s s s e s america inc good morning before we get started i just have one housekeeping matter the parties filed a sealed appendix in this case but the briefs were not filed under seal in no one has requested to conduct this oral argument u nder seal or has a closed proceeding in so we are operating under on the basis that there will be nothing referenced from the sealed appendix during argument we don't intend to reference anything from the sealed appendix in we expect that the parties will not either reference anything at least specific information identifiable information from the and appendix and so that's the basis upon which we are proceeding in and if in the party disagree with proceeding in that fashion today should let us know at this time  otherwise we we will go forward does anyone have an objection to that address them in turn although under section three hundred and sixteen the commission can modify a license this court has made clear in community television and subsequent cases that such authority does not extend to the f c c is making a fundamental change in that license based upon the supreme court's holding versus eighty the verb to modify the supreme court said means to change moderately or in minor fashion and has a connotation of incremental limitation in fact the order has so fundamentally changed p s the size transport of the licenses the authorizations for the satellite trucks that are essential for providing live events programming so as to threaten the transport of a business order takes away sixty percent of the spectrum available for operation of a transportable and imposes multiple technical limitations in the spectrum that means this is a fundamental change precisely what the court said was in permissible community and finding that this is not a fundamental change of as a factual matter in de explain explain that finding and the the evidence that they basing that finding upon then that is something that we owe deference to unless it's not based upon substantial evidence so that correct your honor i think that there is substantial evidence that shows the contrary that is that there has been a substantial it seems in the life but i guess you would agree that as a as a as a legal matter could review that for substantial evidence offer the absolute but you know not necessarily around it because we have to go back to what it is that the statutory interpretation of section three hundred and sixteen and as i indicated the decisions of this court based upon the supreme court holding the we are presenting a we are presenting substantial evidence that demonstrates that that article and mentioned again mr gavin i think and i think i think the standard and please correct me if i'm wrong is when it comes to a your customers and the f c c says that you will and in fact your customers everybody from disney to viacom says that you will  if the f c c has put before us substantial evidence that you will be able to continue doing what you used to do terms of servicing your customers then on the dispute of whether or not that's true or not we have to agree with the f c c if they provided sufficient evidence do you agree with that your honor i return to my point that i think that we haven't gotten to the the the th is is not a situation where we're giving deference to the commission judgment because they have they are ignored the they have ignored the dictate of the statute that a what's the distinction between a modification a fundamental change but in order to take that test and apply it to certain facts you have to figure out what the facts are one fact might be you can continue doing everything you did before one fact might be you can't do things that you used to do and that that's the disputes that we have we have to figure out well who's right and you say you're right f c c says it's right and i believe that so long as the f c c produce a substantial evidence of a chip before us that they're right then we have to agree with the f c c on that disputed facts right want the evidence that you produced and put before the f c c let's exclude the evidence that you put before us as a reviewing court that you did not originally provide to the f c c if we're only talking frequency coordinate where example in order to in order to be able to make the connection for our satellite we had argued that for the particular example of the commission and that the commission has question is the is the miami hard rock stadium example that we used in included in the end and is before the court simply an illustration of the point that evidence during the course of the difficulties of being able to protect the signal because the filtering we provided examples of are in i believe it was in may of may twenty one thousand dollars and again in comments after we've done satellite signal that coming down to earth at at a level of zero point one to the nineteen deaths and point number so small that i'm not sure that i'm even that offering that goes  that goes to the interference from all right that goes your that goes your honor to to think that goes to the interference problem but it also goes to the the the the difficulty of operating in an environment where your signal is so saturated by the signals that are being emitted by the five to transmitters so it's not just it's not just it's one of the much a frequent the issue as it is a power saturation issue i think if i'm remembering right you told the f c c that you could sustain a loss of two hundred megahertz and now you say you can't sustain a loss of three hundred megahertz i guess what where can i go in the record to find you produce evidence just your say so that there's something about that extra one hundred megahertz that allows you table and we felt that there in order to try to make this both move forward but we did provide evidence even at the two hundred level those studies that i referred to on the interference problem were for the filtering uplink satellite that is linked to the downlink set like the we we raise that can point to the commission and i will i could go back and and and supplement the record for you and i'll stop asking questions now maybe it may be in your because your honor as we noted in your point one specifically the commission could this court said that the facts would be different if it was a service where there was currently international and global services being provided which is but typically the case for which there  service which was strictly domestic service the twelve big earth and the d d s service which involved a band where there was nobody currently using the band for international service in our case the band is  being used to transmit programming to and from the united states which which appears to be a pretty evident international service that congress position was not just that you shouldn't auction this it was not withstanding any other provision of the lot it should not be it's interesting that in your point one the court noted that the commission had even noted that it can screw the relevant language of and sixty five f or that act to focus on whether the particular spectrum being assigned is used for international or global satellite communications service that they didn't even do that here are they just simply that we have the authority to do so we're spectrum is being consistent with your holding and your point one where spectrum is actually being used for global and international service as it is here the auction is prohibited by the orbit act  are out of our time and we were we rest on our briefs on the other issues that we raised but we request that the court order all right i'll give you a little bit of time on rebuttal will hear from mr right all right say something now because i think it was getting better thank you your honor di been on modification the question before the court is really a legal is not clearly erroneous why wouldn't that be more than enough to cinch up their case on the legal question i mean you're you listen sixty percent but turns out it's not that doesn't matter apply a blanket existing customers standard but instead applied a standard that considers past customers present customers and reasonable at taishan future customers found in the context of small satellite operators there was no reasonable expectation should your customers and so there as a shorthand for that  fairly all encompassing test refer to it as the existing customers test it i think that's how the order is dest were read did you hadn't noticed that and their order with the notion of existing customers is relevant to modification i mean that's just part of the justification they're using to explain why they're shifting spectrum in it was crystal clear that the notice told you they were planning on shifting spectrum why isn't that understand that's that's one of your substantive arguments but just not seeing on on notice the whole whole point of this from the outset was to shift satellite spectrum and the five g spectrum everyone knew that's what was it issue everyone commented in the administrative proceedings about why that was a good or believe next up counsel for the commission good morning ma'am please the court actually points out for the federal communications commission what the commission did share with exercised its broad spectrum management authority to and also based on representation by the ballot in common including a small satellite dish notice that they could provide their services in the reduced two hundred megahertz allegation with compression and other readily available technology the commission action here that you understand that what the commission did here was a pie of comparable service and or that looked both to the level of existing customers as well as evidence that went to be credible like the future business and the commission express found that the upper two hundred dollars megahertz allocation would accommodate both the existing level of business and the incumbents ability to expand their business and the future that comparable service standard is consistent about how order that aired a potential future customers reasonable expectation of them is there anything in the auto innovators brief terms of what instead as i said the commission applied the comparables every standard which ensured that the badly in comments and the earth station incumbent could provide substantially the same service after the modification i guess you're i guess you're not defending d be wrong to rule it out for the future it does seem like arbitrary capricious to enter well i think there there may be opportunities in the future to address that question squarely but as i said that's not what the commission did here and the extent the court may have concerns about the commission's consideration of things like reliance or investment i think that part can take solace a and the fact that the commission looked at those factors here and being those are the kinds of considerations that would would that have been arbitrary and capricious in this case well i think that we can see that it's appropriate to look at that and the record reasonably credible future business prospects particularly service standard that appears in this order i think judge walker some of your questions seems to understand that the existing customer an existing service information was particularly salient here because there was evidence of a record that the market was declining and as a result of the fact that there were these long standing satellite incumbent and declining market existing customers were particularly relevant and salient data point in ensuring that the incumbents could continue to provide to twenty six dollars of the order and it made it clear that what i was trying to do was maximize the likelihood that the satellite incumbents would voluntarily opt in to clear go themselves and thousands of earth stations on an incumbents had no incentive to divulge what they would accept so the commission started by evaluating the upper bound and i've explained that upper bound was a conservative estimate of the market value of acceleration  licensee if and then it selected a number close to that upper bound because again it was looking to mask my the likelihood of voluntary accelerated clearing on the understanding that that would result in social and economic benefit on an order of magnitude greater than the market valuation of acceleration to the overly licensees and i must admit i suggested that that would need fifteen billion dollars a year for each year acceleration of thirty billion dollars total hundreds of thousands of jobs american now with respect to some of the representation by petitioners counsel i as i said i think the panel understands that the commission relied on substantial evidence in their record in determining that both the s s i and th reduction of spectrum here if the panel had no further question but i'm happy to address other issues but otherwise important issue to us because our clients have an extremely strong interest in having this war if it's critical to free up much needed five g spectrum that custom is demanding and that will has the and we simply don't think that this order did that st of all i think the critical point on that is the arguments from the other side rest on a misreading of the order they assert without basis that the commission it is crystal clear that the commission not only considered existing customers of which then practically but also looked at reasonable business opportunities and we think that's important because it reflects a recognition which is appropriate  fact subject to build out obligations so yes if if the commission tried to sort of take away you know substantially whole of the spectrum we think that would be an issue but i think the critical point at this stuff we go beyond the form of the license we're not just looking out the words in the license we have to look at the real impacts or as a judge cactus i think the phrase you have been used in the eliot case was one of the facts on the the commission they tried to throw in a bunch of additional post evidence in connection with that state motion which this court denied in the form of declarations which tried to clean up things but commission was making a difficult critical decision how do we draw the line in figuring out how effectively what is the lowest amount we can set that would nevertheless sufficiently incentiv thank you good afternoon just look and may please the court my name is paul warner and i represent as american as gas is one of the largest and satellite operators with business on the c band that is already actively working to transition businesses services and customers into the offer two hundred megahertz band free up significant spectrum for playing the revolutionary g e services with my limited time i'd like to focus on the payment which is and i like to pick up with judge walker judge walker's observation that yes the do not have standing to challenge the payments being made by rd party wireless overlay like these two rd party incumbent they plainly don't would point the court to this course decision in the mobile relay case in order to have competitor competitor standing as they're alleging here they need to be current and direct competitors they're not and that brings me to a fundamental distinction between the fs those in the one hand and the incoming satellite operators on the other they f c c made a technical assessment based on his core competency in this area that the  are nothing more than paper network they hold authorization what the f c c concluded based on the outfit and that they did not launch their satellites to provide services in the sea man in the united states they have no see even business now they have no or earth station in the c band in the united states and because of the technical limitations of their satellites and the path business they have provided use and man they are unlikely t predicted to provide services in the future they're free to do so in the same amount of spectrum going forward that is left for the incumbents who have real business in the sea than the incumbents have billions of dollars of business in the f alone has sixteen satellites to provide even service in the united states it has more than one hundred customers and more than one hundred services and it is being impacted seriously by the transition along with the other two actually our services d being provided to us earth station which number in the s of thousands in fact there are sixteen thousand dollars plus earth stations that are going to be impacted by the transition so as a result of their licenses being modified the prop the f c c properly determined that the incumbents will incur real and actual and substantial costs this is an under unprecedented undertaking that the commission has set the income out to accomplish on an expedited conference and i just want the corps to understand the expedited nature and the significant undertaking that is required to transition out of the lower so as i was saying and i recognize my my time is up but the income and satellite operators in order to transition the services are already incurring substantial cost in the order of billions of dollars those costs are set out in transition plans filed with the commission and they will be vetted and reimbursed through an independent clearinghouse now quickly just on the incentive payments those payments are to incentiv e s in the other income and to take on voluntarily the massive cost the logistical challenges and the business and execution risks to carry out the transition at the break neck speed all while on that profound task given the risks and costs and fall and the f t c did not accept the amount that the incumbent actually sa to perform that accelerated relocation the c provided an amount are less than that that amount that the f c c actually approved is also far less than the value that the undecided operators are going to deliver the american public by freeing the spectrum on an accelerated timeline is also less than the value to the wireless overlay life of the obtaining the spectrum early if there are no further questions  an example that was prepared that was provided afterwards but the issues we addressed the issues prior to that i also want to do with my time remaining to touch on something that counsel for the commission said we  would also know that mr kuranda articulated in this theater we think should apply and congress things should apply with respect to determining the payments beyond payments or actual right thank you mr right we have all of your arguments in the case to submit