Subject: [NEXTEL-1] NEXTWAVE WINS OVER THE FCC!

From: Marcel <[email-masked]>
Date: Mon, 27 Jan 2003 11:49:02 -0500

As all the old timers here  know  we have been following this case from day one.. This
ruling is going to "Rock" the wireless world. The implications here are far reaching and
will affect every wireless carrier from the smallest to the largest!

GO NEXTWAVE!
=======================================================
SUPREME COURT OF THE UNITED STATES

FEDERAL COMMUNICATIONS COMMISSION v. NEXTWAVE PERSONAL
COMMUNICATIONS
INC. et al.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA
CIRCUIT

No. 01—653. Argued October 8, 2002–Decided January 27, 2003

Pursuant to provisions of the Communications Act of 1934 authorizing the Federal
Communications Commission (FCC) to
award spectrum licenses to small businesses through competitive bidding, and to allow them
to pay for the licenses in
installments, the FCC auctioned off certain broadband personal communications services
licenses to respondents (hereinafter
NextWave). NextWave made a down payment on the purchase price, signed promissory notes for
the balance, and executed
agreements giving the FCC a first lien on, and security interest in, NextWave’s rights and
interest in the licenses, which recited
that they were conditioned upon the full and timely payment of all monies due the FCC, and
that failure to comply with this
condition would result in their automatic cancellation. NextWave eventually filed for
Chapter 11 bankruptcy protection and
suspended payments to all creditors, including the FCC, pending confirmation of its
reorganization plan. The FCC objected to
the plan, asserting that NextWave’s licenses had been canceled automatically when the
company missed its first
payment-deadline, and announced that NextWave’s licenses were available for auction. The
Bankruptcy Court invalidated the
cancellation of the licenses as a violation of various Bankruptcy Code provisions, but the
Second Circuit reversed, holding that
exclusive jurisdiction to review the FCC’s regulatory action lay in the courts of appeals.
After the FCC denied NextWave’s
petition for reconsideration of the license cancellation, the District of Columbia Circuit
held that the cancellation violated 11
U.S.C. § 525(a), which provides: “[A] governmental unit may not … revoke … a license … to
… a debtor … solely because
such … debtor … has not paid a debt that is dischargeable in the case.”

Held: Section 525 prohibits the FCC from revoking licenses held by a bankruptcy debtor
upon the debtor’s failure to make
timely payments to the FCC for purchase of the licenses. It is undisputed that the FCC is
a “governmental unit” that has
“revoke[d]” a “license,” and that NextWave is a “debtor” under the Bankruptcy Act. Pp.
7—15.

(a) The Court rejects petitioners’ argument that the FCC did not revoke respondent’s
licenses “solely because” of
nonpayment under §525(a). The fact that the FCC had a valid regulatory motive for its
action is irrelevant. Section 525 means
nothing more or less than that the failure to pay a dischargeable debt must alone be the
proximate cause of the cancellation,
whatever the agency’s ultimate motive may be. Pp. 7—8.

(b) The FCC’s contention that regulatory conditions like full and timely payment are not
properly classified as “debts” under
§525(a) fails. Under the Bankruptcy Code, “debt” means “liability on a claim,” §101(12),
and “claim,” in turn, includes any
“right to payment,” §101(5)(A). The plain meaning of a “right to payment” is nothing more
nor less than an enforceable
obligation, regardless of the Government’s objectives in imposing the obligation. E.g.,
Pennsylvania Dept. of Public Welfare
v. Davenport, 495 U.S. 522, 559. Also rejected is petitioners’ argument that NextWave’s
obligations are not “dischargeable”
under §525(a) because it is beyond the bankruptcy courts’ jurisdictional authority to
alter or modify regulatory obligations.
Dischargeability is not tied to the existence of such authority. The Bankruptcy Code
states that confirmation of a reorganization
plan discharges the debtor from any debt that arose before the confirmation date, 11
U.S.C. § 1141(d)(1)(A), and the only
debts it excepts from that prescription are those described in §523, see §1141(d)(2). Ohio
v. Kovacs, 469 U.S. 274, 278.
Petitioners’ contention that the D. C. Circuit has no power to modify or discharge a debt
is irrelevant to whether that court can
set aside agency action that violates §525, which is all that it did when it prevented the
FCC from canceling licenses because of
failure to pay debts dischargeable by bankruptcy courts. Pp. 8—10.

(c) Finally, this Court’s interpretation of §525 does not, as petitioners contend, create
a conflict with the Communications
Act by obstructing the functioning of that Act’s auction provisions. Nothing in those
provisions demands that cancellation be the
sanction for failure to make agreed-upon periodic payments or even requires the Commission
to permit payment to be made
over time. What petitioners describe as a conflict boils down to nothing more than a
policy preference on the FCC’s part for
(1) selling licenses on credit and (2) canceling licenses rather than asserting security
interests when there is a default. Such
administrative preferences cannot be the basis for denying NextWave rights provided by a
law’s plain terms. Pp. 10—11.

254 F.3d 130, affirmed.

Scalia, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O’Connor,
Kennedy, Souter, Thomas, and
Ginsburg, JJ., joined, and in which Stevens, J., joined as to Parts I and II. Stevens, J.,
filed an opinion concurring in part and
concurring in the judgment. Breyer, J., filed a dissenting opinion.

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From: Marcel <[email-masked]>
Date: Mon, 27 Jan 2003 12:21:59 -0500

I just got off the phone with the "Commission", they are preparing remarks as we speak and
should be out shortly. I was told the "Big Guy" is P******.

All I can say is they did it to themselves. The media just called Ex-FCC commissioner Kennard
over at Nextel for his comment. They were told "He is unavailable". They could call
Christopher "Under The Table" Wright for his comments (Hint, Hint WSJ, NYT, WP, MSNBC,
UnStrung, CNN guys here).

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From: Marcel <[email-masked]>
Date: Mon, 27 Jan 2003 12:54:39 -0500

Hot off the Inbox-

What is he kidding "ramifications"? Nextwave and Congress is going to "Slam" him that is what is
going to happen. Billy T. is sending him a Nasty-Gram as we speak and Nextwave is on the phone
with VZ.......

> should be out shortly. I was told the "Big Guy" is P******.

====================================================================================
Federal Communications Commission
Washington, D. C.  20554

January 27, 2003

STATEMENT OF FCC CHAIRMAN MICHAEL POWELL
ON SUPREME COURT DECISION IN NEXTWAVE CASE

“The Supreme Court’s decision brings much needed certainty to an unsettled area of the law.  We
are in the process of examining all of the ramifications of the Court's decision. The Commission
will faithfully implement the Court’s mandate and looks forward to facilitating the provision of
service in these bands to the American people as soon as practicable.”

---

From: Marcel <[email-masked]>
Date: Wed, 29 Jan 2003 15:58:07 -0500

Ouch

Story Filed: Tuesday, January 28, 2003 5:50 PM EST

Jan 28, 2003 (CableFAX/PBI Media via COMTEX) -- FCC lawyers must be shell-shocked after suffering
yet another high-profile defeat at the High Court. The US Supreme Court ruled 8-1 that bankrupt
telecom company NextWave [NXLC] cankeep its wireless licenses even though it wasn't able to pay
for them. NextWave likely will auction the licenses to the highest bidder. When NextWave
defaulted on some payments, the FCC had revoked the licenses back and sold them for $16bln+. The
FCC already returned the upfront payments. "The commission will faithfully implement the Court's
mandate," FCC chmn Michael Powell said.

http://library.northernlight.com/FE20030128940000227.html?cb=0&dx=1006&sc=0#doc
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