More legal wranglings for Nextwave

Bankrupt NextWave hit more legal snags this week in its quest to build out its C and F block PCS licenses it won at auction in 1996 and 1997.

The Federal Communications Commission (FCC), with the U.S. Department of Justice, announced it would appeal a recent appeals court decision from an appeals court to the Supreme Court. The District of Columbia Circuit ruled in June that the FCC violated bankruptcy laws when it revoked NextWave’s licenses and auctioned them off earlier this year to other carriers.

“The High Court review will protect the integrity of the FCC’s auctions program, which Congress has chosen as the best method of assigning scarce and precious spectrum resources to those that will put them to their most productive use,” said FCC Chairman Michael Powell in a statement.

Verizon Wireless and other large carriers who bid billions for NextWave’s licenses in Auction 35 had urged the FCC to take action against NextWave by either entering in negotiations with the company or appealing the decision. A Verizon spokesman declined to comment on the FCC’s latest move.

The commission also filed a motion with the D.C. Circuit to postpone the court’s order that the licenses be returned to NextWave until the Supreme Court has a chance to accept or reject the case.

Yesterday, NextWave filed its reorganization plan with the U.S. Bankruptcy Court for the Southern District of New York. The plan spells out credit facilities that will provide about $2.5 billion in financing and issue up to $3 billion of Series A Convertible Preferred stock. The proceeds will be used to reinstate the claims of the FCC and pay in full the claims of other creditors, according to documentation provided to the bankruptcy court.

The FCC is expected to ask the bankruptcy court to delay consummation of NextWave’s reorganization plan until the Supreme Court acts on the appeal.