Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-02-01098/USCOURTS-caDC-02-01098-0/pdf.json

Parties Involved:
Federal Communications Commission
Appellee
Highway Information Systems, Inc.
Intervenor
Transportation Intelligence, Inc.
Appellant

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 17, 2003 Decided July 25, 2003

No. 02-1098

TRANSPORTATION INTELLIGENCE, INC.,

APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION,

APPELLEE

HIGHWAY INFORMATION SYSTEMS, INC.,

INTERVENOR

Appeal of an Order of the

Federal Communications Commission

Donald J. Evans argued the cause and filed the briefs for

appellant.

Pamela L. Smith, Counsel, Federal Communications Commission, argued the cause for appellee. With her on the brief

were Jane E. Mago, General Counsel, and John E. Ingle,

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 1 of 15
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Deputy Associate General Counsel. Daniel M. Armstrong,

Associate General Counsel, entered an appearance.

James A. Stenger argued the cause and filed the brief for

intervenor. Charles A. Zdebski entered an appearance.

Before: GINSBURG, Chief Judge, and EDWARDS and GARLAND,

Circuit Judges.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge: Transportation Intelligence, Inc.

appeals from an order of the Federal Communications Commission denying the company’s application for review of a

decision to authorize a competitor to market a radio transmitter. Finding that the Commission’s order was neither arbitrary nor capricious, we affirm.

I

Both Transportation Intelligence (TransIntel) and Highway

Information Systems (Highway) manufacture and sell highway advisory radio systems, which use low-power AM radio

transmitters to broadcast traffic, emergency, and other information to drivers.1

 TransIntel is a competitor, as well as a

customer, of Highway; each company has developed and

markets its own radio transmitter, while TransIntel also

resells some of Highway’s devices. TransIntel’s principals,

Joanne and John Alpiser, were employed by Highway until

they left to start TransIntel in 1994. Joanne Alpiser’s father,

Virgil Duncan, was also employed by Highway until he left

the firm in 1998.

The Communications Act of 1934 grants the Federal Communications Commission (FCC) authority to promulgate ‘‘reasonable regulations,’’ consistent with ‘‘the public interest,

convenience, and necessity,’’ to govern ‘‘the interference potential of devices which in their operation are capable of

emitting radio frequency energy TTT in sufficient degree to

1 Highway is a successor in interest to a chain of companies that

marketed the transmitter at issue in this case. For convenience, we

refer to all of the companies as ‘‘Highway.’’

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cause harmful interference to radio communications.’’ 47

U.S.C. § 302a(a). Acting pursuant to that authority, the

FCC generally prohibits the sale of radio frequency devices

absent FCC authorization, which for the type of transmitter

at issue in this case requires the seller to obtain ‘‘certification.’’ See 47 C.F.R. §§ 2.803(a), 2.907; see generally id.

§ 2.801 et seq. A party seeking certification must submit a

written application to the Commission, complete with detailed

descriptions and measurements, ‘‘showing compliance with

the pertinent FCC technical requirements.’’ Id.

§ 2.1033(b)(6); see id. §§ 2.1031-.1060. The Commission will

grant a certificate only if it determines that the equipment is

capable of complying with those requirements and that the

grant ‘‘would serve the public interest, convenience and necessity.’’ Id. § 2.915(a); see id. § 2.919.2

Once the FCC grants an application, any modification in

the ‘‘design, circuitry or construction’’ of the equipment requires a new application for certification. Id. § 2.932(a).

There is an exception, however, for certain minor modifications classified as ‘‘permissive.’’ Id. § 2.932(b). If the FCC

finds that a manufacturer has failed to abide by these rules, it

may revoke the device’s certification or assess a forfeiture

penalty. See id. §§ 1.80(a), 2.939.

On May 19, 2000, TransIntel filed a complaint with the

Commission, alleging, among other things, that Highway had

made substantial modifications to a low-power AM transmitter that the FCC had originally authorized in 1979, without

seeking a new equipment certification. TransIntel stated

that it discovered those modifications when purchasers of that

2 As of 1999, the FCC permitted parties to submit an application

either to the agency or to a designated private entity, known as a

‘‘Telecommunication Certification Body,’’ authorized by the FCC to

certify equipment. Streamlining the Equipment Authorization Process, 64 Fed. Reg. 4984, 4985-90 (FCC Feb. 2, 1999) (codified at 47

C.F.R. §§ 2.960, .962); see 47 U.S.C. § 302a(e) (authorizing the

FCC to use ‘‘private organizations for testing and certifying the

compliance of devices’’). The application at issue in this case was

submitted to the FCC itself.

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Highway transmitter, which TransIntel had resold, complained that the device caused interference with radio transmissions in Rockland County, New York. TransIntel asked

the FCC to revoke Highway’s certification, require a recall,

impose a fine, and conduct a hearing on Highway’s character

and fitness to hold an FCC equipment certification.

Highway responded to TransIntel’s complaint by submitting an application for a new certification of the modified

transmitter, which Highway had also altered to address the

complained-of interference. Highway stated that it regarded

the modifications it had made in its authorized device as

‘‘permissive,’’ but was applying for a new certification because

it could not locate the original test data. On June 28, the

FCC’s Office of Engineering and Technology (OET) granted

Highway’s application.

On July 28, 2000, TransIntel filed a petition for reconsideration with OET. It asked that Highway’s certification be

rescinded or that a hearing be held on the matter in light of

what it described as Highway’s willful violations of FCC

regulations. In a letter dated November 17, 2000, addressing

both TransIntel’s complaint and its petition for reconsideration, OET denied the petition, refused to revoke Highway’s

new certification, and deferred a decision on whether Highway’s alleged earlier infractions warranted a forfeiture penalty. OET stated that, because Highway’s modified device had

now been properly certified and the interference concerns

resolved, revocation of the certification was inappropriate.

On December 15, 2000, TransIntel applied for review by

the Commission of OET’s decision on its petition for reconsideration. TransIntel again requested that the FCC revoke

Highway’s certification or hold a hearing to determine whether Highway had the qualifications for an equipment certification. After considering the parties’ written submissions, the

Commission denied TransIntel’s application for review and

refused to revoke the certification or designate the matter for

a hearing. See Highway Info. Sys., 17 F.C.C.R. 4027, 4029-

30 (2002) [hereinafter FCC Order].

In denying TransIntel’s application for review, the Commission rejected Highway’s argument that the modifications

USCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 4 of 15
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it had made to its transmitter were permissive changes that

did not require a new equipment authorization. Nonetheless,

the FCC affirmed OET’s grant of certification. Although the

modifications were not permissive as defined by FCC rules,

the Commission determined that they were ‘‘relatively innocuous,’’ that ‘‘the resulting modified transmitter readily passed

the Certification process,’’ and that the device was ‘‘now

properly certified.’’ Id. at 4029. It also explained that the

interference of which TransIntel complained ‘‘was not the

result of a rule violation or the lack of appropriate reCertification.’’ The Commission noted that although it might

have pursued the imposition of a fine as an enforcement

matter, the one-year statute of limitations for such a sanction

had already passed. Id. (citing 47 C.F.R. § 1.80(a)(3)); see

47 C.F.R. § 1.80(c)(3). But ‘‘revocation of the equipment

authorization sought by TransIntel is not an appropriate

remedy or sanction in this case,’’ the Commission said, noting

that it had ‘‘stated before that violation of section 2.803 of our

rules generally does not form the basis for a denial of an

equipment authorization.’’ Id. (citing Toshiba Corp., 57 Rad.

Reg. 2d (P & F) 1619, 1622 & n.5 (1985)).

The FCC did not exclude the possibility that ‘‘perpetration

of a fraud on the Commission TTT could form the basis of such

a denial.’’ Id. It concluded, however, that ‘‘TransIntel has

not raised a substantial and material question of fact as to

whether Highway’s actions were so willful or deliberate as to

rise to the level of implicating Highway’s fitness to hold a

FCC equipment authorization.’’ Id. Nonetheless, the Commission noted that it might ‘‘call in further post-grant samples

of the Highway device to ensure that it continues to comply,’’

and warned that ‘‘[a]ny new instance of non-compliance by

Highway could result in sanctions including fines and forfeitures’’ and, if continuous or repeated, ‘‘could call into question

Highway’s fitness to hold an equipment authorization.’’ Id.

II

As we have recounted, the Commission’s order denied

TransIntel’s application for review of OET’s denial of

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TransIntel’s petition for reconsideration, including TransIntel’s request for revocation of the certification granted to

Highway by OET. TransIntel now appeals from the FCC’s

order. Before we may address the merits of that appeal, we

must consider threshold questions concerning our jurisdiction

and standard of review.

A

The denial of a petition for reconsideration by the Commission is generally nonreviewable, unless the request for reconsideration was based on ‘‘ ‘new evidence or changed circumstances.’ ’’ Schoenbohm v. FCC, 204 F.3d 243, 250 (D.C. Cir.

2000) (quoting ICC v. Brotherhood of Locomotive Eng’rs, 482

U.S. 270, 284 (1987)); see Entravision Holdings, LLC v. FCC,

202 F.3d 311, 313 & n.** (D.C. Cir. 2000). The FCC does not

contend that TransIntel’s appeal is unreviewable on this

ground, however, and rightly so. In this case, the FCC did

not deny a petition for reconsideration of its own prior

decision, but rather that of a staff office. Moreover, although

TransIntel characterized its filing with OET as a ‘‘petition for

reconsideration’’ of OET’s decision to grant Highway’s application for a new certification, it was in fact the first opportunity that the FCC’s rules afforded TransIntel to make any

filing at all regarding that application, and hence the first

opportunity OET had to rule on TransIntel’s opposition to the

application. See 47 C.F.R. § 2.923 (providing that only

‘‘[p]ersons aggrieved by virtue of an equipment authorization

action’’ may file ‘‘a petition for reconsideration or an application for review’’ (emphasis added)). Accordingly, both the

OET decision of which TransIntel sought review before the

Commission, and the FCC decision of which TransIntel seeks

review in this court, were dispositions of TransIntel’s first

filings at each level of the agency. The principle that agency

denials of reconsideration are generally nonreviewable is

therefore inapplicable to this case.

The Commission does advance another ground, however,

for concluding that this court lacks jurisdiction to review its

order. The FCC argues that the order was nothing more

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than a determination not to take enforcement action, a category of decision that — like a denial of reconsideration — is

presumptively ‘‘committed to agency discretion’’ and hence

unreviewable. Heckler v. Chaney, 470 U.S. 821, 838 (1985)

(quoting 5 U.S.C. § 701(a)(2)); see id. at 832–33. But it is not

accurate to characterize the FCC’s decision here as a refusal

to take enforcement action. Nor is it correct to describe

TransIntel’s petition for reconsideration or subsequent application for review as a request to take such action.

It may well be fair to describe as an enforcement request

TransIntel’s initial complaint to the Commission, which asked

that Highway be fined and its certification revoked for,

among other things, selling its modified transmitter without a

new certification. But the FCC’s refusal to sanction Highway

for that violation is not the subject of this appeal; indeed,

TransIntel concedes that that refusal is unreviewable. See

Reply Br. at 2–3. After TransIntel filed its complaint, however, Highway responded by submitting an application for a

new certification of the modified device, which OET then

granted. And it is that grant of Highway’s application — an

affirmative act of approval, not merely a refusal to take

action — that TransIntel challenges here. See Heckler, 470

U.S. at 831 (stating that affirmative acts of approval, in

contrast to refusals to take action, are judicially reviewable).

It is true, as the FCC contends, that TransIntel’s opposition to Highway’s application took the form of a request to

revoke Highway’s newly granted certification. But as we

have just described, that was simply a function of the agency’s rules. In contrast to the rules governing broadcast

license applications,3

 the rules concerning equipment certification applications provide no mechanism for an opponent to

contest an application before it is granted. Hence, a petition

for reconsideration was TransIntel’s only option and revocation its only remedy. See 47 C.F.R. § 2.923; see also Toshiba Corp., 57 Rad. Reg. 2d at 1620 (‘‘[T]he Commission’s rules

3 See 47 U.S.C. § 309(d)(1) (permitting interested parties to lodge

their opposition to a broadcast license application prior to FCC

action on the application); 47 C.F.R. § 21.30 (same).

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do not contemplate petitions to deny equipment authorization

applicationsTTTT The only prescribed procedure for challenging an equipment authorization is by a petition for reconsideration or application for review.’’). Nor does the fact that

revocation is TransIntel’s requested remedy in this court put

its appeal in a materially different posture from that routinely

presented when a party appeals from the FCC’s denial of a

challenge to an application for a broadcast license: in such

cases, the FCC normally has already granted the license, see,

e.g., Citizens for Jazz on WRVR, Inc. v. FCC, 775 F.2d 392,

394 (D.C. Cir. 1985), and vacatur is a logical remedy, see, e.g.,

Weyburn Broad. Ltd. v. FCC, 984 F.2d 1220, 1222 (D.C. Cir.

1993).

Furthermore, in contrast to the circumstances that face a

court trying to review a failure to take enforcement action,

here the FCC’s grant of Highway’s application ‘‘provides a

focus for judicial review, inasmuch as the agency [did] exercise[ ] its power,’’ and ‘‘[t]he action TTT can be reviewed to

determine whether the agency exceeded its statutory’’ authority. Heckler, 470 U.S. at 832. Nor is this a case in which

‘‘the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of

discretion.’’ Id. at 830. The Communications Act grants the

FCC authority to promulgate ‘‘reasonable regulations,’’ consistent with ‘‘the public interest, convenience, and necessity,’’

to govern the manufacture and sale of radio transmitting

devices. 47 U.S.C. § 302a(a). Under that authority, the

Commission has promulgated regulations4

 providing that it

will grant an application for certification only if it finds that

the ‘‘equipment is capable of complying with pertinent technical standards,’’ and that a ‘‘grant of the application would

serve the public interest, convenience and necessity.’’ 47

4 See CC Distribs., Inc. v. United States, 883 F.2d 146, 154 (D.C.

Cir. 1989) (holding that ‘‘regulations promulgated by an administrative agency in carrying out its statutory mandate can provide

standards for judicial review of agency action’’ (internal quotation

marks omitted)).

USCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 8 of 15
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C.F.R. § 2.915(a); see id. § 2.919.5

 There is no question that

this ‘‘public interest’’ standard constitutes a broad grant of

discretion to the FCC. But there is also no question that this

is the same standard that governs the FCC’s actions in a

multitude of areas,6

 and against which this court routinely

judges the Commission’s actions to determine whether they

are arbitrary or capricious.7

B

Having concluded that we have jurisdiction to review the

FCC’s decision, we now turn to the remaining threshold issue,

our standard of review. All parties agree — as do we — that

5 The regulations further provide that the Commission may revoke an equipment authorization ‘‘[b]ecause of conditions TTT which

would warrant it in refusing to grant an original application.’’ 47

C.F.R. § 2.939.

6 See, e.g., 47 U.S.C. § 309(a) (directing the FCC to grant broadcast license applications when it ‘‘find[s] that public interest, convenience, and necessity would be served’’); id. § 316 (authorizing the

FCC to modify a station license or construction permit ‘‘if in the

judgment of the Commission such action will promote the public

interest, convenience, and necessity’’); see also id. § 160 (requiring

the FCC to ‘‘forbear from applying any regulation or any provision

of the’’ Communications Act to a telecommunications carrier if,

among other things, the FCC determines that such forbearance ‘‘is

consistent with the public interest’’).

7 See, e.g., Serafyn v. FCC, 149 F.3d 1213, 1218–19 (D.C. Cir.

1998); Astroline Communications Co. v. FCC, 857 F.2d 1556, 1561–

62 (D.C. Cir. 1988); National Ass’n for Better Broad. v. FCC, 591

F.2d 812, 816 (D.C. Cir. 1978); see also National Broad. Co. v.

United States, 319 U.S. 190, 225–26 (1943) (holding that the Communication Act’s public interest standard is sufficiently definite to

overcome a challenge under the nondelegation doctrine).

 Highway also argues that we are barred from considering

TransIntel’s appeal of the denial of its request to hold a hearing

because, although TransIntel asked the Commission to hold a

hearing, it never specifically argued that the Commission was

USCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 9 of 15
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this court must review the merits of the FCC’s order under

the traditional ‘‘arbitrary or capricious’’ standard applied to

Commission decisions. Under that standard, we will uphold

the FCC’s order as long as it was not ‘‘ ‘arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with

law.’ ’’ Global Crossing Telecomms., Inc. v. FCC, 259 F.3d

740, 745 (D.C. Cir. 2001) (quoting 5 U.S.C. § 706(2)(A)); see

47 U.S.C. § 402(g).

TransIntel, however, contends that a stricter — or at least

more structured — standard must apply to the FCC’s refusal

to hold a hearing regarding Highway’s application for certification. In support, it cites cases like Astroline Communications Co. v. FCC, 857 F.2d 1556, 1561 (D.C. Cir. 1988), which

set forth a two-step test that the FCC must use to determine

whether to hold an evidentiary hearing regarding a broadcast

license application. First, the protesting party must submit

‘‘a petition containing ‘specific allegations of fact sufficient to

show TTT that a grant of the application would be prima facie

inconsistent’ ’’ with the public interest, convenience, and necessity. Id. at 1561 (quoting 47 U.S.C. § 309(d)(1)). The

FCC must examine the petition ‘‘on the basis of the petitioner’s allegations alone,’’ proceeding ‘‘ ‘on the assumption that

the specific facts set forth [in the petition] are true.’ ’’ Id.

(quoting Citizens for Jazz, 775 F.2d at 397). Second, if the

FCC determines that the petition satisfies this requirement,

it must then determine whether, ‘‘ ‘on the basis of the application, the pleadings filed, or other matters which it may

officially notice[,] TTT a substantial and material question of

fact is presented.’ ’’ Id. (quoting 47 U.S.C. § 309(d)(2)). If

the FCC finds that such a question is presented, the Commission ‘‘shall proceed’’ to an evidentiary hearing. 47 U.S.C.

§ 309(d)(2) (emphasis added); see id. § 309(e).

But Astroline makes clear that this structured, two-step

process is required by the statute that governs hearings

concerning broadcast license applications.8

 Indeed, the dourequired to do so. We think that TransIntel’s arguments were

sufficiently specific.

8 Astroline, 857 F.2d at 1561 (‘‘Parties challenging an application

by means of a petition to deny and who seek a hearing thereon

must satisfy a two-step test established in 47 U.S.C. § 309(d)(1) &

USCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 10 of 15
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ble quotation marks and citations in the above paragraph

demonstrate that the Astroline analysis is drawn directly

from 47 U.S.C. § 309(d) and (e). There is, however, no such

statutory provision for hearings concerning equipment certification applications. Rather, the Communications Act simply

grants the FCC authority to promulgate regulations to govern the manufacture and sale of such devices. See 47 U.S.C.

§ 302a.

Pursuant to this grant of authority, the Commission has

promulgated the following regulation: ‘‘Whenever it is determined that an application for equipment authorization presents substantial factual questions relating to the qualifications

of the applicant or the equipment TTT, the Commission may

designate the application for hearing.’’ 47 C.F.R. § 2.921

(emphasis added).9

 As is apparent on its face, the regulation

does not contain the language that led the Astroline court to

conclude that the agency must follow a two-step test in

deciding whether to designate a hearing for a broadcast

license.10 Equally important, the regulation states only that,

when there is a substantial factual question, the Commission

‘‘may’’ designate an equipment certification application for

hearing — as compared to § 309(e), which states that it

‘‘shall’’ do so when there is such a question concerning a

broadcast license application. And the FCC reasonably ar-

(2).’’); see also Citizens for Jazz, 775 F.2d at 394 (describing the

Commission’s two-step process as ‘‘statutorily prescribed’’).

9 This regulation could be read as applying only to hearings on

‘‘an application,’’ and not to hearings concerning petitions for reconsideration, because the latter are not mentioned. The FCC does

not suggest such a reading, however, and because it would not

affect our disposition, we do not consider it.

10 The regulation does refer to the existence of a ‘‘substantial

factual question[ ],’’ which is similar to the issue in the second step

of the test applicable to broadcast licenses. But Astroline makes

clear that ‘‘Congress intended that courts play a limited role in

reviewing the Commission’s determinations at this second stage,’’

and that ‘‘[w]e may disturb the Commission’s decision to deny [a]

petition for a hearing only if TTT we determine that that decision

was arbitrary or capricious.’’ 857 F.2d at 1562.

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gues that ‘‘may’’ denotes discretion rather than obligation on

the part of the Commission. Cf. Appalachian Power Co. v.

EPA, 135 F.3d 791, 807 (D.C. Cir. 1998) (stating that ‘‘when a

statute uses the permissive ‘may’ rather than the mandatory

‘shall,’ this choice of language suggests that Congress intends

to confer some discretion on the agency’’ (internal quotation

marks omitted)).

We therefore conclude that the standard of review appropriate for the FCC’s refusal to designate Highway’s application for a hearing is the same as that applicable to the merits

of the agency’s decision: we may overturn those determinations only if they were arbitrary or capricious.

III

The Commission denied TransIntel’s application for review,

without designating an evidentiary hearing, concluding that

the company had ‘‘not raised a substantial and material

question of fact as to whether Highway’s actions were so

willful or deliberate as to rise to the level of implicating

Highway’s fitness to hold a FCC equipment authorization.’’

FCC Order, 17 F.C.C.R. at 4029. Because we find that this

conclusion was neither arbitrary nor capricious, we reject

both TransIntel’s challenge to the Commission’s denial of a

hearing, and the company’s challenge to the denial of its

underlying application for review.

First, it does not appear that any further facts were

required to dispose of TransIntel’s application for review. Cf.

California Pub. Broad. Forum v. FCC, 752 F.2d 670, 674

(D.C. Cir. 1985) (holding that ‘‘the dispute must truly be

factual’’ for a hearing on a petition to deny a television license

to be required). TransIntel submitted a variety of factual

materials, including affidavits from its principals, the Alpisers, asserting that Highway’s management had discussed the

need for obtaining a new certification for the modified transmitter during the time that they worked for Highway. Ms.

Alpiser’s father, Virgil Duncan, also attested to providing

Highway’s management with a copy of the FCC regulations

that require manufacturers to obtain fresh certifications for

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modified transmitters. TransIntel argues that these facts

show that Highway was aware that a new certificate was

required, and that its decision not to apply for one (until

TransIntel complained) was willful and deliberate. TransIntel does not, however, contend that there were any additional

facts that a hearing might have unearthed, and, even when

pressed at oral argument, company counsel could not suggest

any.

Second, the FCC’s order rested not on the truth of

TransIntel’s factual allegations, but rather on their materiality: in the Commission’s view, TransIntel had not asserted

facts that, even if true, would have rendered Highway’s

actions ‘‘so willful or deliberate as to rise to the level of

implicating Highway’s fitness to hold a FCC equipment authorization.’’ FCC Order, 17 F.C.C.R. at 4029 (emphasis

added). The Commission made clear that the threshold for

such a finding of materiality is high, and that under FCC

precedent, ‘‘violation of section 2.803 TTT generally does not

form the basis for a denial of an equipment authorization.’’

Id. (citing Toshiba Corp., 57 Rad. Reg. 2d at 1622 & n.5).

Rather, what is required, the FCC said, is ‘‘the perpetration

of a fraud on the Commission or conduct likely to undermine

the integrity of the equipment authorization process.’’ Id.

In this case, the Commission found that ‘‘the equipment

changes made by Highway’’ were not permissive, and that

Highway therefore violated § 2.803 by marketing its device

without recertification. But the Commission also determined

that the changes ‘‘were relatively innocuous and [that] the

resulting modified transmitter readily passed the Certification process.’’ Id. TransIntel does not dispute that determination, other than to point out that the modified transmitter

did cause interference. The FCC further determined, however, that ‘‘the interference that TransIntel cites as a negative

consequence of the modifications was not the result of a rule

violation or the lack of appropriate re-Certification,’’ and that

‘‘this potential for interference would not likely have been

discovered’’ even if Highway had submitted a timely applicaUSCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 13 of 15
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tion. Id.11 TransIntel does not dispute that assessment,

either. Rather, it rests its challenge on its claim that Highway’s violation was deliberate. But it was reasonable for the

FCC to conclude that a single, minor regulatory violation —

even if deliberate — did not rise to the level of ‘‘fraud on the

Commission’’ or ‘‘conduct likely to undermine the integrity’’ of

the certification process. And that reasonableness dooms

TransIntel’s procedural as well as substantive challenges.12

Moreover, we also note the FCC’s recognition that it had

other means available to ensure that Highway’s transgression

would not be repeated. The Commission retained the option,

it said, to ‘‘call in further post-grant samples of the Highway

device to ensure that it continues to comply.’’ Id. And it

warned that ‘‘[a]ny new instance of non-compliance by Highway could result in sanctions including fines and forfeitures’’

and, if ‘‘[c]ontinuous or repeated[,] TTT could call into question

Highway’s fitness to hold an equipment authorization.’’ Id.

We cannot second-guess the Commission’s determination that

such post-certification monitoring was the more appropriate

way to deal with the case of a ‘‘relatively innocuous’’ regulatory violation. See generally Global Crossing, 259 F.3d at 745.

Finally, TransIntel argues that the FCC’s order was inconsistent with two prior Commission decisions, Atkins Broadcasting, 71 Rad. Reg. 2d (P & F) 1398 (1993), and TeleSTAR,

11 The Commission explained that ‘‘[t]he interference cited by

TransIntel was apparently due to a 22nd harmonic,’’ while FCC

rules ‘‘require testing only through ten harmonics.’’ FCC Order, 17

F.C.C.R. at 4029.

12 See National Ass’n for Better Broad., 591 F.2d at 816 (holding

that if the FCC’s decision that there were no ‘‘substantial and

material questions of fact’’ was ‘‘not arbitrary, capricious or unreasonable,’’ a court must uphold the Commission’s denial of an evidentiary hearing); Toshiba Corp., 57 Rad. Reg. 2d at 1622 & n.5

(refusing to deny certification because, although ‘‘particularly serious violations, such as the perpetration of a fraud on the Commission,’’ could form the basis for denial of an equipment authorization,

‘‘we have no allegations of such serious violations before us’’).

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Inc., 64 Rad. Reg. 2d (P & F) 1444 (1988). In those cases,

TransIntel asserts, the Commission either denied a license

application or designated it for a hearing on the ground that

the applicant had prematurely constructed the very facilities

for which it was seeking approval. The FCC notes, however,

that Atkins and TeleSTAR involved broadcast and common

carrier microwave stations, respectively, and contends that

cases involving licensing of the use of the public spectrum are

not true precedents for equipment certifications. In the

latter, the Commission points out, its primary focus has been

on the technical performance of the device, rather than on the

character of the applicant. See Toshiba Corp., 57 Rad. Reg.

2d at 1622 & n.5. Indeed, TransIntel concedes that there are

‘‘no recorded cases of a certification application being denied

based on the qualifications of the applicant rather than the

device itself.’’ TransIntel Br. at 16.

In any event, neither TeleSTAR nor Atkins was a case in

which the violation was merely that the applicant had deliberately begun station construction before obtaining FCC approval. To the contrary, in TeleSTAR the applicant submitted ‘‘patently false information’’ to the Commission, 64 Rad.

Reg. 2d at 1452, while in Atkins the applicant ‘‘admitted

knowingly submitting fabricated letters’’ and ‘‘false statements of fact,’’ which the FCC concluded were ‘‘calculated to

mislead’’ the Commission, 71 Rad. Reg. 2d at 1400–01. The

allegations asserted in this case simply do not rise to that

level.

In sum, because the FCC’s order rested not on a factual

dispute but rather on the Commission’s estimation of the

relative insignificance of Highway’s infraction, and because

that policy judgment was neither arbitrary nor capricious, we

have no basis for overturning the decision of the Commission.

IV

For the foregoing reasons, the order of the Federal Communications Commission is

Affirmed.

USCA Case #02-1098 Document #762796 Filed: 07/25/2003 Page 15 of 15