Appeals Court: NextWave Keeps Spectrum
One thing is certain at this point in the five-year legal battle over wireless licenses once won by NextWave Telecom: The federal government isnt going to get the $17 billion that wireless operators recently bid during a reauction of those licenses.
In the latest chapter of this saga, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the Federal Communications Commission didnt have the right to cancel NextWaves licenses. The same licenses were reauctioned to companies that included Verizon Wireless and bidders backed by AT&T Wireless and Cingular Wireless.
In addition to this new disappointment for wireless operators, the FCC announced last week that it wont determine by next month, as planned, which spectrum band it will open up for the deployment of third-generation networks.
While the FCC could appeal the NextWave ruling to the Supreme Court, it likely wont. The appeals court said that a regulatory body like the FCC doesnt have the right to rescind licenses on grounds that the owner failed to pay its debt. Past court battles in this case sought to determine the right of the FCC to take back licenses during the automatic stay provision of bankruptcy laws.
"I dont see the Supreme Court wasting its limited number of cases on this," said Brent Weingardt, senior counsel at law firm Bennet and Bennet.
Instead, the FCC, NextWave and the reauction license winners will have to reach a settlement. The task will be tough because the government has counted on receiving the $17 billion from the reauction, the new winners have planned to use that spectrum and NextWave claims it still plans to introduce service.
In one scenario, the new license winners could essentially pay NextWave instead of the FCC for the licenses; then NextWave could pay the FCC the original amount it bid on the licenses, more than $4 billion. Reports have surfaced about talks between Verizon Wireless and NextWave.
A NextWave spokesman said the company expects to make an equipment vendor announcement in the very near future. Weingardt finds that unlikely. "They havent done diddly but spend money on lawyers," he said.