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 todays decision regarding NextWaves 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 anyones wildest dreams; others never fail to 
disappoint.  Although perhaps clear in retrospect, at the time no signal of the C Blocks 
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 governments 
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 Commissions 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 governments 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 governments view of the applicability of FCCs 
automatic termination of licenses to companies subject to the bankruptcy codes 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 NextWaves licenses in 1999 that, today, we reaffirm terminated in 
1998.  Or perhaps one could ask Judge Hardin, the Bankruptcy Judge in NextWaves 
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 NextWaves 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.