NextWave:
The Bankruptcy judge is still trying to keep the FCC from continuing to throw roadblocks in the way of NextWave. Is there anyone here who can explain how keeping NextWave from a successful launch of its service is in any way whatsoever "in the public interest'?
Remember this is tied in directly with the CDMA and the Q's nationwide all data wholesale service:
Caxton, you follow this as closely as anyone. Any comment on this specific action or the general situation re NextWave currently?
Chaz
Full story follows:
September 17, 1999 | NextWave Telecom Inc.
Hawthorne, N.Y. - September 17, 1999 - In a hearing Wednesday in federal bankruptcy court in White Plains, N.Y., the Honorable Adlai S. Hardin Jr. granted a request by NextWave Telecom Inc. ("NextWave" or the "Company") to extend the "exclusivity period" in the Company's bankruptcy proceeding until a hearing on confirmation of NextWave's plan of reorganization can be held. On August 31, 1999, at the request of the Federal Communications Commission ("FCC"), the Second Circuit U.S. Court of Appeals stayed a previously scheduled September 8, 1999, hearing on that plan, pending disposition of the agency's appeal of rulings by Judge Hardin, subsequently upheld on appeal by Federal District Court Judge Charles Brieant, that a constructive fraudulent transaction occurred in connection with the 1997 grant to NextWave of PCS spectrum licenses.
Wednesday's ruling by Judge Hardin maintains the status quo in the bankruptcy proceeding until such time after the Second Circuit rules on the FCC's appeal as a hearing can be held on NextWave's plan, or the parties settle. "At the hearing, the Bankruptcy Court rejected the idea of terminating exclusivity automatically, even if an agreement is reached between the Official Committee of Unsecured Creditors and the FCC or any other third party," said NextWave's spokesperson. "Judge Hardin emphasized that if there is going to be any new plan of reorganization brought before the court, the parties involved in developing such a plan should most seriously consider a fully consensual plan," continued the spokesperson.
"Judge Hardin's ruling preserves NextWave's right to confirm its consensual plan of reorganization, which is the principal means of accomplishing the Bankruptcy Code's primary goal of successful reorganization," said a NextWave spokesperson. Voting on that plan concluded on August 27, 1999, with all impaired classes and over 99 percent of creditors and equity holders returning ballots voting in favor. Not one objection to confirmation of the plan was received. Section 1121 of the Bankruptcy Code provides a debtor with the exclusive right to propose a plan of reorganization following the filing of a Chapter 11 petition, and then to solicit affirmative votes on that plan. The congressionally-determined purpose of Section 1121 is to ensure that a debtor has the initial and unfettered opportunity to negotiate a settlement of its debts and obligations, and to propose and garner support for a plan of reorganization implementing that settlement, without being subject to interference.
The Company's spokesperson noted that "NextWave was ready, willing, and able to commence an uncontested confirmation hearing on its consensual plan on September 8th, and, absent the FCC's appeal, the process of putting our licenses to productive use by rolling out a nationwide competitive wireless network would be well underway. Judge Hardin's ruling recognizes that it would be inequitable to allow one party's desire for continued litigation to allow exclusivity to expire on a technicality, particularly when a consensual plan already has been accepted overwhelmingly by essentially all voting creditors and equity interests, and an uncontested confirmation hearing was scheduled to commence before the exclusivity period expired." NextWave's spokesperson stated, "Even though all parties admit that no alternative plan of reorganization exists, the Court's order controls the reorganization process in a way that precludes anyone from generating a "chaos factor" by making unsubstantiated suggestions that a competing plan is waiting in the wings."
"NextWave is a fully qualified small business licensee with significant financing, coast-to-coast coverage, experienced management and investors, and advanced technology," the spokesperson continued. "The Company is fully capable of delivering affordable wireless local and long distance telephone service to Americans from coast to coast, with Internet access up to 20 times faster than typically available through the wireline networks today. Consumers will see deployment of this unique and innovative technology for a market trial within a few weeks after confirmation and consummation of NextWave's Plan of Reorganization; with the commercial introduction of service in a number of major markets scheduled for the early part of the year 2000 leading to a national roll-out of the service within 18 months."
"NextWave has raised over $1.4 billion of financing to date, and has paid the FCC over $505 million for spectrum licenses. By any fair measure, the Company has demonstrated that it is ready, and qualified, to build out a true competitive nationwide wireless network that not only significantly increases the level of competition in the marketplace, but also puts America at the forefront of introducing the first of the third-generation wireless communications networks with a wide range of highly advanced and innovative services," said NextWave's spokesperson. "Every day that the FCC delays NextWave through endless litigation is a day consumers and schools are subjected to more delay in enjoying the benefits of those services. It's ironic that a government agency directed by Congress to promote small business and consumer interests is preventing those interests from being served," continued the spokesperson.
NextWave's spokesperson stated, "For more than two years, the Company has constantly sought to negotiate a settlement with the FCC that would be allow the PCS spectrum licenses the agency granted to NextWave in 1997 to be put into productive use for the benefit of consumers and competition, but we have been rebuffed at every turn. We have made innumerable overtures to the FCC regarding settlement, and will continue to do so. Claims that NextWave is interested in 'rolling the dice' on litigation, or is taking a high-stakes gamble, are flat-out wrong, and always have been. The Company has always believed that settling with the FCC is the most responsible and fruitful path to follow. We have made every effort humanly possible to initiate a dialog with the FCC to resolve this litigation. We again reiterate that we are more than willing to meet with the FCC to try to find a reasonable solution," emphasized the spokesperson.
At Wednesday's hearing, a lawyer representing the FCC stated that the agency believes it is "premature" to discuss settlement with NextWave.
NextWave's spokesperson noted that the FCC misstated the factual record by claiming in a September 14, 1999, letter to Thomas E. Wheeler, the President of the Cellular Telecommunications Industry, that NextWave is in default on its financial obligations to the FCC. "Judge Hardin and Judge Brieant have stated unambiguously, for the record, that NextWave is not now and has never been in default on any financial obligation to the FCC," the spokesperson said. "The FCC itself has not taken the position before the Court that NextWave is in default and, to the contrary, has acknowledged the laws that specifically provide otherwise. NextWave has made every payment due to the government, totaling over $505 million to date, on time and without hesitation. It is regrettable and does not indicate a true desire to reach a consensual resolution when the FCC makes public statements about factual matters that it knows, or should know, are not true. NextWave's primary goal remains reorganization and immediate use of the licenses. We truly hope we can work together with the FCC, soon, to achieve that goal."
NextWave was organized in 1995 for the purpose of participating in FCC spectrum auctions. In 1997, after participating in several auctions of spectrum reserved by the FCC for award to non-traditional small businesses, the FCC granted the Company PCS licenses in over 90 markets across the United States. The Company's plan of reorganization provides for an infusion of over $700 million of new equity capital to fund the rollout of its nationwide competitive wireless network.
Media Contacts:
Michael Wack
Michael Regan
NextWave
Washington DC Office
202-347-2771 |
