November 24, 1999
Dow Jones Newswires
Appeals Court Reverses Decision That
Favored NextWave
By Mark Wigfield
WASHINGTON -- In a two-sentence order, a New York Appeals Court
has reversed a bankruptcy court decision that would have drastically reduced
the price that NextWave Telecom Inc. (X.NWV) would pay for wireless
telecommunications licenses.
The three-judge panel of the Second Circuit Court of Appeals remanded the
decision to the U.S. Bankruptcy Court for the Southern District of New
York. NextWave is based in Hawthorne, New York.
An appeals court clerk said the court hasn't yet published its opinion. No date
has been set for release of the opinion.
NextWave filed for protection from creditors under U.S. bankruptcy law in
June of 1998. The company had been unable to pay the $4.7 billion it bid for
wireless spectrum in a 1996 auction held by the Federal Communications
Commission.
NextWave successfully argued that the value of the spectrum should be
reduced to only $1.02 billion because of FCC delays. The FCC appealed the
ruling, but it was upheld by a U.S. District Court, which the FCC also
appealed.
An FCC spokesman said the order "is a very encouraging development."
FCC Chairman William Kennard "looks forward to receiving the opinion."
In a brief statement, NextWave said the Second Circuit Court of Appeals
"did not explain the basis for its action, but said it would release an opinion
next week.
"Nextwave will examine the court's opinion when it is available before
reviewing the company's options and deciding what next steps are
appropriate," the company said.
The case has been a source of outrage and frustration for FCC officials, who
believe the bankruptcy court decision undermines the agency's auction
process and is unfair to other bidders.
The FCC has also complained that the NextWave bankruptcy and other
cases around the country resulting from the 1996 auction has delayed public
use of the spectrum. The agency has sought passage of legislation that would
give it the right to return spectrum involved in bankruptcy proceeds to auction.
Congress so far has rejected the idea.
Nextel Communications Inc. (NXTL) has proposed a bankruptcy
reorganization plan in which it would buy the NextWave licenses.
-By Mark Wigfield, Dow Jones Newswires; 202-828-3397;
mark.wigfield@dowjones.com |
