WASHINGTON-NextWave Telecom Inc. last week said the Federal Communications Commission is attempting to re-auction its licenses before a federal appeals court can rule whether it has the authority to do so.
“There is no reason to believe that the [FCC] will issue a decision within a reasonable time period, or before July 26, 2000 … The [FCC] is obviously trying to conduct the re-auction without any meaningful judicial review of the lawfulness of its attempt to cancel the licenses,” said NextWave.
The U.S. Court of Appeals for the 2nd Circuit ruled last month that the bankruptcy court had no jurisdiction when it said the FCC could not cancel and re-auction NextWave’s 90 personal communications services licenses, but left open the question of whether the licenses can be canceled and re-auctioned to be decided by the U.S. Court of Appeals for the District of Columbia Circuit.
The FCC has previously urged the D.C. Circuit to reject NextWave’s appeal until the commission had time to review a petition for reconsideration NextWave said it filed for entirely procedural purposes.
NextWave’s filing last week was meant to show the D.C. Circuit that it believes the FCC will not rule on its recon petition and so the D.C. Circuit should do as the 2nd Circuit suggested and determine whether the FCC had the authority to cancel NextWave’s licenses.
“NextWave’s protective reconsideration petition is plainly futile … Far from resolving the merits of NextWave’s challenges, the 2nd Circuit simply held that the bankruptcy court lacked jurisdiction to rule on the purported cancellation of NextWave’s licenses,” said the company.
The 2nd Circuit’s May decision affirmed a decision it made last year that said that bankruptcy law could not be used in the licensing and regulating of spectrum governed by communications law.
Meanwhile, the FCC has been preparing for a July 26 re-auction of the licenses by seeking comment on various rule changes that would allow large carriers to bid for this spectrum.
In an interesting twist, NextWave also is participating in another appeals case at the D.C. Circuit regarding the FCC’s restructuring options. It was NextWave’s rejection of these options in 1998 that led it to choose bankruptcy. NextWave has intervened on the side of the FCC.
Sprint PCS and U.S. Airwaves Inc. have said the FCC acted in an arbitrary manner when it allowed C-blockers to restructure their payment obligations.
NextWave rejects this argument. “The FCC could reasonably conclude that in light of the widespread financial difficulties experienced by C-block licensees, conducting a series of individualized determinations on restructuring plans would have been inefficient compared to releasing an order that set forth several options among which individual licensees could choose. Therefore, even if the issuance of an order was a slight departure from the initial rules, it is not arbitrary and capricious agency action,” said NextWave. The company argues that neither Sprint nor U.S. Airwaves is a viable designated entity. Sprint does not qualify as a small business and U.S. Airwaves is no longer a recognized entity.
