United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 6, 2001 Decided February 8, 2002

No. 00-1100

Greg Ruggiero,

Petitioner

v\.

Federal Communications Commission and

United States of America,

Respondents

On Petition for Review of an Order of the

Federal Communications Commission

Robert T. Perry argued the cause for petitioner Greg Ruggiero. With him
on the briefs was Barbara J. Olshansky.

Jacob M. Lewis, Attorney, U.S. Department of Justice, argued the cause
for respondents. With him on the briefs were Robert S. Greenspan,
Attorney, Jane E. Mago, Acting General Counsel, Federal Communications
Commission, Daniel M. Armstrong, Associate General Counsel, John E.
Ingle, Deputy Associate General Counsel, C. Grey Pash, Jr. and Lisa E.
Boehley, Counsel.

Before: Henderson, Rogers, and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Dissenting opinion filed by Circuit Judge Henderson.

Tatel, Circuit Judge: In this case, an unlicensed microbroadcaster\--a
\"pirate\"\--challenges the constitutionality of the Radio Broadcasting
Preservation Act of 2000\'s character qualification provision, which
permanently prohibits anyone who ever \"engaged in any manner in the
unlicensed operation of any station in violation of \... the
Communications Act of 1934\" from obtaining a low-power FM radio
license. To survive First and Fifth Amendment challenges in this
Circuit, restrictions limiting the future lawful speech of a
well-defined class of broadcasters must be more than \"minim\[ally\]
ration-al\[ \].\" News Am. Publ\'g, Inc. v. FCC, 844 F.2d 800, 812, 814
(D.C. Cir. 1988) (\"News America\"). Finding nothing in the Act, its
legislative history, or the record before us to justify the character
qualification provision\'s unique and draconian sanction for broadcast
piracy, nor to explain why a more limited restriction would not achieve
Congress\'s objective, we hold that the provision and its implementing
regulation fail to meet this standard and are therefore
unconstitutional.

I.

Section 301 of the Communications Act of 1934 makes it unlawful to
operate a radio station without a license issued by the Federal
Communications Commission. 47 U.S.C. § 301. When the Commission began
licensing FM radio stations in the 1940s, it licensed both high-power
stations and low-power, or \"Class D,\" educational stations operating
with a maximum of ten watts of power. In 1978, however, the Commission
concluded that the Class D stations were impeding expansion of more
efficient high-power operations. Opting to \"str\[ike\] the balance in
favor of licensing higher powered stations to ensure that large
audiences were served,\" the Commission stopped licensing low-power
stations and required most existing stations to upgrade to at least 100
watts. Creation of Low Power Radio Serv., 15 F.C.C. Rcd. 19,208, 19,236
(2000) (\"First Low-Power Reconsideration\") (recons.) (discussing the
1978 rule, Changes in the Rules Relating to Noncommercial Educ. FM
Broad. Stations, 70 F.C.C.2d 972, 983 (1979) (codified at 47 C.F.R. §
73.512(d))).

Over the next two decades, often in open defiance of this rule,
individual pirates began operating unlicensed low-power stations that
broadcast local news, music, and commentary. Known as \"microradio,\"
this phenomenon expanded significantly in the late 1990s after Congress
amended the Telecommunications Act to eliminate restrictions on the
number of radio stations any one person or entity could own.
Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(a), (b), 110
Stat. 56, 110-12 (1996). Following the amendment, own-ership of licensed
radio stations became increasingly concentrated, leading\--according to
microradio proponents\--to a \"marked decline in serious local radio
news reporting\" and a corresponding increase in the perceived
importance and, in turn, number of unlicensed low-power stations.
Pet\'r\'s Br. at 6-7. In response to this microradio expansion, the
Commission cracked down on pirates, ordering them to cease broadcasting
and taking legal action against those who refused. See, e.g., Grid Radio
v. FCC, No. 99-1463, \_\_ F.3d \_\_ (D.C. Cir. Feb. 8, 2002); United
States v. Dunifer, 219 F.3d 1004 (9th Cir. 2000).

In 1999, the Commission again changed course, seeking public comment on
proposed rules that would allow licensing of low-power stations. The
Commission observed that in contrast to 1978, when it first adopted the
microbroadcasting ban, \"\[n\]ow, \... radio service is widely available
throughout the country and very little spectrum remains available for
new full-powered stations,\" so licensing low-power stations could
\"fill \... gaps in the spectrum that would otherwise go unused,\" First
Low-Power Reconsideration, 15 F.C.C. Rcd. at 19,236, providing a
\"low-cost means of serving\" both urban and rural areas, Creation of
Low Power Radio Serv., 14 F.C.C. Rcd. 2471, 2471 (1999) (\"Low-Power
Proposal\") (notice of proposed rulemaking). Many groups submitted
comments, with students, religious groups, and labor unions generally
supporting the low-power program, and the established broadcasting
industry (including National Public Radio and other noncommercial
broadcasters) opposing it.

In January 2000, the Commission issued an order authorizing two new
classes of low-power stations: 100-watt stations, reaching a radius of
roughly 3.5 miles, and 10-watt stations, reaching a radius of less than
2 miles. Creation of Low Power Radio Serv., 15 F.C.C. Rcd. 2205, 2205,
2210-12 (2000) (\"First Low-Power Rulemaking\"). The order encouraged
local ownership of low-power stations, limited the number of such
stations any single entity could own, required the sta-tions to operate
on a noncommercial, educational basis, and prohibited existing media
entities from holding interests in them. Id. at 2215-25. The order also
included a provision addressing license applications by broadcast
pirates. Concerned that those who had flouted the licensing process in
the past could not be trusted \"to deal truthfully with the Commission
and to comply with \[its\] rules and policies,\" the Commission provided
that it would only accept low-power applications from individuals who
certified (under penalty of perjury) that if they had operated illegally
in the past, they ceased all such operations either within twenty-four
hours of being directed by the Commission to do so or within ten days of
publication of the Low-Power Proposal. Id. at 2225-26. The Commission
also extended this requirement to all parties to any corporate
applicant, including the applicant\'s \"parents, its subsidiaries, their
officers and members of their governing boards.\" Id. at 2223-26.

This version of the low-power rules was short-lived. Less than a year
after the rules\' promulgation, Congress, respond-ing to broadcast
industry lobbying, see, e.g., 146 Cong. Rec. S8197-8211 (statement of
Sen. Grams) (discussing licensed broadcasters\' concerns about the
low-power rules), passed the Radio Broadcasting Preservation Act of 2000
(\"RBPA\"), Pub. L. No. 106-553, 114 Stat. 2762 (2000). The RBPA directs
the Commission to amend the low-power rules to limit the frequencies
available for low-power stations, thus reducing the risk of interference
to existing stations. Central to this case, the Act also directs the
Commission to deny licenses to all applicants whose officers or board
members ever \"engaged in any manner in the unlicensed operation of any
station in violation\" of the Communications Act. Id. § 632(a)(1)(B).
This \"character qualification provision\" thus eliminates the
distinction the Commission had drawn between those erstwhile broadcast
pirates who voluntarily ceased broadcasting within a specified period
and those who refused. The provision also rescinds the Commission\'s
discretion to waive the character qualification requirement in cases in
which, despite an applicant\'s\--or a party to an
applicant\'s\--unlicensed broadcasting, the Commission finds no reason
to question the applicant\'s potential reliability as a licensee. Id. §
632(a)(2)(B).

Following passage of the RBPA, the Commission issued rules implementing
the Act\'s character qualification provision. Creation of Low Power
Radio Serv., 16 F.C.C. Rcd. 8026, 2001 FCC LEXIS 1760 (2001) (\"Second
Low-Power Rulemaking\") (amending First Low-Power Rulemaking). Under the
new rules\--described by the Commission as \"minor amendment\[s\]\" that
merely \"codif\[y\] a Congressional requirement\"\--all pirates and
former pirates are automatically and permanently disqualified from
applying for low-power licenses. Id., 2001 FCC LEXIS 1760, at \*15.
Moreover, an applicant is deemed \"ineligible to hold \[a low-power\]
license if it has engaged in unlicensed operation regardless of whether
the Commission has made a specific finding that the party has engaged in
such conduct.\" Id., 2001 FCC LEXIS 1760, at \*14 (emphasis added).

II\.

Petitioner Greg Ruggiero, an acknowledged former pirate affiliated with
microbroadcasting stations in New York City and elsewhere, argues that
facially and as applied to him, the character qualification provision
and implementing regulation violate the First and Fifth Amendments to
the United States Constitution. Before considering the merits of
Ruggiero\'s challenge, we must deal with the Commission\'s argument that
we lack jurisdiction for two independent reasons: because Ruggiero
failed to file a petition for review, and because he lacks Article III
standing. We consider each in turn.

Petition for Review

Resolving the Commission\'s first argument requires an understanding of
the history of this case. Ruggiero originally filed a petition for
review of the Commission\'s First Low-Power Rulemaking, in which he
argued that the then-current version of the licensing restriction
violated both the Administrative Procedure Act and the First Amendment.
Following passage of the RBPA, we remanded the record to the Commission
and directed the parties to file supplemental briefs addressing
Ruggiero\'s standing to pursue his First Amendment claim, as well as the
merits of that claim as applied \"to the Act and any implementing orders
or regulations the Commission may issue.\" Order of the United States
Court of Appeals for the District of Columbia Circuit at 1 (Jan. 8,
2001) (No. 00-1054) (\"Order of Jan. 8, 2001\"). After the Commission
issued the Second Low-Power Rulemaking, the parties submitted the
requested supplemental briefs, and we heard oral argument on Ruggiero\'s
constitutional claims\--expanded by a footnote in Ruggiero\'s
Supplemental Brief to include a claim under the Fifth Amendment\--as
applied to the RBPA and the new rules.

The Commission now argues that because Ruggiero never filed a petition
for review of the Second Low-Power Rulemaking, this court lacks
jurisdiction to hear his constitutional challenge. We disagree. Although
it is true that Ruggiero did not file a second petition for review, he
did, as we directed, file a brief addressing the constitutionality of
the RBPA and the Commission\'s implementing regulation, and that brief,
in all but title, satisfies the four statutory requirements for a
petition for review of the Second Low-Power Rulemaking. Specifically, as
required by 28 U.S.C. § 2344, Ruggiero filed the brief within sixty days
of the rulemaking; stated \"the nature of the proceedings as to which
review is sought, \... the facts on which venue is based, \... the
grounds on which relief is sought, and \... the relief prayed\";
attached a copy of the challenged rulemaking; and served the brief on
the Commission and the United States Department of Justice. See
generally Pet\'r\'s Supp. Br. at 1-10, App. B, Certificate of Service.
Accordingly, we may treat the brief as the \"functional equivalent\" of
a petition for review. See Smith v. Barry, 502 U.S. 244, 248-49 (1992)
(internal citations omitted) (construing pro se brief as notice of
appeal and noting that \"\[i\]f a document filed within the time
specified by Rule 4 gives the notice required by Rule 3, it is effective
as a notice of appeal\"); Moore v. United States Dep\'t of Transp., 2001
U.S. App. LEXIS 2496, at \*12 (7th Cir. Feb. 5, 2001) (unpublished
disp.) (citing Smith v. Barry and construing brief as \"functional
equivalent of a timely petition for review\" of agency action).

This liberal construction of 28 U.S.C. § 2344 makes particular sense in
this case. For one thing, as we learned at oral argument, Ruggiero filed
no second petition for review solely because we had directed him to file
a supplemental brief addressing the applicability of his First Amendment
claims to the RBPA and any subsequent implementing regulations. See
Order of Jan. 8, 2001, at 1; cf. Moore v. South Carolina Labor Bd., 100
F.3d 162, 163 (D.C. Cir. 1996) (discussing \"the unique circumstances
doctrine, under which appellate courts will excuse an untimely notice of
appeal where the appellant could have filed a timely notice but was
misled to delay filing by a court order or ruling which purportedly
extended or tolled the appeal deadline\" (citing, inter alia, Thompson
v. INS, 375 U.S. 384, 387 (1964) (applying the doctrine))). Moreover, we
maintained jurisdiction of Ruggiero\'s claims throughout the
Commission\'s implementation of the RBPA, remanding only the record for
further Commission action. Order of Jan. 8, 2001, at 1; see also D.C.
Cir. R. 41(b). Finally, Ruggiero\'s original contentions, made in his
brief challenging the First Low-Power Rulemaking, are sufficiently broad
to cover at least his First Amendment challenge to the character
qualification provision and implementing regulation. His original brief
asserted that the Commission \"violated \[his\] First Amendment rights
in disqualifying \[him\] from holding a low power FM radio station
license\" and that \"\[t\]he \[a\]utomatic \[d\]isqualification
\[p\]olicy \[l\]acks the \[n\]arrow \[t\]ailoring \[r\]equired by the
First Amendment.\" Pet\'r\'s Br. at 2, 23. These broadly worded
objections to the First Low-Power Rulemaking are equally valid as
objections to the amended rules, as Ruggiero continues to argue
primarily that the Commission violated his First Amendment rights by
automatically disqualifying him and other unlicensed microbroadcasters
from holding low-power licenses. Cf. Tenn. Gas Pipeline Co. v. FERC, 871
F.2d 1099, 1109 (D.C. Cir. 1989) (finding jurisdiction to review claims
despite appellant\'s failure to file new FERC petition for rehearing
because most of appellant\'s objections to agency\'s first decision,
raised in timely petition for review, were \"equally valid\" as
objections to agency\'s amended decision).

Standing

In support of its argument that Ruggiero lacks Article III standing, the
Commission relies on two basic facts: First, although Ruggiero once
operated an unlicensed microradio station, he is not now an applicant
for a low-power license, nor is he associated with any such applicant;
and second, Ruggiero is a resident of New York City where, all concede,
no spectrum space is available for low-power stations. In response,
Ruggiero claims that but for the RBPA\'s character qualification
provision, he would associate with a low-power applicant. To support
this assertion, he submitted a declaration by the President of a
Greenville, South Carolina station stating that the station has applied
for a low-power license and that \"\[b\]ut for the character
qualification provisions\[,\] \... \[it\] would offer \[Ruggiero\] a
position on \[its\] board of directors.\" Wangaza Decl. para. 3. Because
the Commission challenges none of the declaration\'s factual assertions,
we think Ruggiero has established the prerequisites for Article III
standing: a personal injury (inability to become a director of the
Greenville station), fairly traceable to the challenged action (the
character qualification provision and implementing regulation), and
likely to be redressed by the requested relief (a declaration that the
provision and regulation are unconstitutional). See Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560-61 (1992).

We are equally unpersuaded by the Commission\'s secondary standing
argument: that Ruggiero is a \"poor candidate\" to challenge the
character qualification provision because, given his history of
deliberate and willful licensing violations, the Commission would be
unlikely to grant him a license even in the absence of the provision.
This may be true, but it is irrelevant. Ruggiero alleges only that the
RBPA\'s per se ban deprives him of the right to compete in the low-power
licensing process, and the Supreme Court has held that such allegations
are sufficient for Article III standing. See Northeastern Fla. Chapter
of the Assocd. Gen. Contractors of Am. v. City of Jacksonville, 508 U.S.
656, 666 (1993) (\"When the government erects a barrier that makes it
more difficult for members of one group to obtain a benefit than it is
for members of another group, a member of the former group seeking to
challenge the barrier need not allege that he would have obtained the
benefit but for the barrier in order to establish standing.\").

III\.

To evaluate the constitutionality of the RBPA\'s character qualification
provision\--and, in turn, the implementing regu-lation\--we must first
identify the appropriate level of First and Fifth Amendment scrutiny.
The parties agree, as they must in view of Red Lion Broadcasting Co. v.
FCC, 395 U.S. 367 (1969), that the \"scarcity of broadcast frequencies\"
necessitates that \"broadcast regulations receive more lenient \[First
Amendment\] scrutiny than ones affecting other types of speech.\" News
Am., 844 F.2d at 811. Going further, the Commission asserts that under
FCC v. National Citizens Committee for Broadcasting, we should ask only
whether the challenged character qualification provision \"is based on
consideration of permissible factors and is otherwise reasonable.\" 436
U.S. 775, 793 (1978) (\"NCCB\"). We disagree.

To begin with, neither NCCB nor any subsequent Supreme Court case
supports the Commission\'s position that all \"reasonable\" broadcasting
restrictions automatically pass constitutional muster. NCCB involved
both statutory and constitutional challenges to Commission regulations
governing cross-ownership of broadcast stations and daily newspapers in
the same community (\"the cross-ownership rules\"). Although the NCCB
Court did indeed observe that the Commission has broad regulatory
authority to \"issue regulations codifying its view of the
public-interest licensing standard, so long as that view is based on
consideration of permissible factors and is otherwise reasonable,\" it
made that statement when describing the Commission\'s mandate under the
Communications Act. 436 U.S. at 793. Turning to the petitioner\'s First
Amendment arguments, the Court indicated only that regulation of
broadcast frequencies is permissible if the regulation is
content-neutral and preserves \"the interests of the \'people as a whole
\... in free speech.\' \" Id. at 800 (quoting Red Lion Broad. Co., 395
U.S. at 390). Concluding that the challenged cross-ownership regulations
meet both requirements, the Court found the regulations \"a reasonable
means of promoting the public interest in diversified mass
communications.\" Id. at 802. The Court expressly distinguished
broadcast regulations that turn \"on the content of constitutionally
protected speech,\" however, and said nothing about restrictions\--like
those at issue here\--that permanently limit the speech of certain
specific individuals. Id. at 801.

Supreme Court case law since NCCB, moreover, confirms that some
broadcast regulations merit heightened scrutiny. In FCC v. League of
Women Voters, for example, the Court used intermediate scrutiny to
strike down a statute that banned noncommercial educational stations
from \"engag\[ing\] in editorializing.\" 468 U.S. 364, 366 (1984). The
Court observed that although \"the broadcasting industry \... operates
under restraints not imposed upon other media,\" restrictions that
constrain broadcasters\' choices about the view-points presented fail
constitutional scrutiny unless \"narrowly tailored to further a
substantial governmental interest.\" Id. at 380.

Finally, in News America, we expressly rejected rational basis review as
the standard for evaluating the constitutional-ity of a broadcasting
restriction analogous to the one challenged here. See 844 F.2d at
810-14. In that case, we confronted a statute that forbade the
Commission from extending existing waivers of the cross-ownership rules.
The provision affected only two such waivers, both held by a single
publisher/broadcaster, Rupert Murdoch. News America\'s challenges to the
provision \"l\[ay\] at the intersection of the First Amendment\'s
protection of free speech and the Equal Protection Clause\'s requirement
that government afford similar treatment to similarly situated
persons.\" Id. at 804. Reviewing the case law, we identified a
\"spectrum\" of possible broadcast restrictions, \"from the purely
content-based (e.g., \'No one shall criticize the President\') to the
purely structural (e.g., the cross-ownership rules themselves),\" and
suggested that the applicable level of constitutional scrutiny increases
with the extent to which a challenged provision relies on the identity
of the speaker or the content of the covered speech. Id. at 812. On this
spectrum, we continued, the \"prohibition at issue in League of Women
Voters \[was\] at some remove from pure content, as it forbade
\'editorializing\' of any kind by the covered stations\[,\]\" while the
challenged prohibition on extending cross-ownership waivers was \"far
from purely structural \... as it applie\[d\] to a closed class of one
publisher broadcaster.\" Id. Concerned that \"the safe-guards of a
pluralistic political system are often absent when the legislature
zeroes in on a small class of citizens\[,\]\" but wary of League of
Women Voters\' intermediate-scrutiny standard, we concluded, \"\[w\]hat
suffices for this case is that more is required than \'minimum
rationality.\' \" Id. at 814. Applying this heightened rational basis
standard to the challenged provision, we concluded that the provision\'s
narrow focus on extensions of existing waivers of the
newspaper-television cross-ownership rules\--rather than, for example,
extensions of future waivers, or extensions of waivers of the
newspaper-radio cross-ownership rules\--rendered the prohibition
unconstitutionally underinclusive. See id. at 814-15.

Like the prohibition at issue in News America, the RBPA\'s character
qualification provision raises both First Amendment and Equal Protection
concerns, as it restricts future lawful speech (licensed broadcasting)
and applies to a limited class of pirates and former pirates. See 844
F.2d at 812. True, as the dissent points out, Dissent at 1 n.1, the
class of pirate microbroadcasters is neither \"closed\" nor as small as
News America\'s single-member class, but the former class is well
defined (consisting of all pirates), and the character qualification
provision focuses on it \"with the precision of a laser beam.\" News
Am., 844 F.2d at 814. The character qualification provision, moreover,
is far more severe than the News America prohibition: An unlicensed
broadcaster can never lawfully operate a low-power station anywhere in
the country, whereas even under the News America prohibition, Rupert
Murdoch could lawfully have operated a television station outside of any
community in which he \"own\[ed\] or control\[led\] a daily newspaper.\"
Id. at 803; cf. NCCB, 436 U.S. at 800 (holding that the cross-ownership
rules do not \"condition receipt of a broadcast license upon forfeiture
of the right to publish a newspaper\" because even \"\[u\]nder the
regulations, \... a newspaper owner need not forfeit anything in order
to acquire a license for a station located in another community\"). On
the other hand, like the News America prohibition, the character
qualification provision is not purely content-based, nor does it ban \"a
form of speech \... that lies at the heart of First Amendment
protection,\" as did the prohibition on editorializing at issue in
League of Women Voters. 468 U.S. at 381. As in News America, therefore,
we find ourselves in a middle ground, sure only that the appropriate
standard is neither NCCB\'s minimal scrutiny nor League of Women
Voters\' intermediate scrutiny. Also as in News America, however, we
need not \"exact\[ly\] characteriz\[e\] \... the proper standard,\" for
\"any that is appreciably more stringent than \'minimum rationality\'
requires invalidation of the challenged \[provision\].\" 844 F.2d at
802.

IV\.

The RBPA\'s meager legislative history suggests that in enacting the
statute\'s character qualification provision, Congress sought to
increase compliance with Commission regulations in two ways: by
deterring future operation of unlicensed stations and by preventing
former pirates\--who Congress evidently believes would violate other
Commission rules if given the opportunity\--from obtaining licenses. See
H.R. Rep. No. 106-567, at 8 (2000) (\"\[O\]peration of an unlicensed
station demonstrates a lack of commitment to follow the basic rules and
regulations which are essential to having a broadcast service that
serves the public.\"); 146 Cong. Rec. S613-S626 (2000) (statement of
Senator Gregg) (arguing that permitting pirates to obtain low-power
licenses would \"reinforce their unlawful behavior and encourage\[ \]
future illegal activity by opening the door to new unauthorized
broadcasters\"); see also Resp\'ts\' Br. at 7-8 (\"\[T\]he statute \...
is reasonably designed to avoid licensing those whose past conduct
portends future unlawful behavior.\"). Accepting the legitimacy of this
broad goal, we nevertheless believe that the character qualification
provision suffers from the same defect that doomed the statute
challenged in News America: The provision \"bears only the most strained
relationship to \[its ostensible\] purpose.\" 844 F.2d at 814.

To begin with, the provision is \"astonishingly underinclusive,\" id. at
814, excluding some \"conduct that seems indistinguishable in terms of
\[the\] ostensible purpose\" of increasing regulatory compliance, id. at
805. Specifically, the provision bans low-power license applications
only from broadcasters who have operated without a license, leaving the
Commission free to evaluate applications from anyone else under its
preexisting, more permissive character qualification policy. See Policy
Regarding Character Qualifications in Broad. Licensing, 102 F.C.C.2d
1179, 1229 (1986), recon. granted in part and denied in part, 1 F.C.C.
Rcd. 421 (1986). As a result, civil wrongdoers, felons, and even
inveterate regulatory violators other than pirates, retain the
opportunity to demonstrate that notwithstanding their offenses, they can
reliably operate microbroadcast stations in the public interest. In
Modesto Broadcast Group, for example, the Commission considered a
license application filed by a station whose general manager had
operated with relatively high, night-time-authorized power during the
day, risking interference with other stations. 7 F.C.C. Rcd. 3404, 3422
(1992). The Commission ultimately rejected the application, but only
after considering such factors as the willfulness, duration, and timing
of the general manager\'s violations\--factors that the RBPA prohibits
the Commission from considering in cases involving pirates who seek
microbroadcast licenses. See id.; see also Alessandro Broad. Co., 99
F.C.C.2d 1, 11 n.13 (1984) (refusing to disqualify applicant for new
broadcast station permit even though applicant\'s controlling
shareholder had been convicted of second degree murder because \"the
crime was an isolated event that occurred in the remote past and the
state authorities \... \[had\] determined officially that \[the
shareholder was\] rehabilitated,\" so there was \"no predictive nexus
between his past crime and his current and future fitness to be a
Commission licensee\"); Teleprompter Cable Sys., Inc., 40 F.C.C.2d 1027,
1028 (1973) (noting that \"violations of Federal antitrust laws are not
absolutely disqualifying, but are a circumstance from which the
Commission may draw inferences as to probable future conduct\").
Moreover, the Commission may still grant full-power licenses to stations
affiliated with former unlicensed broadcasters. Neither Congress nor the
Commission has articulated any justification for this double standard.
If former misconduct portends noncompliance with Commission regulations,
why shouldn\'t for-mer violators of any relevant federal law or
regulation be ineligible to apply for any broadcast license?

Of course, \"Congress ordinarily need not address a perceived
problem\"\--here, the possibility of future regulatory violations by
past wrongdoers\--\"all at once,\" but we have rejected this \"facile
one-bite-at-a-time explanation\" for otherwise inexplicable
underinclusiveness in \"rules affecting important First Amendment
values.\" News Am., 844 F.2d at 815. Our dissenting colleague omits the
latter half of this quoted passage, arguing that even in the First
Amendment context, Congress may \"permissibly tackle a single part of a
perceived problem \... through a statute \... which is neither
overinclusive nor underinclusive.\" Dissent at 2 & n.2. But the RBPA\'s
underinclusiveness (and indeed its overinclusiveness, too, as we discuss
below) is the precise issue at hand. The dissent\'s argument proves too
much, relabeling any perceived underinclusiveness as a permissible
attempt to address \"a single part of a perceived problem.\" Dissent at
2 n.2.

The character qualification provision is poorly aimed for another
reason: It covers circumstances only marginally related to the purpose
of increasing regulatory compliance. For example, the provision bans
applications from former unlicensed operators who violated the licensing
requirement only briefly or long ago; from operators who have since
exhibited, in whatever manner, an ability to abide by federal laws and
regulations; from operators who plan to serve only as members of a
multi-member board, rather than as president or CEO of an applicant
station; from operators who shut down immediately upon receiving a
Commission order to do so; and, most tellingly, from operators who were
unaware of the licensing requirement at the time of the violation.
Again, neither Congress nor the Commission has explained how a
restriction that ignores such factors accurately targets those former
pirates who pose a real risk of future malfeasance.

These examples of the character qualification provision\'s under- and
overinclusiveness are particularly troubling given the ready
availability of a less restrictive and better aimed alternative: the
analogous provision in the First Low-Power Rulemaking, which allowed for
the possibility of waiver in certain circumstances and applied only to
former pirates who continued to operate in spite of a Commission request
to shut down. Cf. NCCB, 436 U.S. at 802 n.20 (\"The reasonableness of
the \[challenged cross-ownership\] regulations as a means of achieving
diversification is underscored by the fact that waivers are potentially
available from \... \[the\] rules in cases in which a broadcast station
and a co-located daily newspaper cannot survive whithout common
ownership.\"); also News Am., 844 F.2d at 814 (questioning Congress\'s
chosen approach to the identified problem of \"temporary waivers
\'creeping\' into permanence\" and suggesting alternative legislative
solutions). Though potentially still underinclusive, such a limited
restriction would not only permit the Commission to grant a license to
rehabilitated former pirates, but more accurately identify likely future
rule-breakers. Indeed, adopting this limited regulatory restriction in
the first place, the Commission rejected the very per se ban that
Congress has now enacted, see First Low-Power Rulemaking, 15 F.C.C. Rcd.
at 2225-26, reasoning that \"\[t\]he reliability as licensees of parties
who \... illegally operated for a time but \... ceased operation after
being advised of an enforcement action \... is not necessarily as
suspect\" as that of \"\[p\]arties who persist\[ed\] in unlawful
operation after the Commission \[took\] \... enforcement actions,\"
Low-Power Proposal, 14 F.C.C. Rcd. at 2498.

Overall, therefore, we find the character qualification provision so
poorly aimed at maximizing future compliance with broadcast laws and
regulations as to \"raise\[ \] a suspicion\" that perhaps Congress\'s
\"true\" objective was not to increase regulatory compliance, but to
penalize microbroadcasters\' \"message.\" News Am., 844 F.2d at 805.
Indeed, Ruggiero expressly alleges viewpoint discrimination, pointing to
state-ments in the record that suggest many former pirates violated the
licensing requirement solely because they questioned the
constitutionality of the now-defunct microbroadcasting ban and viewed
their piracy as \"civil disobedience.\" See, e.g., Creation of Low Power
Radio Serv., Comment of Civil Rights Orgs., reprinted in J.A. 325
(\"\[O\]ne who broadcasts openly, willingly accepting that the
government will attempt to shut her station down, is engaging in an act
of civil disobedience.\"); Creation of Low Power Radio Serv., Comment of
Professor Robert McChesney, reprinted in J.A. 339 (\"The tremendous
demand for microradio is demonstrated by the emergence of a national
Free Radio Movement, widespread civil disobedience, \... as well as the
proliferation of unlicensed community radio stations \... whose
operators broadcast at the risk of financial losses, seizure of
property, arrest, and in some cases, imprisonment.\"). We need neither
endorse the pirates\' tactics\--in fact, in Grid Radio, slip op. at
11-12, \_\_ F.3d \_\_, (also issued today), we reject an argument that
penalizing microbroadcasting piracy violates the First Amendment\--nor
believe the RBPA discriminates against pirates\' \"message\" to
conclude, as we did in News America, that the provision\'s inaccurate
aim is fatal.

We emphasize that this result does not leave Congress and the Commission
powerless to bar some past pirates from applying for licenses. While
that might well be the outcome were we applying intermediate scrutiny,
we read News America\'s more permissive standard as leaving ample room
for a carefully aimed licensing restriction. Indeed, the Commission
already has authority under its general character qualification
provision to deny licenses to individual pirates who, in the
Commission\'s considered judgment, have demonstrated an inability to
\"comply with the Communications Act and \[Commission\] rules and
policies.\" Policy Regarding Character Qualifications in Broad.
Licensing, 102 F.C.C.2d at 1183. Even under the News America standard,
however, we cannot sanction an automatic and permanent restriction on
unlicensed broadcasters\' future lawful speech without under-standing
why their misdeeds warrant a penalty so much more severe than that
applied to any other misconduct. Yet neither the RBPA itself, nor the
legislative history, nor the record in this case provides a satisfactory
explanation. We thus have no choice but to declare the statute and the
Commission\'s implementing regulation unconstitutional.

V.

The petition for review is granted, the Second Low-Power Rulemaking is
vacated, and this matter is remanded to the Commission for further
proceedings not inconsistent with this opinion.

So ordered.

Karen LeCraft Henderson, Circuit Judge, dissenting:

I dissent from the majority\'s holding that the challenged provision of
the Radio Broadcasting Preservation Act (Act)\--withholding future low
power FM (LPFM) licenses from those who have illegally engaged in LPFM
broadcasting in the past\--falls short of the \"something more than
minimum rationality\"standard adopted in News America Publishing, Inc.
v. FCC, 844 F.2d 800 (D.C. Cir. 1988). Quoting News America, the
majority charges that the Act\'s license restriction is so \"poorly
aimed at maximizing future compliance with broadcast laws and
regulations as to \'raise\[ \] a suspicion\' that perhaps Congress\'s
true objective was not to increase regulatory compliance, but to
penalize pirate microbroadcasters\' \'message.\' \" Maj. Op. at 16
(quoting 844 F.3d at 805). This case, however, is nothing like News
America.

In News America the court overturned a funding resolution that barred
the FCC from using appropriated funds \" \'to extend the time period of
current grants of temporary waivers to achieve compliance with such
rules.\' \" 844 F.2d at 802 (quoting Pub. L. No. 100-202, 101 Stat.
1329, 34 (1987)). The court found the provision \"astonishingly
underinclusive\" for two reasons. First, it did not prohibit extension
of waivers granted after its enactment but only of those already in
existence. Second, it forbade only extensions of existing waivers and
not the granting of new waivers. In fact, because of its narrow focus
the restriction affected only a single party, News America Publishing,
Inc., a corporation owned by Rupert Murdoch, striking him, in the
court\'s words, \"with the precision of a laser beam.\" 844 F.2d at 814.
By contrast, the license restriction here applies to the entire class of
those who as of the time of their license applications have unlawfully
engaged in LPFM broadcasting.[^1] Further, the restriction substantially
furthers the plain intent of the Congress which believed that \"the
operation of an unlicensed station demonstrates a lack of commitment to
follow the basic rules and regulations which are essential to having a
broadcast service that serves the public, and those individuals or
groups should not be permitted to receive licenses in the LPFM
service.\" H.R. Rep. No. 506 at 8 (2000). What could be more reasonable
or logical than to suspect that those who ignored the Commission\'s LPFM
broadcast regulations in the past are likely to do so in the future and
therefore to head them off. The majority claims this class is
underinclusive because it excludes a host of other scofflaws such as
\"civil wrongdoers, felons, and even inveterate regulatory violators
other than pirates.\" Maj. Op. at 13. As the majority acknowledges,
however, \" \'Congress ordinarily need not address a perceived problem
\... all at once.\' \" Maj. Op. at 14 (quoting News America, 844 F.2d at
815.).[^2] It is no surprise that in legislation addressing LPFM
licensing the Congress began with known violators of LPFM regulations.
In any event, given that the class\'s members here are many and
unidentified, see supra note 1, I am at a loss to understand how we can
infer the Congress intended to punish any particular \"message\" the way
the senators mentioned in News America targeted Murdoch\'s message.[^3]

[^1]: This class includes persons who broadcast illegally after the
    Act\'s passage as well as those who had already done so before
    enactment. It is therefore not a \"closed\" class as was the case in
    News America. See 844 F.2d at 810 & n. 13 (noting that challenged
    provision \"impinges on a closed class\" because \"Murdoch is not
    only the sole current member of the class, but is the sole party
    that can ever be a member\").

[^2]: As the majority points out, the court in News America noted other
    courts\' rejection of the \"one-bite-at-a-time explanation for rules
    affecting important First Amendment values.\" News America, 844 F.2d
    at 815, quoted in Maj. Op. at 14. Judging from the examples cited in
    News America, the court meant only that a proffered governmental
    interest will not suffice if the challenged statute does not
    reasonably serve the interest, that is, if the statute is
    underinclusive or overinclusive or both. See FCC v. League of Women
    Voters, 468 U.S. 364, 396 (1984) (striking down statute of \"patent
    overinclusiveness and underinclusiveness\" because it \"clearly
    \'provide\[d\] only ineffective or remote support for the
    government\'s purpose.\' \") (quoting Central Hudson Gas & Elec.
    Corp. v. Pub. Serv. Comm\'n of N.Y., 447 U.S. 557, 564 (1980));
    Community Serv. Broadcasting v. FCC, 593 F.2d 1102 (D.C. Cir. 1978)
    (rejecting statute that \"\[a\]t best \... serves as an overly
    restrictive means\" of achieving asserted purpose) (en banc). I see
    no reason the legislature cannot permissibly tackle a single part of
    a perceived problem (including one touching on the First Amendment)
    through a statute, such as the one here, which is neither
    overinclusive nor underinclusive.

[^3]: As the News America court recounted, Murdoch was thoroughly
    excoriated in the Senate shortly after the Act was passed. See News
    America, 844 F.2d at 807-10.