A federal appeals court in New York yesterday handed a tentative victory to federal regulators seeking to recapture wireless telephone spectrum now held by a bankrupt company, NextWave Personal Communications Inc.

The decision could open the door to other companies hoping to gain the space, including Nextel Communications Inc. of Reston, while heightening the prospect the government will recoup billions of dollars by reselling the spectrum.

The two-sentence decision from a three-judge panel of the U.S. Court of Appeals for the 2nd Circuit left unanswered a bevy of critical questions. But the ruling was clearly bad news for NextWave, and good news for the Federal Communications Commission: The court reversed a federal district court in New York that found the spectrum was worth only about $1 billion, and not the $4.7 billion NextWave had agreed to pay in a federal auction. The court handed the case back for new bankruptcy proceedings.

With an opinion still to come, those speaking for the record yesterday did so guardedly.

"This is an encouraging development," said FCC spokeswoman Joy Howell. "The chairman looks forward to receiving the opinion."

"NextWave will examine the Court's opinion when it is available before reviewing the company's options and deciding what next steps are appropriate," the company said in a brief statement.

The court decision is the latest wrinkle to a case that has tormented regulators, sparked controversy on Capitol Hill and attracted the hungry gaze of other wireless telephone companies. The FCC argues that the airwaves belong to the public, and when those who hold licenses to use the airwaves don't pay, the rights should revert back to the federal government to be auctioned off to another company.

The stakes in the argument are not small. As recently as last week, Nextel was offering to pay as much as $6 billion for the licenses--$3.5 to the federal government and $2.5 billion to NextWave's stockholders and creditors--in a bid to boost its own cellular offerings. NextWave rebuffed the proposal, sources said, hoping the appeals court would affirm its claims and that it would keep the licenses.

When, instead, the court ruled against NextWave yesterday, the market registered its sense that Nextel could wind up with the licenses after all: Nextel's stock skyrocketed, adding $17.31 1/4 a share to close at $115.06 1/4.

For two years in a row, the Senate has adopted provisions that would have sent licenses held by NextWave and other bankrupt companies back to the government for new sales. Both times, the amendments died in last-minute negotiations with the House. This year, the legislation gained the backing of the Clinton administration as a means of staving off more than $5 billion in spending cuts. But the measure did not survive the final round of budget negotiations.

The roots of the dispute go back four years, when NextWave claimed the right to transmit telephone calls in markets that are home to 165 million people using a dedicated chunk of radio spectrum. In an auction supervised by the FCC, the company agreed to pay $4.7 billion. But after handing over a 10 percent down payment, the company made no more payments. It landed in bankruptcy court last year.

The bankruptcy judge declared that NextWave's licenses were worth approximately $1 billion, asserting the transaction amounted to a "fraudulent conveyance," because the company paid too much. That opinion was affirmed in federal district court, but the appeals court reversed that decision.

What happens next won't be clear until the court hands down its full opinion.