United States Court of Appeals

[FOR THE DISTRICT OF COLUMBIA CIRCUIT]{.smallcaps}

Argued November 23, 1999 Decided January 7, 2000

No. 99-1018

[Heidi Damsky, ]{.smallcaps}

[Appellant]{.smallcaps}

v\.

[Federal Communications Commission, ]{.smallcaps}

[Appellee]{.smallcaps}

[Homewood Radio Co. LLC, ]{.smallcaps}

[Intervenor]{.smallcaps}

Appeal of an Order of the

Federal Communications Commission

*Lauren A. Colby* argued the cause and filed the briefs for appellant.

*Pamela L. Smith*, Counsel, Federal Communications Commission, argued
the cause for appellee. On the brief were *Christopher J. Wright*,
General Counsel, *Daniel M. Armstrong*, Associate General Counsel, and
*Gregory M. Christopher*, Counsel.

*Stephen Diaz Gavin* and *Janet Fitzpatrick* were on the brief for
intervenor.

Before: [Williams]{.smallcaps}, [Sentelle]{.smallcaps} and
[Randolph]{.smallcaps}, *Circuit Judges*.

Opinion for the Court filed by *Circuit Judge* [Sentelle]{.smallcaps}.

[Sentelle]{.smallcaps}, *Circuit Judge*: Appellant Heidi Damsky appeals
from an order of the Federal Communications Commission (\"FCC\" or
\"Commission\") finding her financially unqualified to receive an FM
station construction permit and finding that an applicant that
subsequently obtained the permit as part of a settlement agreement did
not make disqualifying misrepresentations to the Commission. Damsky also
argues that an intervening change in law entitled her to participate in
an auction for the already‑issued permit. Upon review of the relevant
law and the record, we hold that the Commission did not err in affirming
the Administrative Law Judge\'s financial qualification findings. We
also hold that Damsky is not entitled to an auction because the
Commission adequately explained why the statutory settlement provisions
and Commission policy permitted the negotiated outcome obtained here.
Therefore, we affirm the Commission\'s decision based on the
aforementioned considerations and do not need to reach the
misrepresentation issue raised by Damsky.

**I. Background**

In 1988, Heidi Damsky, the appellant, and twelve other applicants filed
mutually exclusive applications for a permit to construct a new FM
broadcast station in Homewood, Alabama. The Mass Media Bureau designated
all applications for comparative hearing. As a result of a 1992 hearing,
an Administrative Law Judge found that Damsky failed to establish her
financial qualifications and dismissed her application. *See In re Heidi
Damsky*, 7 F.C.C.R. 5244 ¶¶ 180-83 (1992) (\"Initial Decision\"). The
Commission affirmed the ALJ\'s determination. *See In re Heidi Damsky*,
13 F.C.C.R. 11688 ¶¶ 24-32 (1998) (\"Memorandum Opinion and Order\").

By the time of the 1992 hearing, the applicant pool had narrowed to
include Damsky and two others. The two remaining applicants, WEDA, Ltd.
(\"WEDA\") and Homewood Partners, Inc. (\"HPI\"), entered into a
settlement agreement contingent on Damsky\'s disqualification. Upon
affirming Damsky\'s disqualification, the Commission granted the permit
to the resulting entity, intervenor Homewood Radio Company (\"Homewood
Radio\"). *See Memorandum Opinion and Order*, 13 F.C.C.R. 11688 ¶¶ 4, 7,
24-32. In addition to affirming the ALJ\'s financial disqualification
findings, the Commission addressed two other challenges now properly
raised and argued by Damsky on appeal. First, the Commission rejected
Damsky\'s claim that HPI had made disqualifying misrepresentations to
the Commission. *See id.*¶¶ 12-23. Second, the Commission rejected
Damsky\'s claim that a recent Commission order required it to award the
permit through a competitive auction in which Damsky could participate.
*See In re Heidi Damsky*, 14 F.C.C.R. 370 ¶¶ 9-14 (1999) (\"Further
Petition for Reconsideration\"); *see also In re Heidi Damsky*, 13
F.C.C.R. 16352 (1998) (\"Petition for Reconsideration\").

A. Background on Financial Qualifications

At the time the parties filed their applications, the Commission
resolved competing applications though an evidentiary hearing process
that assessed applicants\' basic and comparative qualifications. Each
broadcast applicant had to establish, among other things, that it was
financially qualified to cover certain construction and operating costs.
*See* 47 U.S.C. § 308(b) (1994); *CHM Broad. Ltd. Partnership v. FCC*,
24 F.3d 1453, 1455 (D.C. Cir. 1994). The financial qualification form in
effect when the parties here made their filings required each applicant
to certify with \"reasonable assurance\" that it had net liquid assets
on hand or had funding obtainable from committed sources sufficient to
construct and operate the requested facilities for three months without
revenues. *See In re Revision of Application for Construction Permit for
Commercial Broadcast Station (FCC Form 301)*, 50 Rad. Reg. 2d 381 (P &
F) (1981) (\"Form 301\"). The form clearly indicated that an applicant
had to be prepared to document certification compliance upon request.
*See id*. If the Commission questioned an applicant\'s financial
qualifications, the applicant had to demonstrate its \"reasonable
assurance\" by showing that, \"prior to certification, it engaged in
serious and reasonable efforts to ascertain predictable construction and
operation costs\" and that it confirmed the availability of net liquid
assets, either on hand or from committed sources, sufficient to
construct and operate the station for three months without revenue. *In
re Northampton Media Assocs.*, 4 F.C.C.R. 5517 ¶¶ 13-15 (1989), *aff\'d
sub nom. Northampton Media Assocs. v. FCC*, 941 F.2d 1214, 1217 (D.C.
Cir. 1991). After questioning and investigating Damsky\'s financial
qualifications, the ALJ found that Damsky failed to make either of the
two showings required to establish a \"reasonable assurance.\"

Specifically, the ALJ found that Damsky failed to show prior to the
certification that she engaged in \"serious and reasonable efforts\" to
formulate cost figures because she only offered a general \$300,000
\"ballpark\" cost estimate based on a conversation with her consulting
engineer. *See Initial Decision*, 7 F.C.C.R. 5244 ¶¶ 6-9, 181. The
Commission affirmed the ALJ\'s findings and conclusions. *See Memorandum
Opinion and Order*, 13 F.C.C.R. 11688 ¶¶ 1, 30. Likewise, the ALJ and
Commission both agreed that Damsky failed to show that she had
sufficient committed funding available since she based her financial
backing on a casual assurance from her husband that the couple had the
assets to cover the \$300,000 project. *See Initial Decision*, 7
F.C.C.R. 5244 ¶¶ 10-24, 182-83; *Memorandum Opinion and Order*, 13
F.C.C.R. 11688 ¶ 31. The ALJ and Commission found that while the record
showed that Damsky\'s husband preferred to obtain a loan rather than
liquidate, neither Damsky nor her husband provided any assurance about
the availability of such a loan contemporaneous with the certification.
*See Initial Decision*, 7 F.C.C.R. 5244 ¶¶ 182-83; *Memorandum Opinion
and Order*, 13 F.C.C.R. 11688 ¶ 32.

B. Challenge with Regard to HPI

In the order affirming Damsky\'s disqualification, the Commission also
accepted the Homewood Radio settlement agreement. Throughout the permit
application process, Damsky challenged the corporate structure of HPI,
one of the settling parties, as violating FCC rules and alleged that HPI
had made various disqualifying misrepresentations to the FCC. The
resulting inquiry primarily focused on whether two of the five HPI
principals impermissibly acquired their ownership interests prior to the
filing of HPI\'s amended application. Two checks formed the heart of the
debate. Apparently, two \"investors\" gave the three original partners
two \$1200 checks marked respectively \"20% Interest Radio\" and
\"Ownership 20% of Homewood Partners.\" The agency inquiry focused on
whether the checks constituted an ownership interest or a loan. Although
conflicting documentary evidence existed, the ALJ evaluated all of the
evidence and resolved the issue in HPI\'s favor by deeming the payments
loans. *See In re Heidi Damsky*, 9 F.C.C.R. 4011 ¶¶ 61-68 (1994)
(\"Supplementary Initial Decision\"). The Commission affirmed the ALJ\'s
findings. *See Memorandum Opinion and Order*, 13 F.C.C.R. 11688 ¶¶
13-23.

C. Background on Auction Provisions

While exceptions to the ALJ\'s decision were pending, this court held in
*Bechtel v. FCC*, 10 F.3d 875 (D.C. Cir. 1993), that the \"integration
of ownership with management\" criteria used in FCC comparative hearings
was arbitrary and capricious and therefore unlawful. *See id.* at 878.
In response to *Bechtel*, the Commission froze all ongoing comparative
cases, including this case, pending the development of a new regulatory
structure. *See Memorandum Opinion and Order*, 13 F.C.C.R. 11688 ¶ 3.
However, the Commission also created an exception to the freeze policy.
The exception allowed a frozen case to be adjudicated to completion if
the parties to the comparative proceeding reached a settlement agreement
even if the settlement were contingent on the resolution of specific
basic qualifying issues. *See Modification of FCC Comparative
Proceedings Freeze Policy*, 9 F.C.C.R. 6689 (1994). The agreement
resulting in Homewood Radio\'s receipt of the construction permit
constituted such a settlement.

However, while the parties here were negotiating for settlement,
Congress amended § 309(j) of the Communications Act to require the
Commission to grant construction permits through a competitive bidding
system. *See* 47 U.S.C. § 309(j) (Supp. III 1997). Since the mandatory
competitive bidding system applied to applications filed after July 1,
1997, newly‑enacted § 309(*l*) covered the applications filed in this
case because the filings occurred before July 1, 1997. Subsection
309(*l*)(1) states that the Commission \"shall \... have the authority\"
to resolve the pre‑July 1, 1997 filings through competitive bidding. In
addition, subsection 309(*l*)(3) required the Commission to \"waive any
provisions of its regulations necessary to permit such persons to enter
an agreement to procure the removal of a conflict between their
applications during the 180-day period beginning on the date of August
15, 1997.\" Here, the settlement agreement fell within the 180-day
window.

Subsequent to the Commission\'s approval of the Homewood Radio
settlement agreement but prior to the Commission\'s denial of Damsky\'s
Petition for Reconsideration, the Commission adopted rules to implement
its new auction authority. In an order, the Commission announced its
decision to resolve the pre‑July 1, 1997 filings by auction because
\"auctions will generally be fairer and more expeditious than deciding
\[the pre‑July 1, 1997 filings\] through the comparative hearing
process.\" *In re Implementation of Section 309(j) of the Communications
Act*, 13 F.C.C.R. 15920 ¶ 34 (1998) (\"*Auction Order*\"). In response
to the *Auction Order*, Damsky sought further administrative remedy and
asserted that the *Auction Order* required the Commission to hold an
auction for the Homewood Radio permit. Specifically, Damsky relied upon
paragraph 89 of the *Auction Order* which stated:

Where the Commission has denied or dismissed an application and such
denial or dismissal has become final (*e.g.*, when an applicant failed
to seek further administrative or judicial review of that ruling), such
an entity is not entitled to participate in the auction. Among those
remaining in the proceeding, we will permit all pending applicants to
participate in the auction, without regard to any unresolved hearing
issues \... as to the basic qualifications of a particular applicant.

*Id.* ¶ 89. Thus, Damsky argued that the intervening *Auction Order*
entitled her to participate in an auction for the permit because the
original order disqualifying her was still under review and the \"new\"
auction system allowed her to participate despite any unresolved
qualification issues. The Commission rejected her claim because the
settling parties reached an agreement in accordance with § 309(*l*) of
the amended statute, the provision ordering the Commission to waive its
rules and policies when necessary to permit 180-day window applicants to
enter into settlement agreements, and because paragraph 89 did not
address cases involving settlements filed within the 180-day waiver
period which were thereafter approved contingent upon the Commission
resolving specified basic qualification issues. *See Further Petition
for Reconsideration*, 14 F.C.C.R. 370 ¶¶ 9-13; *see also In re
Implementation of Section 309(j) of the Communications Act*, 14 F.C.C.R.
8724 ¶ 18 (1999).

On appeal, Damsky challenges the Commission\'s adverse financial
qualification determination resulting in the dismissal of her
application, the Commission\'s determination that HPI did not make
disqualifying misrepresentations, and the Commission\'s approval of the
Homewood Radio settlement agreement in lieu of an auction.

**II. Discussion**

A. Scope of Review

As an initial matter, we must establish the extent of our review since
the FCC challenges the sufficiency of Damsky\'s notice concerning the
issues she currently argues on appeal. With regard to the auction issue,
we hold that Damsky properly raised that issue in her Notice of Appeal
(\"Notice\") by expressly appealing the order denying further
reconsideration in which the Commission first addressed the auction
provisions in dispute. *See Further Petition for Reconsideration*, 14
F.C.C.R. 370 ¶¶ 9-13. Although \"a petition seeking review of an
agency\'s decision not to reopen a proceeding is not reviewable unless
the petition is based upon new evidence or changed circumstances,\"
*Southwestern Bell Telephone Co. v. FCC*, 180 F.3d 307, 311 (D.C. Cir.
1999), the FCC concedes and we agree that the auction issue pertains to
changed circumstances in the law and is therefore reviewable by this
court.

The sufficiency of notice concerning the financial qualification and
misrepresentation issues requires a more extended discussion. In
*Southwestern Bell*, we held that when an agency has denied the
reconsideration of a substantive underlying decision and a party appeals
only the order denying reconsideration, the appeal does not suffice to
bring the earlier substantive decision\'s merits before the court. *See
Southwestern Bell*, 180 F.3d at 309. The FCC argues that Damsky sought
review only of the Commission orders denying her reconsideration and
further reconsideration. Therefore, the FCC asserts, Damsky cannot raise
the financial qualification or misrepresentation issues on appeal since
the Commission only substantively addressed those issues in the
unchallenged underlying *Memorandum Opinion and Order*. However, for the
reasons set forth below, we reject the FCC\'s argument and hold that
Damsky made sufficient references to the underlying substantive
*Memorandum Opinion and Order* in her Notice of Appeal and accompanying
Concise Statement of Reasons to put the Commission on notice that she
intended to challenge the financial qualification and misrepresentation
issues in addition to the auction issue.

On the face of her Notice of Appeal, Damsky clearly states that she is
appealing the Commission order denying further reconsideration. However,
the Notice also references the order denying reconsideration and the
underlying *Memorandum Opinion and Order*. Moreover, Damsky briefly
addresses the merits of the *Memorandum Opinion and Order* in the
Concise Statement of Reasons attached to the Notice. Given the ambiguity
surrounding the existence of actual notice, we analyze Damsky\'s notice
predicament under the \"test for determining whether a filing that names
one order suffices to bring a different order before the court\" set out
in *Southwestern Bell*, 180 F.3d at 313.

To determine whether an applicant sufficiently raised an order or an
issue contained in a particular order, we first examine the notice to
see whether it contains \"the specification of \[other\] orders and
hearing dates \[or\] fail\[ed\] to mention the \[disputed\] order in
either the notice of appeal or the docketing statement\" and also review
other relevant filing information. *Brookens v. White*, 795 F.2d 178,
181 (D.C. Cir. 1986) (per curiam). We then use the results of this
examination to infer the petitioner\'s intent and decide if the
respondent has been misled by the filings. *See Brookens*, 795 F.2d at
181; *see also Southwestern Bell*, 180 F.3d at 313. Here, Damsky, in
passing, cited to the order dealing with her disqualification and the
HPI misrepresentation issues in her Notice of Appeal. However, she also
substantively challenged the Commission\'s denial of her application on
financial qualification grounds and its dismissal of the
misrepresentation issue in the Concise Statement of Reasons attached to
her Notice of Appeal. Thus, the Commission cannot claim that any notice
defects surprised or misled it with regard to the issues Damsky intended
to raise on appeal. Given the circumstances, we conclude that Damsky
adequately brought the *Memorandum Opinion and Order* before this court
for review. Therefore, we will address both the financial qualification
issue analyzed in the *Memorandum Opinion and Order* and the auction
issue analyzed in the order denying further reconsideration. For the
reasons set forth below, we do not reach the misrepresentation issue.

B. Financial Qualifications

We review FCC orders \"under the deferential standard mandated by
section 706 of the Administrative Procedure Act, which provides that a
court must uphold the Commission\'s decision unless it is \'arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law.\' \" *Achernar Broad. Co. v. FCC*, 62 F.3d 1441, 1445 (D.C. Cir.
1995) (quoting 5 U.S.C. § 706(2)(A)). In this task, we \"do not
\'substitute \[our\] judgment for that of the agency\' \[but\]
\[r\]ather we look to see \'whether the decision was based on a
consideration of the relevant factors and whether there has been a clear
error of judgment.\' \" *Freeman Eng\'g Assocs., Inc. v. FCC*, 103 F.3d
169, 178 (D.C. Cir. 1997) (quoting *Motor Vehicle Mfrs. Ass\'n, Inc. v.
State Farm Mut. Auto. Ins. Co.*, 463 U.S. 29, 43 (1983)). We also review
the FCC\'s factual findings for support by substantial evidence. *See,
e.g., Millar v. FCC*, 707 F.2d 1530, 1540 (D.C. Cir. 1983). Given the
relevant standards of review, we hold that the Commission did not act
arbitrarily in affirming the ALJ\'s finding Damsky financially
disqualified since the law and substantial evidence in the record
support the ALJ and Commission\'s decisions regarding Damsky\'s failure
to substantiate her financial qualification. More specifically, we hold
that the Commission\'s conclusion that Damsky did not certify funding
with a \"reasonable assurance\" because she did not engage in \"serious
and reasonable efforts\" to obtain construction and operating cost
figures is not arbitrary or capricious.

In *In re Northampton Media Assocs.*, 4 F.C.C.R. 5517 (1989), *aff\'d
sub nom. Northampton Media Assocs. v. FCC*, 941 F.2d 1214 (D.C. Cir.
1991), the Commission provided some guidance regarding \"reasonable
assurance\" in the certification context:

\[T\]he certification procedure was designed \"to spare\[ \]
\[applicants\] the time and effort necessary *to prepare* and submit the
documentation previously required to demonstrate their qualifications.\"
\... \[R\]easonable assurance does not necessarily require that an
applicant have the written documentation \[previously required\] when it
certifies its financial qualifications. Although the supporting
documentation must be produced upon the Commission\'s request, the
applicant may prepare and submit it after certification, provided that
the applicant actually had a reasonable assurance of adequate funds at
the time of certification.

*Id*. ¶ 14 (quoting *In re Certification of Financial Qualifications by
Applicants for Broadcast Station Construction Permits*, 2 F.C.C.R. 2122
(1987) (emphasis added)). Specifically, the law required Damsky to
establish, upon request, two precertification inquiries in order to
demonstrate \"reasonable assurance.\" First, she had to \"adduce
probative evidence that, prior to certification, \[she\] engaged in
serious and reasonable efforts to ascertain predictable construction and
operation costs.\" *Id.* ¶ 15; *see also Mission Broad. Corp. v. FCC*,
113 F.3d 254, 260 (D.C. Cir. 1997) (noting that applicant must first
determine how much money is required). Second, she had \"\[t\]o
establish the availability of funds to meet these estimated expenses,
\[by\] provid\[ing\] substantial and reliable evidence showing
\'sufficient net liquid assets on hand, or committed sources of funds to
construct and operate for three months without revenue.\' \"
*Northampton,* 4 F.C.C.R. 5517 ¶ 15 (quoting Form 301, 50 Rad. Reg. 2d
at 388); *see also CHM Broad.*, 24 F.3d at 1458. Here, Damsky\'s
reliance on a vague \"ballpark\" cost estimate does not get her over the
initial \"serious and reasonable efforts\" hurdle. *Cf. In re Victorson
Group, Inc.*, 6 F.C.C.R. 1697 ¶¶ 18-19 (Rev. Bd. 1991) (finding
\"general sense\" of estimated costs insufficient for financial
qualification purposes); *In re Sunbelt Ltd. Partnership*, 7 F.C.C.R.
4394 ¶¶ 7-10 (Rev. Bd. 1992) (finding \"bits of information\" on costs
insufficient for financial qualification purposes), *aff\'d*, 8 F.C.C.R.
753 (1993), *rev\'d and remanded on other grounds sub nom. Sunbelt v.
FCC*, Nos. 93-1184 & 93-1708, 1994 WL 191656 (D.C. Cir. May 9, 1994).

Damsky incorrectly relies on *Northampton* as support for her position.
In *Northampton*, the Commission found financially qualified an
applicant---a three‑person corporation including a principal with
experience in radio---that had relied on an oral cost estimate which
included an itemization of equipment, construction, and salary and other
operating costs necessary to cover a low‑cost \"mom and pop\" operation
(\$38,800). *See In re Northampton Media Associates*, 3 F.C.C.R. 570 ¶¶
31, 51-56, 63, 68 (1988); *Northampton*, 4 F.C.C.R. 5517 ¶¶ 5, 17. The
applicant had relied on a consulting engineer to prepare the technical
portion of the application and to give advice regarding potential
construction and operation costs. *See* 3 F.C.C.R. 570 ¶ 53. Here,
unlike in *Northampton*, Damsky, a person relatively unfamiliar with the
radio industry, relied on a consultant\'s \"ballpark\" estimate
indicating that the relevant costs would be around \$300,000. While
Damsky\'s figure came from an engineer, perhaps even an engineer with
experience in radio station management, Damsky could not verify that the
figure took into account basic and fundamental expenses. Given the
potential magnitude of construction and operation costs at stake, the
Commission reasonably concluded that Damsky did not have enough
supporting detail at the time of her certification to make her reliance
on the \$300,000 figure reasonable. The evidence offered by Damsky did
not establish that she had made \"serious and reasonable efforts\" to
secure a cost figure *at the time of certification*. Thus, the
Commission legitimately rejected Damsky\'s application due to her
lackadaisical cost inquiry efforts.

C. The Auction

In reviewing the interpretation and application of the FCC auction rules
challenged here, we afford the deference due the FCC\'s interpretation
of its own rules and policies, and will uphold the FCC\'s interpretation
unless it is \"plainly erroneous or inconsistent with the regulation.\"
*E.g., Freeman Eng\'g*, 103 F.3d at 178 (citations and quotations
omitted). Considering the ambiguity surrounding the interaction between
the § 309(*l*) auction and settlement provisions as described by the
Commission in the *Auction Order*, we conclude that the Commission
adequately explained why it did not regard paragraph 89 of the *Auction
Order* as requiring that Damsky be allowed to participate in an auction
for the construction permit.

In addition to giving the Commission the ability to resolve transitional
competing comparative permit applications though a competitive auction
mechanism, Congress required the Commission to \"waive any provisions of
its regulations necessary to permit such persons to enter an agreement
to procure the removal of a conflict between their applications\" during
a 180‑day window. 47 U.S.C. § 309(*l*). Here, two applicants, not
including Damsky, filed a settlement agreement within the 180-day
period. The agreement was contingent upon the Commission\'s affirming
the ALJ\'s finding that Damsky was disqualified on financial
qualification grounds. Since the auction issue involves, in part, the
Commission\'s interpretation of a statute committed to its
administration, we employ the *Chevron* analysis in reviewing the
agency\'s interpretation. Pursuant to *Chevron*, we will give effect to
any unambiguously expressed intent of Congress as contained in the
statutory provision under review. *See Nuclear Info. Resource Serv. v.
Nuclear Regulatory Comm\'n*, 969 F.2d 1169, 1173 (D.C. Cir. 1992) (en
banc). However, if the statutory provision is silent or ambiguous, we
will defer to the agency\'s interpretation assuming its interpretation
is reasonable and consistent with the statute\'s purpose. *See id.*
Given the statutory language in issue, we hold that the Commission
reasonably interpreted § 309(*l*) as affording applicants falling in the
window period, upon the resolution of any basic qualification disputes,
the opportunity to settle instead of participating in an auction. *See
Further Petition for Reconsideration*, 14 F.C.C.R. 370 ¶¶ 11-12; *In re
Implementation of Section 309(j) of the Communications Act*, 14 F.C.C.R.
8724 ¶ 18. The Commission\'s use of Damsky\'s financial qualification as
a condition to approving the settlement agreement is consistent with the
statute. *See also* 47 U.S.C. § 309(j)(6)(E) (1994) (indicating that the
grant of auction authority not \"be construed to relieve the Commission
of the obligation in the public interest to continue to use \...
threshold qualifications \... in order to avoid mutual exclusivity in
application and licensing proceedings\").

In reaching our decision, we reject Damsky\'s contention that §
309(*l*)(3) only governs global settlements. The Commission reasonably
interpreted the statute when it determined that partial settlements
could be approved under § 309(*l*)(3). *See Auction Order*, 13 F.C.C.R.
15920 ¶¶ 73, 93; *In re Implementation of Section 309(j) of the
Communications Act*, 14 F.C.C.R. 8724 ¶ 18. Nothing in the statute
dictates that § 309(*l*)(3) only permits universal settlement. Since
settlements are private contractual arrangements, an applicant such as
Damsky has no general legal right to be included in a settlement. *See
In re Anax Broad. Inc.,* 88 F.C.C.2d 607 ¶ 10 (1981). Thus, nothing in
the statute or other law appears to preclude the Commission from
approving a settlement that includes only *qualified* parties. The
Commission has acted consistent with this interpretation. *See In re
Global Information Tech., Inc.,* 12 F.C.C.R. 11808 ¶¶ 1, 3, 6 (1997),
*aff\'d on other grounds sub nom. Frontier Broad., Inc. v. FCC*, No.
97-1530, 1998 WL 704510 (D.C. Cir. Sept. 4, 1998); *In re Gonzales
Broad., Inc.*, 12 F.C.C.R. 12253 ¶¶ 4, 19 (1997), *aff\'d on other
grounds sub nom. Jelks v. FCC*, 146 F.3d 878 (D.C. Cir. 1998), *cert.
denied*, 199 S. Ct. 1045 (1999); *In re Pensacola Radio Partners*, 13
F.C.C.R. 11681 ¶ 1 (1998), *aff\'d on other grounds sub nom. Floyd v.
FCC*, No. 98-1269, 1999 WL 236879 (D.C. Cir. Mar. 29, 1999).

The Commission\'s interpretation of paragraph 89 of the *Auction Order*
comports with its interpretation of the statute and its prior practice.
The Commission reasonably interprets paragraph 89 as only applying to
cases \"where an auction would otherwise be held because no settlements
were reached.\" *Memorandum Opinion and Order*, 14 F.C.C.R. 370 ¶ 12. As
the Commission points out, the *Auction Order* and supporting notices
separate out § 309(*l*)(3) settlement from auction rules and guidelines.
*See id.* ¶ 13. Moreover, the Commission adequately established on the
record that a proper § 309(*l*)(3) settlement would obviate the need for
an auction. *See id.*; *In re Implementation of Section 309(j) of the
Communications Act*, 14 F.C.C.R. 8724 ¶ 18. The Commission\'s reading of
paragraph 89 makes sense when the provision is analyzed in context.
Thus, paragraph 89 does not undo the Commission\'s approval of the
settlement agreement in this case since the Commission reasonably
interpreted paragraph 89 as not pertaining to permissible settlement
agreements reached pursuant to § 309(*l*)(3).

To recap, we hold that Damsky provided sufficient notice to entitle her
to review of her claims stemming from the *Memorandum Opinion and Order*
in addition to review of the auction issue. However, we uphold the
Commission\'s determination that Damsky was financially disqualified
from receiving the Homewood FM station construction permit. We also hold
that the Commission reasonably interpreted § 309(*l*) and its *Auction
Order* as not providing Damsky with the opportunity to participate in an
auction.

**III. Conclusion**

We conclude that the Commission did not err in finding Damsky
financially disqualified from receiving a construction permit and in
interpreting the auction provisions as being inapplicable to her. Thus,
the Commission correctly dismissed Damsky\'s application. Since Damsky
has no claim to the construction permit, we need not reach her challenge
concerning the alleged misrepresentations made by HPI. Because the law
and record support the Commission\'s findings regarding Damsky\'s
financial qualifications and the Commission\'s interpretation and
application of the relevant settlement and auction provisions are
reasonable, we affirm the Commission\'s determinations challenged on
appeal.