days" NextWave’s obligation under otherwise applicable FCC
regulations to decide by June 8, 1998, whether to avail itself of the options in the Restructuring
Orders. That same filing, while challenging the bankruptcy court’s jurisdiction to adjudicate the
avoidance complaint, unambiguously confirmed that the Bankruptcy Code’s automatic stay provision
(11 U.S.C. § 362) was in effect and barred cancellation of NextWave’s licenses while NextWave
reorganized. The Commission stated that the automatic stay
would give NextWave "bankruptcy protection from collection of C block license payments
pending reorganization of its business affairs," id. at 18 n.5 (JA747), and that
"enforcement of a final regulatory order against a bankrupt is subject to the automatic stay,
and the bankrupt retains its right to challenge any such order in the appropriate forum," id.
(emphasis added).
These acknowledgements came as no surprise because the Bankruptcy Code generally forbids a debtor
from making payments on pre-petition debt until there is a plan of reorganization in place, and the
Code’s automatic stay provision generally prevents even government creditors from enforcing
payment obligations or seizing assets of the estate.
The Commission’s representations were entirely consistent with its actions elsewhere. In the Pocket
bankruptcy case, for example, the FCC acknowledged the applicability of the automatic stay and
bargained with the debtors, creditors, and the lender to the debtor-in-possession ("DIP") for a
provision removing it under certain conditions to allow cancellation of the licenses. Additionally, the
Commission consistently treated C Block licensees in Chapter 11 differently from C Block licensees
who were not. The latter received notices in the summer of 1998 establishing new payment schedules
after the moratorium on installment payments had been lifted, and received reminders in July and
October 1998 specifying their payment amounts. Licensees in bankruptcy (including NextWave)
received no such notices at any time. See Gutierrez Decl. ¶¶ 5-6 (JA925). Had NextWave received such
notices, it could have sought additional financing and taken other steps to meet the payment
obligations.
Perhaps most importantly, the Commission took no action to cancel NextWave’s licenses when
NextWave did not make its first interest payment by October 1998. The Commission did not then
argue that the deferred payment constituted a default requiring cancellation of the licenses, nor did it
move the bankruptcy court to lift the automatic stay to permit cancellation when payment was deferred
pending reorganization. Had the Commission believed the licenses canceled automatically in October
1998, as it now contends, there would have been no reason to wait fifteen months to seek cancellation
– particularly given the Commission’s stated desire to put the spectrum into use expeditiously. Indeed,
in November 1998, after the purported cancellation date, the Commission unambiguously reaffirmed
that the licenses had not canceled, stating that
although "[t]he regulations provide that upon failure to make the payments the license is
automatically canceled[,] . . . [t]hat hasn’t [happened] in this case due to the automatic
stay." Transcript of Nov. 12, 1998 Hearing, at 30 (Bankr. S.D.N.Y. Nov. 12, 1998) (emphasis
added) (JA644), and that
"[d]uring the pending of the bankruptcy, the Bankruptcy Court and the automatic stay would
hold the creditors at bay, including the Federal Communications Commission, while the
debtor pursues its judicial remedies before the D.C. Circuit." Transcript of Nov. 9, 1998
Hearing, at 5 (Bankr. S.D.N.Y. Nov. 9, 1998) (JA696).
The Bankruptcy Court’s Avoidance Decision and the Commission’s Response. In April 1999, after a
lengthy trial, the bankruptcy court held that it had jurisdiction to consider NextWave’s avoidance
claim, and reduced NextWave’s financial obligation to the FCC pursuant to § 544 of the Code. 244
B.R. at 259-60. Only after this ruling did the Commission first seek leave to cancel the licenses by
filing a motion to lift the automatic stay "so that the regulations’ automatic cancellation provisions may
take effect." Memorandum of Law in Support of the FCC’s Motion to Lift Automatic Stay, at 1-2 (May
28, 1999) (emphasis added) (JA552-53). By asking that the automatic stay be lifted to permit
cancellation, the Commission made clear that the stay had previously been in place and had barred
cancellation of NextWave’s licenses.
Moreover, the Commission sought to lift the stay solely because NextWave would be permitted to keep
the licenses without paying the full price after it emerged from bankruptcy – not because NextWave
had missed any interest payments while still in bankruptcy. As the Commission stated, "n light of the
Court’s recent avoidance ruling in NextWave Personal Communications, Inc. v. FCC, Adv. Pro. No.
98-5178A (Bankr. S.D.N.Y.), NextWave will not pay the amount of its winning bids for the Licenses."
Id. at 1-2 (emphasis added) (JA552-53). The motion never suggested that the licenses had canceled
already for failure to make interest payments by October 1998, or even that any interest payments were
due in October 1998.
Critically, despite the fact that the October 1998 payment date applied equally to NextWave’s C and F
Block licenses, and despite the fact that NextWave made no payments on the F Block licenses while in
bankruptcy, the FCC never sought to lift the automatic stay to allow for cancellation of the F Block
licenses. The May 1999 motion applied only to the C Block licenses, which were the subject of the
bankruptcy court’s avoidance ruling. NextWave’s payment obligations for the F Block licenses were
not at issue; the bankruptcy court’s avoidance ruling did not reduce their price, and thus the FCC did
not seek to lift the stay for those licenses. Indeed, during oral argument on the FCC’s motion, the FCC
told the bankruptcy court that "[t]here is no trigger for the automatic cancellation . . . to date with
regard to [NextWave’s] the F-block licenses," and that NextWave "can comply with . . . payment
obligations" and keep its F Block licenses. Transcript of Proceedings, at 16-17 (Bankr. S.D.N.Y. May
26, 1999) (JA576-77). The January 12, 2000 Public Notice was the Commission’s first indication that
the F Block licenses had canceled or that installment payments were past due.
This pattern continued even after the avoidance proceeding concluded. On August 10, 1999 – almost a
year after the date on which the FCC now claims the licenses canceled – the FCC |
