WASHINGTON-Verizon Wireless last week reiterated its request that the Federal Communications Commission delay its award of personal communications services licenses until an appeal by bankrupt NextWave Telecom Inc. is settled.
“Money paid to the government and held for possible return represents funding capacity that could be used for other purposes such as network expansion, increased services to customers, or other purposes. Instead of using the money for these beneficial and pro-competitive ends, high bidders would be forced to pass on those opportunities to pay the money to the government. Once foregone, business opportunities are often irretrievable,” said John T. Scott III, Verizon vice president and deputy general counsel for regulatory law.
Verizon proposed two plans to the FCC.
Plan A would have the commission wait until final resolution of the NextWave litigation before releasing the public notice announcing it is ready to award the licenses contingent upon full payment within 10 days.
Plan B would have the commission release the public notice but then allow the license winners to delay payment on licenses reclaimed from NextWave until 10 days after the litigation is resolved. The potential licensees would accrue interest on the final payment until it is made.
While the filing implies this would be 10 days after the U.S. Court of Appeals for the District of Columbia Circuit rules in the NextWave case, the possibility is that it could take much longer. If NextWave loses the appeal, it has at least 30 days to make a decision about what, if any action to take.
In an interview with RCR Wireless News, Scott admitted the filing was a “little too shorthand.” Another scenario could be if the FCC loses in court, it would appeal and then if the agency eventually won, Verizon would pay for its licenses.
“When the FCC gets a good result, that is when the money gets paid,” said Scott.
Verizon spokesman Jeffrey Nelson said the nation’s largest wireless carrier made the filing last week at the commission, which generally reiterates a proposal made the day after oral argument was heard in the NextWave case, to make sure the record was complete. Nelson said since bidders are not allowed to communicate with the FCC after the auction closes, there is no way for Verizon to lobby for its position or to “know their thinking” on its March proposal.
Nelson did not say why Verizon waited until after NextWave had what many observers said was a positive experience before the D.C. Circuit.
NextWave supports Verizon’s proposal to delay license awards.
“The commission has guaranteed the U.S. Court of Appeals that NextWave will have its licenses returned if it prevails in its court challenge. Since the court is expected to render its decision very soon, common sense requires the FCC to wait until the court rules before acting on the pending applications. Nothing in Verizon’s recent filing justifies deviating from that prudent course of action,” said Michael Wack, NextWave’s deputy general counsel.
Verizon was an ardent supporter of not delaying the re-auction of the licenses, but Nelson said the re-auction did not necessarily have to include the NextWave licenses. The most aggressive bidding in the auction was for three 10-megahertz licenses for the New York market created from the division of NextWave’s 30-megahertz license.
In other related auction litigation last week, the U.S. government asked the U.S. Supreme Court to review a decision 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. The government believes the Supreme Court should review the 5th Circuit’s ruling because that court said it “respectfully disagreed” with a ruling by the U.S. Court of Appeals for the 2nd Circuit in the NextWave case.
