[wordup] NextWave's Victory, FCC's Goof and America's Loss

[Adam Shand]

From: 
http://weblog.siliconvalley.com/column/dangillmor/archives/000760.shtml

January 28, 2003
NextWave's Victory, FCC's Goof and America's Loss
• posted by Dan Gillmor 05:53 AM

     Washington Post: FCC Loses Auction Appeal. The Supreme Court ruled 
yesterday that the Federal Communications Commission violated federal 
law when it attempted to reclaim part of the public airwaves from a 
wireless firm that had sought refuge in bankruptcy court after it could 
no longer afford to make payments on its $4.74 billion bid.

So, NextWave gets away with it, because the FCC screwed up.

Let's remember some history. NextWave bid multi-billions on spectrum, 
made the down payment and then defaulted. The FCC tried to re-auction 
the spectrum, but NextWave appealed -- successfully -- on the grounds 
that the FCC couldn't override bankruptcy laws.

William Kennard, former FCC chairman, put it pretty well when he said it 
would be unfair to license bidders that actually paid their bills to let 
NextWave off the hook. He was right, but he's largely responsible for 
his agency's auction system that left the public holding the bag, not 
the NextWave investors who should have borne the loss.

Sen. John McCain also nailed it when, as quoted by Wired News, he called 
NextWave "a company whose only contribution to the American economy has 
been to manipulate, for private gain, the results of an improperly 
designed auction."

NextWave claimed it really, truly intended to create a wireless system, 
but got sandbagged by government auctions that undermined the value of 
its licenses. Really? At one point, in a sleazy deal that thankfully 
went sour, those license values appeared to have tripled.

Now the licenses aren't worth so much. Well, I'm not weeping for 
NextWave, and you shouldn't, either.

Everyone looks bad in this saga.