WSJ article -- NextWave Asks FCC to Delay Transferring Spectrum Licenses
March 13, 2001
Tech Center
NextWave Asks FCC to Delay
Transferring Spectrum Licenses
By YOCHI J. DREAZEN
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- Wireless-services provider NextWave Personal Communications
Inc. asked the Federal Communications Commission to delay transferring its
reclaimed spectrum licenses to new buyers to give a federal court time to rule on
the matter.
In a letter Friday, NextWave said the FCC shouldn't transfer the licenses until the
U.S. Court of Appeals for the District of Columbia Circuit decides whether a
January spectrum auction was legal. Bidders paid more than $17 billion for the
licenses, most of them reclaimed from NextWave for nonpayment. The company
has asked the court to cancel the auction and force the FCC to return the licenses.
Oral arguments are set to begin Thursday.
"The FCC already told the court that NextWave will
get the licenses back if we win the appeal, so
awarding the licenses before the case is decided
could mean lots of unnecessary expenditures of time
and money for us, the FCC and the companies themselves," said Michael Wack,
NextWave's deputy general counsel. "Why not avoid all of that damage by waiting
until the court rules?"
An FCC spokeswoman declined to comment, noting that companies have another
two weeks to file petitions about the auction. The FCC is unlikely to formally
respond to NextWave's petition until the comment period ends later this month. FCC
officials said the agency would begin awarding the licenses soon after.
The maneuvering represents the latest escalation in
the long-running legal fight between NextWave,
Hawthorne, N.Y., and the FCC. As demonstrated by
the auction bidding, the licenses are enormously
valuable to wireless companies hoping to fill gaps in
their coverage areas or to roll out advanced
telecommunications services.
The company has also mounted a sophisticated
lobbying campaign -- despite its financial woes -- to
regain the licenses. NextWave and its creditors have
hired political heavyweights such as former
Republican National Chairman Haley Barbour and
former House Appropriations Committee Chairman
Bob Livingston (R., La.) to press its case. In court,
the company will be represented by another big gun:
Solicitor General-designate Theodore Olson, who
won the Supreme Court appeal that sealed the 2000
election for President George Bush.
In 1996, NextWave submitted a total of $4.7 billion in winning bids for 63 wireless
licenses, but the company soon ran into financial troubles and in 1998 filed for
protection under Chapter 11 of the Bankruptcy Code. In total, it only paid the FCC
$500 million for the licenses, which the agency reclaimed and began reauctioning
last year.
NextWave has spent years battling the agency in bankruptcy and federal court,
arguing that the FCC didn't have the statutory authority to reclaim the licenses.
A bankruptcy court in New York ruled in the company's favor in 1999, but a federal
appeals court there overturned the decision later that year. The company then sued
the FCC in federal court here, setting the stage for this week's oral arguments.
Write to Yochi J. Dreazen at yochi.dreazen@wsj.com
***************************************************************
NextWave's Battle Continues
1996: NextWave bids $4.7 billion for 63 Federal Communications
Commission wireless spectrum licenses, winning the auction.
June 1998: NextWave files for Chapter 11 bankruptcy protection after only
paying the FCC $500 million.
December 1999: NextWave offers to pay the remaining $4.2 billion as part
of a broad reorganization of the company.
January 2000: NextWave offers to pay the remaining amount in cash, with
interest. The next day, the FCC formally cancels the company's licenses and
makes plans to resell them.
November 2000: Supreme Court refuses to hear a NextWave case that
would have helped the company reclaim the licenses.
December 2000: The FCC begins taking bids for the reclaimed licenses.
January 2001: The auction ends, having raised more than $17 billion for the
government.
March 15, 2001: The U.S. Court of Appeals for the District of Columbia
begins hearing oral arguments on NextWave's petition to cancel the spectrum
auction and force the FCC to return the licenses.
Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. |
