News Release: September 17, 1997 Statement of Chairman Reed Hundt

[ Text Version]

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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554 News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov
ftp.fcc.gov

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

September 17, 1997

STATEMENT OF CHAIRMAN REED HUNDT ON NEED FOR LAW TO GUARANTEE THAT FCC CAN RECLAIM AND REAUCTION SPECTRUM LICENSES FROM LICENSEES WHO DEFAULT

I am pleased to report that all four Commissioners have today called on Congress to adopt legislation that would prevent wireless licensees who default on their installment payments from using bankruptcy litigation to refuse to relinquish their spectrum licenses for reauction. We have sent a letter to Capitol Hill today that explains that this legislation is needed to avoid delaying competition and new services, to ensure the collection of revenues, and to restore certainty to the market.
I understand that the House of Representatives may begin consideration of the Commerce, Justice, State and the Judiciary Appropriations measure as early as this week, and hope that Congress will consider attaching our proposed legislation as an amendment to that bill.
A number of C-Block licensees have argued that, even if they default on their installment payments, the Commission cannot take back and reauction spectrum licenses while bankruptcy litigation is ongoing. This is a totally incorrect reading of the statutory scheme, but clarifying legislation is needed to eliminate the risk that valuable spectrum licenses will get caught up in litigation.
Along with the Administration, I sought this legislation in July. I thank my colleagues for now joining me in emphasizing the importance of this legislation and the pressing need for its adoption.
I also thank Senator Dominici and others on Capitol Hill who have said they would try to work with us on this legislation. I am confident that, as Members of Congress continue to study this issue, they will agree with us that this clarifying legislation is needed. Congress never intended to create another gold mine for lawyers or a convenient dodge for defaulters when it asked the FCC to consider installment payments to encourage small businesses to compete in spectrum auctions.
This legislation is part of the solution to the C-Block problem. The next step is for the Commission to issue a Notice of Proposed Rulemaking that adopts the menu approach advocated by Chairman Tauzin and Congressman Markey in the letter we received yesterday.
Adoption of that NPRM is no way obviates the need for the bankruptcy legislation. We need that legislation to permit us to use installment payments in the future and to maintain the credibility of installment payments that exist.

--FCC--

	NEWS
	Federal Communications Commission 1919 - M Street, N.W. Washington, D.C. 20554	News media information 202 / 418-0500 Fax-On-Demand 202 / 418-2830 Internet: http://www.fcc.gov ftp.fcc.gov
	This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).
	September 17, 1997
	STATEMENT OF CHAIRMAN REED HUNDT ON NEED FOR LAW TO GUARANTEE THAT FCC CAN RECLAIM AND REAUCTION SPECTRUM LICENSES FROM LICENSEES WHO DEFAULT
	I am pleased to report that all four Commissioners have today called on Congress to adopt legislation that would prevent wireless licensees who default on their installment payments from using bankruptcy litigation to refuse to relinquish their spectrum licenses for reauction. We have sent a letter to Capitol Hill today that explains that this legislation is needed to avoid delaying competition and new services, to ensure the collection of revenues, and to restore certainty to the market. I understand that the House of Representatives may begin consideration of the Commerce, Justice, State and the Judiciary Appropriations measure as early as this week, and hope that Congress will consider attaching our proposed legislation as an amendment to that bill. A number of C-Block licensees have argued that, even if they default on their installment payments, the Commission cannot take back and reauction spectrum licenses while bankruptcy litigation is ongoing. This is a totally incorrect reading of the statutory scheme, but clarifying legislation is needed to eliminate the risk that valuable spectrum licenses will get caught up in litigation. Along with the Administration, I sought this legislation in July. I thank my colleagues for now joining me in emphasizing the importance of this legislation and the pressing need for its adoption. I also thank Senator Dominici and others on Capitol Hill who have said they would try to work with us on this legislation. I am confident that, as Members of Congress continue to study this issue, they will agree with us that this clarifying legislation is needed. Congress never intended to create another gold mine for lawyers or a convenient dodge for defaulters when it asked the FCC to consider installment payments to encourage small businesses to compete in spectrum auctions. This legislation is part of the solution to the C-Block problem. The next step is for the Commission to issue a Notice of Proposed Rulemaking that adopts the menu approach advocated by Chairman Tauzin and Congressman Markey in the letter we received yesterday. Adoption of that NPRM is no way obviates the need for the bankruptcy legislation. We need that legislation to permit us to use installment payments in the future and to maintain the credibility of installment payments that exist. --FCC--