Powell: ‘Biggest’ Problem Is Spectrum Management
FCC Chairman Michael K. Powell has set an ambitious agenda for the
Commission in 2002. In his first interview of the new year, Chairman Powell
sat down with TRW Jan. 3 and discussed his views on a variety of issues,
including spectrum policy.
He suggested that pressures from new technologies and ever-increasing
demand for spectrum ensure that current spectrum-management schemes can’t
last another decade. He also addressed the next steps in the long-running fight
over NextWave Telecom, Inc.’s “C” and “F” block PCS (personal
communications service) licenses. An edited transcript of the conversation
follows.
(snip)
TRW: What do you see as the next step in the fight over spectrum held by
NextWave?
Powell: As we sit here today, I think it’s very, very cloudy. I understand all the
reasons [the settlement agreement] didn’t get through Congress. But I continue to
stand very firmly believing there’s a very powerful and persuasive story why that was
a way to wrap up a pretty big mess once and for all.
I’m not one that was particularly thrilled that [NextWave was] going to get money
either, but I couldn’t let that blind me to the bigger public interest of getting the
spectrum into the market, something we just talked about, and getting the
government its money.
I’ll tell you the first place we go from here, as far as the FCC is concerned. Congress
may come back and want to take it up—I don’t know if the companies would be
willing to do that or not—but the FCC is going to have to go back to being a litigator
principally.
We have a case in the Supreme Court, and there are reply briefs due this month.
Time doesn’t stand still. I still believe settlement was and is, though a messy course,
the best one for everybody involved. But it’s not the only one, and we’ll go back to
muddling through what we were muddling through before, which is [that] the licenses
are encumbered.
They’re ensnared in a bankruptcy proceeding. There’s an appellate case in the
Supreme Court. There’s a pending case in the [U.S. Court of Appeals for the] 10th
Circuit. If we stay on the litigation course, we’ll probably still be here three years or
four years. . . .
I’ll tell you right now, even if we win in the Supreme Court, we’re talking about three
or four years from now [before it’s resolved]. Even if you win, you’re going to get a
remand in the [U.S. Court of Appeals for the] D.C. Circuit, because the D.C. Circuit
had about 10 issues and only ruled on one because it was conclusive. So the
[Supreme Court is] going to say, “You’re wrong about that, but now go look at the
other issues.”
The reauction winners, who paid a whole lot of money at auction, have huge
opportunity costs. They cannot and will not sit around forever hoping to pay a . . .
bill for spectrum that they can’t use. . . .
I don’t know that most of them, as an honest business decision, can sit idly by for
years, particularly when the spectrum value fluctuates. . . . Ultimately, if this
[settlement] falls apart and they get out, well, at least [they’ll have escaped] from a
pretty huge expense. And what’s going to happen? The spectrum is public property.
It will get auctioned again some day, and they’ll be back.
But back to your question, my best judgment is there will be some exploration
among the companies, probably without our significant involvement, about whether
they want to or can possibly stay the course for some period longer in hopes of
seeing whether Congress returns and takes the matter up. As far as the FCC is
concerned, Congress, within its rights, didn’t endorse it in that time frame. We
principally now have to look to what our litigation options are.
The other thing that people forget is that there’s a bankruptcy proceeding going on.
The judge has kept things at bay waiting to see whether this got resolved. If it
doesn’t, he’s going to back settling the estate.
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