Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
NextWave Ruling Spells Victory and Defeat
When the government is a creditor, it cannot exercise self-help remedies that may be consistent with regulatory policies but are in violation of the specific provisions of the Bankruptcy Code, 11 U.S.C. ” 101 et seq. In Federal Communications Comm'n v. NextWave Personal Communications, Inc., No. 01-653, 2003 U.S. LEXIS 1059, at *7-8, 71 U.S.L.W. 4085 (Jan. 27, 2003), the Supreme Court held that Bankruptcy Code Section 525, which prohibits a governmental unit from revoking a license to a debtor in bankruptcy, prevents the Federal Communications Commission (FCC) from revoking spectrum licenses that were bought on credit, but not paid for when due by NextWave Personal Communications, Inc. (NextWave). The Court rejected the FCC policy arguments as irrelevant to its considerations. For spice, the Majority almost scoffed at Justice Breyer's dissenting opinion that the ruling could be interpreted to prevent a government licensor from ever revoking a license to a debtor in bankruptcy.
The Court's decision should end what has become a seemingly never-ending war between NextWave and the FCC. Although this war may be over, bankruptcy court jurisdiction was a major casualty of the campaign waged in the Second Circuit Court of Appeals. As discussed later in this article, NextWave's initial battles were twice fought in the Bankruptcy Court for the Southern District of New York, with the outcome ultimately determined by the Second Circuit. It held, not once but twice, that the Bankruptcy Court lacks jurisdiction to over-rule what it determined to be regulatory actions taken by the FCC (see accompanying article, this page). The Supreme Court's decision did not result from an appeal of the Second Circuit's decisions. Instead, the decision arose from NextWave's appeal to the United States Court of Appeals for the District of Columbia (D.C. Circuit). In the D.C. Circuit, NextWave challenged the FCC's denial of its application for reconsideration of the license revocation under the Administrative Procedures Act. The Supreme Court held that the Second Circuit decision was only jurisdictional and, therefore, NextWave's bankruptcy arguments could be re-litigated in the D.C. Circuit.
The NextWave jurisdictional determinations raise an important query: In future bankruptcy cases where the FCC exercises an alleged regulatory power that is in direct conflict with the Bankruptcy Code, does the bankruptcy court have the jurisdiction to resolve the dispute? For example, Section 214(a) of the Communications Act, 47 U.S.C. ” 151, et seq. requires a telecommunications provider to obtain a certificate from the FCC that the public convenience will not be adversely affected before service may be terminated. Can the FCC prevent a telecom provider from discontinuing service caused by a debtor's rejection of an executory contract under Section 365 of the Bankruptcy Code? Can the bankruptcy judge decide this issue? Especially in the Second Circuit, a telecom debtor may have to run its bankruptcy case parallel to FCC regulatory proceedings.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Spurred By Data Breaches, CLOs Are Increasing Cybersecurity Leadership Role
Chief information officers still bear the brunt of cybersecurity worries at many companies. But a study by the Association of Corporate Counsel Foundation finds that chief legal officers are increasingly taking a leadership role in cybersecurity strategy.
GCs Want to Tap Into AI But Lack Roadmap, Report Shows
General counsel are eager to tap the promise of generative AI. But without clear technology road maps, many legal departments are struggling to turn that interest into action.
Is Google Search Dead? The Key to Thriving In an AI-Driven World
Part Two of this two-part articleexamines practical steps marketers must take to succeed in this changing landscape by embracing a multichannel, AI-driven approach to their marketing and PR efforts. This means rethinking your strategy to build direct connections with your audience, using platforms that elevate your visibility and focusing on storytelling that resonates.
Shifting Crypto and Cyber Enforcement Priorities In SEC
When the SEC issues the next annual enforcement report for fiscal year 2025, we expect securities offering actions and investment adviser actions will almost certainly be up, and the “crypto” and “cyber” cases will almost certainly be down. Public statements by the new SEC administration have said as much, but even more telling than public statements are the allocation of limited enforcement resources.
Seventh, Ninth Court Rulings Tighten Reach of Federal Video Privacy Protection Act
The VPPA may be nearly four-decades old and video-rental stores largely a thing of the past, but the rise of online content, streaming services and ancillary activities has brought with it frequent litigation based on the VPPA. The key challenge in these litigations is how to interpret the VPPA’s 1980s terms in light of today’s digital advances.