- The Washington Times - Wednesday, October 9, 2002

ASSOCIATED PRESS
The Supreme Court yesterday considered the future of unused wireless spectrum in 90 markets around the nation in a high-dollar bankruptcy case.
Justices will decide whether the government had the power to reclaim valuable licenses from NextWave Telecom Inc. as the New York company tried to work out its finances in bankruptcy court.
Their decision will affect the future of wireless networks in overcrowded markets such as Chicago, Los Angeles, New York, Philadelphia, San Francisco, Seattle and Washington.
Justices also said they were mindful that the outcome could affect other situations in which someone has a government license and encounters financial trouble.
Paul D. Clement, the lawyer representing the Federal Communications Commission at the Supreme Court, said NextWave did not provide services to customers and that the government was justified in reclaiming the unused licenses.
"Others stood ready to provide service," he said.
But some justices questioned if the government appeared greedy, yanking the licenses that NextWave bid $4.7 billion for and then selling them to other companies for more than $15 billion.
Justice David H. Souter said the commission "was making an economic decision, not a regulatory decision" to help the public.
"Why don't you settle the case today?" asked Justice John Paul Stevens, noting that the government could get the $4.7 billion it was initially promised.
For telecommunications companies and investors, huge amounts of money are on the line in the fight between the government and NextWave, which bid on frequency bands but then filed for bankruptcy protection before paying for them.
Laurence Tribe, an attorney for NextWave creditors, told justices that investors "need to know whether an agency is going to pull out the lifeline." He said without that safeguard, investors will not be willing to finance future projects.
The Supreme Court's ruling is not expected for several months.
NextWave had agreed to pay $4.7 billion for the frequencies in 1996 after winning them in an auction. The Hawthorne, N.Y., company failed to keep up with payments and filed for bankruptcy protection in 1998.
The FCC sold the licenses to Verizon Wireless, VoiceStream Wireless and other companies at a second auction for more than $15 billion, but the appeals court nullified the second sale.
Telecommunications analysts say the spectrum is needed to meet consumer demands for high-quality calls and new services.


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