                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

In re: MAGNACOM WIRELESS, LLC,         
                         Debtor,


DONALD A. THACKER,                           No. 05-35839
                          Appellant,
                                              D.C. No.
                                           CV-04-05681-FDB
               v.
FEDERAL COMMUNICATIONS                        OPINION
COMMISSION; UNITED STATES OF
AMERICA,
                       Appellees.
                                       
      Appeal from the United States District Court
         for the Western District of Washington
      Franklin D. Burgess, District Judge, Presiding

                  Argued and Submitted
            June 7, 2007—Seattle, Washington

                Filed September 17, 2007

      Before: Betty B. Fletcher, Harry Pregerson, and
              Sandra S. Ikuta, Circuit Judges.

                    Opinion by Judge Ikuta




                            12463
12466             IN RE: MAGNACOM WIRELESS


                         COUNSEL

Donald B. Verrilli, Jr. and William M. Hohengarten, Jenner
& Block, LLP, Washington, D.C., for the plaintiff-appellant.
John S. Riper and Joseph M. Campos, Stanislaw Ashbaugh,
LLP, Seattle, Washington, for the trustee.

Peter D. Keisler, Assistant Attorney General, John McKay,
United States Attorney, William Kanter, and H. Thomas
Byron III, Department of Justice, Civil Division, Washington,
D.C., for the defendants-appellees.


                          OPINION

IKUTA, Circuit Judge:

   This appeal requires us to consider the effect of the Federal
Communications Commission’s (“FCC”) cancellation of
licenses held by a licensee in bankruptcy proceedings. Donald
Thacker, in his capacity as trustee to the bankruptcy estate of
Magnacom Wireless, LLC (“Magnacom”), appeals the district
court’s decision to deny his claim to the proceeds from the
FCC’s auction of new licenses for the radio spectrum previ-
                       IN RE: MAGNACOM WIRELESS                      12467
ously covered by Magnacom’s cancelled licenses. We con-
clude that the FCC’s cancellation of Magnacom’s licenses
extinguished Magnacom’s interest in those licenses and the
underlying spectrum. Such cancellation did not result in any
traceable proceeds, and did not constitute a lien-enforcement
remedy. Therefore, Magnacom is not entitled to such pro-
ceeds. We have jurisdiction under 28 U.S.C. § 158(d)(1) and
affirm the decision of the district court.

                                      I.

   Under the terms of the Communications Act of 1934
(“Act”), the FCC grants licenses for use of the radio spectrum.
The licenses give licensees the right to use segments of the
spectrum in various geographic areas for specified terms, in
accordance with FCC provisions. See 47 U.S.C. § 3011 Pursu-
ant to the Act, the licenses do not give licensees an ownership
interest in the spectrum. Id.

   Beginning in 1994, the FCC began selling the licenses
based on a competitive bidding process. See id. § 309(j). With
exceptions not relevant to the instant case, all proceeds from
these auctions are deposited into the U.S. Treasury. Id.
§ 309(j)(8). As part of this new market-driven licensing pro-
cess, the Act requires the FCC to “ensure that small busi-
nesses, rural telephone companies, and businesses owned by
members of minority groups and women are given the oppor-
tunity to participate in the provision of spectrum-based ser-
vices. . . .” Id. § 309(j)(4)(D). To fulfill this mandate, the FCC
  1
   47 U.S.C. § 301 states:
      It is the purpose of this chapter, among other things, to maintain
      the control of the United States over all the channels of radio
      transmission; and to provide for the use of such channels, but not
      the ownership thereof, by persons for limited periods of time,
      under licenses granted by Federal authority, and no such license
      shall be construed to create any right, beyond the terms, condi-
      tions, and periods of the license.
12468                 IN RE: MAGNACOM WIRELESS
earmarks certain blocks of spectrum for auction to small,
entrepreneurial companies known as “designated entities.” 47
C.F.R. § 1.2110(a). Other license purchasers must pay the
entire bid price at the time of the successful bid, but the FCC
allows designated entities to pay only a down payment and
then complete their purchase by making installment payments
during the term of the license. 47 C.F.R. § 1.2110(g). FCC
regulations condition these licenses upon “the full and timely
performance of the licensee’s payment obligations under the
installment plan.” 47 C.F.R. § 1.2110(g)(4); see also 47
C.F.R. § 1.2110(g)(4)(iv). Thus, in relation to designated enti-
ties, the FCC plays the dual role of regulator and creditor.

   Magnacom, one such designated entity, was created for the
purpose of obtaining licenses to the spectrum in order to pro-
vide personal communications services. In September 1996,
Magnacom purchased a number of radio spectrum licenses
from the FCC under an installment payment plan. Magnacom
made down payments of ten percent of the purchase price for
licenses to use “C block” spectrum segments and twenty per-
cent of the purchase price for licenses to use “F Block” seg-
ments. In total, Magnacom paid approximately $7 million on
a purchase price of approximately $55 million. For each
license, Magnacom signed the FCC’s standard promissory
note and security agreement (the “Security Agreement”),
promising to pay the rest of the purchase price in quarterly
installments throughout the ten-year license term.

   In the Security Agreement, Magnacom acknowledged: (1)
it possessed no underlying right to the spectrum;2 (2) the
FCC’s security interest in the licenses did not derogate from
the FCC’s regulatory authority over the licenses;3 (3) the
  2
     “Debtor understands and acknowledges that it holds a mere conditional
license to use the Spectrum with no ownership interest in the Collateral (or
any underlying right to use the Spectrum) . . . .” Security Agreement ¶ 2.
   3
     “Debtor further understands and acknowledges that it is giving a secur-
ity interest to the Commission in the Collateral only to assist the Commis-
                      IN RE: MAGNACOM WIRELESS                        12469
licenses would be automatically cancelled if an event of
default occurred;4 (4) Magnacom would not be entitled to any
proceeds from the sale of new licenses following cancellation;5
and (5) the Security Agreement would be subject to the Act,
FCC regulations, and federal law.6

  Not long after purchasing its licenses, Magnacom began to
experience financial difficulties. In an attempt to meet its

sion in protecting its ability to enforce the Commission’s regulations
which condition holding the license in compliance with all then-applicable
orders and regulations of the Commission, including, but not limited to,
full and timely payment of all payments under the Installment Payment
Plan. To that end, and not in derogation of any of the Commission’s regu-
latory authority over the License, Debtor hereby acknowledges that the
Commission has a first security interest in the Collateral . . . .” Security
Agreement ¶ 2.
   4
     “If an Event of Default shall occur, the Commission shall thereafter
have the following rights and remedies (to the extent permitted by applica-
ble law) in addition to the rights and remedies relating to the Note, all such
remedies being cumulative, not exclusive, and enforceable alternatively,
successively or concurrently at such time or times as Commission deems
expedient: (a) the License shall be automatically canceled pursuant to 47
C.F.R. § 1.2110.” Security Agreement ¶ 8.
   5
     “Debtor hereby acknowledges the Commission’s authority, pursuant to
the Communications Act of 1934, as amended, and the Commission’s
orders and regulations then-applicable to such licenses, to conduct another
public auction or assign the License in the event that the Commission
rescinds, cancels, or revokes the License for any default under this Agree-
ment . . . . Debtor further acknowledges that in the event that the Commis-
sion rescinds, cancels, or revokes the License for any default under this
Agreement . . . Debtor has no right or interest in any moneys or evidence
of indebtedness given to the Commission by a subsequent licensee of the
Spectrum and that all such moneys or evidence of indebtedness are, and
shall remain, the full property of the federal Treasury, pursuant to Section
309(j) of the Communications Act of 1934, as amended, and then-
applicable commission orders and regulations.” Security Agreement ¶ 8.
   6
     “This Agreement shall be governed by and construed in accordance
with Communications Act of 1934, as amended, then-applicable Commis-
sion orders and regulations, as amended, and federal law.” Security Agree-
ment ¶ 12.
12470             IN RE: MAGNACOM WIRELESS
installment payment obligations, Magnacom restructured its
debt by returning some licenses to the FCC, modifying other
licenses, and using the resulting down payment credits to pre-
pay for other licenses. Following this restructuring, Magna-
com held eighteen licenses subject to the installment payment
requirements and owed the FCC approximately $48 million.
Despite this restructuring, Magnacom’s financial difficulties
continued.

   On October 28, 1998, the day before Magnacom would
have defaulted on its remaining installment payments, Magna-
com filed a voluntary petition for relief under Chapter 11. In
response, on April 21, 1999, the FCC asked the bankruptcy
court for relief from the automatic stay imposed by 11 U.S.C.
§ 362. The bankruptcy court granted the request. In May
1999, the court lifted the stay on the FCC and ruled that “the
FCC may pursue immediately any and all of its remedies,
including its right to cancel the Defaulted Licenses if such
licenses have not already [been] canceled as a matter of law.”
Thereafter, the FCC cancelled the licenses. On July 12, 1999,
Magnacom’s bankruptcy case was converted from Chapter 11
to Chapter 7.

   In January 2000, the FCC filed a proof of claim as an unse-
cured creditor to obtain the approximately $48 million dollars
that the Magnacom bankruptcy estate still owed for the now-
cancelled licenses. With the acquiescence of Magnacom’s
trustee, the court approved the FCC’s proof of claim.

   In 2001, while the FCC’s claim against the bankruptcy
estate was pending, the FCC auctioned licenses to the spec-
trum segments formerly licensed to Magnacom. See Public
Notice, C and F Block Broadband PCS Spectrum Auction
Scheduled for December 12, 2000, 15 F.C.C.R. 19485 (2000).
The new licenses offered by the FCC for auction did not have
the same terms as the cancelled Magnacom licenses. Among
other things, the new licenses were for a new ten-year term
ending in 2011 (Magnacom’s licenses had been set to expire
                  IN RE: MAGNACOM WIRELESS                12471
in 2006 and 2007) and had different build-out construction
deadlines. In addition, the FCC would not accept installment
payments for the licenses. As it turned out, market conditions
had changed since the time Magnacom had won its licenses
at auction. The winning bidders in the 2001 auction paid a
total purchase price of $287 million, substantially more than
Magnacom had paid for licenses to the same spectrum seg-
ments. Pursuant to 47 U.S.C. § 309(j)(8), the proceeds of the
auction were deposited into the U.S. Treasury.

   In light of the subsequent sale of new licenses, on February
12, 2003, Magnacom’s trustee filed a motion to reconsider the
FCC’s allowed claim against Magnacom’s bankruptcy estate.
In his motion, the trustee opposed the FCC’s unsecured claim
on the ground that the reauctioned licenses were sold for a
substantially higher price than was required to cover Magna-
com’s default. Despite the FCC’s opposition, the bankruptcy
court granted this motion on September 2, 2003, holding that
the FCC was not entitled to any distribution from the estate.

   On December 19, 2003, the trustee filed a complaint
against the FCC in bankruptcy court, seeking the return of any
proceeds from the auction of the new licenses that exceeded
the amount Magnacom owed to the FCC. The bankruptcy
court dismissed the complaint for failure to state a claim upon
which relief could be granted. The trustee appealed this deci-
sion to the district court, which affirmed the decision on June
22, 2005. The trustee now appeals the decision of the district
court.

                              II.

   We review a dismissal for failure to state a claim pursuant
to Federal Rule of Civil Procedure 12(b)(6) de novo. Pack v.
United States, 992 F.2d 955, 957 (9th Cir. 1993). Limiting our
review to the content of the trustee’s complaint, “[a]ll allega-
tions of material fact are taken as true and construed in the
light most favorable to the nonmoving party.” Id. Likewise,
12472             IN RE: MAGNACOM WIRELESS
“[w]e review the district court’s decision on an appeal from
a bankruptcy court de novo.” Richmond v. United States, 172
F.3d 1099, 1101 (9th Cir. 1999) (quotation marks omitted).

                              III.

   The principal issue in this appeal is the legal effect of the
FCC’s cancellation of Magnacom’s licenses. It is undisputed
that Magnacom’s licenses were cancelled following the bank-
ruptcy court’s original decision to lift the stay. What the par-
ties debate is the effect of this cancellation. Magnacom’s
trustee argues that the cancellation and subsequent spectrum
auction is subject to Bankruptcy Code and Uniform Commer-
cial Code (“UCC”) rules that give the Magnacom estate enti-
tlement to surplus proceeds. The FCC argues that under
applicable statutes and regulations, once the licenses were
cancelled, they ceased to exist and any right in the underlying
spectrum was extinguished. Therefore, the proceeds from the
auction of the new licenses were not property of the bank-
ruptcy estate.

   [1] The plain language of the Act supports the FCC’s posi-
tion. Under 47 U.S.C. § 301, licenses “provide for the use” of
the spectrum, “but not the ownership thereof.” In other words,
licensees have a property interest only in the use of the spec-
trum, not in the underlying spectrum itself. Moreover, § 301
provides that the property interest created by a license is lim-
ited to “the terms, conditions, and periods” of the license
itself. Id. Consistent with the Act, the Security Agreement
states that licenses are extinguished upon non-payment, and
convey no rights to the underlying spectrum. See Security
Agreement, ¶ 2; see also 47 C.F.R. § 1.2110(g)(4)(iv) (“If an
eligible entity obligated to make installment payments fails to
pay the total Required Installment Payment . . . it shall be in
default, its license shall automatically cancel, and it will be
subject to debt collection procedures.”). Because licenses
“provide for the use” of the spectrum and convey no owner-
ship interest “beyond the terms, conditions, and periods of the
                       IN RE: MAGNACOM WIRELESS                      12473
license,” 47 U.S.C. § 301, it follows that once the licenses are
cancelled for nonpayment, the licenses cease to exist along
with any interest in the spectrum for which the license was
issued. See FCC v. NextWave Pers. Commc’ns Inc., 537 U.S.
293, 307-08 (2003) (describing cancellation as “eliminating
the licenses”). Thus, under the plain language of the statute
and applicable regulations, once an FCC license is cancelled,
a licensee no longer has any right derived from that license
and therefore has no entitlement to the proceeds from the auc-
tion of a new license.7

   [2] There is one wrinkle to this analysis, but it does not
change the result in this case. Section 525 of Title 11 states
that “a governmental unit may not . . . revoke . . . a license
. . . to . . . a person that is . . . a debtor under this title . . .
solely because such . . . debtor . . . has not paid a debt that
is dischargeable in the case under this title . . . .” 11 U.S.C.
§ 525.8 Applying § 525 in a factual situation similar to ours,
  7
   The FCC explained its position on this issue in an opinion letter that
addresses precisely the circumstance presented in this case:
      [I]t is our understanding that, where there is collateral in goods
      or other tangible property, the proceeds from the liquidation of
      collateral would be applied to debts (and other costs) due. In the
      case of FCC licenses that are cancelled and reauctioned, how-
      ever, there is no liquidation of the collateral by the FCC and no
      proceeds from the resale of the defaulted license because the
      license is canceled and, in effect, disappears.
Leonard J. Kennedy, Esq., 11 F.C.C.R. 21572, 21576 (OGC/WTB 1996)
(citation omitted). This opinion letter does not have the force of law and
is not entitled to any Chevron deference. See Christensen v. Harris
County, 529 U.S. 576, 587 (2000). We find its analysis persuasive
because, as explained above, licenses provide only for the use of the spec-
trum and convey no ownership interest beyond the license term. Once the
licenses are cancelled for nonpayment, the licenses cease to exist.
   8
     The full text of 11 U.S.C. § 525(a) reads:
      Except as provided in the Perishable Agricultural Commodities
      Act, 1930, the Packers and Stockyards Act, 1921, and section 1
      of the Act entitled “An Act making appropriations for the Depart-
12474                IN RE: MAGNACOM WIRELESS
the Supreme Court held that the FCC’s regulatory authority to
cancel licenses did not trump the provision of § 525; rather,
the FCC was precluded from cancelling a license solely
because of the licensee’s failure to pay on a debt discharge-
able in bankruptcy. NextWave, 537 U.S. at 304. Thus, the
FCC’s decision to cancel Magnacom’s licenses for nonpay-
ment would be subject to challenge under § 525.

   [3] NextWave is not applicable here, however, because
Magnacom’s trustee does not challenge the FCC’s cancella-
tion of the licenses and does not seek relief based on § 525.
Magnacom’s trustee did not object to the FCC’s motion for
relief from the automatic stay to allow the FCC to cancel the
licenses. Nor does the trustee now argue that the FCC’s can-
cellation of the licenses violated § 525; in his opening brief
trustee explicitly accepts the FCC’s cancellation, stating that
“Magnacom is not trying to recover its licenses or set aside
their transfer to new licensees.” Section 525 is not applicable
when, as here, an entity does not challenge the cancellation of
its license.9

     ment of Agriculture for the fiscal year ending June 30, 1944, and
     for other purposes,” approved July 12, 1943, a governmental unit
     may not deny, revoke, suspend, or refuse to renew a license, per-
     mit, charter, franchise, or other similar grant to, condition such a
     grant to, discriminate with respect to such a grant against, deny
     employment to, terminate the employment of, or discriminate
     with respect to employment against, a person that is or has been
     a debtor under this title or a bankrupt or a debtor under the Bank-
     ruptcy Act, or another person with whom such bankrupt or debtor
     has been associated, solely because such bankrupt or debtor is or
     has been a debtor under this title or a bankrupt or debtor under
     the Bankruptcy Act, has been insolvent before the commence-
     ment of the case under this title, or during the case but before the
     debtor is granted or denied a discharge, or has not paid a debt that
     is dischargeable in the case under this title or that was discharged
     under the Bankruptcy Act.
  9
    Besides noting that both Magnacom and the bankruptcy court had pre-
viously given their consent to the cancellation of the licenses, the bank-
                      IN RE: MAGNACOM WIRELESS                       12475
                                    IV.

  Although the plain language of the statute and applicable
regulations indicate that Magnacom had no entitlement to pro-
ceeds from a new auction, the trustee argues that cancellation
did not eliminate the bankruptcy estate’s right to collect sur-
plus proceeds from the auction of new licenses covering the
same spectrum. The trustee asserts that both the Bankruptcy
Code and the UCC provide independent bases for the return
of “surplus proceeds” from the second auction.

   The trustee’s argument under the Bankruptcy Code is as
follows. Once Magnacom entered bankruptcy, its interests in
the licenses, as well as the proceeds of those licenses, became
property of the bankruptcy estate. 11 U.S.C. § 541(a)(1),
(a)(6). The term “proceeds” includes all funds “traceable to”
or “substituted for” the original property. See 11 U.S.C.
§ 541(a)(6). Because Magnacom’s licenses gave it the exclu-
sive right to use a portion of the spectrum, the FCC’s cancel-
lation of the Magnacom licenses freed up that portion of the
spectrum. As a result, the trustee argues, the FCC was enabled
to sell new licenses, and the proceeds from the sale of the new

ruptcy court also rested its conclusion that § 525 was not applicable on the
alternative basis that Magnacom was in Chapter 7 bankruptcy not Chapter
11 bankruptcy, unlike the debtor in NextWave, 537 U.S. at 297. Because
debts of corporations are not dischargeable under Chapter 7 bankruptcy,
§ 525 would not be applicable in Magnacom’s Chapter 7 case. See 11
U.S.C. § 727(a) (“The court shall grant the debtor a discharge, unless . . .
the debtor is not an individual.”); see also NLRB v. Better Bldg. Supply
Corp., 837 F.2d 377, 378 (9th Cir. 1988) (“Partnerships and corporations
may not discharge their debts in a liquidation proceeding under Chapter
7 of the Code.”). On this record, however, it is unclear whether the FCC
cancelled the licenses while Magnacom’s proceedings were in Chapter 11
or Chapter 7. Magnacom remained in Chapter 11 bankruptcy proceedings
after the bankruptcy court lifted the stay, and the record does not reflect
the date that the FCC cancelled the licenses. However, given the fact that
§ 525 is ultimately not relevant to the trustee’s claim, we need not reach
the bankruptcy court’s alternative holding.
12476             IN RE: MAGNACOM WIRELESS
licenses are traceable proceeds of the cancelled Magnacom
licenses, and thus property of the bankruptcy estate.

   [4] We are unpersuaded by the trustee’s argument based on
the Bankruptcy Code. This argument is based on the premise
that Magnacom retained an interest in the spectrum after the
FCC cancelled its licenses, a premise we have already
rejected. If a bankruptcy estate includes a valuable property
interest that is sold, or swapped for a different piece of prop-
erty, the proceeds remain part of the estate. See Catalano v.
Comm’r, 279 F.3d 682, 686 (9th Cir. 2002). Thus, if the FCC
had sold Magnacom’s licenses, the Magnacom estate might
have rights to proceeds from such a sale. Alternatively, if
Magnacom retained rights to the spectrum covered by its
licenses, the Magnacom estate might have rights to proceeds
from the sale of new licenses to use the underlying spectrum.
However, in this case, Magnacom’s property—the licenses—
were extinguished and had no value once they were cancelled
by the FCC. And as we have previously noted, Magnacom
had no interest in the underlying spectrum or any subsequent
licenses for the spectrum. See 47 U.S.C. § 307(a). When the
property of an estate no longer exists and has not been dis-
posed of in any way that generated proceeds, the trustee has
no remedy. See generally 44 GEORGE GLEASON BOGERT ET AL.,
THE LAW OF TRUSTS AND TRUSTEES § 921 (6th ed. 2007). Here
the licenses were extinguished and were simply not disposed
of in any way.

   [5] It is true that the FCC had to cancel Magnacom’s
licenses before the FCC could sell new licenses for the under-
lying spectrum. However, this fact alone does not give
Magnacom any rights to proceeds from the new licenses. A
creditor’s lawful extinction of a property right in the bank-
ruptcy estate does not give the trustee in bankruptcy rights to
other property created by that creditor. See In re Gull Air,
Inc., 890 F.2d 1255, 1262 (1st Cir. 1989) (“[W]hen a debtor’s
proprietary interest expires by operation of an express condi-
tion, the Bankruptcy Code does not preserve that interest and
                  IN RE: MAGNACOM WIRELESS                12477
prevent termination.”). Therefore, the FCC’s sale of new
licenses for the use of spectrum segments to which Magna-
com had no rights did not generate any proceeds traceable to
Magnacom’s licenses.

   We are also unpersuaded by the trustee’s UCC argument.
The trustee contends that the Security Agreement gave the
FCC a security interest in the licenses that could be enforced
only pursuant to the terms of the UCC. See Security Agree-
ment, ¶ 8(i) (giving the FCC “any remedies of a Secured
Party under the Uniform Commercial Code.”). Article 9 of the
UCC sets forth a secured creditor’s lien-enforcement reme-
dies. Under Article 9 of the UCC (subject to multiple proce-
dural requirements), after a borrower defaults, the secured
creditor may sell its collateral subject to the borrower’s right
to any surplus from the sale. UCC §§ 9-610, 9-615. If a credi-
tor held a security interest in the proceeds of Magnacom’s
licenses, and the licenses had been sold, the creditor would
have owed the Magnacom estate any proceeds beyond what
was necessary to satisfy the debt owed to the creditor. See
MLQ Investors, L.P. v. Pac. Quadracasting, Inc., 146 F.3d
746, 749 (9th Cir. 1998). The trustee contends that the UCC
likewise applies to the FCC’s enforcement of the Security
Agreement and requires the FCC to return the excess pro-
ceeds from its auction of new licenses to the bankruptcy
estate.

   If we assume that the UCC is applicable to the Security
Agreement (an issue we do not reach), the UCC would sup-
port the trustee’s claim of entitlement to proceeds from the
FCC’s sale of new licenses only if the FCC’s cancellation of
the licenses was a lien-enforcement remedy under the UCC.
The trustee argues that both the applicable regulations and the
Security Agreement make cancellation a lien-enforcement
remedy. We look at both in turn.

  [6] By its terms, the Security Agreement does not make
cancellation a lien-enforcement remedy. However, the trustee
12478              IN RE: MAGNACOM WIRELESS
relies on NextWave Personal Communications, Inc. v. F.C.C.,
254 F.3d 130 (D.C. Cir. 2001), aff’d by, NextWave, 537 U.S.
293, to support this argument. As noted above, NextWave
Personal Communications, Inc. involved a debtor who raised
various challenges to the FCC’s cancellation of its license,
including the ultimately successful argument that § 525 pre-
vented the FCC from cancelling its licenses. In response, the
FCC made a highly technical argument. The FCC first pointed
out that under 11 USC § 362(b)(4), the automatic stay does
not prevent the government from taking certain regulatory
actions. The FCC argued that such allowable regulatory
actions include cancelling a debtor’s licenses. If it interpreted
§ 525 as precluding the FCC from cancelling a debtor’s
licenses, the court would create a conflict with § 362(b)(4).
The court rejected this argument on the ground that
§ 362(b)(4) did not apply to license cancellation in this case.
The court noted the FCC’s concession that “canceling the
licenses and seeking to collect on the debt was ‘tantamount to
. . . foreclosing on collateral.’ ” Id. at 151. Because foreclo-
sure actions are not exempt from the automatic stay under
§ 362(b)(4), the court concluded that it could read § 525 to
prohibit the FCC from cancelling licenses without conflicting
with § 362(b)(4). Id. We do not consider this brief discussion
to be the D.C. Circuit’s reasoned conclusion that cancellation
of an FCC license is a lien-enforcement action. The D.C. Cir-
cuit’s suggestion that § 362(b)(4) did not exempt the FCC’s
license cancellation from the automatic stay was based on the
FCC’s concession that its action was “tantamount to foreclos-
ing on collateral.” In our circuit, statements made in passing,
without analysis, are not binding precedent. See, e.g., United
States v. Johnson, 256 F.3d 895, 915 (9th Cir. 2001). More-
over, the D.C. Circuit’s decision was superceded by the
Supreme Court’s analysis in Nextwave, which did not address
the question whether license cancellation constituted lien
enforcement. NextWave, 537 U.S. at 302. Therefore, we reject
the trustee’s argument that under the D.C. Circuit’s NextWave
                   IN RE: MAGNACOM WIRELESS                12479
decision we must interpret the Security Agreement to make
cancellation a lien-enforcement remedy.

   The trustee also points to regulations governing the licenses
that state that when a licensee misses an installment payment
“it shall be in default, its license shall automatically cancel,
and it will be subject to debt collection procedures.” 47
C.F.R. § 1.2110(g)(4)(iv) (emphasis added). According to the
trustee, the use of “and” suggests that cancellation triggers a
hybrid regulatory and lien-enforcement action that is subject
to typical debtor-creditor law. We read this language in the
opposite way: after non-payment, the license is extinguished
and the debtor will be held accountable for the unpaid
licensee fees. See Leonard J. Kennedy, Esq., 11 F.C.C.R.
21572, 21576. This is exactly how the FCC proceeded in this
case: it took steps to obtain relief from the automatic stay in
order to cancel Magnacom’s licenses, and then proceeded to
enforce its claims as an unsecured creditor in the bankruptcy
proceedings.

   Finally, we disagree with the trustee’s reading of NBD Park
Ridge Bank v. SRJ Enterprises, Inc. (In re SRJ Enterprises,
Inc.), 150 B.R. 933, 938 (Bankr. N.D. Ill. 1993), and its prog-
eny to support the argument that because the FCC had a
security interest in the licenses, its cancellation of those
licenses must be deemed to be a lien-enforcement remedy. In
re SRJ Enterprises, Inc. involved a debtor in Chapter 11 bank-
ruptcy proceedings who sold his car dealership and, as part of
the sales price, received a “termination fee” for voluntarily
terminating his Nissan sales franchise. Id. at 935. Nissan
would not have issued a new franchise to the buyer of the
dealership until the debtor terminated the existing franchise.
Id. The court determined that the creditor’s security interest
in “general intangibles” included a security interest in the ter-
mination fee received by the debtor. Id. at 939-40. In the
course of reaching this conclusion, the court analogized to
cases allowing lenders to enforce security interests in the pro-
ceeds from sales of FCC licenses, even though FCC did not
12480                 IN RE: MAGNACOM WIRELESS
allow lenders to take a security interest in the licenses them-
selves. Id.

   These cases do not help the trustee. Unlike our case, the
debtor in In re SRJ Enterprises, Inc. owned a valuable right;
the right to terminate its franchise agreement. The bankruptcy
court merely held that a secured creditor had an interest in the
proceeds derived from exercising that right. Similarly,
secured creditors may take a security interest in the proceeds
derived from licensees’ exercise of their valuable right to sell
or transfer their licenses. By contrast, Magnacom did not own
a termination right or any other valuable right. Any value
stemming from Magnacom’s license was extinguished when
the FCC unilaterally cancelled the license pursuant to its con-
tractual and regulatory rights. Moreover, nothing in In re SRJ
Enterprises, Inc. suggests that the FCC was required to
enforce its security interest in the licenses, rather than merely
cancelling them.

   [7] We conclude that the trustee’s UCC arguments are to no
avail. The FCC had a regulatory and contractual right to can-
cel Magnacom’s licenses. This right was separate and inde-
pendent from the FCC’s rights as a secured creditor. Nothing
in the Security Agreement or the applicable regulations indi-
cates that a license cancellation must be viewed as a lien-
enforcement remedy, and we decline to do so. Because the
FCC’s license cancellation is not a UCC lien-enforcement
remedy, the UCC’s requirements are simply inapplicable.
Therefore, even if the UCC were applicable to the Security
Agreement, it would not entitle Magnacom to proceeds after
its licenses were extinguished.10
  10
    By the same token, the fact that a debtor’s rights to surplus proceeds
are unwaivable under U.C.C. § 9-602(4) is not relevant in this case. The
FCC did not exercise its lien-enforcement remedies and did not sell collat-
eral owned by Magnacom. Therefore, it received no surplus proceeds to
which Magnacom was entitled.
                  IN RE: MAGNACOM WIRELESS               12481
   [8] In sum, under 47 U.S.C. § 301, once Magnacom’s
licenses were cancelled by the FCC, Magnacom’s licenses
had no value and Magnacom’s interest in the underlying spec-
trum was extinguished. This valueless asset could not gener-
ate any traceable proceeds for purposes of the Bankruptcy
Code. Moreover, nothing in the Security Agreement or appli-
cable law requires us to treat the FCC’s license cancellation
as a lien-enforcement proceeding subject to the UCC. There-
fore, Magnacom had no entitlement to the proceeds from any
subsequent sale of new licenses covering the same spectrum.

                              V.

   Finally, the trustee argues that principles of issue preclu-
sion and judicial estoppel barred the FCC from claiming that
Magnacom was not entitled to the proceeds from the sale of
new licenses for the spectrum covered by the Magnacom
licenses.

   The trustee’s issue preclusion argument is based on the
bankruptcy court’s September 2, 2003 order disallowing the
FCC’s unsecured claim against the bankruptcy estate. In its
order, the bankruptcy court indicated that the FCC was not
entitled to recover the $48 million that Magnacom had failed
to pay for the now-cancelled licenses because the FCC’s
claim had been satisfied by the sale of the new licenses. The
court stated that it was “unconvinced by the FCC’s argument
that the claim may not be reconsidered because the licenses
that it subsequently auctioned were different licenses than the
ones previously held by the Debtor . . . . No matter how
labeled, however, the FCC could not have auctioned these
licenses to new users, but for the Debtor’s default.” In re
Magnacom Wireless, LLC, No. 98-39048, at 5-6 (Bankr.
W.D. Wa. Sept. 2, 2003) (memorandum decision on motion
for reconsideration). However, in ultimately disallowing the
FCC’s claim, the court relied primarily on the FCC’s policy
statement that it would “ ‘forgive any outstanding debt so
long as it has been made whole (penalties and costs included)
12482             IN RE: MAGNACOM WIRELESS
in a subsequent auction.’ ” Id. at 6 (quoting Leonard J. Ken-
nedy, Esq., 11 F.C.C.R. at 21576). The court concluded:

    Although the FCC disputes that it received a $238
    million surplus from the subsequent auction of the
    licenses, the FCC has conceded that the proceeds
    from the subsequent auction exceed the amount of its
    claim against the Debtor’s estate. If the Court were
    to accept the FCC’s argument, the FCC would
    unquestionably receive a substantial windfall. Such
    a result would be contrary to the FCC’s position as
    stated in the [policy] letter that it would “forgive out-
    standing debt so long as it has been made whole
    (penalties and costs included) in a subsequent auc-
    tion.” 11. F.C.C.R. at 21576. Prevention of such a
    double recovery to the harm of the Debtor’s creditors
    and estate, particularly where the claimant has recog-
    nized in its own policy statements that such a result
    would be inequitable, is precisely the type of circum-
    stance that Fed. R. Civ. P. 60(b)(5) or (6) should be
    utilized to prevent.

Id. at 7-8.

   Moreover, although the bankruptcy court refused to allow
the FCC to proceed against Magnacom, the court expressly
did not conclude that Magnacom was entitled to proceeds
from the FCC’s sale of the new licenses. In this same order,
the court stated that it “recognizes that the part[i]es have
included briefing on issues that are not necessarily before the
Court at this time. For example, the Movants are taking the
position that the estate also has substantial claims against the
FCC for the $238 million surplus. The Court simply con-
cludes that the FCC is not entitled to any further claim against
the estate for the $48,187,219.73.” In a subsequent order, the
bankruptcy court reiterated that it did not reach the issue of
whether Magnacom was entitled to surplus proceeds. The
court concluded that “[t]he issue decided by the Court in its
                     IN RE: MAGNACOM WIRELESS                     12483
September 2, 2003 Decision was whether reconsideration of
the FCC’s claim was proper. The Court made it clear in its
decision that this was the only issue before it, and that it was
not making any rulings on whether the estate had any claim
to the surplus proceeds.” In re Magnacom Wireless, LLC, No.
98-39048, at 6 (Bankr. W.D. Wa. Oct. 5, 2004) (memoran-
dum decision on motion to dismiss complaint).

   [9] Reading the entirety of the bankruptcy court’s order in
context, and giving due weight to the court’s subsequent inter-
pretation of its own order, we must conclude that the court did
not decide the question whether Magnacom was entitled to
proceeds from the sale of the new licenses. Id. at 8. “A party
invoking issue preclusion must show: (1) the issue at stake is
identical to an issue raised in the prior litigation; (2) the issue
was actually litigated in the prior litigation; and (3) the deter-
mination of the issue in the prior litigation must have been a
critical and necessary part of the judgment in the earlier
action.” Littlejohn v. United States, 321 F.3d 915, 923 (9th
Cir. 2003). Because the “issue at stake” in this case is not
“identical to an issue raised in the prior litigation” and has not
been adjudicated, issue preclusion does not bar the FCC from
making its arguments here.11

   The trustee also argues that the FCC’s claim is barred by
the doctrine of judicial estoppel. “Judicial estoppel is an equi-
table doctrine that precludes a party from gaining an advan-
tage by asserting one position, and then later seeking an
advantage by taking a clearly inconsistent position.” Hamilton
v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir.
2001). The trustee failed to raise this argument before either
the bankruptcy court or the district court. We, therefore, deem
it waived. See El Paso v. Am. W. Airlines, Inc. (In re Am. W.
Airlines, Inc.), 217 F.3d 1161, 1165 (9th Cir. 2000).
  11
    We also reject the trustee’s argument that the bankruptcy court’s
October 5, 2004 ruling on this issue confused issue preclusion and claim
preclusion. As our analysis indicates, the bankruptcy court did not reach
the issue of the legal effect of the license cancellation.
12484            IN RE: MAGNACOM WIRELESS
                            VI.

   In sum, we uphold the bankruptcy court’s dismissal of the
trustee’s claim. The FCC’s license cancellation extinguished
Magnacom’s rights to the underlying spectrum. Magnacom
has no claim to the proceeds of the subsequent auction of new
licenses covering the same spectrum.

  Affirmed.
