WASHINGTON-Yet another federal appeals court has been brought into the debacle known as the personal communications services C-block.
Bankrupt PCS operator NextWave Telecom Inc. filed on Feb. 11 a petition for review with the U.S. Court of Appeals for the D.C. Circuit “for protective purposes.” It is trying to stop the Federal Communications Commission from canceling and re-auctioning its 90 C- and F-block licenses.
In addition, NextWave filed a longer and more detailed petition for reconsideration with the FCC. NextWave expects the FCC to ignore its reconsideration petition and for the D.C. Circuit to be the final arbitrator.
“In filing the petition for review and the notice of appeal, NextWave believes that it has satisfied the exhaustion requirements because a petition for reconsideration at the [FCC] would be futile in view of the position the [FCC] has taken on the cancellation issue in litigation against NextWave and elsewhere,” said NextWave. “NextWave thus believes [this] petition for reconsideration to be unnecessary … NextWave will withdraw [this] petition for reconsideration should the D.C. Circuit agree that exhaustion has occurred or would be futile.”
The recon petition gives specific instances where the government said the bankruptcy proceeding protects the licenses from cancellation. NextWave contends this is not allowed due to the practice of judicial estoppel.
“Judicial estoppel prevents a party in a legal proceeding from taking a position contrary to a position the party has previously taken in the proceeding or an earlier proceeding,” said NextWave.
The FCC announced Jan. 12 that it was canceling NextWave’s C- and F-block licenses and would re-auction them on July 26. The FCC based its actions on a Dec. 22 opinion from the U.S. Circuit Court of Appeals for the Second Circuit, saying bankruptcy law could not be used in the licensing and regulating of spectrum governed by communications law. Bankruptcy Judge Adlai S. Hardin Jr. said the move to re-auction the licenses amounted to “self-help repossession by ambush.”
The Second Circuit has now given each of the parties, including Judge Hardin, the opportunity to explain the status of NextWave’s licenses. If necessary, oral argument on this issue will be heard in March.
The FCC and NextWave disagree whether the PCS licenses are assets frozen by the bankruptcy automatic stay.
In another proceeding, involving bankrupt C-blocker Metro PCS (formerly General Wireless Inc.), the U.S. Court of Appeals for the Fifth Circuit heard oral argument earlier this month over whether Metro PCS could retain its 14 C-block PCS licenses by paying $166 million instead of $1.06 billion-the amount it originally bid in the 1996 FCC auction.
During those arguments the government urged the Fifth Circuit to rely on the Second Circuit’s decision, but Metro PCS argued the FCC was a creditor not a regulator when it established the installment payment system that has caused so much controversy.
