WASHINGTON-In the final salvo of paperwork regarding NextWave Telecom Inc.’s opposition to its application for review, Antigone Communications L.P. and PCS Devco Inc. continue to maintain their push for, at best, a reversal of NextWave’s personal communications services licenses and, at second best, an evidentiary hearing to address “questions of material fact.”
Antigone/Devco charge NextWave with trying to introduce an application for review via its attack in its opposition to the Wireless Telecommunications Bureau’s finding that NextWave was in violation of the foreign-ownership cap. Citing that NextWave’s due date for any challenge to the WTB’s order was March 17 instead of the date two weeks later when the C-block winner filed its opposition, the petitioners called the action “a cavalier approach to the [Telecommunications] Act” and continued by writing, “Indeed, NextWave has not even requested a waiver … to permit its untimely filing. Any such waiver would be unwarranted and inequitable here because of the gross prejudice NextWave’s filing visits on petitioners.”
Antigone/Devco also called the alleged application for review and the way it was presented to the commission as not being “an expert opinion on a non-legal matter” and “nothing more than an additional legal document.” The two would like to see the argument stricken from the record.
Last-minute foreign funding found by NextWave just prior to the C-block auction’s close also was attacked, with Antigone/Devco providing in its attachments evidence in NextWave’s own words that it would have failed to make its down payment had these monies not come through. And because such funding made the difference between success and failure for NextWave, Antigone/Devco wrote that the FCC should affirm that the financing was equity and not debt. “Viewing the mid-auction foreign investment … NextWave acted in bad faith in pretending that it met the foreign-ownership statute,” Antigone/Devco concluded.
The final document also contained a rebuttal written by the petitioner’s expert auction witness, Dr. Peter Cramton, to NextWave’s auction experts who contended that NextWave’s participation in the C-block auction had not affected the behavior and the success of other bidders.
“NextWave had a large effect on prices in the C-block auction,” Cramton wrote. “You don’t need any fancy economic models to see this-common sense will do. This was an auction with severely budget-constrained bidders. McAfee and McMillan (NextWave’s experts) are asking you to believe that removing this bidder [with 41 percent of the money] would not have a large effect on prices. The notion is absurd.”
Beside rebutting McAfee and McMillan point by point in a lengthy attachment, Cramton included a few thoughts on the integrity of the C-block and future auctions, and the FCC’s role in preserving it. “Without enforcement, bids become meaningless. Lack of enforcement introduces a whole new level of game playing, which destroys the efficiency of the auction,” he wrote.
“With enforcement, bidders with the highest values win the spectrum; without enforcement, bidders with the most optimistic views about how lax enforcement will be win the spectrum.”
He continued, “The C-block auction presents the first major challenge to the integrity of the auction program … The FCC can enforce the clear and explicit rules or it can cave in to the auction winners. Compromising the auction rules in this case will have disastrous consequences to future auctions, both in revenue and especially efficiency terms … When bidders break the rules (as NextWave did), eject them. When bidders fail to pay on time, foreclose. Taking a hard line will avoid countless legal challenges from prior auction participants and will preserve the FCC’s outstanding track record in implementing auctions. The choice is clear.”
