Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-01018/USCOURTS-caDC-99-01018-0/pdf.json

Parties Involved:
Heidi Damsky
Appellant
Federal Communications Commission
Appellee
Homewood Radio Co. LLC
Intervenor

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 23, 1999 Decided January 7, 2000

No. 99-1018

Heidi Damsky,

Appellant

v.

Federal Communications Commission,

Appellee

Homewood Radio Co. LLC,

Intervenor

Appeal of an Order of the

Federal Communications Commission

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

appellant.

Pamela L. Smith, Counsel, Federal Communications Commission, argued the cause for appellee. On the brief were

Christopher J. Wright, General Counsel, Daniel M. ArmUSCA Case #99-1018 Document #488868 Filed: 01/07/2000 Page 1 of 15
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strong, Associate General Counsel, and Gregory M. Christopher, Counsel.

Stephen Diaz Gavin and Janet Fitzpatrick were on the

brief for intervenor.

Before: Williams, Sentelle and Randolph, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: Appellant Heidi Damsky appeals

from an order of the Federal Communications Commission

("FCC" or "Commission") finding her financially unqualified

to receive an FM station construction permit and finding that

an applicant that subsequently obtained the permit as part of

a settlement agreement did not make disqualifying misrepresentations to the Commission. Damsky also argues that an

intervening change in law entitled her to participate in an

auction for the already-issued permit. Upon review of the

relevant law and the record, we hold that the Commission did

not err in affirming the Administrative Law Judge's financial

qualification findings. We also hold that Damsky is not

entitled to an auction because the Commission adequately

explained why the statutory settlement provisions and Commission policy permitted the negotiated outcome obtained

here. Therefore, we affirm the Commission's decision based

on the aforementioned considerations and do not need to

reach the misrepresentation issue raised by Damsky.

I. Background

In 1988, Heidi Damsky, the appellant, and twelve other

applicants filed mutually exclusive applications for a permit to

construct a new FM broadcast station in Homewood, Alabama. The Mass Media Bureau designated all applications

for comparative hearing. As a result of a 1992 hearing, an

Administrative Law Judge found that Damsky failed to establish her financial qualifications and dismissed her application.

See In re Heidi Damsky, 7 F.C.C.R. 5244 pp 180-83 (1992)

("Initial Decision"). The Commission affirmed the ALJ's

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determination. See In re Heidi Damsky, 13 F.C.C.R. 11688

pp 24-32 (1998) ("Memorandum Opinion and Order").

By the time of the 1992 hearing, the applicant pool had

narrowed to include Damsky and two others. The two remaining applicants, WEDA, Ltd. ("WEDA") and Homewood

Partners, Inc. ("HPI"), entered into a settlement agreement

contingent on Damsky's disqualification. Upon affirming

Damsky's disqualification, the Commission granted the permit to the resulting entity, intervenor Homewood Radio Company ("Homewood Radio"). See Memorandum Opinion and

Order, 13 F.C.C.R. 11688 pp 4, 7, 24-32. In addition to

affirming the ALJ's financial disqualification findings, the

Commission addressed two other challenges now properly

raised and argued by Damsky on appeal. First, the Commission rejected Damsky's claim that HPI had made disqualifying misrepresentations to the Commission. See id.pp 12-23.

Second, the Commission rejected Damsky's claim that a

recent Commission order required it to award the permit

through a competitive auction in which Damsky could participate. See In re Heidi Damsky, 14 F.C.C.R. 370 pp 9-14

(1999) ("Further Petition for Reconsideration"); see also In

re Heidi Damsky, 13 F.C.C.R. 16352 (1998) ("Petition for

Reconsideration").

A. Background on Financial Qualifications

At the time the parties filed their applications, the Commission resolved competing applications though an evidentiary

hearing process that assessed applicants' basic and comparative qualifications. Each broadcast applicant had to establish,

among other things, that it was financially qualified to cover

certain construction and operating costs. See 47 U.S.C.

s 308(b) (1994); CHM Broad. Ltd. Partnership v. FCC, 24

F.3d 1453, 1455 (D.C. Cir. 1994). The financial qualification

form in effect when the parties here made their filings

required each applicant to certify with "reasonable assurance"

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nues. See In re Revision of Application for Construction

Permit for Commercial Broadcast Station (FCC Form 301),

50 Rad. Reg. 2d 381 (P & F) (1981) ("Form 301"). The form

clearly indicated that an applicant had to be prepared to

document certification compliance upon request. See id. If

the Commission questioned an applicant's financial qualifications, the applicant had to demonstrate its "reasonable assurance" by showing that, "prior to certification, it engaged in

serious and reasonable efforts to ascertain predictable construction and operation costs" and that it confirmed the

availability of net liquid assets, either on hand or from

committed sources, sufficient to construct and operate the

station for three months without revenue. In re Northampton Media Assocs., 4 F.C.C.R. 5517 pp 13-15 (1989), aff'd sub

nom. Northampton Media Assocs. v. FCC, 941 F.2d 1214,

1217 (D.C. Cir. 1991). After questioning and investigating

Damsky's financial qualifications, the ALJ found that Damsky

failed to make either of the two showings required to establish a "reasonable assurance."

Specifically, the ALJ found that Damsky failed to show

prior to the certification that she engaged in "serious and

reasonable efforts" to formulate cost figures because she only

offered a general $300,000 "ballpark" cost estimate based on a

conversation with her consulting engineer. See Initial Decision, 7 F.C.C.R. 5244 pp 6-9, 181. The Commission affirmed

the ALJ's findings and conclusions. See Memorandum Opinion and Order, 13 F.C.C.R. 11688 pp 1, 30. Likewise, the

ALJ and Commission both agreed that Damsky failed to

show that she had sufficient committed funding available

since she based her financial backing on a casual assurance

from her husband that the couple had the assets to cover the

$300,000 project. See Initial Decision, 7 F.C.C.R. 5244

pp 10-24, 182-83; Memorandum Opinion and Order, 13

F.C.C.R. 11688 p 31. The ALJ and Commission found that

while the record showed that Damsky's husband preferred to

obtain a loan rather than liquidate, neither Damsky nor her

husband provided any assurance about the availability of such

a loan contemporaneous with the certification. See Initial

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Decision, 7 F.C.C.R. 5244 pp 182-83; Memorandum Opinion

and Order, 13 F.C.C.R. 11688 p 32.

B. Challenge with Regard to HPI

In the order affirming Damsky's disqualification, the Commission also accepted the Homewood Radio settlement agreement. Throughout the permit application process, Damsky

challenged the corporate structure of HPI, one of the settling

parties, as violating FCC rules and alleged that HPI had

made various disqualifying misrepresentations to the FCC.

The resulting inquiry primarily focused on whether two of the

five HPI principals impermissibly acquired their ownership

interests prior to the filing of HPI's amended application.

Two checks formed the heart of the debate. Apparently, two

"investors" gave the three original partners two $1200 checks

marked respectively "20% Interest Radio" and "Ownership

20% of Homewood Partners." The agency inquiry focused on

whether the checks constituted an ownership interest or a

loan. Although conflicting documentary evidence existed, the

ALJ evaluated all of the evidence and resolved the issue in

HPI's favor by deeming the payments loans. See In re Heidi

Damsky, 9 F.C.C.R. 4011 pp 61-68 (1994) ("Supplementary

Initial Decision"). The Commission affirmed the ALJ's findings. See Memorandum Opinion and Order, 13 F.C.C.R.

11688 pp 13-23.

C. Background on Auction Provisions

While exceptions to the ALJ's decision were pending, this

court held in Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993),

that the "integration of ownership with management" criteria

used in FCC comparative hearings was arbitrary and capricious and therefore unlawful. See id. at 878. In response to

Bechtel, the Commission froze all ongoing comparative cases,

including this case, pending the development of a new regulatory structure. See Memorandum Opinion and Order, 13

F.C.C.R. 11688 p 3. However, the Commission also created

an exception to the freeze policy. The exception allowed a

frozen case to be adjudicated to completion if the parties to

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the comparative proceeding reached a settlement agreement

even if the settlement were contingent on the resolution of

specific basic qualifying issues. See Modification of FCC

Comparative Proceedings Freeze Policy, 9 F.C.C.R. 6689

(1994). The agreement resulting in Homewood Radio's receipt of the construction permit constituted such a settlement.

However, while the parties here were negotiating for settlement, Congress amended s 309(j) of the Communications Act

to require the Commission to grant construction permits

through a competitive bidding system. See 47 U.S.C. s 309(j)

(Supp. III 1997). Since the mandatory competitive bidding

system applied to applications filed after July 1, 1997, newlyenacted s 309(l) covered the applications filed in this case

because the filings occurred before July 1, 1997. Subsection

309(l)(1) states that the Commission "shall ... have the

authority" to resolve the pre-July 1, 1997 filings through

competitive bidding. In addition, subsection 309(l)(3) required the Commission to "waive any provisions of its regulations necessary to permit such persons to enter an agreement

to procure the removal of a conflict between their applications

during the 180-day period beginning on the date of August

15, 1997." Here, the settlement agreement fell within the

180-day window.

Subsequent to the Commission's approval of the Homewood

Radio settlement agreement but prior to the Commission's

denial of Damsky's Petition for Reconsideration, the Commission adopted rules to implement its new auction authority. In

an order, the Commission announced its decision to resolve

the pre-July 1, 1997 filings by auction because "auctions will

generally be fairer and more expeditious than deciding [the

pre-July 1, 1997 filings] through the comparative hearing

process." In re Implementation of Section 309(j) of the

Communications Act, 13 F.C.C.R. 15920 p 34 (1998) ("Auction Order"). In response to the Auction Order, Damsky

sought further administrative remedy and asserted that the

Auction Order required the Commission to hold an auction

for the Homewood Radio permit. Specifically, Damsky relied

upon paragraph 89 of the Auction Order which stated:

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Where the Commission has denied or dismissed an application and such denial or dismissal has become final (e.g.,

when an applicant failed to seek further administrative or

judicial review of that ruling), such an entity is not

entitled to participate in the auction. Among those

remaining in the proceeding, we will permit all pending

applicants to participate in the auction, without regard to

any unresolved hearing issues ... as to the basic qualifications of a particular applicant.

Id. p 89. Thus, Damsky argued that the intervening Auction

Order entitled her to participate in an auction for the permit

because the original order disqualifying her was still under

review and the "new" auction system allowed her to participate despite any unresolved qualification issues. The Commission rejected her claim because the settling parties

reached an agreement in accordance with s 309(l) of the

amended statute, the provision ordering the Commission to

waive its rules and policies when necessary to permit 180-day

window applicants to enter into settlement agreements, and

because paragraph 89 did not address cases involving settlements filed within the 180-day waiver period which were

thereafter approved contingent upon the Commission resolving specified basic qualification issues. See Further Petition

for Reconsideration, 14 F.C.C.R. 370 pp 9-13; see also In re

Implementation of Section 309(j) of the Communications Act,

14 F.C.C.R. 8724 p 18 (1999).

On appeal, Damsky challenges the Commission's adverse

financial qualification determination resulting in the dismissal

of her application, the Commission's determination that HPI

did not make disqualifying misrepresentations, and the Commission's approval of the Homewood Radio settlement agreement in lieu of an auction.

II. Discussion

A. Scope of Review

As an initial matter, we must establish the extent of our

review since the FCC challenges the sufficiency of Damsky's

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notice concerning the issues she currently argues on appeal.

With regard to the auction issue, we hold that Damsky

properly raised that issue in her Notice of Appeal ("Notice")

by expressly appealing the order denying further reconsideration in which the Commission first addressed the auction

provisions in dispute. See Further Petition for Reconsideration, 14 F.C.C.R. 370 pp 9-13. Although "a petition seeking

review of an agency's decision not to reopen a proceeding is

not reviewable unless the petition is based upon new evidence

or changed circumstances," Southwestern Bell Telephone Co.

v. FCC, 180 F.3d 307, 311 (D.C. Cir. 1999), the FCC concedes

and we agree that the auction issue pertains to changed

circumstances in the law and is therefore reviewable by this

court.

The sufficiency of notice concerning the financial qualification and misrepresentation issues requires a more extended

discussion. In Southwestern Bell, we held that when an

agency has denied the reconsideration of a substantive underlying decision and a party appeals only the order denying

reconsideration, the appeal does not suffice to bring the

earlier substantive decision's merits before the court. See

Southwestern Bell, 180 F.3d at 309. The FCC argues that

Damsky sought review only of the Commission orders denying her reconsideration and further reconsideration. Therefore, the FCC asserts, Damsky cannot raise the financial

qualification or misrepresentation issues on appeal since the

Commission only substantively addressed those issues in the

unchallenged underlying Memorandum Opinion and Order.

However, for the reasons set forth below, we reject the

FCC's argument and hold that Damsky made sufficient references to the underlying substantive Memorandum Opinion

and Order in her Notice of Appeal and accompanying Concise

Statement of Reasons to put the Commission on notice that

she intended to challenge the financial qualification and misrepresentation issues in addition to the auction issue.

On the face of her Notice of Appeal, Damsky clearly states

that she is appealing the Commission order denying further

reconsideration. However, the Notice also references the

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dum Opinion and Order. Moreover, Damsky briefly addresses the merits of the Memorandum Opinion and Order

in the Concise Statement of Reasons attached to the Notice.

Given the ambiguity surrounding the existence of actual

notice, we analyze Damsky's notice predicament under the

"test for determining whether a filing that names one order

suffices to bring a different order before the court" set out in

Southwestern Bell, 180 F.3d at 313.

To determine whether an applicant sufficiently raised an

order or an issue contained in a particular order, we first

examine the notice to see whether it contains "the specification of [other] orders and hearing dates [or] fail[ed] to

mention the [disputed] order in either the notice of appeal or

the docketing statement" and also review other relevant filing

information. Brookens v. White, 795 F.2d 178, 181 (D.C. Cir.

1986) (per curiam). We then use the results of this examination to infer the petitioner's intent and decide if the respondent has been misled by the filings. See Brookens, 795 F.2d

at 181; see also Southwestern Bell, 180 F.3d at 313. Here,

Damsky, in passing, cited to the order dealing with her

disqualification and the HPI misrepresentation issues in her

Notice of Appeal. However, she also substantively challenged the Commission's denial of her application on financial

qualification grounds and its dismissal of the misrepresentation issue in the Concise Statement of Reasons attached to

her Notice of Appeal. Thus, the Commission cannot claim

that any notice defects surprised or misled it with regard to

the issues Damsky intended to raise on appeal. Given the

circumstances, we conclude that Damsky adequately brought

the Memorandum Opinion and Order before this court for

review. Therefore, we will address both the financial qualification issue analyzed in the Memorandum Opinion and

Order and the auction issue analyzed in the order denying

further reconsideration. For the reasons set forth below, we

do not reach the misrepresentation issue.

B. Financial Qualifications

We review FCC orders "under the deferential standard

mandated by section 706 of the Administrative Procedure Act,

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which provides that a court must uphold the Commission's

decision unless it is 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.' " Achernar

Broad. Co. v. FCC, 62 F.3d 1441, 1445 (D.C. Cir. 1995)

(quoting 5 U.S.C. s 706(2)(A)). In this task, we "do not

'substitute [our] judgment for that of the agency' [but] [r]ather we look to see 'whether the decision was based on a

consideration of the relevant factors and whether there has

been a clear error of judgment.' " Freeman Eng'g Assocs.,

Inc. v. FCC, 103 F.3d 169, 178 (D.C. Cir. 1997) (quoting Motor

Vehicle Mfrs. Ass'n, Inc. v. State Farm Mut. Auto. Ins. Co.,

463 U.S. 29, 43 (1983)). We also review the FCC's factual

findings for support by substantial evidence. See, e.g., Millar

v. FCC, 707 F.2d 1530, 1540 (D.C. Cir. 1983). Given the

relevant standards of review, we hold that the Commission

did not act arbitrarily in affirming the ALJ's finding Damsky

financially disqualified since the law and substantial evidence

in the record support the ALJ and Commission's decisions

regarding Damsky's failure to substantiate her financial qualification. More specifically, we hold that the Commission's

conclusion that Damsky did not certify funding with a "reasonable assurance" because she did not engage in "serious

and reasonable efforts" to obtain construction and operating

cost figures is not arbitrary or capricious.

In In re Northampton Media Assocs., 4 F.C.C.R. 5517

(1989), aff'd sub nom. Northampton Media Assocs. v. FCC,

941 F.2d 1214 (D.C. Cir. 1991), the Commission provided

some guidance regarding "reasonable assurance" in the certification context:

[T]he certification procedure was designed "to spare[ ]

[applicants] the time and effort necessary to prepare and

submit the documentation previously required to demonstrate their qualifications." ... [R]easonable assurance

does not necessarily require that an applicant have the

written documentation [previously required] when it certifies its financial qualifications. Although the supporting documentation must be produced upon the Commission's request, the applicant may prepare and submit it

after certification, provided that the applicant actually

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had a reasonable assurance of adequate funds at the time

of certification.

Id. p 14 (quoting In re Certification of Financial Qualifications by Applicants for Broadcast Station Construction Permits, 2 F.C.C.R. 2122 (1987) (emphasis added)). Specifically,

the law required Damsky to establish, upon request, two precertification inquiries in order to demonstrate "reasonable

assurance." First, she had to "adduce probative evidence

that, prior to certification, [she] engaged in serious and

reasonable efforts to ascertain predictable construction and

operation costs." Id. p 15; see also Mission Broad. Corp. v.

FCC, 113 F.3d 254, 260 (D.C. Cir. 1997) (noting that applicant

must first determine how much money is required). Second,

she had "[t]o establish the availability of funds to meet these

estimated expenses, [by] provid[ing] substantial and reliable

evidence showing 'sufficient net liquid assets on hand, or

committed sources of funds to construct and operate for three

months without revenue.' " Northampton, 4 F.C.C.R. 5517

p 15 (quoting Form 301, 50 Rad. Reg. 2d at 388); see also

CHM Broad., 24 F.3d at 1458. Here, Damsky's reliance on a

vague "ballpark" cost estimate does not get her over the

initial "serious and reasonable efforts" hurdle. Cf. In re

Victorson Group, Inc., 6 F.C.C.R. 1697 pp 18-19 (Rev. Bd.

1991) (finding "general sense" of estimated costs insufficient

for financial qualification purposes); In re Sunbelt Ltd. Partnership, 7 F.C.C.R. 4394 pp 7-10 (Rev. Bd. 1992) (finding

"bits of information" on costs insufficient for financial qualification purposes), aff'd, 8 F.C.C.R. 753 (1993), rev'd and

remanded on other grounds sub nom. Sunbelt v. FCC, Nos.

93-1184 & 93-1708, 1994 WL 191656 (D.C. Cir. May 9, 1994).

Damsky incorrectly relies on Northampton as support for

her position. In Northampton, the Commission found financially qualified an applicant--a three-person corporation including a principal with experience in radio--that had relied

on an oral cost estimate which included an itemization of

equipment, construction, and salary and other operating costs

necessary to cover a low-cost "mom and pop" operation

($38,800). See In re Northampton Media Associates, 3

F.C.C.R. 570 pp 31, 51-56, 63, 68 (1988); Northampton, 4

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F.C.C.R. 5517 pp 5, 17. The applicant had relied on a consulting engineer to prepare the technical portion of the application and to give advice regarding potential construction and

operation costs. See 3 F.C.C.R. 570 p 53. Here, unlike in

Northampton, Damsky, a person relatively unfamiliar with

the radio industry, relied on a consultant's "ballpark" estimate indicating that the relevant costs would be around

$300,000. While Damsky's figure came from an engineer,

perhaps even an engineer with experience in radio station

management, Damsky could not verify that the figure took

into account basic and fundamental expenses. Given the

potential magnitude of construction and operation costs at

stake, the Commission reasonably concluded that Damsky did

not have enough supporting detail at the time of her certification to make her reliance on the $300,000 figure reasonable.

The evidence offered by Damsky did not establish that she

had made "serious and reasonable efforts" to secure a cost

figure at the time of certification. Thus, the Commission

legitimately rejected Damsky's application due to her lackadaisical cost inquiry efforts.

C. The Auction

In reviewing the interpretation and application of the FCC

auction rules challenged here, we afford the deference due

the FCC's interpretation of its own rules and policies, and will

uphold the FCC's interpretation unless it is "plainly erroneous or inconsistent with the regulation." E.g., Freeman

Eng'g, 103 F.3d at 178 (citations and quotations omitted).

Considering the ambiguity surrounding the interaction between the s 309(l) auction and settlement provisions as described by the Commission in the Auction Order, we conclude

that the Commission adequately explained why it did not

regard paragraph 89 of the Auction Order as requiring that

Damsky be allowed to participate in an auction for the

construction permit.

In addition to giving the Commission the ability to resolve

transitional competing comparative permit applications

though a competitive auction mechanism, Congress required

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the Commission to "waive any provisions of its regulations

necessary to permit such persons to enter an agreement to

procure the removal of a conflict between their applications"

during a 180-day window. 47 U.S.C. s 309(l). Here, two

applicants, not including Damsky, filed a settlement agreement within the 180-day period. The agreement was contingent upon the Commission's affirming the ALJ's finding that

Damsky was disqualified on financial qualification grounds.

Since the auction issue involves, in part, the Commission's

interpretation of a statute committed to its administration, we

employ the Chevron analysis in reviewing the agency's interpretation. Pursuant to Chevron, we will give effect to any

unambiguously expressed intent of Congress as contained in

the statutory provision under review. See Nuclear Info.

Resource Serv. v. Nuclear Regulatory Comm'n, 969 F.2d

1169, 1173 (D.C. Cir. 1992) (en banc). However, if the

statutory provision is silent or ambiguous, we will defer to the

agency's interpretation assuming its interpretation is reasonable and consistent with the statute's purpose. See id. Given the statutory language in issue, we hold that the Commission reasonably interpreted s 309(l) as affording applicants

falling in the window period, upon the resolution of any basic

qualification disputes, the opportunity to settle instead of

participating in an auction. See Further Petition for Reconsideration, 14 F.C.C.R. 370 pp 11-12; In re Implementation

of Section 309(j) of the Communications Act, 14 F.C.C.R.

8724 p 18. The Commission's use of Damsky's financial qualification as a condition to approving the settlement agreement

is consistent with the statute. See also 47 U.S.C.

s 309(j)(6)(E) (1994) (indicating that the grant of auction

authority not "be construed to relieve the Commission of the

obligation in the public interest to continue to use ... threshold qualifications ... in order to avoid mutual exclusivity in

application and licensing proceedings").

In reaching our decision, we reject Damsky's contention

that s 309(l)(3) only governs global settlements. The Commission reasonably interpreted the statute when it determined that partial settlements could be approved under

s 309(l)(3). See Auction Order, 13 F.C.C.R. 15920 pp 73, 93;

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In re Implementation of Section 309(j) of the Communications Act, 14 F.C.C.R. 8724 p 18. Nothing in the statute

dictates that s 309(l)(3) only permits universal settlement.

Since settlements are private contractual arrangements, an

applicant such as Damsky has no general legal right to be

included in a settlement. See In re Anax Broad. Inc., 88

F.C.C.2d 607 p 10 (1981). Thus, nothing in the statute or

other law appears to preclude the Commission from approving a settlement that includes only qualified parties. The

Commission has acted consistent with this interpretation.

See In re Global Information Tech., Inc., 12 F.C.C.R. 11808

pp 1, 3, 6 (1997), aff'd on other grounds sub nom. Frontier

Broad., Inc. v. FCC, No. 97-1530, 1998 WL 704510 (D.C. Cir.

Sept. 4, 1998); In re Gonzales Broad., Inc., 12 F.C.C.R. 12253

pp 4, 19 (1997), aff'd on other grounds sub nom. Jelks v. FCC,

146 F.3d 878 (D.C. Cir. 1998), cert. denied, 199 S. Ct. 1045

(1999); In re Pensacola Radio Partners, 13 F.C.C.R. 11681

p 1 (1998), aff'd on other grounds sub nom. Floyd v. FCC, No.

98-1269, 1999 WL 236879 (D.C. Cir. Mar. 29, 1999).

The Commission's interpretation of paragraph 89 of the

Auction Order comports with its interpretation of the statute

and its prior practice. The Commission reasonably interprets

paragraph 89 as only applying to cases "where an auction

would otherwise be held because no settlements were

reached." Memorandum Opinion and Order, 14 F.C.C.R.

370 p 12. As the Commission points out, the Auction Order

and supporting notices separate out s 309(l)(3) settlement

from auction rules and guidelines. See id. p 13. Moreover,

the Commission adequately established on the record that a

proper s 309(l)(3) settlement would obviate the need for an

auction. See id.; In re Implementation of Section 309(j) of

the Communications Act, 14 F.C.C.R. 8724 p 18. The Commission's reading of paragraph 89 makes sense when the

provision is analyzed in context. Thus, paragraph 89 does not

undo the Commission's approval of the settlement agreement

in this case since the Commission reasonably interpreted

paragraph 89 as not pertaining to permissible settlement

agreements reached pursuant to s 309(l)(3).

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To recap, we hold that Damsky provided sufficient notice to

entitle her to review of her claims stemming from the Memorandum Opinion and Order in addition to review of the

auction issue. However, we uphold the Commission's determination that Damsky was financially disqualified from receiving the Homewood FM station construction permit. We

also hold that the Commission reasonably interpreted s 309(l)

and its Auction Order as not providing Damsky with the

opportunity to participate in an auction.

III. Conclusion

We conclude that the Commission did not err in finding

Damsky financially disqualified from receiving a construction

permit and in interpreting the auction provisions as being

inapplicable to her. Thus, the Commission correctly dismissed Damsky's application. Since Damsky has no claim to

the construction permit, we need not reach her challenge

concerning the alleged misrepresentations made by HPI.

Because the law and record support the Commission's findings regarding Damsky's financial qualifications and the Commission's interpretation and application of the relevant settlement and auction provisions are reasonable, we affirm the

Commission's determinations challenged on appeal.

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