United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 17, 2000 Decided July 11, 2000

No. 99-1513

AMSC Subsidiary Corporation,

Appellant

v\.

Federal Communications Commission,

Appellee

Globalstar, L.P., et al.,

Intervenors

Appeal of an Order and Authorization of the

Federal Communications Commission

Bruce D. Jacobs argued the cause for appellant. With him on the briefs
were Barry H. Gottfried, Lon C. Levin and Hadrian R. Katz.

Philip L. Malet, William D. Wallace and William F. Adler were on the
briefs for intervenors supporting appellant.

Gregory M. Christopher, Counsel, Federal Communications Commission,
argued the cause for appellee. With him on the brief were Christopher J.
Wright, General Counsel, and Daniel M. Armstrong, Associate General
Counsel.

Gregory C. Staple and R. Edward Price were on the brief for intervenors
supporting appellee.

Before: Ginsburg, Randolph, and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge: AMSC Subsidiary Corporation petitions for
review of the Federal Communications Commission\'s decision to license
mobile earth terminals (METs) to receive Mobile Satellite Service (MSS)
from a foreign-licensed satellite in the Upper L-band of the
electromagnetic spectrum. See In re Applications of SatCom, Order &
Authorization, 14 F.C.C.R. 20,798, 20,798 p 1 (1999). AMSC claims the
Commission effectively modified its license to provide MSS in the Upper
L-band without affording it the hearing required by § 316 of the
Communications Act of 1934. AMSC also claims the Commission\'s decision
was arbitrary and capricious because it abandoned without explanation
the agency\'s long-standing policy against authorizing more than one MSS
system to operate in the Upper L-band. In addition, two intervenors
claim the Commission could not lawfully allow METs in the United States
to use a satellite that is not itself licensed by the Commission to
serve the United States. Finding no merit in AMSC\'s claims, and not
reaching that of the intervenors, we deny the petition for review.

I. Background

MSS is a realtime voice and data telecommunications service provided to
and from METs located anywhere within the transmission area of the
satellite. MSS can be used on land, including areas too sparsely settled
to support cellular or other land-based telecommunications services, at
sea, or in the air. In a typical MSS system, a MET transmits to the
satellite on one frequency and the satellite simultaneously transmits
back to the MET on another frequency. The satellite also communicates
with a fixed earth terminal that is connected to the public switched
telephone network, thereby allowing direct communications between a MET
and an ordinary telephone.

The technical characteristics of MSS create a unique interference
problem. A MET uses a nearly omnidirectional antenna to communicate with
an MSS satellite, and is incapable of discriminating among transmissions
from different MSS satellites; likewise, an MSS satellite transmits
indiscriminately to a large geographic area. Therefore, if satellites or
METs in two MSS systems covering the same geographic area transmit on
the same frequency, then their signals will interfere with one another
and one or both signals will not be useful. This can occur even if the
two METs are thousands of miles apart. Because of this problem, no two
MSS systems can operate on the same frequencies insofar as the
footprints of their satellites overlap.

A. AMSC\'s License

In 1985 the Commission proposed to license an MSS system to serve the
United States in the 28 MHz that comprise the Upper L-band. After
receiving comments on its proposal, the Commission estimated that the
minimum spectrum needed for a viable MSS system was 20 MHz; considering
that estimate, the limited amount of spectrum available, and the high
cost of building an MSS system, the Commission decided to license only
one system. See In re Amendment of Parts 2, 22 and 25 of the
Commission\'s Rules, Second Report & Order, 2 F.C.C.R. 485, 486 p 6
(1987) (Upper L-band Licensing Order). The Commission therefore ordered
the license applicants to form a consortium for the purpose of
developing a single MSS system; in 1989 the Commission licensed that
consortium, AMSC, to provide MSS in the United States using the entire
Upper L-band. See In re Amendment of Parts 2, 22 and 25 of the
Commission\'s Rules, Memorandum Opinion, Order & Authorization, 4
F.C.C.R. 6041, 6058 p 121 (1989) (AMSC Licensing Order).

In addition to AMSC\'s, there are four MSS satellites transmitting to
all or parts of North America in the Upper L-band: TMI (licensed by
Canada), Telecomm (licensed by Mexico), TMSat (licensed by Russia), and
Inmarsat (licensed by the United Kingdom). If AMSC transmitted on all
the frequencies in the Upper L-band, its signals would interfere with
those of the other MSS operators. Therefore, although it licensed AMSC
to use the entire Upper L-band, the Commission expressly conditioned
AMSC\'s use of the license upon the outcome of \"international
coordination,\" id. at 6048 p 52, that is, the multilateral negotiating
process used to avoid interference among carriers licensed by different
nations to operate in the same band of spectrum. Thus, in the jargon of
the trade, AMSC is authorized to operate only in those portions of the
Upper L-band that are \"coordinated for\" its use. Order &
Authorization, 14 F.C.C.R. at 20805 p 14.

B. International Coordination

The Commission, representing the United States in negotiations with the
other four affected nations, sought to coordinate 20 MHz of spectrum in
the Upper L-band for the exclusive use of AMSC. Because the combined
spectrum demands of the five different licensees far exceeded the amount
of spectrum available, the five nations were unable to reach a permanent
coordination agreement and the Commission was unable to secure 20 of the
28 MHz for AMSC. In 1996, however, the five nations did enter into an
interim agreement (known as the Mexico City Memorandum of Understanding
(MOU)) under which, pending a permanent coordination agreement, the
Upper L-band would be coordinated on a yearly basis by agreement among
the five MSS operators themselves. See Order & Authorization, 14
F.C.C.R. at 20802 p 18.

Under the Mexico City MOU, the amount of spectrum coordinated for each
MSS system can change from year to year. See id. The key variables
guiding negotiations among the five operators are their (1) present
spectrum usage and (2) projected near-term needs. The five operators
were able to reach agreements for 1997, 1998, and 1999 but not for 2000.
See id. at 20814 p 34.

C. DISCO II

As mentioned above, the Commission determined in the Upper L-band
Licensing Order that it would license only one MSS system in the Upper
L-band. The adoption by the United States in 1997 of the WTO Agreement
on Basic Telecommunications Services, however, obligated the United
States to open its satellite markets to foreign systems licensed by
other WTO member countries. See Fourth Protocol to the General Agreement
on Trade in Services (GATS) (April 30, 1996), 36 I.L.M. 336 (1997)
(entered into force Jan. 1, 1998). The Commission therefore adopted
procedures to give satellite systems licensed by other countries access
to the U.S. market. See In re Amendment of the Commission\'s Regulatory
Policies to Allow Non-U.S. Licensed Space Stations to Provide Domestic
and International Satellite Service in the United States, Report &
Order, 12 F.C.C.R. 24,094 (1997) (DISCO II).

In addition to allowing a satellite operator licensed by a foreign
country to apply for a U.S. license in the same way that a would-be
domestic operator applies for a license to serve customers in the United
States, that is, through a \"space station processing round,\" the
Commission established a second mechanism by which a foreign system
could get access to the U.S. market: Earth stations located in the
United States could apply for a license to receive service from a
satellite licensed by another country even if that satellite was not
itself licensed to serve the United States. See id. at 24173-74 p p
183-88. The Commission announced it would grant these earth station
licenses if doing so was in the public interest, see id. p 186, taking
into account \"competition in the United States\[,\] \... spectrum
availability, eligibility \... and operating requirements, and national
security, law enforcement, foreign policy, and trade issues,\" id. at
24106 p 29.

Concerning spectrum availability\--the one factor in the DISCO II public
interest analysis that is relevant to this case\--the Commission
acknowledged that the WTO agreement did not require it to authorize a
satellite licensed by a foreign country to serve customers in the United
States if there was inadequate spectrum: \"\[The Commission does\] not
expect to require existing U.S. satellite systems to change their
licensed operating parameters or to decrease their capacity in order to
accommodate additional non-U.S. systems.\" Id. at 24158 p 147. If the
foreign satellite operator sought access to the U.S. market by applying
for earth station licenses for U.S. customers to use its satellite, then
the Commission indicated that in assessing spectrum availability as part
of the public interest analysis it would:

> determine whether, and to what extent, the proposed U.S. service will
> impact existing operations in the United States\.... \[In\]
> exceptional cases where grant would create debilitating interference
> problems or where the only technical solution would require
> U.S.-licensed systems to significantly alter their operations\[,\] we
> would impose technical constraints on the foreign system\'s operations
> in the United States or, in cases where any such measures would be
> insufficient to remedy the technical problem, deny the request.

Id. at 24159 p 150. AMSC did not petition for review of DISCO II.

D. The Order & Authorization

Shortly after DISCO II was released, SatCom Systems, Inc., a U.S.
company, and TMI Communications, the company that operates the MSS
satellite system licensed by Canada, each applied to the Commission for
earth station licenses that would allow up to 125,000 new METs in the
United States to use the TMI satellite for MSS in the Upper L-band. See
Order & Authorization, 14 F.C.C.R. at 20799 p p 2-3. The Commission
reviewed the license applications under the public interest analysis
announced in DISCO II. On the issue of spectrum availability, the
Commission concluded that the new METs would have no effect upon AMSC\'s
existing operations. See id. at 20810 p 25. Although the METs would be
licensed to receive MSS from the TMI satellite throughout the Upper
L-band, their licenses would be conditioned upon receiving service only
in those portions of the Upper L-band coordinated for the use of the TMI
satellite, see id. at 20826 p p 63-64, and not on spectrum coordinated
for AMSC.

This license condition comes into play, however, only when there is a
coordination agreement in effect. See id. As AMSC pointed out to the
Commission, the existing coordination agreement was set to expire on
December 31, 1999\--less than two months after the Commission adopted
the Order & Authorization. If no new coordination agreement was reached,
AMSC argued, then the new METs would be free to operate anywhere in the
Upper L-band, potentially interfering with AMSC\'s licensed MSS
operations.

The Commission responded to this concern by further conditioning the new
earth station licenses upon noninterference with AMSC (and all other MSS
operations):

> In the absence of any continuing operator-to-operator agreement in the
> L-band, SatCom and TMI\'s operations\[,\] like those of AMSC \... will
> be on a non-interference basis until a future operator-to-operator
> agreement is reached.

Id. at 20814 p p 33-34; see also id. at 20826 p p 63-64. Finding that
the requested earth station licenses satisfied this and the other public
interest requirements laid out in DISCO II, the Commission granted earth
station licenses to SatCom and TMI.

II\. Analysis

AMSC petitions this court for review of the Order & Authorization,
raising two challenges: (1) the Commission in effect modified AMSC\'s
license without affording it the hearing required by § 316 of the
Communications Act; and (2) the Commission, without giving a reasoned
explanation, reversed its longstanding policy of having only one MSS
licensee in the Upper L-band. The Intervenors raise a different claim:
The Commission could not allow METs in the United States to use a
satellite that is not licensed by the Commission to serve the United
States.

A. Modification of AMSC\'s License

In § 316 of the Communications Act the Commission is expressly
authorized to modify a license as follows:

> Any station license or construction permit may be modified by the
> Commission \... if in the judgment of the Commission such action will
> promote the public interest, convenience, and necessity, or the
> provisions of this chapter or of any treaty ratified by the United
> States will be more fully complied with.

47 U.S.C. § 316(a)(1). AMSC claims that in the Order & Authorization the
Commission modified AMSC\'s license to provide MSS throughout the Upper
L-band without providing the hearing required by § 316. The Commission
does not dispute that § 316 requires a hearing if the Commission
modifies a license, but contends that it did not modify AMSC\'s license
and therefore did not have to hold a hearing.

Although the Commission did not, of course, literally change the terms
of AMSC\'s license, we regard \"a license \[as\] modified for purposes
of section 316 when an unconditional right conferred by the license is
substantially affected.\" P&R Temmer v. FCC, 743 F.2d 918, 927-28 (D.C.
Cir. 1984). AMSC claims the Commission substantially affected rights
conferred by its license in two respects.

First, AMSC argues that the Commission has \"harm\[ed\] AMSC\'s \...
prospects\" for coordinating sufficient spectrum to meet its needs in
future rounds of international negotiations. By licensing METs in the
United States to use the TMI satellite, the Commission increased TMI\'s
present and future needs in the Upper L-band, thereby reducing AMSC\'s
need as a proportion of aggregate international demand for that
spectrum. Because the crucial variables affecting coordination under the
Mexico City MOU are present spectrum usage and projections of short-term
future spectrum need, AMSC claims the Commission \"dramatically
improve\[d\] TMI\'s negotiating position and correspondingly
weaken\[ed\] AMSC\'s negotiating position,\" thus ensuring that AMSC
will be unable to obtain through the international coordination process
the 20 MHz it says it needs.

The Commission responds that AMSC\'s license has always been expressly
conditioned upon the international coordination process. AMSC\'s license
does not guarantee success in those negotiations; it merely provides the
opportunity to participate, which is unaffected by the Order &
Authorization.

We agree with the Commission. We assume for the sake of the argument
that AMSC is correct in predicting that TMI will obtain more L-band
spectrum at AMSC\'s expense in future rounds of international
coordination. That does not work a modification of AMSC\'s license
because the license contains no \"unconditional right\" to any
particular outcome in the coordination process. P&R Temmer, 743 F.2d at
927. On the contrary, the license is expressly conditioned upon and
thereby made subordinate to the outcome of international coordination.
We further note that AMSC is not required to accept any future
coordination agreement; it can simply veto an agreement it believes
offers it an unduly limited amount of spectrum, whether as a result of
TMI\'s greater traffic in the United States or for any other reason.

Second, AMSC claims the Commission modified its license by subjecting it
to an increased risk of electrical interference. See FCC v. National
Broadcasting Co. (KOA), 319 U.S. 239, 245 (1943); Western Broadcasting
Co. v. FCC, 674 F.2d 44, 50 (D.C. Cir. 1982). The Commission
acknowledged in the Order & Authorization that the AMSC and TMI
satellites cover the same geographic area and so would cause mutually
destructive interference to the extent they operate on the same
frequencies. 14 F.C.C.R. at 20815 p 36. Therefore, AMSC argues, the
Commission\'s licensing of new METs to use the TMI satellite increases
the likelihood that AMSC will face interference in conducting its
operations.

Because the new METs are limited to the spectrum coordinated for use by
TMI, however, the Commission denies that the Order & Authorization
increases the likelihood that AMSC will face interference. The
Commission\'s point is plainly well-taken when an international
coordination agreement is in effect: With each system licensed to use
only the Upper L-band frequencies that have been coordinated for its
use, AMSC and TMI will not interfere with each other.

AMSC claims, however, that when there is no coordination agreement in
effect SatCom and TMI are free to operate on any frequency in the Upper
L-band, including the frequencies that had previously been coordinated
for AMSC. The Commission responds that even then the likelihood of
interference is not increased by the Order & Authorization because
SatCom\'s and TMI\'s licenses are expressly conditioned upon their
operating \"on a non-interference basis.\" Id. at 20826 p p 63-64. If
they violate that express condition, then the Commission may revoke
their licenses. See 47 U.S.C. § 312. (We note, without surprise, that
AMSC does not claim to have experienced any interference since December
31, 1999, when the last coordination agreement expired.)

In sum, we agree with the Commission that in these circumstances AMSC\'s
claim of an increased likelihood of interference is too speculative to
constitute a modification of its license cognizable under § 316.
Therefore, no hearing was required.

B. Reasoned Decision Making

AMSC claims the Commission failed adequately to explain in the Order &
Authorization the reversal of its long-held position that the amount of
spectrum needed for a viable MSS system precludes the Commission from
licensing more than one such system in the Upper L-band. AMSC is correct
that the Commission\'s policy had been to authorize only one MSS system
in the Upper L-band; AMSC\'s claim fails, however, because the
Commission reversed that policy in DISCO II, and replaced it with a
public interest condition that the Commission then applied\--with an
adequate explanation\--in the Order & Authorization here under review.

The Commission points out in the Order & Authorization that it had
established rules in DISCO II for licensing earth stations to receive
service from a satellite licensed by another country if such service
would be in the public interest. 14 F.C.C.R. at 20804 p 11. AMSC had
expressed its concern in DISCO II that there was inadequate spectrum in
the Upper L-band to allow a non-U.S. satellite to serve MSS customers in
the United States. See Reply Comments of AMSC Subsidiary Corp., IB
Docket No. 96-111 (Sept. 5 1997). Although it was aware of AMSC\'s
concern, the Commission did not treat the satellite market in the Upper
L-band differently than any other U.S. satellite market. By its terms,
therefore, the public interest analysis in DISCO II appears to govern
entry by foreign-licensed satellites into the Upper L-band MSS market in
the United States.

AMSC argues, however, that the public interest analysis in DISCO II did
not alter the Commission\'s existing spectrum management policy for the
Upper L-band; to the contrary, AMSC claims DISCO II incorporated that
policy as one requirement that a non-U.S. licensed satellite must
satisfy in order to use the Upper L-band to serve customers in the
United States. In other words, AMSC reads DISCO II as merely contingent:
If at some future point AMSC were to obtain 20 MHz of spectrum (or if
the Commission were to give a reasoned explanation why AMSC should make
do with less than 20 Mhz) then the Commission could authorize a foreign
MSS to serve the United States in the Upper L-band pursuant to the DISCO
II procedures. Because AMSC has less than 20 MHz of spectrum, however,
and the Commission has not explained why AMSC has enough spectrum to be
viable\--indeed, it expressly reserved the issue how much spectrum is
required for an MSS to be viable, see Order & Authorization, 14 F.C.C.R.
at 20813 p 31 & n.85\--AMSC claims the Commission failed to provide a
reasoned explanation for allowing a second MSS system to serve the
United States in the Upper L-band.

The Commission denies that the public interest analysis in DISCO II
carried forward the Commission\'s prior spectrum management policy for
the Upper L-band. The policy prior to DISCO II had been concerned with
AMSC\'s eventual spectrum needs; the Commission\'s goal had been to
secure for AMSC use of at least 20 MHz in the Upper L-band. The factor
of spectrum availability in the public interest analysis of DISCO II,
however, protects only AMSC\'s existing operations. See DISCO II, 12
F.C.C.R. at 24158-59 p p 147, 150 (Commission \"d\[oes\] not expect to
require existing U.S. satellite systems to change their licensed
operating parameters or to decrease their capacity in order to
accommodate additional non-U.S. systems,\" and Commission will condition
or decline license applications \"where grant would create debilitating
interference problems or where the only technical solution would require
U.S.-licensed systems to significantly alter their operations\").

We agree with the Commission that in the DISCO II rulemaking proceeding
it changed the spectrum management policy for the Upper L-band; we think
the matter is clear but, even were it opaque, we would accept the
Commission\'s reasonable interpretation of its own rules. See Cassell v.
FCC, 154 F.3d 478, 484 (D.C. Cir. 1998). The only open question,
therefore, is whether the Commission applied DISCO II in an arbitrary
and capricious manner in the present case. The Commission explained at
length in the Order & Authorization why SatCom\'s and TMI\'s licenses
satisfy the tests for spectrum availability announced in DISCO II: The
new METs will not require AMSC to change its licensed operating
parameters, see 14 F.C.C.R. at 20810 p 25, nor to decrease its system
capacity, see id. at 20811 p 26; neither will they cause interference
problems for AMSC, see id. p p 27, 33-34. Because the Commission thus
gave a thorough and reasoned explanation of its decision, we deny
AMSC\'s petition for review.[^1]

C. The Intervenors\' Claim

Intervenors Globalstar L.P. and Space System License, Inc. claim the
Commission cannot license METs in the United States to use the TMI
satellite without that satellite having first been licensed to operate
in the United States\--a requirement that would have obliged the
Commission to conduct a space station processing round in which the
intervenors could also have competed for a license. The Commission urges
us not to consider the intervenors\' claim because the petitioner did
not raise it and there are no exceptional circumstances warranting its
consideration at the instance of an intervenor. The intervenors reply
that they do not raise an issue different from that raised by AMSC;
rather, as required by D.C. Cir. Rule 28(e), they merely \"focus upon
points not made or adequately elaborated upon in \[AMSC\'s\] brief,
although relevant to the issues\" raised by AMSC. Specifically, the
common issue as they state it is \"whether the FCC unlawfully granted
\[the TMI satellite\] access to MSS spectrum in the United States that
was not otherwise available for licensing except to AMSC.\"

Recall that AMSC claimed the Commission was required to explain why AMSC
could make do with less than 20 MHz before it allowed another satellite
to serve customers in the United States using the Upper L-band; it did
not deny that with such an explanation the Commission could allow the
second satellite to provide such service using the licensing procedure
for earth stations it announced in DISCO II. Ratcheting down the
intervenors\' issue to a comparable level of abstraction, one can see
that the intervenors are indeed trying to raise a different issue than
does the petitioner. The intervenors argue that even if the Commission
fully explained why there is sufficient spectrum in the Upper L-band for
two MSS systems to serve U.S. customers, it still could not allow TMI to
serve customers in the United States without conducting a space station
processing round.

We have repeatedly held that only in \"extraordinary cases,\" Lamprecht
v. FCC, 958 F.2d 382, 389 (D.C. Cir. 1992), will we address an issue
raised solely by an intervenor. We have identified two factors, at least
one (and perhaps both) of which must be present to establish such
circumstances: The intervenor had no incentive to file its own petition
for review; and resolution of the issue raised by the intervenor is an
\"essential predicate\" to the resolution of the issue raised by the
petitioner. Synovus Fin. Corp. v. Board of Governors of the Fed. Reserve
Sys., 952 F.2d 426, 433 (D.C. Cir. 1991); see also National Ass\'n of
Regulatory Utility Comm\'rs v. ICC, 41 F.3d 721, 730 (D.C. Cir. 1994).

Neither factor is present in this case. The intervenors were aggrieved
by the Commission having authorized the TMI satellite to provide service
to METs in the United States without opening up a space station round;
therefore, they had the incentive and the ability to file their own
petition for review. And resolution of the intervenors\' issue is
neither a necessary nor even a logical antecedent to the resolution of
the petitioners\' issue; if anything, the opposite is true. We therefore
do not consider the intervenors\' challenge.

III\. Conclusion

For the foregoing reasons, AMSC\'s petition for review is

> Denied.

[^1]: AMSC claims in its reply brief that the Commission failed to
    address AMSC\'s objection to SatCom\'s and TMI\'s failure to provide
    certain technical information required by Commission regulations.
    Although AMSC alluded to the factual basis for this claim in the
    statement of facts in its opening brief, it did not actually make
    the argument until its reply brief. The argument is therefore
    waived. See Sitka Sound Seafoods, Inc. v. NLRB, 206 F.3d 1175, 1181
    (D.C. Cir. 2000).