On December 22, 1999, the United States Court of Appeals for the Second Circuit released its decision resolving the longstanding battle between the FCC and NextWave Personal Communications, Inc. over that company’s PCS licenses. NextWave had convinced two lower courts to apply Chapter 11 bankruptcy provisions to reduce its license payment obligations to the FCC and seemed poised to emerge from bankruptcy with a revised business plan and significant new financing. But the FCC viewed NextWave’s victory before the lower courts as threatening the agency’s jurisdiction and the integrity of the auction process. The Second Circuit’s decision, which reverses the two prior decisions, represents a significant "win" for the FCC, might finally end the FCC’s efforts to obtain a legislative fix to its bankruptcy woes (see Telecommunications Law Update, January 14, 1999), and generally signals that bankruptcy will not be an effective means of avoiding FCC license debt in the future.
