WASHINGTON-Three wireless carriers-all of which won licenses in the PCS re-auction-petitioned the Federal Communications Commission to re-evaluate the ownership structure of bankrupt NextWave Telecom Inc.
“This investigation should include an inquiry as to whether the company, based on the totality of the circumstances, was eligible to hold licenses under the commission’s C- and F-block eligibility rules in October 1998, and, if so, whether the company as it would emerge from bankruptcy under its plan of reorganization (or any other plan) would be eligible to hold those licenses … to examine the degree of NextWave’s foreign ownership … whether NextWave will be able to satisfy the regulatory requirements imposed on C- and F-block licensees if its licenses are reinstated. Moreover, the commission should allow for public comment on the important issues raised in this petition. Only after developing a full record will the commission have the information it needs to determine what action it should take on remand,” reads the petition.
The petition had been widely rumored for several days, but it was unclear until it was filed who actually was joining in the pursuit. In the end Verizon Wireless, VoiceStream Wireless Corp. and Alaska Native Wireless L.L.C signed the petition.
NextWave said the petition was a delay tactic. “Rather than accept the recent ruling by the U.S. Court of Appeals for the District of Columbia, and abide by the rule of the law, these carriers have now launched a blatant attempt to bottle up a new competitor in administrative proceedings,” said Michael Wack, NextWave’s senior vice president and deputy general counsel.
Verizon Wireless, which pushed the FCC last year to re-auction the licenses, said it was legitimate to ask for such an investigation regardless of the delay it might create.
“The time is not the issue. The issue is whether NextWave is eligible to hold the licenses,” said Verizon’s spokesman Jeffrey Nelson.
Repeatedly in answers to a variety of questions, Nelson said it “makes sense” to investigate NextWave’s ownership structure.
NextWave insisted last week that it has always had a legal ownership structure. “We are in compliance. We have been in compliance and we will continue to be in compliance,” said Frank Cassou, NextWave’s general counsel.
The carriers also question NextWave’s ability to build out its system given its recent travails in bankruptcy, but in an interview last week with RCR Wireless News, Allen Salmasi, NextWave’s chief executive officer, insisted the company has genuine buildout plans and that its `carrier’s-carrier’ strategy will work.The impetuous behind the petition is unclear.
Carriers that asked not to be identified-some of which did not eventually sign onto the petition-claim that Kathleen O’Brien-Ham, deputy chief of the FCC’s Wireless Telecommunications Bureau, contacted them to urge them to file such a petition.
Ham outright denied such contacts took place. She called such allegations “completely untrue.” She did acknowledge that conversations took place but she said they were informational only regarding the existence of an outstanding foreign-ownership petition against NextWave.
Antigone Communications L.P. and PCS Devco, Inc. had appealed to the full commission a 1997 bureau-level decision to conditionally grant NextWave’s licenses giving them six months to come into compliance with foreign-ownership rules, which limit foreign ownership to 25 percent. The FCC mooted this petition when it canceled the licenses, but Ham says that since the D.C. Circuit said the FCC could not cancel the licenses, the petition again is pending before the full commission.
The foreign-ownership battle is one familiar to VoiceStream Wireless. It was forced to get a waiver of the 25-percent rule to complete its merger with Deutsche Telekom AG.
“If we had to fight the [foreign ownership] battle, they darn well have to,” said Brian T. O’Connor, VoiceStream’s vice president for legislative and regulatory affairs.
The FCC has yet to indicate how it will respond to the D.C. Circuit’s remand. In a related case, the FCC and Department of Justice continue to ask for delay in a bankruptcy proceeding involving Kansas PCS Ltd. The deadline is today for the FCC to file a brief in the KPCS case. As noted in its latest extension request, the KPCS issue is “the same rule” as was decided by the D.C. Circuit. How the court responds in this case-involving three licenses-could well indicate how it might respond in the NextWave case involving 90 licenses re-auctioned for nearly $16 billion.
