TerreStar claimed in bankruptcy court documents Friday that four of its affiliate companies shouldn’t have to pay Sprint $104 million in spectrum-clearing costs, saying that Sprint’s claim “would impose a novel theory of liability that does not currently exist in federal common law or FCC precedent.”
TerreStar claims the four affiliates, including TerreStar National Services and TerreStar Canada, aren’t liable for the band-clearing costs because they have never been FCC licensees.
Sprint says TerreStar is required to compensate it for the cost of clearing spectrum when it was ordered by the FCC to move from the 800 MHz band to the 2 GHz band in 2004. At the time, the FCC said that Sprint could seek reimbursement from operators moving into the newly vacated spectrum, such as TerreStar.
TerreStar argues that even if it is liable for the spectrum clearing costs, its affiliate companies aren’t retroactively responsible for the costs. The company is trying to sell itself off to get out of bankruptcy.
Dish Network has placed a $1.38 billion opening bid on TerreStar. The auction for the company’s assets is expected to begin on June 30.