WASHINGTON-The remaining C-block licensees are being pushed into bankruptcy because the Federal Communications Commission has chosen to re-auction the returned licenses before the resolution of three outstanding bankruptcy proceedings, a licensee told a congressional hearing on Friday. “Financing that was hard to find before June 8 has all but vanished,” said Michael W. Green, president and CEO of Carolina PCS Corp.
The FCC required C-block licensees to make a restructuring election on June 8. A majority of the licenses were returned and NextWave Telecom Inc., which had the potential to be the nation’s largest PCS carrier, went into bankruptcy on that date. Due to this lack of financing, Green said, Congress and the FCC should expect additional bankruptcies prior to the Oct. 29 payment date.
Rep. Billy Tauzin (R-La.), who chaired the spectrum-management hearing of the House telecom subcommittee, said that Congress should step in and change the FCC’s plans because “the course we are on is leading us to a final disaster.”
Tauzin is likely to receive support for congressional action from the full committee leadership, Reps. Tom Bliley (R-Va.), chairman, and John Dingell (D-Mich.), ranking Democrat. Neither man attended the hearing but both submitted statements indicating support for congressional action. “The time for litigation and rule making may be at an end. We are through attempting to guide the [FCC] to the right course. We certainly can’t sit and watch as this valuable resource we call spectrum sits on the shelf,” Bliley said.
Referring to a recent decision by Judge Steven A. Felsenthal in the General Wireless Inc.’s bankruptcy case where Felsenthal said his decision would promote development of the C-block, Dingell said, “I find it ironic that a bankruptcy judge in Dallas has a better sense of the Communications Act than the FCC … We need to clean up the [FCC’s] mess so that the provision of service will commence and public will be served.”
The FCC is not the only culprit in the C-block debacle, said Rep. Edward Markey (D-Mass.), ranking Democrat on the telecom subcommittee. “Budgeteers set spectrum policy on its head. They turned the FCC into the governmental equivalent of Sotheby’s. This put the goals of this subcommittee at risk.”
In another spectrum issue, the subcommittee heard testimony from an attorney representing three rural cellular license applicants, Great Western Cellular Partners, FutureWave General Partners L.P., and Monroe Telephone Services L.P., whose applications were rejected due to the foreign-ownership rules that have since been changed.
Phillip Verveer urged the subcommittee to pass H.R. 2901, a bill sponsored by Rep. Joseph M. McDade (R-Pa.), that would reinstate the applications, afford the applicants an opportunity to amend their applications, and direct the FCC to process the applications pursuant to its regulations within 90 days.
