Aug 24, 2001 12:00 PM,

Appeals court denies stay for FCC in NextWave case

Lynnette Luna

A U.S. appeals court said it won’t delay its judgment that returns several PCS licenses to bankrupt NextWave Telecom.

More on this Topic

Industry News

Blogs

Briefing Room

The Federal Communications Commission was trying to keep the U.S. Court of Appeals for the District of Columbia from enforcing its June order that requires the commission to return the licenses to NextWave before the Supreme Court accepts or rejects the case. The FCC intends to file an appeal with the country’s highest court next month.

The FCC feared NextWave would obtain ownership of the licenses and the bankruptcy court could consummate NextWave’s reorganization plan before the Supreme Court studies the case. This could put the commission in the position of being unable to challenge the appeals court’s decision, because NextWave would have substantially emerged from bankruptcy.

However, NextWave has indicated it would not build its network until the Supreme Court decides to hear the case.

“In light of [NextWave’s] stipulation that they will make the effectiveness of their plan of reorganization contingent upon a final decision from the Supreme Court … the FCC cannot demonstrate any substantial harm would result from the continuation of the bankruptcy proceedings during the limited pendency of the certiorari petition,” said the appeals court.

Before NextWave can receive its licenses, the FCC must determine whether NextWave meets the foreign-ownership restrictions placed upon designated-entities such as NextWave. Several carriers have challenged NextWave’s credentials as a designated entity with the FCC.

NextWave’s general counsel, Michael Wack, said the appeals court’s “ruling puts strong additional wind behind NextWave’s efforts to continue its network buildout and move further down the road to completing its successful reorganization.”

NextWave is scheduled to present its plan of reorganization with the bankruptcy court in New York on Sept. 12. The company has lined up $2.5 billion in loans from UBS Warburg and has preferred stock commitments for $1.8 billion.