Supreme Court Rejects NextWave’s Appeal

The Supreme Court Tuesday rejected an appeal by NextWave Personal Communications Inc., which has been fighting to save its wireless licenses from being repossessed and resold by federal regulators.

The high court’s decision not to hear the appeal cleared a big hurdle for the Federal Communications Commission, which is set to re-auction the licenses for which NextWave was unable to make timely payments, on Dec. 12.

NextWave bid about $4.8 billion to obtain the 90 licenses in two auctions in 1996. However, the Hawthorne, N.Y.-based company declared bankruptcy in 1998 after it ran into financing difficulties and was unable to pay for the licenses.

The FCC moved to cancel the licenses because of nonpayment, but a bankruptcy court ruled NextWave could hold on to the licenses because they were a company asset and therefore protected under bankruptcy laws. That decision was reversed in May by the U.S. Court of Appeals for the 2nd Circuit.

The Supreme Court, without any comment or dissent, sided with the FCC and denied the company’s appeal, letting stand the appeals court ruling.

“No one should be too surprised--or too excited--by today’s announcement that the Supreme Court has declined [to hear the appeal],” NextWave spokesman Michael Wack said.

“The principal holding of that decision is that companies must pay the full amount of their bids in FCC spectrum auctions, which NextWave is prepared and has previously offered to do.”

The FCC has rejected that offer because the company previously failed to make timely payments.

Although the high court’s action was a big victory for the FCC, it may not end the saga because NextWave has filed a request with the agency and the U.S. Court of Appeals for the District of Columbia to delay the Dec. 12 auction until that appellate court determines whether the cancellation was legal.