FCC ASKS BANKRUPTCY COURT TO DELAY NEXTWAVE CONFIRMATION HEARING
FCC asked U.S. Bankruptcy Court, White Plains, N.Y., not to approve Oct. 30 confirmation hearing proposed for NextWave’s reorganization plan until after U.S. Supreme Court rules on Commission’s request for certiorari. Commission plans to ask court Sept. 12 to review U.S. Appeals Court, D.C., ruling that returned PCS licenses to bankrupt C-block bidder. D.C. Circuit had remanded decision to cancel NextWave licenses for missed payment. U.S. Attorney N.Y. Mary Jo White told Bankruptcy Court Wed. that FCC wanted Supreme Court to have opportunity to weigh certiorari petition before proposed confirmation hearing was held for NextWave reorganization plan. Meanwhile, despite uncertainty created by litigation, Office of Management & Budget (OMB) said it wasn’t fretting over possibility it might not receive auction proceeds in NextWave case. In Jan. PCS re-auction, wireless carriers bid nearly $15.4 billion on licenses for which NextWave originally had bid $4.7 billion. D.C. Circuit turned down stay request, at our deadline.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
NextWave reorganization plan is based on carrier’s ability to retain its C- and F-block licenses, FCC said in objecting to company’s proposed confirmation schedule. “However, the issue of debtors’ eligibility to hold licenses remains the subject of active litigation,” Commission said. If NextWave’s plan is confirmed Oct. 30, before Supreme Court has chance to make decision on cert petition, “the FCC faces the prospect of irreparable harm,” agency said. Bankruptcy Court Judge Adlai Hardin has set Sept. 5 hearing on FCC request. Aug. 31 is deadline for filing objections to NextWave’s proposed plan of reorganization at bankruptcy court.
Meanwhile, in D.C. Circuit, FCC filed follow-up to its request earlier this month that appeals court stay its remand mandate. NextWave had said it opposed FCC request for stay, asking court to deny Commission’s motion (CD Aug 20 p3). NextWave had contended that FCC couldn’t demonstrate “substantial likelihood” that Supreme Court would agree to hear case. It also countered FCC argument that stay was needed to avoid risk that request for certiorari would be made moot by completion of proposed reorganization plan before Supreme Court could issue decision. In latest filing at D.C. Circuit, FCC said nothing in NextWave’s opposition indicated “this case is somehow unworthy of Supreme Court review.” Congress has highlighted auctions as main tool by which FCC can allocate spectrum licenses, Commission said. “Any case that potentially undermines the effective use of auctions as an allocative tool is thus a serious candidate for review by the Supreme Court,” FCC said. “Moreover, the $12 billion budgetary impact of this case makes the case of national importance by that fact alone.”
OMB assumed before Appeals Court decision in June that it would be receiving auction proceeds and it must continue to make that assumption, agency source said. Issue could be important, because surplus, including auction proceeds, is estimated at $1 billion, figure that could turn into deficit without proceeds. Just as OMB doesn’t alter its projections in response to proposed legislation that hasn’t been signed into law, it won’t change its budget projections on chance that Supreme Court will overturn NextWave decision, spokeswoman said.
Numerous situations could arise in any year that might have impact on budget, she said. However, Administration won’t respond by changing budget in midyear, source said: “It’s not like we're going into a deficit if we don’t get” NextWave-related proceeds. “We don’t make plans for every contingency that might happen.”
Meanwhile, FCC awarded 50 licenses for winning bidders in C- and F-block re-auction held in Jan. Payment deadline for licenses was Aug. 10 and spectrum awards were contingent on compliance with that date. In several recent public notices, FCC has been granting licenses won in Jan. auction that weren’t tied up in NextWave litigation. In notice released Wed., FCC awarded 33 licenses won by Verizon Wireless and 7 by VoiceStream.