Lobbying Continues On Fate Of NextWave
Wireless Licenses
By MARK WIGFIELD
WASHINGTON -- A lobbying battle continues in Congress over the fate
of valuable wireless telephone licenses that are tied up in bankruptcy court.
In testimony before a Senate Appropriations subcommittee Tuesday,
Federal Communications Commission Chairman William Kennard asked
the panel to approve language that would clarify his agency's power in
bankruptcy court to reclaim and re-auction licenses of bankrupt
companies.
At the same time, lobbyists for a bankrupt wireless firm, NextWave
Telecom Inc. (X.NWV), are seeking language in a bankruptcy law
overhaul bill that would essentially treat the FCC like any other creditor. In
NextWave's bankruptcy, the court reduced the company's debt to the
FCC from $4.7 billion to about $1 billion.
At stake is the nearly nationwide network of 63 wireless licenses held by
NextWave, licenses that could be worth up to $10 billion, according to
some estimates cited by the FCC. Also at stake is the integrity of the
government's license auctioning system - and the billions of dollars netted
from it.
Players include the high-profile lobbying firm of Haley Barbour, former
chairman of the Republican National Committee. The firm is lobbying on
behalf of NextWave investor Bay Harbour Management, a New York
investment firm.
Other investors listed by NextWave include Qualcomm Inc. (QCOM),
Sony Corp.'s (SNE) Sony Electronics, Lucent Technologies Inc. (LU),
and others.
Parties interested in seeing the license restored to the FCC for re-auction
include SBC Communications Inc. (SBC), Nextel Communications Inc.
(NXTL) and the Cellular Telecommunications Industry Association.
NextWave has been involved in a legal wrangle with the FCC ever since it
was high bidder for the licenses in 1996. Unable to pay the $4.7 billion it
bid, the company filed for bankruptcy in 1998.
The court revalued the licenses at about $1 billion, and sparked a debate
over how much power the FCC should have in bankruptcy court. The
FCC says its duty to manage public spectrum gives it the right to reclaim its
licenses tied up in bankruptcy; NextWave says the agency has no more
power than any other creditor.
Telecommunications analyst Paul Glenchur says the continued lobbying on
the issue isn't surprising, given ambiguities in the law.
"The whole legal foundation for the re-auction of licenses is in major legal
question," Glenchur says. "The law is not clear."
Currently, both sides are waiting for a key decision from New York's
Second District Court of Appeals in the NextWave case. After a string of
losses in the New York bankruptcy court and U.S. District Court, the
Appeals Court in February allowed the FCC to prepare for auctions this
summer pending its decision on broader legal questions, where it seems to
be favoring the FCC.
Meanwhile, it isn't clear what will happen on Capitol Hill.
The FCC's bankruptcy provisions were narrowly defeated on a budget bill
last year. That casts doubt on prospects for this year, an election year.
And NextWave backers will have to convince House and Senate
conferees that adding the controversial FCC language to bankruptcy
reform legislation now in its final stages won't sink the entire bill.
-Mark Wigfield, Dow Jones Newswires; 202-828-3397;
mark.wigfield@dowjones.com |
