WASHINGTON-The New York Yankees may have won the World Series but in the world where politics and policy converge, as another famous Yankee once said, “it ain’t over ’till it’s over.”
That is certainly true in NextWave Telecom Inc.’s quest to keep its 90 personal communications services licenses.
At RCR Wireless News’ press time on Friday, it seemed as if the bankrupt C-blocker had failed to sway the Speaker of the House of Representatives.
Speaker J. Dennis Hastert (R-Ill.) “has been trying to keep these bills clean of any telecom riders that have not gone through any process,” said his office.
But the industry and NextWave were not expected to give up the fight.
And the fight could go on until at least this Friday when it is hoped Congress will finally leave town after finishing its business for the year.
If the industry wins and NextWave is not able to attach a legislative savior to a must-pass bill, the industry said the credit goes to one of its major champions on Capitol Hill, Sen. Judd Gregg (R-N.H.).
“Judd Gregg has been the work horse. It has been through his tenacity that has kept this measure from being added to places that we knew were targets. … He has been following this for a long time. … He is firmly committed to his position. What makes it even better is he is right,” said Steven K. Berry, senior vice president for congressional affairs for the Cellular Telecommunications and Internet Association.
On Wednesday, the wireless industry was up in arms when it appeared the White House, under the urging of a key NextWave investor, had struck a deal with Senate Majority Leader Trent Lott (R-Miss.) to delay the auction by the Federal Communications Commission of 422 C- and F-block, 90 of which were won by NextWave in an auction in 1996 for $4.7 billion.
Lott refused to dispute the rumors and told reporters on Wednesday that “extenuating circumstances” would have to be weighed against a desire to not add legislation to spending bills.
The thought not only outraged (and scared) the industry but also the FCC.
Early Thursday morning, FCC Chairman William Kennard sent a letter to the House Commerce Committee urging that the auction not be legislatively delayed.
“It is important to the public and to our economy to proceed promptly with these auctions and make more spectrum available as quickly as possible,” Kennard said.
For the first time, Kennard coupled the C- and F-block re-auction with a scheduled auction of TV broadcast licenses in the 700 MHz scheduled for March 6.
“Delay of the Dec. 12 auction would affect the timing of other auctions, including the auction of licenses for the 700 MHz spectrum now scheduled for March,” said Kennard.
Previously, the FCC has said there is no relationship between auctions.
Kennard did not have unanimous agreement for his position. FCC Commissioner Harold Furchtgott-Roth reiterated his position last week that the re-auction be delayed until the cloud of legal uncertainty is removed.
NextWave filed for bankruptcy in 1998 without making any installment payments on its debt to the FCC.
The re-auction is scheduled for Dec. 12 but NextWave has asked the U.S. Court of Appeals for the District of Columbia to stay the re-auction.
Additionally, the bankrupt entity is expected to ask the U.S. Supreme Court to reconsider its decision earlier this month to not hear its appeal of a ruling by the U.S. Court of Appeals for the 2nd Circuit that said the licenses were not protected from FCC cancellation during bankruptcy. A decision late on Oct. 20 by the U.S. Court of Appeals for the 5th Circuit to uphold a bankruptcy court ruling reducing the amount that Metro PCS (formerly General Wireless Inc.) owes the government seems to counter the 2nd Circuit’s decision. This would mean a split in the circuits making it ripe for the Supreme Court to settle the legal dispute.
For its part, the FCC said after the Oct. 23 print edition had gone to press that it was disappointed in the 5th Circuit’s decision.
“We are disappointed by the decision allowing GWI to keep valuable wireless licenses for a fraction of what it bid. However, because the court reached that decision on procedural grounds, it did not disturb the FCC’s authority to cancel other licenses for failure to pay the full bid price,” said FCC spokeswoman Linda Paris.
A bankruptcy court ruled that Metro’s 14 licenses were worth $166 million rather than the $1.06 billion bid amount. This was upheld by a federal district court so the FCC appealed to the 5th Circuit.
The FCC said it is now evaluating its options with the Department of Justice which acts as its appellate lawyer.
