Jim- Here's the letter:
September 20, 1999
The Honorable William E. Kennard
Chairman
Federal Communications Commission
445 12th Street, S.W.
Washington, D.C. 20554
Re: In re NextWave Personal Communications Inc., et al., Chapter 11 Case No. 98 B 21529 (Jointly Administered) (ASH)
Dear Chairman Kennard:
I am writing with respect to your recent letter to Thomas E. Wheeler, of the Cellular Telecommunications Industry Association, defending the activities of the FCC staff with regard to the PCS licenses that are the subject of the=20
above-referenced bankruptcy proceeding.
It is my understanding that Christopher J. Wright, FCC General Counsel,and Raymond Fisher, Associate Attorney General, sent a letter on August 10, 1999 to Counsel for Nextel Communications, Inc. In that letter, Mr. Wright expressly committed his support, as well as the support of "relevant" FCC staff, to Nextel's Term Sheet and Joint Plan of Reorganization concerning NextWave's PCS licenses. Specifically, the letter stated:
This letter confirms that the undersigned, Christopher J. Wright, General Counsel of the [FCC] . . . and the relevant staff of the FCC will recommend to the FCC that it accept and agree to support the resolution of the=20
NextWave Cases as proposed in the Term Sheet. . . . You and Nextel are authorized to disclose the existence and substance of this letter and the Term Sheet in connection with any efforts to raise necessary funding, to propose or implement a plan of reorganization consistent with that
described in the Term Sheet . . .
As you are aware, NextWave's plan of reorganization was filed on July 27,1999 and is currently under consideration by creditors and by the Bankruptcy Court for purposes of confirmation. Nextel is not a party in interest in the=20
bankruptcy proceeding and, therefore, has no standing to file a plan of reorganization.
Under the Communications Act of 1934, as amended, the Commission has several options at its disposal with respect to licensees. It can renew a license(with or without conditions); it can deny an application to renew; or it can
revoke a license. In each case, the Act imposes specific procedures on the FCC that are designed to protect the public at large, and the licensee in particular.
With respect to NextWave, the Commission has previously determined that the company is qualified to hold licenses, and on that basis issued NextWave 95 licenses.
The FCC's actions with respect to the Nextel/NextWave transaction represent a radical departure from Commission policy and precedent. This departure has
been made without the benefit of public participation or a public articulation of a change in policies. In Reuters Limited v. FCC, 781 F.2d 946 (1986), the Court warned that:
It is elementary that an agency must adhere to its own rules and regulations. Ad hoc departures from those rules, even to achieve
laudable aims, cannot be sanctioned, for therein lies the seeds of destruction of the orderliness and predictability which are the hallmarks of lawful administrative action.
The Court warned further that an agency is not permitted "to deviate from its rules in order to achieve what it deems to be justice in the individual case."
Even if it were appropriate for the Commission to act as a partisan, the manner in which it is conducting itself vis-a-vis Nextel's takeover bid for NextWave is inappropriate for several reasons. First, the Commission has not conducted
any proceeding that concludes that NextWave, the incumbent licensee, is unfit or unqualified to hold its licenses. As noted above, the Commission is bound by specific statutory requirements that must be met before it is permitted to revoke a license.
Second, the Commission is engaged in an effort to transfer licenses without having been presented with a written application, or having to provide an opportunity for public participation. Section 310(d) of the Act is clear:
No construction permit or station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner, voluntarily
or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application to the Commission and upon findings by the Commission that the public interest, convenience, and necessity will be served thereby (emphasis added)
The Commission is expressly prohibited from considering "whether the public interest, convenience, and necessity might be served by the transfer,assignment, or disposal of the . . . license to a person other than the
proposed transferee or assignee." Mr. Wright's actions appear to conflict with these statutory provisions.
I also must note that it would be inappropriate for the Commission to support a takeover bid of a C-Block licensee by a company that does not comply with the Commission's eligibility criteria for C-Block licensees. Section 24.709 of the Commission's rules contain the specific criteria for C-Block eligibility.
Nextel does not appear to qualify to hold C-block licenses as its assets and revenues exceed substantially the amounts that these eligibility criteria permit. Mr. Wright's letter appears to indicate his support for creating an exemption
for compliance with its eligibility criteria specifically for Nextel. Such an exemption is not available for other C-block licensees, despite the precarious financial condition of many of the remaining C-block licensees. To the
extent that the Commission determines, through a public proceeding, that an exemption should be created, such an exemption should be made available to all C-block
licensees, including NextWave.
Over the last twenty years, the Commission has scrupulously attempted to remain neutral in the face of takeover battles for its licensees. In so doing, the Commission has held that the procedures outlined in the Act should be
used neither as a sword nor as a shield. It is unprecedented, therefore, that the Commission would not only take sides in a hostile takeover effort, but act
as an organizer of such an effort, aiding and abetting one company in an effort to acquire another company.
For the above reasons, I am extremely troubled by Mr. Wright's conduct and I ask that you review this matter fully and provide me with your views.
Please instruct the Office of General Counsel to insert a copy of this letter, as may be appropriate under Commission rules, in the official record of any relevant proceeding.
Sincerely,
JOHN D. DINGELL
RANKING MEMBER
cc: The Honorable Adlai S. Hardin, Jr.
The Honorable Tom Bliley
The Honorable Henry J. Hyde
The Honorable John Conyers
The Honorable W.J. "Billy" Tauzin
The Honorable Edward J. Markey
Commissioner Susan Ness
Commissioner Harold Furchtgott-Roth
Commissioner Michael Powell
Commissioner Gloria Tristani |
