Washington Post: Judges Overturn Airwave Auction. “The tragedy here is that by welshing on its promise to pay the U.S. government, NextWave could walk away with billions,” based on the value of the rights, said former FCC chairman William E. Kennard, who pushed for the January auction before leaving the agency.
This case is another proof of the maxim that the real scandal is often what’s legal, not what’s illegal. NextWave made high auction bids for some wireless spectrum, didn’t pay what it owed and then filed for bankruptcy protection.
The government had put the defaulted-on spectrum back on the market and got billions in bids from companies that had the resources to pay for and actually use the spectrum. Those deals are now dead, and NextWave is free to sell a valuable asset that it didn’t deserve in the first place. This is not a tragedy, as Kennard calls the situation. It’s an outrage.
Bottom line is that NextWave wins, big, on its broken promises. The taxpayers lose, big.
The FCC, which Kennard was running at the time, has itself to blame in some ways. How could the agency not have realized that companies like NextWave would pull precisely this kind of stunt? Surely the FCC’s lawyers could have predicted this.
But the worst actor in this drama is clearly NextWave. Is Congress awake? Sounds like some laws need updating.