Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-01100/USCOURTS-caDC-00-01100-0/pdf.json

Parties Involved:
Federal Communications Commission
Respondent
Greg Ruggiero
Petitioner
United States of America
Respondent

Document Text:

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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,

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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] rational[ ]." 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. s 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

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ing 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. s 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, s 202(a), (b),

110 Stat. 56, 110-12 (1996). Following the amendment, ownership 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,

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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 stations 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, responding 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,

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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. s 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.

s 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

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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 LowPower 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. s 2344,

Ruggiero filed the brief within sixty days of the rulemaking;

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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. s 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 "vioUSCA Case #00-1100 Document #656940 Filed: 02/08/2002 Page 7 of 20
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lated [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

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tutional). 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 regulation--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 "reaUSCA Case #00-1100 Document #656940 Filed: 02/08/2002 Page 9 of 20
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sonable" broadcasting restrictions automatically pass constitutional muster. NCCB involved both statutory and constitutional challenges to Commission regulations governing crossownership 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 viewpoints presented fail constitutional scrutiny unless "narrowly

tailored to further a substantial governmental interest." Id.

at 380.

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Finally, in News America, we expressly rejected rational

basis review as the standard for evaluating the constitutionality 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 contentbased (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 safeguards 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 newspaperradio cross-ownership rules--rendered the prohibition unconstitutionally underinclusive. See id. at 814-15.

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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, ConUSCA Case #00-1100 Document #656940 Filed: 02/08/2002 Page 12 of 20
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gress 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

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general manager had operated with relatively high, nighttime-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 former 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,

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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,

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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 statements 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

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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 understanding 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.

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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

__________

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").

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 legislaUSCA Case #00-1100 Document #656940 Filed: 02/08/2002 Page 18 of 20
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tion 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

__________

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)); CommunityServ. 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.

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the Congress intended to punish any particular "message" the

way the senators mentioned in News America targeted Murdoch's message.3

__________

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.

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