Court Backs NextWave on License Sale

A federal appeals court declined Thursday to delay a court order that the government return valuable airwaves licenses to NextWave Telecom that it had repossessed and resold.

The Federal Communications Commission had asked for the delay until the Supreme Court decides whether to settle the government’s battle with NextWave.

The Hawthorne, N.Y.-based telecommunications company had paid $500 million toward the licenses it won for a $4.7-billion bid in a 1996 FCC auction for small businesses before defaulting on its payments and filing for bankruptcy.

The FCC stripped the licenses from NextWave and sold them as part of a $17-billion auction in January to the nation’s top wireless companies, including Verizon Wireless, AT&T; Wireless Services and Cingular Wireless.

In June, a federal appeals court ruled that the government should not have resold the licenses, saying they were protected by bankruptcy laws. That order, which was to take effect Aug. 13, was what the FCC wanted put off while it appealed to the high court.

With Thursday’s decision by a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, the order will take effect Thursday. That means the FCC must begin the process of returning the licenses to NextWave, which includes hearing challenges by the new auction winners as to whether NextWave originally met qualifications for winning the auction.

Now, NextWave has a $5.5-billion plan to reorganize and emerge from bankruptcy, with which it intends to pay the FCC for the licenses.

NextWave did not return a message seeking its response to the ruling.

Shares of NextWave rose 23 cents to $7.35 in over-the-counter trading.