[Congressional Record Volume 147, Number 178 (Thursday, December 20, 2001)]
[Senate]
[Pages S13914-S13915]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          NEXTWAVE SETTLEMENT

  Mr. HATCH. Mr. President, I rise to address the issue of wireless 
spectrum and the importance of its availability and utilization in a 
struggling economy. On November 28, 2001, the Administration forwarded 
proposed legislation to Congress to codify a proposed settlement in the 
NextWave wireless spectrum bankruptcy litigation. We needed to pass 
this legislation before December 31st in order to avoid nullifying the 
agreement. Unfortunately, it appears we will not be able to address 
this settlement before the end of the year because members of this body 
have expressed their intention to block its consideration on the floor. 
It is not certain that a similar settlement can be arranged next year--
which leaves a significant financial return to the U.S. Treasury in 
doubt and denies viable industry actors access to essential wireless 
spectrum which could be a vital tool in jumpstarting the economy.
  This is not the first time I have voiced my concerns about the 
NextWave spectrum controversy. In a letter to then Chairman Kennard of 
the Federal Communications Commission in October of 2000, I warned him 
that a premature re-auction of the NextWave licenses would be imprudent 
while litigation was still pending in the D.C. Circuit. The legal 
questions went directly to the possessory interests of the spectrum and 
the validity of the FCC's action to automatically cancel NextWave's 
licenses upon filing for bankruptcy. The FCC ignored my warning and, in 
so doing, created untold practical problems and a myriad of legal 
liability issues.
  On June 22 of this year, the D.C. Circuit ruled in favor of NextWave, 
holding that the FCC violated Section 525 of the Bankruptcy Code. This 
order essentially nullified Auction 35 in which the FCC preemptively 
re-auctioned the spectrum licensed to NextWave. Presently, both sides 
have filed for certiorari with the Supreme Court to ask for

[[Page S13915]]

the final disposition of this case. However, there is no certainty that 
the Supreme Court will agree to review the case, or if it does, when or 
to whom it will ultimately award the licensing rights to the spectrum. 
In fact, given the D.C. Circuit's opinion and legal reasoning, there is 
a substantial likelihood that the FCC will not prevail, which may be 
why they were able to reach the settlement of this issue.
  After extensive negotiations, the interested parties, including the 
Office of Management and Budget, the U.S. Department of Justice, and 
the FCC, reached a comprehensive Settlement Agreement to govern the 
disposition of the licenses in question and provide for their release 
into the marketplace and financial return to the Treasury.
  This proposal is a chance to bring closure to litigation that has 
dragged on, and which, in all likelihood, could result in a net loss to 
the government if it were to continue. We have an opportunity to 
finalize this settlement, return money to the Treasury and release 
valuable spectrum for commercial use--something that is essential to 
help this struggling economy.
  The current litigation has been prolonged unnecessarily. To continue 
it now, in my view would be a mistake, and the American taxpayer could 
be the loser. I certainly hope that the American taxpayer ultimately is 
not the victim of Congressional inaction.

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