Supreme Court: NextWave can keep wireless licenses

IDG News Service - The U.S. Supreme Court has ruled that bankrupt wireless provider NextWave Telecom Inc. can keep 63 wireless spectrum licenses for which it bid $4.74 billion, and that may be what the company intends to do.

NextWave, which continues to go through bankruptcy proceedings in New York, intends to find a way to pay the 90% of the money it still owes for the licenses, said a public relations representative of the company, and it will either use the licenses, or sell all or some of them.

The Supreme Court, in a decision released today, ruled that the U.S. Federal Communications Commission was wrong in trying to take back the licenses while the Hawthorne, N.Y., wireless company was going through bankruptcy.

Writing for an 8-1 majority, Justice Antonin Scalia argued that the FCC's power didn't supersede NextWave's bankruptcy protection.

The FCC wanted the court to return the licenses to the agency. The FCC had reauctioned the licenses to other wireless companies for nearly $16 billion, but that sale was later overturned by an appeals court.

The dispute goes back to 1996, when NextWave bid on 63 wireless spectrum licenses during an FCC auction. Beyond the initial down payment, NextWave failed to pay additional installments to the agency, which re-auctioned the licenses last year. The wireless carrier claimed that those licenses were its property, protected under a 1998 bankruptcy filing, and in 2001, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the spectrum rights must be returned to NextWave. In August, the FCC asked the Supreme Court to hear the case.

The FCC didn't issue an immediate comment on the Supreme Court ruling.

NextWave officials praised the decision. All sides will benefit from "getting the licenses into use as quickly as possible to provide service to the public and help fuel economic recovery," said NextWave Chairman and CEO Allen Salmasi in a statement.

Tom Wheeler, president and CEO of the Cellular Telecommunications and Internet Association (CTIA), also supported the court ruling. "Finally, this Gordian legal knot has been cut," he said in a statement. "This valuable spectrum, tied up in the courts and thus left fallow for far too long, can now be put to use delivering wireless service to America's consumers."

A representative of the CTIA declined to comment on whether it will be better for the wireless industry if NextWave keeps the licenses or sells them.