Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-01188/USCOURTS-caDC-99-01188-0/pdf.json

Parties Involved:
Howard G. Bill
Petitioner
Federal Communications Commission
Respondent
Dewey Matthew Runnels
Petitioner
United States of America
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 19, 2000 Decided June 13, 2000

No. 98-1424

Orion Communications Limited,

Petitioner

v.

Federal Communications Commission and

United States of America,

Respondents

Liberty Productions, A Limited Partnership, et al.,

Intervenors

Consolidated with

98-1434, 98-1444, 98-1445, 98-1523, 99-1188,

99-1212, 99-1249, 99-1260, 99-1423

On Petitions for Review of Orders of the

Federal Communications Commission

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USCA Case #99-1188 Document #522907 Filed: 06/13/2000 Page 1 of 5
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Stephen C. Leckar argued the cause for petitioner Orion

Communications Limited, et al. With him on the briefs were

Richard F. Swift, Donald J. Evans, Gene A. Bechtel, Stephen

T. Yelverton and Loren A. Colby.

James K. Edmundson argued the cause and filed the briefs

for petitioners Dewey Matthew Runnels and Howard G. Bill.

Dennis P. Corbett argued the cause for petitioner Davis

Television Duluth, LLC., et al. and Intervenors Riverbank

Restaurants, Inc., et al. With him on the briefs were Loren

A. Colby and Timothy K. Brady.

Daniel M. Armstrong, Associate General Counsel, Federal

Communications Commission, argued the cause for appellees.

With him on the brief were Christopher J. Wright, General

Counsel, C. Grey Pash, Jr., Attorney, Joel I. Klein, Assistant

Attorney General, United States Department of Justice, Robert B. Nicholson and Robert J. Wiggers, Attorneys.

Stephen T. Yelverton, Timothy K. Brady, Donald J. Evans,

Thomas A. Hart, Jr. and Scott C. Cinnamon were on the

brief for intervenors.

Before: Ginsburg, Tatel and Garland, Circuit Judges.

Opinion for the Court filed Per Curiam.

Per Curiam: In the Balanced Budget Act of 1997, Congress

amended section 309(j) of the Communications Act of 1934 to

require competitive bidding for commercial broadcast services, replacing the Commission's historic practice of awarding such licenses through comparative hearings. See Balanced Budget Act of 1997 s 3002(a)(1), Pub. L. No. 105-33,

111 Stat. 251, codified at 47 U.S.C. s 309(j). Following a

notice of proposed rulemaking, the FCC issued two orders

implementing section 309(j). First Report and Order, 13

FCC Rcd. 15920 (1998); Memorandum Opinion and Order,

14 FCC Rcd. 8724 (1999). Various parties filed petitions for

review of these orders. In this opinion, we consider the

petition for review in No. 99-1188. We resolved all of the

issues raised by the other petitions in a separate order issued

herewith.

USCA Case #99-1188 Document #522907 Filed: 06/13/2000 Page 2 of 5
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In the First Report and Order, the FCC determined that

applicants for broadcast service auctions would be subject to

its anti-collusion rule, 47 C.F.R. s 1.2105(c)(1), which it had

previously applied in sixteen spectrum auctions. First Report

and Order, 13 FCC Rcd. at 15980-81 p 155. This rule

provides that, following the filing of short-form applications,

applicants are prohibited from cooperating, collaborating,

discussing or disclosing in any manner the substance of

their bids or bidding strategies, or discussing or negotiating settlement agreements, with other applicants until

after the high bidder makes the required down payment,

unless such applicants are members of a bidding consortium or other joint bidding arrangement identified on the

bidder's short-form application....

47 C.F.R. s 1.2105(c)(1). In other words, applicants may not

negotiate settlement agreements after their short-form applications have been filed.

Petitioners contest the FCC's application of its anticollusion rule, urging instead that the Commission permit

applicants to negotiate settlement agreements within a reasonable interval--they suggest ninety days--of the date of

filing. They first contend that the anti-collusion rule violates

section 309(j)(6)(E), which provides:

Nothing in this subsection, or in the use of competitive

bidding, shall be construed to relieve the Commission of

the obligation in the public interest to continue to use

engineering solutions, negotiation, threshold qualifications, service regulations, and other means in order to

avoid mutual exclusivity in application and licensing proceedings.

47 U.S.C. s 309(j)(6)(E) (emphasis added). Making a Chevron step one argument, petitioners claim that "Congress both

intended and expressly provided that the Commission is

obliged in the public interest to use settlements (i.e., 'other

means') to avoid mutual exclusivity in broadcast auction proceedings."

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The question we ask at Chevron step one is whether

Congress has "directly spoken to the precise question at

issue." Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 842 (1984). We cannot see how

section 309(j)(6)(E) speaks to the precise question of whether

the FCC must permit a reasonable interval for settlement

negotiations when the statute does not even mention settlements, let alone a specific time interval for negotiations. To

be sure, settlements are "other means" of avoiding mutual

exclusivity, but the statute cannot be read to direct the FCC

to adopt all other means available.

Petitioners next claim that the Commission's application of

the anti-collusion rule is arbitrary and capricious, arguing

that "the Commission never explains why, in its view, the

provision for a reasonable interval for settlement is irreconcilable with its policy to deter collusion." We disagree. The

Commission more than adequately explained its reasons for

applying the anti-collusion rule. "Permitting competing applicants for new facilities in all broadcast services to engage

in discussions concerning settlements or other resolution of

their mutual exclusivities following submission of their shortform applications," the Commission said, "would, we believe,

reduce the effectiveness of the anti-collusion rule." Memorandum Opinion and Order, 14 FCC Rcd. at 8755 p 61. The

Commission elaborated:

For example, if competing broadcast auction applicants

were permitted to engage in discussions concerning settlement or other resolution of mutual exclusivities, these

competing applicants would almost inevitably transfer

information at least indirectly affecting bids or bidding

strategies, thereby adversely impacting the competitiveness of the auction. Moreover, given our statutory obligation to utilize auctions as a primary licensing tool, the

protection of the integrity of the auction process is of

paramount importance, and we are consequently concerned about actions that compromise the integrity of the

process, particularly behavior that violates the anticollusion rule. The Commission's experience in conductUSCA Case #99-1188 Document #522907 Filed: 06/13/2000 Page 4 of 5
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ing numerous previous auctions has demonstrated the

importance of the anti-collusion rule in preventing and

facilitating the detection of collusive conduct.

Id. (internal quotation marks omitted). Finding this explanation entirely reasonable, we deny the petition for review.

So ordered.

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