Subject: [NEXTEL-1] US Supreme Court Rules For Nextwave Telecom

From: Marcel <[email-masked]>
Date: Tue, 28 Jan 2003 18:00:54 -0500

US Supreme Court Rules For Nextwave Telecom

DOW JONES NEWSWIRES

By Mark Wigfield and Mark H. Anderson
Of DOW JONES NEWSWIRES

WASHINGTON -- The U.S. Supreme Court on Monday handed a
huge victory to NextWave Telecom Inc. (X.NWV), a bankrupt mobile
phone startup that has engaged in a six-year legal battle with regulators
over wireless spectrum worth billions of dollars.

The court, in an 8-1 decision, said the Federal Communications
Commission acted illegally when it canceled NextWave's mobile phone
licenses even though the company was protected from creditors under
federal bankruptcy law.

NextWave bid $4.7 billion for the licenses in a 1996 FCC auction. But
NextWave filed for bankruptcy when it couldn't get financing to pay its installments to
the FCC after the
spectrum market collapsed.

The case has been closely watched by the wireless industry. Competitors bid nearly $16
billion for the
NextWave licenses when the FCC re-auctioned them in January 2001 even as a NextWave
challenge of
the license cancellation was pending.

Five months later, the U.S. Court of Appeals ordered the FCC to return those licenses to
NextWave,
leaving bidders like Verizon Wireless in limbo. Verizon Wireless, a partnership between
Verizon
Communications Inc. (VZ) and Vodafone PLC (VOD), bid nearly $9 billion of the $16 billion
reaped in
the re-auction.

The FCC had argued that its authority to manage the nation's spectrum overrides bankruptcy
law.
Section 525 of the federal bankruptcy code prevents the government from revoking a license
solely
because the bidder didn't pay a debt that can be discharged in bankruptcy.

The Supreme Court opinion affirms the lower court decision ordering the FCC to return the
auction
spectrum to NextWave.

"The revocation of NextWave's licenses is not in accordance with law," wrote Justice
Antonin Scalia in
the majority opinion.

Scalia was joined by Chief Justice William Rehnquist and Justices Sandra Day O'Connor,
Anthony
Kennedy, David Souter, Clarence Thomas and Ruth Bader Ginsburg.

Justice John Paul Stevens joined with two parts of the decision. He filed a separate
opinion concurring in
part and concurring with the judgment. Justice Stephen Breyer dissented.

Scalia's opinion flatly rejected the FCC's argument that its regulatory goals overrode
federal bankruptcy
law. The majority said the FCC's motive was "irrelevant" in a proper reading of the
bankruptcy law.

The FCC also argued that the wireless spectrum was not a debt that could be discharged as
part of a
bankruptcy proceeding. The high court also rejected this argument. "No matter how the
commission
casts it, the argument loses," Scalia said, citing prior court precedent giving bankruptcy
claims "the
broadest available definition."

The third part of the decision focuses on whether the bankruptcy laws conflict with the
Communications
Act of 1934.

"It does not, as petitioners contend, obstruct the functioning of the auction provisions,"
Scalia said. "What
petitioners describe as a conflict boils down to nothing more than a policy preference on
the FCC's
part."

The ruling is a blow to the FCC, which had argued a ruling for NextWave would undermine
the integrity
of spectrum auctions. FCC attorneys have worried that if NextWave prevailed, companies
could win an
auction, declare bankruptcy the next day and avoid their debts.

The 1996 auction was unusual in that it allowed installment payments as a way to comply
with a
congressional mandate that some airwaves be reserved for small businesses. The FCC has
since
abandoned the installment plan for spectrum auctions.

Justice Breyer's lone dissent focused on the government's security interest in the
auctioned spectrum.

"Because the government, asserting its security interest, may be able to show that
revocation here bears
no relationship to the debt's 'dischargeability' and would not otherwise improperly
interfere with the
code's 'fresh start' objective, I would vacate the court of appeals judgment and remand,"
Breyer wrote.

-By Mark Wigfield and Mark H. Anderson, Dow Jones Newswires; 202-828-9200;
[email-masked], [email-masked].
http://online.wsj.com/article_email/0,,BT_CO_20030127_003476-search,00.html?collection=autowire%2F30day&vql_string=Nextwave%3Cin%3E%28article%2Dbody%29

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From: Marcel <[email-masked]>
Date: Tue, 28 Jan 2003 18:52:22 -0500

What  DJ failed to mention some of the behind the scenes antics involving Nextwave and Nextel. Vince McBride and Scott Reiter are just 2 people who
suffered through the Nextwave ordeal who can see through the "Smoke & Mirrors".

Vince McBride and Scott Reiter, each with dreams of
opening their own small wireless businesses, won
licenses. But they've seen nothing in return for the
$306,000 and $200,000 they handed over to the Federal
Communications Commission respectively and are so
enraged that they're seeing conspiracy everywhere.
>>(The FCC later agreed to return bidders money)<<

<SNIP>
They also think that former FCC Chairman Bill
Kennard's connection to Nextel Communications is
fishy. The FCC tried to make a backroom deal that would
allow Nextel to buy NextWave's licenses, without offering
other companies the same chance to buy them. That
deal would have involved the FCC granting waiver
excusing Nextel from small-business regulations
attached to the licenses. When Congress found out, it
put a stop to it. Now Kennard sits on Nextel's board.

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