"The full and timely payment condition is essential to the integrity of the auction and licensing process," the FCC said. NextWave bid $4.7 billion for those licenses several years ago but was able to pay only $474 million before seeking protection in a New York bankruptcy court. Those licenses cover 165 million people in the United States.
The FCC's rejection of NextWave's request for reconsideration of its earlier ruling against NextWave wasn't unexpected, as the commission has vigorously fought the bankruptcy court's contention that the licenses still belonged to NextWave, not to the U.S. government.
The FCC repeated its argument today, saying the U.S. Second Circuit Court of Appeals already ruled that bankruptcy rules would not allow NextWave to hold on to its licenses in opposition to the FCC's existing policies.
"Automatic cancellation of licenses (upon nonpayment) is fully consistent with the FCC's congressional mandate as well as with its regulations and precedent," the agency said today in a statement.
Competing wireless carriers will welcome the ruling, as NextWave's spectrum is scheduled to be re-auctioned in November. A recent ruling by the FCC opened the auction to large providers such as SBC Communications and Nextel Communications. The original auction was limited to small companies such as NextWave, but that has proven to contribute to a high default rate.
FCC Commissioner Harold Furchtgott-Roth differed from his colleagues, saying the FCC should "take a step back" and delay the re-auction "until there is greater clarity about the legal fate of these licenses." He concurred with the commission's decision to reject NextWave's petition but said he would have supported a ruling that would have postponed the re-auction until the Supreme Court had a chance to rule on the issue.
Spectrum is in high demand because companies want to use the airwaves to deliver wireless Internet services, such as Net access over mobile phones or high-speed downloads of music or video. Congress has already included in its budget projections billions of dollars from that upcoming auction.
Accessing the Internet with a wireless device "is one of the most exciting advances in telecommunications," FCC Chairman William Kennard said in a statement, and the commission's ruling "will help make this a reality."