Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-01441/USCOURTS-caDC-07-01441-0/pdf.json

Parties Involved:
CTIA - The Wireless Association
Intervenor for Respondent
Federal Communications Commission
Respondent
M2Z Networks, Incorporated
Petitioner
United States of America
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 5, 2009 Decided March 10, 2009

No. 07-1360

M2Z NETWORKS, INCORPORATED,

APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION,

APPELLEE

NETFREEUS, LLC, ET AL.,

INTERVENORS

Consolidated with 07-1441

On Appeal and Petition for Review of an 

Order of the Federal Communications Commission

Viet D. Dinh argued the cause for appellant/petitioner. With

him on the briefs was Perry O. Barber.

Stephen G. Kraskin and David Honig were on the brief for

amici curiae Minority Media and Telecommunications Council

and Broadband Wireless Partners in support of petitioner.

USCA Case #07-1441 Document #1169381 Filed: 03/10/2009 Page 1 of 17
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Darius B. Withers, Michael R. Gardner, and John T.

Delacourt were on the brief for amici curiae College Parents of

America, et al. in support of petitioner.

Joel Marcus, Counsel, Federal Communications

Commission, argued the cause for appellee/respondents. On the

brief were Thomas O. Barnett, Assistant Attorney General,

United States of America, Robert B. Nicholson and Robert J.

Wiggers, Attorneys, Matthew B. Berry, General Counsel,

Federal Communications Commission, Joseph R. Palmore,

Deputy General Counsel, Daniel M. Armstrong, Associate

General Counsel, and James M. Carr, Counsel. Laurence N.

Bourne, Counsel, Federal Communications Commission,

entered an appearance.

Jonathan E. Allen, Joe D. Edge, Jeffrey J. Lopez, and

Christopher C. Sabis were on the brief for intervenors

NetfreeUS, LLC and Open Range Communications, Inc.

Michael F. Altschul, Ian Heath Gershengorn, and Elaine J.

Goldenberg were on the brief for intervenor for appellee CTIA

- The Wireless Association. Donald B. Verrilli Jr. entered an

appearance.

Before: SENTELLE, Chief Judge, and ROGERS and GRIFFITH,

Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge: In this consolidated proceeding,

M2Z Networks, Inc. (M2Z) challenges two related decisions of

the Federal Communications Commission (FCC or

Commission). First, it appeals the dismissal of its application

for a nationwide, 15-year exclusive license to the 2155-2175

megahertz (MHz) spectrum to provide wireless broadband

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Internet access. Second, it petitions for review of the denial of

its petition for forbearance on that application. Despite the

ingenious arguments of petitioner, we affirm the order of the

FCC in all respects, dismissing M2Z’s application without

prejudice and denying its expansive petition for forbearance.

I. Background

The FCC has designated 130 MHz of spectrum for

advanced wireless services, to provide wireless Internet access

and other voice and high-speed data services. In re Service

Rules for Advanced Wireless Services in the 2155-2175 MHz

Band (NPRM), 22 F.C.C.R. 17,035, 17,039-41 (¶¶ 6-7) (2007).

Service rules have been adopted for one 90 MHz range, now

called AWS-1. In re Service Rules for Advanced Wireless

Services in the 1.7 GHz and 2.1 GHz Bands, 18 F.C.C.R. 25,162,

25,163 (¶ 1) (2003). Service rules for a second, 20 MHz, band

called AWS-2 have been proposed but not approved. See In re

Service Rules for Advanced Wireless Services in the 1915-1920

MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz

Bands, 19 F.C.C.R. 19,263 (2004). In September 2005, the FCC

“designat[ed]” the 2155-2175 MHz band “for AWS use,” in

what came to be called AWS-3. In re Amendment of Part 2 of

the Commission’s Rules to Allocate Spectrum Below 3 GHz for

Mobile and Fixed Services to Support the Introduction of New

Advanced Wireless Services, Including Third Generation

Wireless Systems, 20 F.C.C.R. 15,866, 15,872 (¶ 9) (2005).

Service rules were not proposed for this AWS-3 band until

September 2007. See NPRM, at ¶ 1.

On May 2, 2006, M2Z Networks filed an application with

the FCC for a license to the entire AWS-3 band. Before us,

M2Z claims that the band had lain largely fallow since it was

first identified by the Commission in 1992 to provide for

emerging telecommunications technologies. See In re

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Redevelopment of Spectrum to Encourage Innovation in the Use

of New Telecommunications Technologies (1992 Notice), 7

F.C.C.R. 1542, ¶ 19 (1992). This characterization may not be

entirely accurate, as there were 1800 active licenses in the 2155-

2175 MHz band in September 2007. NPRM, at ¶ 9. “These

incumbents consist[ed] primarily of Fixed Microwave Service

(FS) and Broadband Radio Services (BRS) licensees, who are

subject to relocation by emerging technology (ET) licensees

(including future AWS-3 licensees).” Id. Though M2Z may

imply that the Commission has dragged its feet, the Commission

counters that it has long “recognize[d]” the difficulty of

replacing old licensees with emerging technology licensees.

1992 Notice, at ¶ 19. Because the incumbents “provide

important and essential services,” the Commission proposed to

“pursue this reallocation in a manner that w[ould] minimize

disruption of the existing . . . operations.” Id.

M2Z’s plan was to deliver basic wireless broadband access

to most of the country free of charge, ultimately making money

by charging for premium service. According to the petitioner,

for the plan to work, it needed an exclusive, nationwide license

to the entire segment for 15 years. In September 2006, M2Z

amended its application with a petition for forbearance under 47

U.S.C. § 160(c) and 47 C.F.R. § 1.53. M2Z asked the

Commission to forbear from applying 47 C.F.R. §§ 1.945(b),

(c), and “any other rule, provision of the Act, or Commission

policy . . . to the extent such rules, statutory provisions, or

policies [would] impede the acceptance and grant” of its

application. 

In January 2007, the FCC found M2Z’s application

acceptable for filing, without assessing the merits. Typically,

applications for broadcast licenses are processed according to

preexisting service rules. But, because there were no service

rules for the proposed AWS-3 band, the Commission accepted

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the application “pursuant to [its] general statutory authority”

under 47 U.S.C. § 309(a). Upon accepting the application for

filing, the FCC invited petitions to deny the application, and

additional applications for the same band of spectrum. The

Commission received voluminous comments, and six new

applicants sought licenses for the spectrum.

On August 31, 2007, the Commission dismissed without

prejudice all applications for access to the 2155-2175 MHz

band, denied M2Z’s petition for forbearance, and found “that the

public interest is best served by first seeking public comment on

how the band should be used and licensed.” In re Applications

for License and Authority to Operate in the 2155-2175 MHz

Band (Order), 22 F.C.C.R. 16,563, 16,564 (¶ 1) (2007).

II. Analysis

In this case, we review the FCC’s application of its own

procedures when granting licenses and its interpretation of

related statutory provisions. In particular, we ask whether the

Commission was reasonable in denying M2Z certain procedural

advantages in its quest for a bandwidth license.

Before proceeding to the merits, we will briefly address the

Commission’s contention regarding administrative exhaustion.

The FCC claims that we lack jurisdiction over seven distinct

arguments advanced by M2Z. The Administrative Procedure

Act (APA) does not pose a barrier to jurisdiction because

judicial exhaustion requirements under the APA are prudential

only. See Darby v. Cisneros, 509 U.S. 137, 146 (1993). But the

FCC contends that 47 U.S.C. § 405 bars our consideration of

any “question[] of fact or law upon which the Commission . . .

has been afforded no opportunity to pass.” 47 U.S.C. § 405(a).

“Ordinarily,” however, “disgruntled parties are not required to

seek administrative reconsideration before challenging a

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Commission order in this court, and exceptions to this general

rule are to be construed narrowly.” Nat’l Ass’n for Better

Broad. v. FCC (NABB), 830 F.2d 270, 274 (D.C. Cir. 1987).

Most importantly, governing precedent dictates that section

405(a) constitutes “an exhaustion requirement, rather than . . . a

jurisdictional prerequisite.” Petroleum Commc’ns, Inc. v. FCC,

22 F.3d 1164, 1170 (D.C. Cir. 1994). Additionally, in Freeman

Engineering Associates, Inc. v. FCC, we recognized that section

405 “contains the traditionally recognized exceptions to the

exhaustion doctrine,” like futility. 103 F.3d 169, 183 (D.C. Cir.

1997) (quoting Omnipoint Corp. v. FCC, 78 F.3d 620, 635 (D.C.

Cir. 1996)). The exhaustion requirement ensures that the

Commission has the opportunity to pass on all issues in the case

before the issues are presented for review by the court.

Importantly, we construe each of M2Z’s objections to address

the substantive content of the FCC’s legal conclusions that

would necessarily have been implicated in their application and

petition, rather than merely to protest procedural imperfections.

Ordinarily petitioners must give agencies an opportunity to cure

“technical defect[s]” before seeking review by this court.

NABB, 830 F.2d at 274. Because we conclude that the

Commission has “had an opportunity to pass” on each of M2Z’s

arguments that we discuss today, we may proceed to the merits.

A. Forbearance Under 47 U.S.C. § 160

We review the FCC’s interpretation of its statute with

deference under the familiar framework of Chevron, U.S.A., Inc.

v. Natural Resources Defense Council, Inc., 467 U.S. 837

(1984). See EarthLink, Inc. v. FCC, 462 F.3d 1, 7 (D.C. Cir.

2006). In addition, the Commission’s judgments on the public

interest are “entitled to substantial judicial deference.” FCC v.

WNCN Listeners Guild, 450 U.S. 582, 596 (1981).

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In 47 U.S.C. § 160, Congress provided that “the

Commission shall forbear from applying any regulation or any

provision” of the relevant statute “if the Commission determines

that . . . forbearance from applying such provision or regulation

is consistent with the public interest.” 47 U.S.C. § 160(a)(3).

M2Z petitioned the Commission to forbear from applying 47

C.F.R. §§ 1.945(b) and (c). Section 1.945(b) requires the

Commission to wait 31 days before acting on applications for

licenses not subject to competitive bidding. 47 C.F.R. §

1.945(b). Section 1.945(c) requires, among other things, that all

license applications granted without a hearing must be from

applicants who are “legally, technically, financially, and

otherwise qualified.” 47 C.F.R. § 1.945(c)(2). Therefore, M2Z

argues that the Commission should have granted its petition to

for forbear from two provisions. The first provision would have

required the FCC to wait 31 days after it accepted M2Z’s

application for filing; this was mooted months before the Order

issued. The second would have required the FCC to hold a

hearing unless it could officially notice M2Z’s qualifications.

1. Forbearance and the Public Interest

M2Z also petitioned the Commission, in a strikingly broad

and inclusive request, to forbear from applying “any other rule,

provision of the Act, or Commission policy . . . to the extent such

rules, statutory provisions, or policies [would] impede the

acceptance and grant” of its application. (Emphasis added.)

Under the statute, the Commission should forbear from applying

those rules if it determines that forbearance “is consistent with

the public interest.” 47 U.S.C. § 160(a)(3). M2Z, however,

makes the startling assertion that the Commission should forbear

from applying those rules if M2Z’s application “is consistent

with the public interest.” It argues that, because both statutory

provisions discuss “the public interest,” the FCC may only make

one inquiry to answer the independent questions posed by the

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two sections. Section 309(a) announces the standard under

which the Commission is to consider applications—“whether

the public interest, convenience, and necessity will be served by

the granting of such application.” 47 U.S.C. § 309(a). Section

160(a)(3) announces the standard under which the Commission

is to consider forbearing from applying its rules—whether

“forbearance from applying such provision or regulation [would

be] consistent with the public interest.” 47 U.S.C. § 160(a)(3).

As M2Z frames the issue, “[s]ince M2Z requested forbearance

from any laws or rules that stood in the way of granting its

application, the questions presented to the Commission merged

into one: Would it be in the public interest to grant M2Z’s

application?” This argument obscures the difference between

the questions. The first asks whether granting an application is

in the public interest; the second asks whether forbearing from

subjecting applications to certain regulations is in the public

interest. They might both be true, but the truth of the first does

not imply the truth of the second.

Because M2Z misconstrues the issue, it is naturally

dissatisfied with the resolution. It claims that the FCC was

required to walk through its application, and answer each of its

proposed public interest claims on the merits. It therefore

accuses the Commission of “deciding not to decide,” an

approach we rejected in AT&T, Inc. v. FCC, 452 F.3d 830 (D.C.

Cir. 2006). In AT&T, the FCC denied a forbearance request

asking it to “forbear from applying Title II common carrier

regulation to IP platform services.” Id. at 832. The Commission

reasoned that it could not rule on the forbearance request

because it “had yet to determine whether common carrier

regulations even applied to IP platform services.” Id. Although

there are some factual parallels to this case, the law is not

parallel. We observed in AT&T that the statute “gives the

Commission authority to decide only whether ‘forbearance . . .

is consistent with the public interest,’ not to decide whether

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deciding whether to forbear is in the public interest.” Id. at 836

(quoting 47 U.S.C. § 160(a)(3)). Although the Commission here

ultimately chose to undertake a rulemaking, it first decided

whether forbearance was in the public interest. It weighed the

costs and benefits in the following manner:

While [M2Z’s] proposed approach[] may result in the

issuance of a license sooner than conforming to established

processes, such licensing would come at the expense of

establishing a complete record that enables the Commission

to consider all of the relevant factors in determining

whether to grant a license without a hearing. In short, a

potentially speedy but ill-considered licensing process does

not serve the public interest. Moreover, as set out in detail

below, the various filings made in this proceeding that

oppose M2Z’s . . . application[] or propose competing uses

of the band support our conclusion that a grant of . . . th[is]

. . . application[] without adhering to the requirements of

Section 1.945 would disserve the public interest.

Order, at ¶ 9. The Commission did not refuse to rule on the

forbearance request. It ruled, just not the way M2Z wanted it to.

2. Forbearance and Considering Competitive Market

Conditions

M2Z also contends that the FCC failed to address whether

forbearance would promote competitive market conditions, as

required by 47 U.S.C. § 160(b). M2Z says both that the

Commission’s treatment was cursory and that it defined the

wrong market in its analysis. The Commission wrote the

following: “We observe that the grant of any of the pending

applications, by cutting off consideration of a competitive

bidding licensing framework and precluding consideration of

other potential applicants for this spectrum, would appear to

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compromise the development of competitive market

conditions.” Order, at ¶ 10 n.34. M2Z sought a 15-year

monopoly on valuable bandwidth; itshould not be surprised that

the FCC was terse in its analysis of this proposal’s effect on

competitive market conditions.

M2Z tries to analogize to the reversibly brief treatment

given by administrative agencies in Getty v. FSLIC, 805 F.2d

1050 (D.C.Cir. 1986), and Missouri Public ServiceCommission

v. FERC, 234 F.3d 36 (D.C. Cir. 2000). The petitioner in Getty

was able to show that despite “two fleeting references” in the

administrative record to a statutorily required factor, there was

“no evidence that [the agency] paid any attention” to that factor.

Getty, 805 F.2d at 1055, 1056. The agency’s order only

“contained a boilerplate recitation of the language” required. Id.

at 1055. In Missouri Public Service Commission, the agency

merely named the factors, and we held that “[a] passing

reference . . . is not sufficient to satisfy the [agency’s] obligation

to carry out ‘reasoned’ . . . decisionmaking.” Mo. Pub. Serv.

Comm’n, 234 F.3d at 41. Though not lengthy, the

Commission’s order in this case was neither a boilerplate

recitation of the required language nor a passing reference

without any reasoning. The FCC named the factor

(“competitive market conditions”), and gave two reasons why

the application “would appear to compromise” that

factor—namely, by “cutting off consideration of a competitive

bidding licensing framework and precluding consideration of

other potential applicants for this spectrum.” Order, at ¶ 10

n.34. And, though the Order referred directly to the provider

market, rather than the consumer market, it seems clear what the

Commission meant. Without scrutinizing and comparing

applications from various companies, the Commission feared

that it would not choose the most efficient provider for this

bandwidth. An auction would help it find this ideal provider, so

it was not in the public interest to forbear from an auction.

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In short, the FCC’s analysis of the effects of M2Z’s

breathtakingly broad petition on competitive market conditions

was so plainly unobjectionable that it didn’t warrant any further

discussion by the Commission.

B. Considering the Public Interest Under 47 U.S.C. § 157

M2Z next argues that the nature of its project should have

earned it preferential treatment under 47 U.S.C. § 157. That

section says that “[a]ny person or party (other than the

Commission) who opposes a new technology or service

proposed to be permitted under this chapter shall have the

burden to demonstrate that such proposal is inconsistent with the

public interest.” 47 U.S.C. § 157(a). M2Z argues that its

proposal falls within this language because it uses new

technologies, combines them in an innovative way, and provides

a new service, and that no party has met the burden to show that

its proposal is inconsistent with the public interest.

In its Order, the Commission said that M2Z proposes

“us[ing] technologies that other service providers are already

using” and that these technologies “are all proven technologies

that have been deployed in other bands.” Order, at ¶ 13. It

supported this conclusion by noting the “relatively slow speed”

of the technologies proposed by M2Z. Id. at ¶ 14. Therefore,

the Commission reasoned, it should not be considered a new

technology or service. The Commission further noted that,

under the statute, it is “expressly exclude[d]” from having to

demonstrate that a proposal is not in the public interest. Id. at

¶ 16; see also id. at ¶ 16 n.55. Finally, the Commission held

that, because of the slow speed and less-than-aggressive

expansion schedule, M2Z’s proposal was inconsistent with the

public interest. Id. at ¶ 15.

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1

 47 U.S.C. § 157(b) reads as follows: “The Commission shall

determine whether any new technology or service proposed in a

petition or application is in the public interest within one year after

such petition or application is filed. If the Commission initiates its

own proceeding for a new technology or service, such proceeding

shall be completed within 12 months after it is initiated.”

We begin by accepting the Commission’s interpretation

regarding the burden-shifting portion of the statute, which,

again, reads that “[a]ny person or party (other than the

Commission) . . . shall have the burden.” 47 U.S.C. § 157(a)

(emphasis added). It is certainly a reasonable interpretation of

this statute to say that the Commission does not have to meet

any burden. M2Z’s only response is to say that the FCC’s

interpretation removes shifting of the burden from the statute

entirely. It argues that 47 U.S.C. § 157(b)1 calls for the

Commission to be a “neutral arbiter” assessing whether a plan’s

“opponents carry their burden.” Therefore, M2Z reasons, the

phrase “other than the Commission” prevents the Commission

from being a party that could even opine, independently, on

whether the proposal is inconsistent with the public interest.

Though M2Z’s interpretation might be reasonable, that

question is not presented in this case. We only need to decide

whether the Commission’s interpretation was reasonable. See

Chevron, U.S.A., Inc., 467 U.S. at 843-45. M2Z argues that the

Commission’s interpretation could not be reasonable: because

the Commission must always decide in the end, and it may never

have the burden shifted against it, the burden may never be

shifted, and therefore that portion of the statute is surplusage.

But this reasoning is flawed. The statute obviously governs

when the Commission is weighing evidence presented by third

parties—when, for example, such parties make petitions to deny

an application for spectrum. When the Commission evaluates

these parties’ petitions, the burden is applied against them. And

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when the Commission is undecided or in equipoise, the burden

is never removed, making every word of the statute count. We

therefore hold that it was reasonable for the FCC to conclude

that 47 U.S.C. § 157 does not give the Commission the burden

of proving that M2Z’s proposal was not in the public interest.

With this established, the rest of the issue becomes more

straightforward. In particular, the parties’ technical dispute over

whether M2Z’s proposal was a new technology or service

becomes less important. We need not decide whether the

Commission confused orthogonal frequency-division multiple

access (OFDMA) with orthogonal frequency-division

multiplexing (OFDM) technologies. We also need not decide

whether M2Z waived this argument when it wrote that it sought

a license “on the basis of the broad range of public interest and

consumer welfare benefits . . . , rather than on the basis of

technological innovations alone.” And, finally, we need not

decide whether M2Z’s application is better considered as a new

service, because it would be uniquely free and nationwide, or as

an old service, because it would offer wireless broadband

Internet access like many other providers.

Even assuming that M2Z proposed a new technology or

service, we must affirm the Commission’s public-interest

decision as long as it is not “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 5 U.S.C.

§ 706(2)(A). This we find easy to do. The Commission found

that “the transmission speeds proposed by M2Z [we]re

unremarkable compared to other broadband services currently

being deployed.” Order, at ¶ 14. It further found that “in light

of the relatively slow speed proposed and the evolving nature of

broadband internet access service, the grant of such an

application would not serve the public interest.” Id. Noting that

“the construction benchmarks proposed by M2Z [we]re not

particularly aggressive,” and that they “f[e]ll[] short of the build

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2

 M2Z’s insistence that the Commission’s Order came after

the end of 47 U.S.C. § 157(b)’s one-year statute of limitations is

unavailing. Although M2Z filed its original application on May 5,

2006, it first mentioned 47 U.S.C. § 157 in its forbearance petition of

September 1, 2006. The Commission’s Order was released August 31,

2007. By piggy-backing a petition on its application, M2Z cannot

force the FCC to act in less time than the statute permits.

out standards that [the FCC] ha[s] imposed in other contexts

such as 700 MHz band,” the FCC found that “granting [M2Z’s]

application would prevent, rather than facilitate, widespread

broadband deployment.” Id. at ¶ 15. We hold that, the

Commission having given sufficient reasons, nothing in 47

U.S.C. § 157 prevents the Commission from deciding that

M2Z’s proposal was not in the public interest.2

C. Competitive Bidding Under 47 U.S.C. § 309(j)

Under 47 U.S.C. § 309(j), the FCC must generally process

“mutually exclusive applications . . . through a system of

competitive bidding.” 47 U.S.C. § 309(j)(1). The statute,

however, makes an exception to this general call for auctions.

Specifically, nothing in section 309(j) 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. § 309(j)(6)(E). M2Z uses this

provision to repeat its argument that the Commission failed to

assess all of its public interest evidence. It claims that the

Commission must make a public interest finding to determine

whether holding an auction is appropriate. Because the

Commission did not expressly evaluate all of M2Z’s comments,

M2Z argues that the Commission failed to live up to its statutory

duties and should be reversed for acting arbitrarily and

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capriciously.

This argument fails for many of the reasons mentioned

before: M2Z again misconstrues the question presented to the

agency. Nothing in the statute requires the Commission to

specifically address every piece of evidence presented by M2Z.

The Commission was required only to respond to the petition for

forbearance (which it denied) and possibly to determine under

47 U.S.C. § 157 whether M2Z proposed any new technology or

service that was in the public interest (which it decided M2Z had

not). The words “public interest” appearing in 47 U.S.C.

§ 309(j)(6)(E) do not require additional explicit action by the

FCC, except to address them in its response for M2Z’s petition

for forbearance under 47 U.S.C. § 160 “from Section 309(j)(1).”

Furthermore, the Commission did assess the public interest

when considering whether to dispense with an auction. It

explained that

before authorizing spectrum uses, [the FCC] typically first

conduct[s] a rulemaking proceeding to obtain public

comment on how the band should be used and licensed.

Beginning with the promulgation of Section 309(j), we have

most commonly determined, after consideration of the

public comment filed in the applicable rule making, that a

licensing framework that permits the filing and acceptance

of mutually exclusive applications, which are then required

by statute to be resolved through competitive bidding,

would best serve the public interest for the types of

spectrum use proposed by M2Z . . . . [T]his type of

framework best serves the public interest because it is the

one most likely to result in the selection of licensees that

will value the spectrum the most and put it to its highest and

most efficient use.

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Order, at ¶ 10 (footnote omitted). The Commission decided that

“even given the potentially longer timeline to the provision of

actual service,” it would rather auction the space than “give

[M2Z] spectrum for free.” Id. at ¶ 11. Leaving open the

possibility of “an alternative licensing framework” (i.e.,

something other than an auction), the Commission refused

forbearance because it “would be inconsistent with the public

interest.” Id. “[A]t this point,” the Commission explained, “the

record does not justify” deviation from the normal process of

competitive bidding. Id.

M2Z is correct that the Commission had to consider the

public interest in deciding whether to forgo an auction. Whether

this is characterized as an analysis under section 309 or a section

160 forbearance analysis matters little. And, as we have noted,

the Commission considered the public interest when deciding

whether to forgo an auction. It is not required to perform that

analysis exactly the way M2Z would have performed it. As

FCC precedent in support of its position, M2Z cites In re

Improving Public Safety Communications in the 800 MHz Band,

19 F.C.C.R. 14,969 (2004). That case noted only that the

Commission “ha[d] the authority” to forgo auctions—a point

which is not disputed. Id. at ¶ 72 n.236. It is worth noting,

however, that the Commission did discuss forgoing auctions by

“impos[ing] threshold qualifications” on the applicants, id.;

M2Z’s forbearance petition asks the Commission to put aside

just such qualifications screening. M2Z also cites In re

Flexibility for Delivery of Communications by Mobile Satellite

Service Providers in the 2 GHz Band, the L-Band, and the

1.6/2.4 GHz Bands, 18 F.C.C.R. 1962 (2003), but that case

specifically held that section 309(j)(1) did not apply at all,

because the licenses were not “initial.” See id. at ¶¶ 219-29.

Because the Commission reasonably performed every statutory

duty at issue, its Order was not arbitrary or capricious, and was

not contrary to 47 U.S.C. § 309(j).

USCA Case #07-1441 Document #1169381 Filed: 03/10/2009 Page 16 of 17
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III. Conclusion

Although M2Z presents a number of creative arguments,

none of them has serious legal merit. The FCC Order should

therefore be affirmed in all respects.

So ordered.

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