The FCC is charged with ensuring that NextWave, like other licensees, complies with the laws and regulations governing the use of the electromagnetic spectrum. Debtors in bankruptcy must conform their conduct to the law just like anyone else. On the other hand, as someone seeking payment on a promissory note, the FCC is a creditor and, as a creditor, it must bide its time and participate in the reorganization process on the same basis as the other creditors. Our law of corporate reorganizations prevents creditors from trying to assert their individual rights. If it did not, the efforts of each creditor to be paid would threaten to destroy both the firm and the jobs it generates.
Bankruptcy law minimizes the costs of financial failure.
Such rules are all the more important in path-breaking industries that employ new technologies. Here the potential rewards are high, but the risk of financial failure is great as well. The problem in NextWave arises in many contexts. From landing slots issued by the FAA to liquor permits granted by local governments, an agency must separate its role as regulator from its role as creditor. A piecemeal approach undermines both the effectiveness of government regulation and the operation of capital markets.