COMPETING NEXTWAVE CONSTRUCTION PETITIONS PENDING AT FCC

In letter to bureau May 21, NextWave said its initial construction filings in Jan., and subsequent ones for licenses other than C-block, met FCC rules in “all respects.” It said they were “indistinguishable from filings by other C- block licensees that the Commission has approved with dispatch and without reservation.” NextWave said it had asked Wireless Bureau “repeatedly” since Jan. to confirm that agency was satisfied with initial construction deadline or to identify company’s deficiencies. “The Bureau has pointedly refused NextWave’s requests,” carrier said. NextWave stressed that at recent meeting with bureau, carrier’s uncertainty over its status was “prejudicing” construction efforts. It said Acting Gen. Counsel on NextWave issues, John Rogovin, told it that Office of Gen. Counsel had provided advice on issue. NextWave said it had been informed by Commission that status of its construction filings was “ripe” for bureau decision.

NextWave made 3 requests for relief in petition last month. It asked that FCC update its universal licensing system (ULS) to “confirm” that company had satisfied broadband PCS construction requirement on licenses for which it already had filed build-out demonstrations. NextWave said it already had filed notifications of compliance with initial construction requirement for 67 of 95 PCS markets. It said ULS didn’t yet reflect that NextWave had satisfied first round of construction requirements on licenses and that licensing database contained “erroneous” statements of deadlines on initial construction requirements.

Petition also asked that FCC update its records to show that construction requirements were tolled “by operation of law,” saying clock stopped on its build-out requirements during: (1) Period of Jan. 12, 2000-Aug. 31, 2001, time for which FCC had canceled NextWave’s licenses before D.C. Circuit ruled otherwise. “Possession of a valid license is an absolute precondition to any construction requirement,” petition said. (2) Sept. 17, 2001-Dec. 31, 2001, period covered by settlement agreement last fall. NextWave said if FCC were to deem its construction notifications deficient or to reject its tolling arguments, it wanted waiver or extension of initial construction deadline “to account for the time period during which the Commission maintained that NextWave’s licenses were canceled.” Petition said: “NextWave readily satisfies the standards for granting a waiver or an extension, because NextWave clearly could not have been expected to construct facilities and build out its network at the same time that the Commission had barred NextWave from using those very licenses by canceling them and re-auctioning the spectrum covered by the licenses to third parties.”

Meanwhile, N.Y. Telecom asked FCC to seek public comment on NextWave petition. If agency finds that NextWave hasn’t met its construction deadlines and Supreme Court upholds D.C. Circuit decision that returned those licenses to NextWave, “N.Y. Telecom requests that such licenses be revoked and made available immediately for re-auction,” filing said. N.Y. Telecom said some of its partners were affiliated with Eldorado Communications, but it didn’t elaborate further on ownership. Eldorado had competed with NextWave in original C-block auction, filing for bankruptcy protection after auction and returning licenses it had won. Eldorado has sought review of FCC decision earlier this year to return 85% of deposits by re-auction winners, saying it would amount to discriminatory treatment of small businesses that were intended to benefit from original PCS auction. N.Y. Telecom contended that 63 of NextWave’s PCS licenses carried 5-year construction deadline of Jan. 3, 2002. While NextWave is seeking clarification that build-out period for some of those licenses has been extended, “it is apparent that, in some and probably all of these markets, NextWave did not meet the original January 3, 2002, construction deadline,” N.Y. Telecom said. It said it has commissioned field tests in 4 sample markets to evaluate whether Jan. 3 date had been met. In test markets of N.Y.C., Allentown, Pa., Washington and Baltimore, results indicated that build-out deadline was missed, N.Y. Telecom said. “Based upon the timing of NextWave’s certifications of construction (the earliest being January 30, 2002) as to other markets with a January 3, 2002, construction deadline, it would appear that construction in none of these markets was timely completed,” it said. That means that unless FCC grants more time for those markets, NextWave’s licenses for allegedly delinquent markets should be revoked, filing said. N.Y. Telecom also asked that FCC: (1) Require NextWave to clarify “exact dates” by which its other markets were placed in service. (2) Reject NextWave request for waiver as failing on merits and coming “too late to resuscitate the licenses in question.” (3) Open to public comment NextWave’s request for clarification or extension of time for construction milestones.

“A public notice and comment proceeding is required to consider the fundamental fairness of changing the rules for NextWave still further from those that were set for others who participated in [PCS] Auction No. 5 and who played by the rules for this auction,” N.Y. Telecom said. “When these auction participants sought relief from their obligations, the Commission sought public comment on their request.” If FCC were to “proceed out of public view to offer NextWave even greater relief from its obligations than those required by the bankruptcy court would be unwarranted, as well as exceedingly unfair,” filing said.

FCC spokeswoman said Commission now had before it filings by NextWave and N.Y. Telecom. “All issues are under review,” she said Fri.

One point of contention between arguments in N.Y. Telecom and NextWave filings is how each side is viewing terms of settlement agreement. Congress failed to enact legislation last year that would have put into effect $16- billion NextWave settlement agreement worked out by FCC, Justice Dept., NextWave and re-auction winners such as Verizon, VoiceStream and Alaska Native Wireless. N.Y. Telecom, in filing by Washington attorney Henry Goldberg, who also represents Eldorado, stressed what it called “irregularity” of settlement proceedings last fall, which included tolling provisions. “NextWave filed no request for a waiver of the Commission’s rules, made no showing that a rule waiver was warranted under the Commission’s waiver standards and the Commission made no finding that a waiver of its rules was warranted or in the public interest,” N.Y. Telecom said. But NextWave filing said construction benchmarks for its C-block and F-block licenses were tolled from Sept. 17, 2001, until agreement “terminated by its own terms” Dec. 31, 2001. “Thus, even if it were appropriate to measure NextWave’s compliance with construction requirements by calculating build-out dates from the time of initial license grants without interruption -- and it is not -- the company has filed its fully compliant demonstrations in a timely manner,” NextWave said. Company said it hadn’t yet heard from FCC whether its previous filings on build-out status were compliant.