Senators Eye C-Block Status
By Caron Carlson
WASHINGTON--Brace yourself for the latest twisting slope on the C-Block PCS license roller coaster.
Contrary to widely shared expectations, the White House last week did not use its executive budget proposal to push for a
speedy return of NextWave Personal Communications Inc.'s licenses to the FCC, but individuals in Congress and the courts
took steps that could achieve the same end.
Senate Budget Committee Chairman Pete Domenici, R-N.M., summed up the frenzy surrounding the C-Block debacle at the
Feb. 10 hearing on the matter: Of all the hearings he'd conducted during the previous three weeks, last week's regarding
NextWave's licenses "generated more calls, e-mails, faxes and visits by industry people than any to date."
The same day Domenici held his NextWave hearing, the U.S. Court of Appeals for the Second Circuit denied the company's
request for a rehearing of its Dec. 22 decision that overturned the bankruptcy court's devaluation of the licenses.
Simultaneously, the Second Circuit set up a fast track for the FCC to appeal the bankruptcy court's most recent order that the
commission acted unlawfully when it declared NextWave's licenses cancelled and available for re-auction. The Second Circuit
asked the parties to address whether the bankruptcy court's order is consistent with the circuit court's December decision, and
cleared the way for the FCC to continue planning the re-auction scheduled for July 26.
NextWave will continue following every available avenue to hold on to its licenses, but the majority of the industry is proceeding
as though the licenses will be up for grabs come July. Their major focus now is who will be eligible to bid for the C-Block
licenses, as determined by the "designated-entity" restriction for small businesses and the spectrum cap.
The issue divides the industry fairly neatly between big and small businesses. At the Senate Budget Committee hearing, a
representative from each camp pleaded its case. Dan Pegg, senior vice president of Public Affairs at Leap Wireless
International Inc., urged Congress not to allow a reversal of policy on the C-Block designated entity restriction, arguing that
small businesses like his serve modest-spending consumers who may not otherwise receive wireless service. Dennis Strigl,
president and CEO of Bell Atlantic Mobile, pressed Congress for a full repeal of the spectrum cap.
Sen. Frank Lautenberg, D-N.J., said the cap and the rules limiting the C-Block spectrum to small businesses need to be
examined. Sen. Judd Gregg, R-N.H., asked a series of questions attacking NextWave for its partial foreign ownership, for
moving its headquarters from San Francisco to New York and for filing bankruptcy. Gregg said he is very concerned about the
role of the bankruptcy court in the matterwhether it has functioned appropriately.
NextWave COO Raymond Dolan reiterated his offer made to the FCC to pay the entire $4.3 billion debt to the government in
one lump sum. "Our offer is sincere, and it is the right and fair result," Dolan said.
All the while echoing the mantra that revenue generation is not the primary goal of spectrum auctions, the senators, FCC
Chairman William Kennard and the other witnesses spent a fair portion of the hearing speculating on how much a re-auction of
NextWave's licenses might bring the U.S. Treasury.
While revenue predictions for past auctions typically have proven far wide of the mark, a C-Block re-auction could be first to
hit the target. Then again, the re-auction could be just another spin on the roller coaster. |
