WASHINGTON-Despite recent Federal Communications Commission allusions to a prompt public notice detailing changes to its C-block personal communications services financial restructuring order, such a notice probably will not be released for weeks-perhaps months-and the election date for any of its options won’t be until sometime this summer.
Under a scenario that was being played out a week ago, the FCC contemplated approving a press release detailing possible new options and the date changes, but that plan collapsed, and the commission chose instead to deal with date changes and policy changes separately. As a result, cash-strapped C-blockers may be gaining in time what they lost in hard policy changes.
Commissioners voted unanimously Feb. 24 to move the option-election date from Feb. 26 to “60 days after the publication in the Federal Register of the commission’s forthcoming order on reconsideration to select their payment options.” The FCC also changed the March 31 payment-resumption date for C- and F-block licensees to “at least 30 days after the revised election date.”
Sources within the commission told RCR that the release of the reconsideration order probably would occur, at the earliest, several weeks from now but there are indications that several months could be the real scenario.
Commissioner Susan Ness, who argued last September for an expedited handling of C-block options at the time the options order was adopted, issued a separate statement following the vote in which her distaste for another delay was obvious.
“Given the commission’s continued delay in concluding the C-block reconsideration proceeding, I reluctantly agree that an extension of the election date is necessary,” she wrote. “I concur because I am not in favor of prolonging the reconsideration proceeding. Continuing to consider changes to our rules delays the marketplace certainty that must exist in order for systems to be financed and constructed. The result is to delay use of this spectrum by those otherwise prepared to go forward to provide beneficial services to the American public.”
According to Ness aide James Casserly, despite the commissioner’s distaste for prolonging this issue, she decided not to vote against it. “She thought that restoring certainty to the market was the most important thing the FCC could do,” he said. “She doesn’t believe it’s fair that licensees make an election when they don’t know what the options will be.”
In September, the FCC voted to offer four financial-restructuring options to any C-block licensee that wanted such consideration, including:
Continuing with the status quo and making payments on licenses as usual;
Disaggregation of half of a licensee’s spectrum in any given market, with 50-percent debt credit given for use in buying licenses at reauction;
Returning all markets for any remaining debt forgiveness; or
Payment in full at face value for some licenses (prepayment) and relinquishing others to the FCC for debt forgiveness. Specialized rules are attached to this option.
Despite the commission’s refusal to release any details of the reconsideration draft currently under consideration, sources inside the chairman’s office confirmed that C-block licensees may be allowed to use 70 percent of their down payments from returned licenses to pay for those that will be retained, and that they may be allowed to pick and choose different payment options for different major trading areas.
For at least the last week, the Wireless Telecommunications Bureau had its recommendations for the reconsideration order circulating on the Eighth Floor, but last week’s actions made it obvious there was some disagreement between the commissioners regarding the tweaking. Casserly, however, reiterated Ness staff policy that such deliberations would not be made public, and that “the bureaus may write the items but the commissioners vote them.” Casserly also pointed out this delay was not unusual with the current commission, given the fact that there are so many issues on the table and that the majority of the panel is new.
“There were no particular problems with the C block; the same thing is happening with many items,” Casserly said. “A number of bureau items haven’t been moving as fast as we had hoped.”
The reconsideration order, Casserly said, will not be seen this week or next, but he cringed at the idea that it could take months to decide. “We need to decide this as soon as we can and then move on,” he said. “The old commission was pretty efficient, but this still is a tortuous proceeding. This won’t be as nasty, as brutish or as long as it was last September, but it will get done.”
The delay is affecting different players in different ways. “Further vacillation on the part of the FCC,” commented John Bensche, a Lehman Brothers analyst. NextWave Telecom Inc. is keeping its opinion of the situation close to the vest, saying only, “We appreciate that the FCC is carefully deliberating this matter.” The bankruptcy judge handling Pocket Communications Inc.’s case has postponed all new hearings regarding the company’s licenses and debt situation until the FCC settles the options issue; Pocket’s lenders are continuing their efforts to strike a deal with the commission, but those talks, too, probably will be put on hold.
