**SEPARATE STATEMENT OF COMMISSIONER HAROLD FURCHTGOTT-ROTH**

*Re Public Notice DA 00-49, Auction of C and F Block Broadband PCS
Licenses, Nextwave Petition for Reconsideration, Order on
Reconsideration* (rel. September 6, 2000)

Government is at its best when it is most boring, when it follows laws
and rules with a soporific routine. A government that is predictable and
unshakable is a government on which people can rely in order to make
long-term plans. After the long ordeal of the C Block bankruptcies, the
Commission can best return to its routine by taking a step back and
delaying the auction of the C Block licenses until there is greater
clarity about the legal fate of these licenses. We should not endeavor
to rush into a re-auction that may only exacerbate the already vast
troubles suffered by all parties concerned. Thus, while I concur with
today's decision regarding NextWave's petition for reconsideration, I
would have supported a request to delay the re-auction until NextWave
has had an opportunity to pursue a final decision from the Supreme Court
regarding the interaction between the bankruptcy code and the
Communications Act.

New technologies and ever-changing market circumstances create
uncertainty and instability. Each of our auctions has dealt with
different portions of the spectrum, has had different legal
requirements, and has had different policy objectives. The differences
in auctions make each unique. Honest and hard-working individuals, both
inside and outside of the federal government, and particularly here at
the FCC, invested their time, efforts, and hopes into developing a new
auction model to distribute PCS licenses. Some new government programs
succeed beyond anyone's wildest dreams; others never fail to disappoint.
Although perhaps clear in retrospect, at the time no signal of the C
Block's fate was apparent.

It launched with great fanfare. At the time, the bid amounts were
breathtakingly large. The auction seemed to mark an auspicious launch
for new businesses, and a windfall of promised receipts for the federal
government.

These hopes made the rapid collapse of the C-block licensees all the
more dramatic, disappointing, and almost incomprehensible. In
retrospect, the entire episode was not incomprehensible at all.
Something dreadful went wrong. The culprit was not an individual inside
or outside government; the culprit was installment payments. Their
culpability is widely recognized; indeed, it is incomprehensible that
this agency would ever use them again.

History is not forgiving. We cannot go back in time, completely correct
our past mistakes, and start over without a trace. If we could, we would
have redone the C-block auction long ago. Instead, the FCC and private
parties have bravely faced the inescapable: the failure of the initial
C-block auction.

What should a government agency and private parties do in the wake of a
failure? Private parties can be expected to take whatever positions are
necessary to save themselves. They can be expected to be mercurial and
even desperate. They can be expected to seek to blame others for their
plight.

The federal government could respond in a similar manner. The
government's behavior could be mercurial and even desperate. It could
seek to blame others for their plight.

The federal government, however, is at its best when it chooses a
different path. Unlike a small company, the federal government is not
threatened with evanescence. It has a future, long and bright, despite
countless mistakes and bad situations. The federal government is at its
best: when it is dull and boring, when it takes tedious rules and
carries them out, when it is painfully predictable, when it is selfless
in accepting blame for its mistakes, and when it is long-forbearing in
understanding the behavior of private parties that are not at their
best.

The story of the aftermath of the C-block auction, the role of the
government and the private licensees is not a happy history or a
pleasant drama. It is a tragedy with many victims and no heroes. It is a
mixture of a comedy of the absurd and a comedy of errors-combined in a
manner without comedy, only absurdity and errors. At times throughout
this history, the behavior of the federal government has been difficult
to predict.

The history recounted in the Commission's document has many twists and
turns. But it is only part of the story. It does not, for example,
describe the unexpected delays in the issuing of the initial licenses.
Nor does it describe how the government's battle with NextWave is but
one of several battles the government is having with C-block licensees
over the role of the bankruptcy code. The federal government has had
smashing legal victories against NextWave; the progress of the war is
less clear in other skirmishes; and final victory for the federal
government in the entire legal war is far from certain.

What precisely is the federal government's view of the applicability of
FCC's automatic termination of licenses to companies subject to the
bankruptcy code's stay provisions? Perhaps one should ask Airadigm
today, or 3 months ago, or 6 months ago, or 12 months ago. That company
has been offering service for months with what it believed to be an FCC
license, but which now, it seems, automatically cancelled in 1999. Or
perhaps one should ask Nextel about its negotiations with Commission
staff for the possible transfer of NextWave's licenses in 1999 that,
today, we reaffirm terminated in 1998. Or perhaps one could ask Judge
Hardin, the Bankruptcy Judge in NextWave's case, who clearly seemed
surprised to learn that the licenses had never been a part of that
proceeding.

The battle between the Commission and NextWave has raged for two years.
It is a sequence of precipitous decisions on both sides. NextWave has
had victories in some courts; the Commission has had victories on appeal
in higher courts. The outcomes have been hardly predictable; indeed, the
entire saga is filled with more twists and turns and unexpected
developments so as to appear more fictional than real.

The NextWave litigation has not yet ended. The litigation for other
C-block licensees rages as well. Yet the Commission seeks now to
reauction certain C-block licenses as quickly as possible. Which
licenses will be offered for auction? That depends on the status of
litigation at the time of the auction. Certainly, no one today could say
with certainty exactly which licenses will be available in 3 months, or
6 months, or 9 months. The Commission could hold an auction with
licenses available as of a given date; but the following day, based on
either Commission or court action, some of those licenses may no longer
be available for auction. An auction in which the legal status of
licenses is still in doubt is a risky and unpredictable adventure. Some
may say that the legal status is firmly and finally established in the
current matter; given the dramatic history of the C-Block, I am yet to
be convinced that we have read the final chapter. There is one outcome
that could be far worse than the current tragedy: if the Commission held
a premature auction that a court subsequently held invalid. In that
situation, the number and classes of victims would only expand; the
tortuous litigation of two years would be prolonged much longer.

Independent of the merits of NextWave's litigation, I believe that it
would make sense for the FCC to hold a C-Block reauction only when we
have greater clarity about which licenses are available. It would result
in a simple, perhaps tedious auction, one without the drama and
unpredictability of the past two years. But it would be government at
its best. It would be a government that sees a long future and sees its
measure of success in the long term, not next week or next month. It
would be a government that is patient, long-forbearing, willing to admit
its faults, willing to stand by its decisions. If that were our path, we
could be predictable, unshakable, and boring in our routine. And we
would all be the better for it.