The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge
Nextel Spectrum Acquisition Corp. ("NAC") had a contract with Hispanic Information and Telecommunications Network, Inc. ("HITN") to lease radio spectrum rights in and around Washington, D.C. NAC complains that the lease gave it a valid right of first refusal ("ROFR") on any bona fide offer(s) HITN received for these spectrum rights. See First Am. Compl. for Specific Performance, Injunctive and Other Relief ("Am. Compl.") ¶ 1. NAC further complains that HITN has agreed to lease the relevant spectrum rights to Clearwire Corporation ("Clearwire") without affording NAC an opportunity to exercise its ROFR, thereby violating the lease. HITN moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that NAC mis-reads the plain language and meaning of the lease agreement and that HITN has not violated any of NAC's rights. See Defendant HITN's Motion to Dismiss ("Def.'s Mot.") [Dkt. #3].*fn1 The Court heard oral argument on August 16, 2007, and will now grant the motion to dismiss.
The lease in question was titled Airtime Royalty Agreement ("ARA") and was initially entered into on February 21, 1995, between The George Washington University ("GW") and Eastern Cable Networks Corp. ("ENET"). See Defendant HITN's Mem. in Supp. of Its Mot. to Dismiss ("Def.'s Mem."), Ex. B. At that time, GW had been issued a license by the Federal Communications Commission ("FCC") to construct and operate an instructional television fixed service station over the Educational Broadband Service ("EBS") for which the FCC had reserved certain spectrum on the 2.5 Ghz band.*fn2 The federal lease allowed GW to lease excess capacity to others, including commercial for-profit organizations. Id. at 1. Pursuant to the ARA, ENET leased excess capacity from GW for an initial term of 1995 to 1998, subject to automatic annual renewal for a ten-year period. See id. at 2 (Automatic Renewal Terms ¶ I.B.1). The ARA also contained the following terms:
C. Right of First Refusal
1. ENET shall have the exclusive right to match the material terms and conditions of any bona fide offer to lease excess capacity from the University during any or all of the period from the expiration of the automatic renewal term under Section I.B through two years thereafter (the "Right of First Refusal").
2. If the University desires to enter into an agreement to lease excess capacity that would commence anytime within two years after the expiration of the automatic renewal term under Section I.B, the University must provide written notice to ENET at the commencement of any negotiations regarding such lease and must provide written notice to the party with whom it is negotiating of ENET's Right of First Refusal. Such notice must be given one year prior to expiration of the contract.
3. Within seven (7) days of receiving a bona fide offer to lease excess capacity acceptable to the University, the University shall serve ENET with a written notice containing the material terms and conditions of that offer, identifying the offeror and stating the University's intent to accept the offer in the event that ENET does not elect to match the offer on substantially the same material terms and conditions as those contained in the notice. The University shall not accept any offer to lease excess capacity that includes terms or conditions that have the purpose or the effect of preventing ENET from exercising its Right of First Refusal. Within thirty (30) days of ENET's receipt of the University's written notice, ENET shall notify the University in writing of its desire to exercise its Right of First Refusal. . .
Over time, NAC succeeded to the interests of ENET and HITN assumed the rights and obligations of GW under the ARA. See Def.'s Mem. at 3. Pursuant to the ARA, HITN leased certain EBS D channels ("DC Spectrum") in the Washington, D.C. area to NAC. Id. The term of the ARA, with all automatic renewals, expired on February 21, 2005. Def.'s Mem., Ex. B ¶ I.B.1. The two-year period thereafter, during which NAC held a ROFR, ended on February 21, 2007.
Allegedly beginning on or about November 2003, HITN developed a relationship with Clearwire concerning leasing excess EBS capacity that HITN held in various markets. See Am. Compl. ¶¶ 22 - 41. That relationship led to a Master Royalty and Use Agreement ("MRUA") between Clearwire and HITN dated October 4, 2006. See Am. Compl. ¶ 36; Def.'s Mem., Ex. A.
The MRUA provides Clearwire with an "exclusive" right to all of HITN's licensed spectrum. See Am. Compl. ¶ 38; Def.'s Mem. Ex. A, Recitals at 4 (the parties agree that "in securing a source of spectrum capacity for the future and facilitating the branding of the Clearwire mark through the services provided by Licensee in the non-profit community; . . . [HITN] desires to make available to Clearwire, and Clearwire desires to have access to, . . . any additional Commercial Spectrum Capacity of [HITN] that is accepted by Clearwire and made subject to an IUA [Individual Use Agreement] as provided in this Agreement (the 'Future Spectrum Capacity'), all in accordance with the terms of this Agreement"). Most particularly, the MRUA states:
(b) Option for Future Spectrum Capacity. Licensee grants Clearwire an option (the "Option") to enter into IUAs with Licensee in respect of any and all spectrum (including, but not limited to, the Commercial Spectrum Capacity, EBS and BRS ("Spectrum") on FCC Licenses held by Licensee that is Available or that becomes Available during the Term, at prices to be negotiated in good faith based on the fair market value ("FMV") of such Spectrum at the time the Option is to be exercised, provided, however, that the negotiated price shall not exceed . . . per MHZ POP. The Option shall be exercisable in Clearwire's sole discretion each time Spectrum of Licensee or its Affiliates becomes Available during the Term . . . .
See Am. Compl. ¶ 40; Def.'s Mem., Ex. A at 6-7. The term "Available" is defined in the MRUA as spectrum that "is not encumbered by any Lien, including, but not limited to, any purchase option, right of first refusal, or other contractual obligation of ...