United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 1, 2000 Decided February 6, 2001

No. 99-1346

Bachow Communications, Inc., et al.,

Appellants/Petitioners

v\.

Federal Communications Commission

and United States of America,

Appellees/Respondents

Columbia Millimeter Communications, L.P., et al.,

Intervenors

Consolidated with

Nos. 99-1347, 99-1360, 99-1361, 99-1362, 99-1363,

99-1364, 99-1365, 99-1391, 99-1392, 99-1393,

99-1394, 99-1533

On Appeals From and Petitions for Review of Orders of the

Federal Communications Commission

\-\-\-\-\-\-\-\--

Robert L. Corn-Revere argued the cause for appellants/petitioners. With
him on the briefs were Catherine E. Stetson, Walter H. Sonnenfeldt,
Robert J. Keller, Thomas J. Dougherty, Jr., Christa M. Parker, Louis
Gurman, and E. Ashton Johnston. Doane F. Kiechel III entered an
appearance.

Pamela L. Smith, Counsel, Federal Communications Commission, argued the
cause for appellees/respondents. With her on the briefs were Christopher
J. Wright, General Counsel, Daniel M. Armstrong, Associate General
Counsel, Joel I. Klein, Assistant Attorney General, U.S. Department of
Justice, Robert B. Nicholson and Andrea Limmer, Attorneys. Roberta L.
Cook, Counsel, entered an appearance for appellee Federal Communications
Commission.

Before: Edwards, Chief Judge, Sentelle and Randolph, Circuit Judges.

Opinion for the Court filed by Circuit Judge Randolph.

Randolph, Circuit Judge: The issues in these consolidated cases center
on the Federal Communications Commission\'s conversion of its system for
awarding licenses in the 39 GHz (gigahertz) band from a comparative
application process to a public auction. The 39 GHz band, comprising the
38.6 to 40.0 GHz frequencies on the electromagnetic spectrum, appears to
have attracted little commercial interest until the mid-1990s, when
newly developed technology became available. Until late 1995, the
Commission processed non-mutually exclusive applications (that is,
applications having no competition for the same frequency and
territory),[^1] but resolved mutually exclusive applications by holding
a comparative hearing.

Increased commercial interest in the 39 GHz band rendered the
comparative application system impracticable. From January to November
1995 alone, the Commission received more than 2,100 applications for
licenses. In late 1994 the Commission also received a telecommunications
industry association petition for rulemaking. In response to the
petition and the growing number of applications, the Commission
considered changing its method of allocating licenses and eventually
adopted a competitive bidding system.

The Commission commenced the transition on November 13, 1995, by
imposing, without notice and opportunity for comment, an application
freeze. See 11 F.C.C.R. 1156 (Nov. 13, 1995). In the course of two
Notices of Proposed Rulemaking and two reconsideration orders issued
between December 1995 and July 1999, the Commission implemented interim
licensing procedures and disposed of applications still pending under
the comparative application system. It dismissed without prejudice
applications that were not filed at least 30 days before the November
13, 1995, freeze date, or, in Commission parlance, that were not
\"ripe.\" It also dismissed \"ripe\" applications\--those filed at least
30 days before the freeze date\--that were mutually exclusive with other
applications on the freeze date and whose mutual exclusivity had not
been resolved by amendment or voluntary dismissal by December 15, 1995,
the cut-off date for amendments. See 11 F.C.C.R. 4930 (Dec. 15, 1995);
12 F.C.C.R. 2910 (Jan. 17, 1997); 12 F.C.C.R. 18,600 (Nov. 3, 1997); 14
F.C.C.R. 12,428 (July 29, 1999). Conversely, the Commission processed
applications filed at least 30 days before November 13, 1995, and that
were not mutually exclusive on that date or that had their mutual
exclusivity resolved by amendment or voluntary dismissal by December 15,
1995.[^2]

I.

The private parties\--the appellants and petitioners\--object to the
Commission\'s dismissal of their pending applications, to the 30-day
ripeness period, and to the amendment cut-off. They do not contest the
application freeze itself or the Commission\'s adoption of a competitive
bidding system.

A. Dismissal of Applications

Once the Commission decided to adopt new licensing rules for the 39 GHz
band, it had to choose the effective date of the rules and dispose of
applications still pending under the old regime. As appellants see it,
the Commission\'s decision to dismiss all pending mutually exclusive
applications was arbitrary and capricious. Naturally, they hoped to
avoid having to start the application process all over again in a public
auction. We have, however, recognized the Commission\'s authority to
change license allocation procedures midstream. See Maxcell Telecom
Plus, Inc. v. FCC, 815 F.2d 1551 (D.C. Cir. 1987) (upholding change from
comparative application system to lottery); DIRECTV, Inc. v. FCC, 110
F.3d 816 (D.C. Cir. 1997) (upholding change from pro rata distribution
policy to competitive bidding).

In deciding to dismiss applications that either did not satisfy the
30-day ripeness requirement or were mutually exclusive, the Commission
balanced the need to implement the new regulatory regime against the
effect of upsetting the expectations of appellants and others. We
perceive no error in its resolution of these opposing interests. The
Commission reasonably feared that processing mutually exclusive
applications under an antiquated and burdensome comparative application
system would diminish the efficiency gains expected from competitive
bidding. See 12 F.C.C.R. at 18,642.

In appellants\' view, their side of the balance weighs much heavier
because they obtained rights against prospective competitors who were
foreclosed from applying by the Commission\'s cut-off rules. Under rules
existing when appellants filed, public notice of the filing of the first
application for a given license triggered a 60-day filing window; that
is, competing applicants had to file within 60 days of the public notice
or lose their right to file. See 47 C.F.R. § 21.31(b)(2)(i) (1995).[^3]
Several applicants for 39 GHz licenses filed more than 60 days before
the freeze order, yet saw their applications dismissed because of mutual
exclusivity. Upon reaching the sixtieth day following public notice of
the first application but before the freeze order, the filing rule
theoretically should have closed the application pool to competing
filers, protecting these applications from additional competition.
Appellants complain that the application freeze and subsequent dismissal
of pending mutually exclusive applications defeated the cut-off rule by
permitting people who would have been closed out of applicant pools in
the comparative application system to bid for the same licenses in the
public auction.[^4] In their words, \"the Commission\'s decision
effectively required pending mutually exclusive applicants to bid
against new applicants filing years after the established cut-off
dates.\" Brief for Appellants at 58.

Appellants claim that McElroy Electronics Corp. v. FCC, 86 F.3d 248
(D.C. Cir. 1996), renders the Commission\'s actions arbitrary. See Brief
for Appellants at 57-60. In McElroy, we recognized that \"as against
latecomers, timely filers who have diligently complied with the
Commission\'s requirements have an equitable interest in enforcement of
the cut-off rules.\" 86 F.3d at 257. That equitable interest arose in
circumstances not present here. The appellants in McElroy filed cellular
applications even though the Commission had not yet formulated rules for
those licenses. See id. at 250. The Commission dismissed the
applications as premature and later established a one-day filing window.
On the filing date, which was approximately five years after the
appellants had filed, 517 applicants filed for the Los Angeles licenses
and 494 filed for the Minneapolis licenses. See id. at 251. The first
time McElroy came to this court, we ordered the Commission to reinstate,
nunc pro tunc, the applications previously dismissed as premature. See
McElroy Elec. Corp. v. FCC, 990 F.2d 1351 (D.C. Cir. 1993). The
Commission then decided that the reinstated applicants would have to
enter a lottery with those who filed under the later one-day window,
reasoning that the public notices announcing appellants\' applications
did not establish a deadline for competing applications. See 86 F.3d at
252. We reversed, citing the Commission\'s \"notice and cut-off
procedure under which the applications at issue \... were filed,
\[wherein\] competing applicants were entitled to participate in a
comparative hearing or lottery only if they filed their applications
within \'sixty (60) days after the date of the public notice listing the
first of the conflicting applications as accepted for filing\'.\" Id. at
253. The issue was \"whether the public notices gave sufficient notice
of \[the Commission\'s acceptance of appellants\' applications for
filing\] to cut off third parties\' rights.\" Id. We found the public
notice sufficient to trigger the 60-day cut-off period. See id. at 257.

McElroy stands for the proposition that the Commission must follow its
own rules. See, e.g., Reuters Ltd. v. FCC, 781 F.2d 946, 950 (D.C. Cir.
1986). It does not create some generalized right to exclude competitors.
The \"equitable interest\" in McElroy was the applicants\' interest in
the Commission enforcing its filing and notice rules, not an interest in
preventing the Commission from changing them. As we have recognized
before, the Commission may make midstream rule adjustments, even though
it disrupts expectations and alters the competitive balance among
applicants. See Maxcell, 815 F.2d 1551; DIRECTV, 110 F.3d 816.

Moreover, any interest in enforcement of cut-off rules is just that\--an
interest, not a vested right: \"timely applicants have no \'vested right
against challenge from untimely competitors,\' in the sense of
precluding the FCC from ever granting a cut-off waiver, but they
certainly have an equitable interest whose weight it is \'manifestly
within the Commission\'s discretion to consider\'.\" Florida Inst. of
Tech. v. FCC, 952 F.2d 549, 554 (D.C. Cir. 1992). The Commission\'s
authority to change rules that affect pending applications is bounded by
principles of retroactivity, not by an abstract interest in excluding
competitors. McElroy holds only that if the Commission decides to
process timely applications, it generally may not also process competing
applications filed out of time. The case does not govern the present
situation in which the Commission decides, without violating its rules,
not to process pending mutually exclusive applications at all.[^5]

Even if McElroy stood for all that appellants read into it, they could
not have obtained any \"equitable interest\" to immunize their
applications against dismissal. The most they could have obtained is the
relief we granted in McElroy\--an order requiring dismissal of
applications filed after the cut-off date. See 86 F.3d at 259. McElroy
does not require the Commission to process all applications pending
under an obsolete license allocation system just because applicants who
were otherwise cut off might re-apply in a new system.[^6]

B. The Ripeness Period

The Commission imposed a ripeness period co-extensive with the time
period in which competitors had the right to file competing
applications. The point apparently was to avoid granting applications
under the old system when the time period for others to file a mutually
exclusive application had not yet expired. The Commission originally
used a 60-day period, representing the period during which prospective
applicants could file competing applications under the Commission\'s
rules. See 47 C.F.R. § 21.31(b) (1995); but see supra note 3
(contemplating shorter filing period under some circumstances). It later
shortened the period to 30 days, explaining that \"it is our practice to
process applications as soon after the close of the 30-day public notice
period as possible.\" See 14 F.C.C.R. at 12,430 & 12,449; see also 47
C.F.R. § 101.37(c) (1998) (Commission cannot grant application until 30
days after application appears on public notice).

The Communications Act, with a few exceptions not relevant here, forbids
the Commission to grant an application \"earlier than thirty days
following issuance of public notice by the Commission of the acceptance
for filing of such application or of any substantial amendment
thereof.\" 47 U.S.C. § 309(b). The Commission reasonably determined that
its ripeness period \"will assure fairness to potential applicants who
were precluded by the freeze from filing competing applications in time
to be entitled to comparative consideration.\" 11 F.C.C.R. at 4989
n.197. Had the Commission granted applications filed less than 30 days
before the freeze date, it would have denied potential competing
applicants the 30-day filing period the Act guarantees them.

The Supreme Court long ago recognized the procedural rights the
Communications Act guarantees to those who file mutually exclusive
applications. Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945), held
that the Commission could not grant one mutually exclusive application
without holding the comparative hearing required by the Communications
Act. See also McElroy, 86 F.3d at 253. In Kessler v. FCC, 326 F.2d 673
(D.C. Cir. 1963), we decided that Ashbacker procedural rights apply also
to potential applicants whose applications would have been mutually
exclusive but for an application freeze. In Kessler, the Commission
froze applications effective close-of-business on May 10, 1962.
Appellants in that case filed applications between May 11 and June 15,
1962. Some of the late applicants claimed their applications were
mutually exclusive with applications on file. Unlike the present case,
the Commission employed no ripeness period; it processed all
applications pending on the freeze date. We held that the Commission\'s
refusal to process mutually exclusive applications filed after the
freeze but that were otherwise timely denied those applicants their
Ashbacker rights: \"those appellants who tendered applications which
are, or become, in fact mutually exclusive with an application pending
on May 11, 1962, or one accepted for filing since that date, are
entitled to participate in a comparative hearing on that application
under the Ashbacker case\--if any grant is to be made\--and \[ \] the
Commission may not deprive them of this right when their applications
were timely but were rejected only because of a temporary freeze on
accepting new applications.\" 326 F.2d at 687-88. We reasoned that \"the
substantial effect of a contrary view would be not only to freeze the
acceptance for filing of a timely application but to freeze new
applicants permanently out of a right of substance\--the comparative
hearing on the pending application to which they are entitled when their
application is timely.\" Id. at 688.

Kessler\'s reasoning applies here. Without the ripeness period, the
Commission could have granted applications filed less than 30 days
before the freeze date, abrogating the Ashbacker rights of prospective
applicants who could have filed timely competing applications but for
the freeze. The ripeness period quite sensibly guarantees that all
applications that are granted were on public notice for the 30 days
required by the Communications Act. See 47 U.S.C. § 309(b).[^7]

C. The Amendment Cut-Off

The Commission apparently intended the November 13, 1995, freeze to cut
off amendments as well as applications. But the freeze order specified
only the latter. See 11 F.C.C.R. 1156. Despite this oversight, the
Commission, in the first Notice of Proposed Rule Making and Order it
issued on December 15, 1995, stated that the November 13 freeze applied
to amendments, except for a limited class of license modification
amendments. See 11 F.C.C.R. at 4988-90. In its first Reconsideration
Order, issued on January 17, 1997, the Commission changed the cut-off
date for amendments of right from November 13, 1995, the application
freeze date, to December 15, 1995, the date it promulgated the interim
licensing procedures.[^8] The Commission recognized that it was the
December 15 order, not the November 13 order, that \"suspended any
further action on these amendments.\" 12 F.C.C.R. at 2918.

The amendment cut-off precluded private resolution of mutual exclusivity
after December 15, 1995. It was no longer possible for amendments (or,
apparently, voluntary dismissals) to cure mutual exclusivity and render
an application eligible for processing under the old regime. Appellants
claim they had a substantive right to cure mutual exclusivity that may
not be abrogated without notice and comment. Relying on Ashbacker, they
insist that \"the right of competing applicants to simultaneous
consideration under Ashbacker is a \'right of substance\' \" and that
\"equally of substance is an applicant\'s right to avoid consolidated
treatment and its unintended consequences by means of conflict-resolving
minor amendments and voluntary dismissals.\" Brief for Appellants at 46.

The \"right to avoid consolidated treatment\" finds no support in
Ashbacker or any other authorities the appellants have brought to our
attention. The right to amend is no more substantive than the right to
file an application in the first place, which we have previously held
the Commission may suspend without notice and comment. See Kessler, 326
F.2d at 682; Neighborhood TV Co. v. FCC, 742 F.2d 629, 637 (D.C. Cir.
1984). Like the rules governing the filing of applications, rules
permitting (or suspending) amendments are \"rules of agency
organization, procedure, or practice\" exempt from the Administrative
Procedure Act\'s notice and comment requirement. See 5 U.S.C. §
553(b)(A); James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277,
280-82 (D.C. Cir. 2000); JEM Broad. Co. v. FCC, 22 F.3d 320, 326-28
(D.C. Cir. 1994) (FCC \"hard look\" rules prohibiting amendment did not
require notice and comment: \"we conclude that a license applicant\'s
right to a free shot at amending its application is not so significant
as to have required the FCC to conduct notice and comment rulemaking,
particularly in light of the Commission\'s weighty efficiency
interests.\"); Maxcell, 815 F.2d at 1561 (stating but not deciding that
a \"cut-off rule arguably may be understood as an \'interpretive\' rule,
a rule of agency \'procedure\' or of agency \'practice\', any of which
is exempt from the notice and comment requirements\").

We also reject appellants\' claim that the amendment cut-off was
arbitrary and capricious.[^9] Appellants\' panoply of arguments in this
regard reduce to a central premise: refusal to accept amendments after
December 15, 1995, \"artificially preserved mutual exclusivity with
respect to \[39 GHz\] applications, creating the fiction that
applications that were mutually exclusive before December 15, 1995,
remained so even after their frequency conflicts had been resolved\" in
violation of Ashbacker. Brief for Appellants at 49-50 (emphasis
omitted). Appellants read Ashbacker far too broadly.[^10] In the
Court\'s words: \"We only hold that where two bona fide applications are
mutually exclusive the grant of one without a hearing to both deprives
the loser of the opportunity which Congress chose to give him.\"
Ashbacker, 326 U.S. at 333; see also Maxcell, 815 F.2d at 1561
(\"Ashbacker therefore simply is irrelevant to a situation where a
license applicant complains that its application was not considered due
to a \'regulation\' that \'for orderly administration, requires an
application \... to be filed within a certain date\'.\"); Reuters, 781
F.2d at 951 (criticizing an attempt to bootstrap a fairness argument
onto Ashbacker\'s narrow holding). Ashbacker constrains only the grant
of mutually exclusive applications; it does not touch the Commission\'s
authority to dismiss or suspend amendments of mutually exclusive
applications.

II\.

Appellants contend that the Commission\'s treatment of their
applications violated 47 U.S.C. §§ 309(j)(6)(E) and 309(j)(7). We hold
the former was not violated and the latter does not apply.

A. Section 309(j)(6)(E)

The Communications Act permits the Commission to adopt a system of
competitive bidding to resolve mutually exclusive applications subject
to \"obligations described in paragraph (6)(E).\" 47 U.S.C. § 309(j)(1).
Paragraph (6)(E) of subsection 309(j) states that \"nothing in \[the
subsection authorizing competitive bidding\], or in the use of
competitive bidding, shall be construed to relieve the Commission of the
obligation in the public interest to continue to use engineering
solutions, negotiation, threshold qualifications, service regulations,
and other means in order to avoid mutual exclusivity in application and
licensing proceedings.\" 47 U.S.C. § 309(j)(6)(E).

In appellants\' view, subsection (j)(6)(E) requires the Commission to
permit private resolution of mutual exclusivity. We think the obligation
that provision imposes on the Commission in designing a competitive
bidding system is something less than allowing license applicants to
file applications or amend them at will under an obsolete licensing
system. Subsection (j)(6)(E) affirms Congress\' view that statutory
competitive bidding authority does not wholesale replace \"engineering
solutions, negotiation \... and other means\" to avoid mutual
exclusivity; it does not, as appellants would have it, forbid resort to
competitive bidding unless no other means to resolve mutual exclusivity
are available. In Benkelman Telephone Co. v. FCC, 220 F.3d 601, 606
(D.C. Cir. 2000), we rejected the argument that the Commission created
\"artificial\" mutual exclusivity in adopting a competitive bidding
system: \"having found the policy changes in the public interest, the
Commission was authorized to implement them without regard to section
309(j)(6)(E)\[,\] which imposes an obligation only to minimize mutual
exclusivity \'in the public interest\' and \'within the framework of
existing policies\'.\" Orion Communications Ltd. v. FCC, 213 F.3d 761
(D.C. Cir. 2000), also refutes appellants\' contention. There we held
that the Commission is not required to allow bidders to use negotiated
settlements to reduce mutual exclusivity; settlements may be \" \'other
means\' of avoiding mutual exclusivity, but the statute cannot be read
to direct the FCC to adopt all other means available.\" Id. at 763. As
we stated in DIRECTV, \"nothing in § 309(j)(6)(E) requires the FCC to
adhere to a policy it deems outmoded \'in order to avoid mutual
exclusivity in \... licensing proceedings\'; rather, that provision
instructs the agency, in order to avoid mutual exclusivity, to take
certain steps, such as the use of an engineering solution, within the
framework of existing policies.\" 110 F.3d at 828; see also Orion, 213
F.3d at 763; Benkelman, 220 F.3d at 605.

B. Section 309(j)(7)

Title 47, U.S.C. § 309(j)(7) restricts consideration of the public fisc
in certain of the Commission\'s decisions.[^11] As the introductory
clauses of § 309(j)(7)(A) & (B) indicate, the restriction pertains only
to three types of decisions, none of which is implicated here. The
covered decisions concern assignment of bands of frequencies to classes
of stations under 47 U.S.C. § 303(c), development of alternative payment
methods under 47 U.S.C. § 309(j)(4)(A), and area designations and
bandwidth assignments under 47 U.S.C. § 309(j)(4)(C). Section 309(j)(7)
does not restrict the Commission\'s choice of an overall license
allocation mechanism.

\* \* \*

The Commission\'s dismissal of pending 39 GHz applications, use of a
30-day \"ripeness\" period, and imposition of an amendment cut-off date
were reasonable and in accordance with law. We therefore deny the
petitions for review and affirm the Commission\'s orders.[^12]

So ordered.

[^1]: See, e.g., 47 C.F.R. § 101.45(a) (\"the Commission will consider
    applications to be mutually exclusive if their conflicts are such
    that the grant of one application would effectively preclude by
    reason of harmful electrical interference, or other practical
    reason, the grant of one or more of the other applications\").

[^2]: The Commission made other changes to the licensing system not
    relevant to this appeal. For example, it replaced applicant-defined
    rectangular service areas with Commission-defined geographic areas.
    See 12 F.C.C.R. at 18,610.

[^3]: The filing rule also provided a shorter time period, but not less
    than 30 days, in cases where the Commission \"takes final action on
    the previously filed application.\" 47 C.F.R. § 21.31(b)(2)(ii)
    (1995).

[^4]: We doubt whether 39 GHz licenses in the public auction are really
    the same as the licenses in the comparative application system. As
    noted previously, the Commission changed the manner in which it
    designated service areas for those licenses, in part to reduce
    mutual exclusivity problems. See supra note 2; 12 F.C.C.R. at
    18,610. Because an application pool consists of a set of mutually
    exclusive applications or chains of mutually exclusive applications,
    see 47 C.F.R. § 21.31(b) (1995), licensing changes that alter mutual
    exclusivity presumably will also alter application pools. In any
    event, we find the Commission\'s dismissal of pending mutually
    exclusive applications lawful regardless of the identity of licenses
    in the comparative application and competitive bidding systems.

[^5]: In Title III of the Balanced Budget Act of 1997, Congress amended
    the Communications Act to include a right to exclude competitors.
    See Pub. L. No. 105-33, § 3002(a)(3), 111 Stat. 251, 260 (1997)
    (codified at 47 U.S.C. § 309(l )). That provision states: \"With
    respect to competing applications for initial licenses or
    construction permits for commercial radio or television stations
    that were filed with the Commission before July 1, 1997, the
    Commission shall (1) have the authority to conduct a competitive
    bidding proceeding pursuant to subsection (j) to assign such license
    or permit; \[and\] (2) treat the persons filing such applications as
    the only persons eligible to be qualified bidders for purposes of
    such proceeding.\" 47 U.S.C. § 309(l ). Neither party cited this
    provision. In any event, it would not affect our analysis because
    appellants have not alleged that the Commission has permitted
    entities who did not apply before July 1, 1997, to bid for licenses.

[^6]: We also reject appellants\' argument that the Commission departed
    from its own precedents in dismissing pending applications. See
    Brief for Appellants at 62-65. Prior instances in which the
    Commission has adopted a new license allocation system yet processed
    applications pending under the old one rested on different
    fact-specific cost/benefits balances the Commission drew under
    Maxcell. See 815 F.2d at 1554; Brief for Appellee/Respondents at
    20-21. In the wireless cable services order appellants cite, the
    Commission expressly premised its decision \"on the basis of this
    record.\" 10 F.C.C.R. 9589 (1995) (para. 92). Significantly, that
    order involved a small number of pending applications. Id. at para.
    89; cf. Kessler v. FCC, 326 F.2d 673, 686 (D.C. Cir. 1963) (\"Nor do
    we dispute the Commission\'s judgment in this instance that
    equitable considerations required or at least justified the
    processing of pending applications where an analysis showed that
    they involved potential grants not so numerous as to frustrate the
    ends sought in the rule making proceeding.\"). Similarly, in the
    commercial broadcast and ITFS proceedings, the Commission found that
    \"the re-opening of filing windows would certainly not expedite the
    disposition of the pending applications or the commencement of
    service to the public, but would produce further delays.\" 13
    F.C.C.R. 15,920 (1998) (para. 108).

[^7]: Appellants cite the principle that Ashbacker \"applies not to
    prospective applicants, but only to parties whose applications have
    been declared mutually exclusive.\" Brief for Appellants at 28
    (quoting Reuters Ltd. v. FCC, 781 F.2d 946, 951 (D.C. Cir. 1986)).
    We have held that not everybody interested in a telecommunications
    license has a right to a comparative hearing, that the right inheres
    in those who actually file timely, mutually exclusive applications.
    See Reuters, 781 F.2d at 951. But we have also held that Ashbacker
    rights inhere in potential applicants whose right to file a timely
    competing application is frustrated by a Commission freeze order.
    See Kessler, 326 F.2d at 686-88. There is such a class of potential
    applicants in this case\--those whose timely applications would be
    mutually exclusive with applications filed in the 30 days preceding
    November 13, 1995\--and Ashbacker applies to them.

[^8]: Commission rules at the time defined an amendment of right as an
    amendment that \"cures a mutually exclusive situation without
    creating a new one.\" 12 F.C.C.R. at 2918; 47 C.F.R. §§ 101.29 &
    101.45 (1997).

[^9]: Contrary to appellants\' assertion, the Commission provided a
    reasoned basis for its action. The Commission adequately explained
    that \"accepting and processing such amendments would burden
    Commission resources and could lead to results inconsistent with our
    intent in this proceeding to update the regulatory structure of the
    39 GHz band in light of contemporary market conditions.\" 14
    F.C.C.R. at 12,437-38; see also id. at 12,447 (The Commission
    \"froze new applications for 39 GHz licenses because of its concern
    that applications filed under the former rules may not conform to
    the technical and service requirements being considered. For the
    same reason, it froze certain amendments to pending 39 GHz
    applications\....\"); Maxcell, 815 F.2d at 1555 (accepting
    Commission\'s efficiency justification for change from comparative
    application system to lottery).

[^10]: The right to a hearing recognized in Ashbacker applies only in a
    comparative application system. See 47 U.S.C. § 309(a) & (e)
    (Communications Act hearing provision for applications to be granted
    on the basis of \"public interest, convenience, and necessity\"). It
    does not apply when licenses are allocated by lottery or auction.
    See 47 U.S.C.§ § 309(i) & (j); McElroy, 86 F.3d at 253 n.5.

[^11]: Section 309(j)(7)(A) states: \"In making a decision pursuant to
    section 303(c) of this title to assign a band of frequencies to a
    use for which licenses or permits will be issued pursuant to this
    subsection, and in prescribing regulations pursuant to paragraph
    4(C) of this subsection, the Commission may not base a finding of
    public interest, convenience, and necessity on the expectation of
    Federal revenues from the use of a system of competitive bidding
    under this subsection.\" Section 309(j)(7)(B) states: \"In
    prescribing regulations pursuant to paragraph (4)(A) of this
    subsection, the Commission may not base a finding of public
    interest, convenience, and necessity solely or predominantly on the
    expectation of Federal revenues from the use of a system of
    competitive bidding under this subsection.\"

[^12]: We have considered appellants\' other contentions and reject
    them.