FCC Seeks Court Review of NextWave Case
dailynews.yahoo.com
Friday October 19 6:52 PM ET
By Peter Kaplan
WASHINGTON (Reuters) - The Federal Communications Commission (news - web sites) asked the U.S. Supreme Court (news - web sites) on Friday to overturn an appeals court decision barring the agency from repossessing a valuable slice of the airwaves from NextWave Telecom Inc. (NXLC.PK).
The agency filed a last-minute petition asking the high court to review the case, even while trying to negotiate a settlement with NextWave that would transfer the licenses to established wireless telecommunications companies.
The FCC (news - web sites)'s appeal seeks to overturn a June ruling by the U.S. Court of Appeals that concluded that the agency violated bankruptcy laws when it repossessed the licenses NextWave had won in a 1996 auction but failed to pay for.
In its petition, the FCC argues that bankruptcy law should not supersede statutes designed to allocate the airwaves ''effectively and efficiently in the public interest.''
``A more destructive threat to the commission's auction process--or any other market-based license allocation regime--is difficult to imagine,'' the petition said.
NextWave bid $4.7 billion for the wireless licenses in a 1996 auction but was unable to complete payment and later entered into bankruptcy proceedings. The licenses cover lucrative markets like Los Angeles, New York, Boston and Seattle.
The FCC earlier this year held a new auction for the airwaves that raised $15.8 billion, but the appeals court ruled that their resale was a violation of bankruptcy law.
The ruling ``transfers the licenses to entities that value the spectrum less highly and that, under the FCC rules established at Congress's direction, have forfeited any entitlement to the spectrum,'' the FCC said in its petition.
In recent weeks FCC officials have been locked in intense settlement discussions with NextWave and a group of wireless carriers.
FCC chairman Michael Powell said on Friday that negotiations to settle the matter out-of-court ``are still underway at the moment.''
A group of wireless carriers, including Verizon Wireless (NYSE:VZ - news)(VOD.L), AT&T Wireless Services Inc. (NYSE:AWE - news) and Deutsche Telekom AG (DTEGn.DE) unit VoiceStream Wireless Corp., that won at the second auction, have proposed an agreement that would require them to pay almost $16 billion.
Under the plan, investors in bankrupt NextWave would end up with $5 billion after paying off debts and taxes, and the federal government would be paid $11 billion, sources familiar with the talks have said.
All sides seemed to have an incentive to settle the dispute this week, but sources said on Wednesday that government officials raised objections over the timing of payments by one of the established carriers.
The wireless companies are keen to gain the spectrum to fill holes in their existing networks while the FCC has until the end of Friday to ask for a Supreme Court review of the appeals court decision.
A speedy conclusion to months of talks on a deal would also allow NextWave to present the settlement to a bankruptcy court hearing scheduled for Monday. |
