Still smarting from a loss in the U.S. Supreme Court, the FCC has included language in its reauthorization bill (S. 1264), now pending in the Senate, on "Application of Communications Act with Bankruptcy and Similar Laws" that would legislatively reverse its defeat in the NextWave case. The provision states that "bankruptcy laws shall not be applied (A) to avoid, discharge, stay or set-off any pre-petition debt obligation to the United States arising from an auction under this Act, (B) to stay the payment obligations of the debtor to the United States if such payments were a condition of the grant or retention of a license under this Act or (C) to prevent the automatic cancellation of licenses for failure to comply with any monetary or non-monetary condition for holding any license... including automatic cancellation of licenses for failure to pay a monetary obligation of the debtor to the United States when due under an installment payment plan arising from an auction..." The provision further provides that the debtor shall have no interest in the proceeds from auction to any license reclaimed by the FCC.

Chapter 12 Awaits President Bush's Signature

A bill to extend the farm bankruptcy law for six more months, retroactively to July 1, awaits President Bush's expected signature at press time for this issue. The bill was presented to the president on Aug. 7, meaning that the bill will likely be signed during the third week of August. A permanent extension and expansion of chapter 12 is contained in H.R. 975, the House-passed bankruptcy reform bill.

Asbestos Bill Consensus Collapses

Sen. Orrin Hatch's plan to find a legislative solution to the unending asbestos litigation crisis has run aground, amid unhappiness by the insurance industry, defendant companies, unions and the plaintiff bar. Hatch (R-Utah), chairman of the Senate Judiciary Committee, made numerous concessions to committee Democrats to win support without success. However, the concessions left the supposed beneficiaries of the law also in opposition. Hatch plans to continue to mark up the bill in committee after the Senate returns following Labor Day. There has been very little action in the House on the issue, making it very unlikely any bill will emerge during the first session of the 108th Congress. (See related article on p. 26.)

Senate Hearings Coming on Credit Counseling Industry Practices

The Senate Government Affairs Committee Permanent Subcommittee on Investigations, chaired by new Senator Norm Coleman (R-Minn.), plans to hold oversight hearings on the consumer credit counseling industry. The industry has witnessed explosive growth in recent years, fueled by record consumer spending and household debt. Some have questioned the practices of some of the largest players in what is largely an unregulated area. The hearings are expected to focus on consumer protection issues including full disclosure of rates and costs.