The Point Where The FCC Refuses A $4.3 Billion Lump Sum Payment Plus An Offer To Provide A Billion Dollars Worth Of Internet Access

When we offered to prepay our entire commitment to the Federal government on January 11th , seven years before schedule, and to waive any further appeals, we expected the Federal Communications Commission to accept our offer and we would have emerged from bankruptcy on January 21,2000. I’d be doing the job I was hired to do – building out the network – rather than testifying before this committee. Maybe we were naive to believe the FCC would want to end the delay of service to millions of Americans and to end the needless and expensive litigation. But our confidence was based in part on the fact that only six months earlier the staff of the FCC recommended the acceptance of an offer by Nextel to pay only $2.1 billion, less than half of the amount owed to the government. Rather than respond to our offer, the FCC issued a notice of their intention to re-auction the licenses that we hold. As recently as the day before yesterday, I watched the FCC Chairman state that "my goal is to get the spectrum working for the American consumer and recover for the American taxpayer the many billions of dollars that are owed the government." Mr. Chairman, I share that goal, and so do my colleagues that have worked with me for years at NextWave. We stand ready to deliver on that goal. The time has come to move on. In fact, Mr. Chairman you said yourself in a 1997 letter to then-FCC Chairman Hundt that "it is probably not optimal to pursue options that forestall the commercial application of Block C spectrum because of time consuming and costly litigation resulting either from extended bankruptcy proceedings or from lawsuits filed by losing bidders...." You were right then. There should have been a commercially viable alternative to bankruptcy. You are right now. Unfortunately, Mr. Chairman, NextWave was left with no alternative but to file for bankruptcy protection on June 8, 1998. From that date forward, the FCC has taken on the role of the 800-pound gorilla. Most recently, the FCC unlawfully attempted to unilaterally revoke NextWave’s licenses. The bankruptcy court overseeing the case pointed out that: Although the FCC has broad regulatory powers, it is also a creditor which must abide by the US bankruptcy laws and not crush the thousands of creditors, investors and pension funds which have supported NextWave. The bankruptcy court characterized the January 12th license revocation as "self-help repossession by ambush." So, how did we get to this point?  The point where the FCC refuses a $4.3 billion lump sum payment plus an offer to provide a billion dollars worth of internet access to areas currently underserved by incumbent carriers – areas such as inner-city schools and Native American reservations?