Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-97-01393/USCOURTS-caDC-97-01393-0/pdf.json

Parties Involved:
Federal Communications Commission
Respondent
National Telephone Cooperative Association
Petitioner
United States of America
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 16, 1998 Decided February 6, 1998 

No. 93-1110

JAMES L. MELCHER, ET AL.,

PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION AND 

UNITED STATES OF AMERICA,

RESPONDENTS

CELLULARVISION USA, INC., ET AL.,

INTERVENORS

-

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Consolidated with

Nos. 93-1111, 93-1112, 93-1113, 93-1114, 93-1115, 93-1116, 

93-1117, 93-1118, 93-1119, 93-1120, 93-1122, 93-1123, 

93-1124, 93-1125, 93-1126, 93-1127, 93-1128, 93-1130, 

93-1131, 93-1132, 93-1133, 93-1134, 93-1135, 93-1136, 

93-1137, 93-1139, 93-1140, 93-1142, 93-1143, 93-1144, 

93-1145, 93-1146, 93-1147, 93-1148, 93-1149, 93-1150, 

93-1152, 93-1154, 97-1368, 97-1371, 97-1380, 97-1386, 

97-1393, 97-1415, 97-1431, 97-1483, 97-1484

On Petitions for Review of Orders of the 

Federal Communications Commission

Frederick M. Joyce argued the cause for petitioners James 

L. Melcher, et al., with whom John Haven Chapman and 

Christine McLaughlin were on the briefs. James H. Barker, 

III, Michael R. Gardner, Tom W. Davidson, Daniel E. Troy 

and Robert L. Pettit entered appearances.

Richard P. Bress argued the cause for petitioners United 

States Telephone Association, et al., with whom Maureen E. 

Mahoney, Gary M. Epstein, Michael E. Glover, James G. 

Pachulski, Mary M. McDermott, Linda Kent, M. Robert 

Sutherland, Gail L. Polivy and John F. Raposa were on the 

briefs. Frank W. Krogh and Andre J. Lachance entered 

appearances.

Paul J. Sinderbrand argued the cause for petitioner U S 

West, Inc., with whom L. Andrew Tollin, Robert G. Kirk, 

Craig E. Gilmore, Georgina M. Lopez-Ona and Robert B. 

McKenna were on the briefs.

L. Marie Guillory argued the cause for petitioner National 

Telephone Cooperative Association, with whom David Cosson 

was on the briefs.

Joel Marcus, Counsel, Federal Communications Commission, argued the cause for respondents, with whom Joel I. 

Klein, Acting Assistant Attorney General, United States Department of Justice, Robert B. Nicholson and Andrea Limmer, Attorneys, William E. Kennard, General Counsel at the 

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time the brief was filed, Federal Communications Commission, Christopher J. Wright, General Counsel, John E. Ingle, 

Deputy General Counsel, Carl D. Lawson and Roberta L. 

Cook, Counsel, were on the brief. Catherine G. O'Sullivan,

Attorney, United States Department of Justice, Daniel M. 

Armstrong, Associate General Counsel, Federal Communications Commission, and David Silberman, Counsel, entered 

appearances.

Glenn B. Manishin argued the cause for intervenors WebCel Communications, Inc., et al., with whom Matthew B. 

Pachman and John D. Windhausen, Jr., were on the joint 

briefs. Frank W. Krogh entered an appearance.

Caressa D. Bennet, Michael R. Bennet, Gregory W.

Whiteaker and Stephen G. Kraskin were on the joint briefs 

for intervenors Rural Telecommunications Group, et al.

Before: EDWARDS, Chief Judge, WALD and ROGERS, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge: This case involves the Local Multipoint Distribution Service ("LMDS"), a new wireless mode of 

communication that supports video, voice, and data services. 

The crux of the dispute concerns the Federal Communication 

Commission's ("FCC") decision to bar incumbent local telephone companies (known as local exchange carriers, or 

"LECs"), including rural local telephone companies, from 

holding LMDS licenses in the same geographic areas in which 

they provide telephone service, for three years from the date 

of the upcoming LMDS auction.1 The FCC explains that its 

Order is designed to prevent LECs from acquiring LMDS 

licenses in order to preempt competition in the local tele-

__________

1 The FCC's challenged eligibility restriction applies to both local 

exchange carriers and cable operators. One of the petitioners 

before us, U S West, Inc., provides both local exchange service and 

is the nation's third largest cable operator. However, U S West 

substantially replicates the arguments that the LEC petitioners 

advance, and relies on no critical distinctions between the situation 

of LEC and cable service providers.

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phone market. The LEC and rural LEC petitioners, consisting of various trade associations as well as individual LEC 

companies, challenge the FCC's eligibility restriction on multiple grounds. In addition, a number of waiver applicants 

challenge the FCC's previous decision, promulgated while the 

FCC was devising the current regime, that denied them 

waivers of the rules that formerly governed use of the 

spectrum now designated for LMDS. We reject the claims 

put forth by the LECs, the rural LECs, and the waiver 

applicants, and accordingly deny their petitions for review.

I. BACKGROUND

A. The Regulatory Regime Before 1996 

In 1970, the FCC adopted a cross-ownership rule prohibiting telephone companies from providing video programming 

directly to subscribers in their telephone service areas, because of concerns that telephone companies might monopolize 

the emerging cable industry. See General Tel. Co. v. United 

States, 449 F.2d 846, 851-52 (5th Cir. 1971). Congress eventually codified that rule in 1984. See 47 U.S.C. § 533(b), 

repealed by Telecommunications Act of 1996, Pub. L. No. 

104-104, § 302(b)(1), 110 Stat. 56, 124 ("1996 Act"). Over the 

next two decades, however, it became apparent that this 

cross-ownership prohibition granted cable providers too much 

protection. By 1992, "most cable television subscribers ha[d] 

no opportunity to select between competing cable systems," 

resulting in "undue market power for the cable operator as 

compared to that of consumers and video programmers." 

Cable Television Consumer Protection and Competition Act 

of 1992, Pub. L. No. 102-385, § 2(a)(2), 106 Stat. 1460, 1460.

B. The Telecommunications Act of 1996

Congress enacted the Telecommunications Act of 1996 "to 

provide for a pro-competitive, de-regulatory national policy 

framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information 

technologies and services to all Americans by opening all 

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telecommunications markets to competition." H.R. CONF.

REP. NO. 104-458, at 1 (1996) ("Conference Report").2

The 1996 Act eliminates the ban on telephone-cable crossownership, see 1996 Act § 302(b)(1), and authorizes a variety 

of ways for telephone companies to deliver video services, 

including: (1) via Title III radio-based systems (the Title that 

includes LMDS); (2) as a common carrier under Title II; (3) 

via a Title IV cable system; and (4) through an Open Video 

System ("OVS"), see id. § 651.

The only specific reference in the legislative history of the 

1996 Act to LMDS involves section 301(b)(3)(C) of the Act. 

This section amends 47 U.S.C. § 543(l)(1), which provides 

alternative definitions of "effective competition," by expanding the definition of that term to include: "a local exchange 

carrier or its affiliate (or any multichannel video programming distributor using the facilities of such carrier or its 

affiliate) [that] offers video programming services directly to 

subscribers by any means (other than direct-to-home satellite 

services) in the franchise area of an unaffiliated cable operator which is providing cable service in that franchise area, but 

only if the video programming services so offered in that area 

are comparable to the video programming services provided 

by the unaffiliated cable operator in that area." 1996 Act 

§ 301(b)(3)(C) (emphasis added). The Conference Report on 

the 1996 Act states that " '[b]y any means,' includes any 

medium (other than direct-to-home satellite service) for the 

delivery of comparable programming, including MMDS [Mul-

__________

2 The House Report similarly stated that:

The original rationale for adopting the prohibition of telephone company entry into video services has been satisfied, 

and given the changes in technology and the evolution of the 

cable industry, the prohibition is no longer valid. In fact, three 

governmental bodies, the [FCC], the Commerce Department's 

National Telecommunications and Information Administration 

(NTIA) and the Department of Justice's Antitrust Division 

have expressly found that the statute impedes competition in 

the cable industry.

H.R. REP. NO. 104-204, pt. 1, at 52-53 (1995).

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tichannel Multipoint Distribution Service], LMDS, an open 

video system, or a cable system." Conference Report, at 170.

The 1996 Act seeks additionally to stimulate competition in 

the local telephone market, requiring, for instance, incumbent 

local telephone companies to interconnect with the facilities 

and equipment of their competitors. See 1996 Act 

§ 251(c)(2); see also id. § 251(c)(3) (duty to provide "unbundled access"); id. § 251(c)(4)(A) (duty "to offer for resale at 

wholesale rates any telecommunications service that the carrier provides at retail to subscribers who are not telecommunications carriers"). Along the same lines, section 271 of the 

1996 Act provides that a Regional Bell Operating Company 

("RBOC") may provide long-distance service, but only after 

that RBOC has demonstrated that it has met all the requirements for opening its local telephone market to competition 

and the FCC has found that "the requested authorization is 

consistent with the public interest, convenience, and necessity." Id. § 271(d)(3)(C).

C. The FCC's Rulemaking on LMDS

On January 8, 1993, three years before the passage of the 

1996 Telecommunications Act, the FCC released a Notice of 

Proposed Rulemaking that proposed redesignating the 28 

GHz spectrum for LMDS. See In the Matters of Rulemaking 

to Amend Part 1 and 21 of the Commission's Rules to 

Redesignate the 27.5-29.5 GHz Frequency Band, 8 F.C.C.R. 

557 (released Jan. 8, 1993) ("first NPRM"). This first NPRM 

stated that the FCC did not propose to adopt cross-ownership 

restrictions on acquiring LMDS licenses, explaining that:

The evidence before us suggests that the most likely first 

use of the 28 GHz band will be video entertainment 

programming.... There is no assurance this will be the 

case, or that even if it is the predominant use, that it will 

be the most viable use in all geographic areas. In view 

of this uncertainty, we are inclined not to exclude any 

existing video distribution or telecommunications firm 

from constructing and operating 28 GHz facilities. We 

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seek comment on our tentative policy conclusion that 

cross-ownership restrictions should not be imposed.

Id. ¶ 33. The FCC then denied the 971 outstanding requests 

for waivers of the rules that formerly governed use of the 

spectrum now tentatively designated for LMDS. See id.

¶¶ 51-53. (These rejected waiver applicants had sought to 

provide point-to-multipoint service on the 28 GHz band, at a 

time when only point-to-point service was authorized. See 

id.) Many of the applicants, including all of the petitioners in 

this case who challenge the waiver denials, petitioned the 

FCC for reconsideration of the first NPRM. See In the 

Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 of the 

Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, at ¶ 385 n.595 (released Mar. 13, 1997) ("Order"). In addition, these waiver applicants concurrently 

sought review of the FCC's denial of their waiver requests in 

this court. This court held the latter petitions in abeyance 

pending the completion of the FCC's reconsideration process.

The FCC's Third Notice of Proposed Rulemaking, released 

in July 1995, solicited "further comment on competitive issues" associated with LEC acquisition of in-region LMDS 

licenses. In the Matter of Rulemaking to Amend Parts 1, 2, 

21, and 25 of the Commission's Rules to Redesignate the 

27.5-29.5 GHz Frequency Band, 11 F.C.C.R. 53, at ¶ 101 

(released July 28, 1995) ("third NPRM"). Specifically, the 

third NPRM asked a number of questions, including:

To what extent can this [28 GHz band] spectrum be used 

to provide service that is competitive with local telephone 

service, particularly the provision of access services to 

residential and business subscribers? Would allowing a 

LEC to acquire LMDS licenses in its service area eliminate a potential and important new source of competition 

in the local exchange market? Given the LECs' current 

monopoly status with regard to the provision of local 

exchange service, would LECs be likely to acquire 

LMDS spectrum as a means of forestalling competitive 

entry into the local exchange market, for example, by 

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warehousing spectrum or diverting it to less optimal 

uses?

Id.

Congress passed the Telecommunications Act of 1996 several months after the release of this third NPRM. The FCC 

accordingly sought "specific comment on how our policies 

towards LMDS eligibility would best promote the competitive 

objectives of the 1996 Act." In the Matter of Rulemaking to 

Amend Parts 1, 2, 21, and 25 of the Commission's Rules to 

Redesignate the 27.5-29.5 GHz Frequency Band, 11 F.C.C.R. 

19005, at ¶ 105 (released July 22, 1996) ("fourth NPRM"). 

The Commission explained its current reasoning this way:

In considering eligibility for LECs and cable operators 

within their geographic service areas one must weigh the 

potential for competition presented by open entry against 

the possibility that this spectrum may be used to forestall rather than promote competition. Open eligibility 

may delay or eliminate an opportunity to increase the 

number of competitors in the local exchange telephony 

and multichannel video programming markets. On the 

other hand, a bar on eligibility could prevent LECs and 

cable operators from using LMDS to compete against 

each other more effectively and rapidly or to provide new 

services not now offered by any firm.

Id. ¶ 125.

The FCC released its Final Order on March 13, 1997. This 

Order placed a three-year ban on LECs acquiring LMDS 

licenses within their service areas, see Order WW 157-99, and 

denied reconsideration of the Commission's earlier denial of 

the waiver applications, see id. WW 383-406. In explaining its 

decision to impose this three-year eligibility restriction, the 

Commission stated that,

Based on the record here, standard economic theory, 

our experience, an analogous situation in the cable TV 

industry, and our assessment of competitive and regulatory developments in the local telephony and MVPD 

[Multichannel Video Programming Distributor] markets, 

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we find on balance that a policy favoring restricted 

eligibility for a limited time would result in the greatest 

likelihood of increased competition in the local telephony 

and MVPD markets. By restricting in-region LEC and 

cable companies, we ensure the entry of a new LMDS 

operator that could provide competition in the LEC 

market, the MVPD market, or both. An incumbent, on 

the other hand, would have a strong incentive to obtain 

an LMDS license in order to prevent a new entrant from 

obtaining the license and competing directly in the incumbent's current market. In so doing, such an incumbent will have forestalled market entry by an entity that 

could provide both telephony and MVPD and will have 

deprived consumers of an opportunity to choose between 

a possible two providers in each market and the lower 

prices for such services that consumer choice necessarily 

implies. Furthermore, either incumbent would have no 

incentive to use the LMDS spectrum to provide the 

service in which it has market power because this could 

result in lower prices for the service, and lower profits. 

By temporarily restricting incumbents' eligibility to acquire in-region LMDS licenses, this policy maximizes the 

likelihood of increasing competition in both the LEC and 

MVPD markets.

Id. ¶ 162.

Although rural LECs had asked the FCC to exempt them 

from this eligibility restriction, the Commission decided 

against granting such an exception. The rural LECs argued 

that rural residents would likely be deprived of access to 

LMDS services unless the incumbent rural LECs were permitted to acquire LMDS licenses in their existing service 

areas. See id. ¶ 179. The FCC disagreed. It noted, inter 

alia, that even incumbent rural LECs would only provide 

LMDS service where it was profitable to do so, and that 

outsiders should be equally willing to acquire and operate 

licenses in such situations. See id. ¶ 180. The FCC further 

found it unlikely that many rural LECs would be subject to 

the eligibility bar, see id., because the restriction only applies 

to a LEC if ten percent or more of the population in the basic 

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trading area ("BTA") that the desired LMDS license covers is 

also within the LEC's authorized telephone service area, see 

id. ¶ 188, and BTAs typically encompass geographic areas 

that are significantly larger than a rural LEC's service area, 

see id. ¶ 180.

II. ANALYSIS

A. The LEC Petitioners

The LEC petitioners challenge the FCC's imposition of the 

eligibility restriction under section 706(2)(A) of the Administrative Procedure Act ("APA"), which requires this court to 

"hold unlawful and set aside" the FCC's Order to the extent 

that it is "arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

1. Whether the FCC has Changed its Policy Without 

Explanation

The LECs argue, first, that the FCC's Order constitutes 

arbitrary decision making in violation of APA § 706(2)(A) 

because it is an unexplained departure from prior rules that 

authorize and encourage LECs to offer new wireless communication services. Along these lines, the LECs note that in 

1981 the FCC set aside one cellular service license per 

market exclusively for the use of the incumbent LEC. See 

Final Brief of Petitioners United States Telephone Association, et al., at 14-15, citing In the Matter of an Inquiry into 

the Use of Bands 825-845 MHz and 870-890 MHz for Cellular Communications Systems, 86 F.C.C.2d 469, 483, 488, 491-

92 (1981). Similarly, although the FCC was initially concerned that LECs might use the Personal Communications 

Service ("PCS"), another wireless communications technology, for anticompetitive ends, it decided in 1993 to include 

LECs in the bidding on the ground that LEC participation 

would promote the rapid development of the technology and 

yield a broader range of services at a lower price. See id. at 

15, citing In the Matter of Amendment of the Commission's 

Rules to Establish New Personal Communications Services, 7 

F.C.C.R. 5676, 5705 (1992); 8 F.C.C.R. 7700, 7751-52 (1993). 

The LECs contend that the FCC's reasons for permitting 

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LECs to acquire and use these other wireless services apply 

as strongly in the LMDS context and that the FCC has failed 

to differentiate its prior decisions from the instant eligibility 

restriction.

Although the portion of the FCC's Order devoted to this 

issue is relatively brief, we find that it adequately explains 

why the FCC reached a different conclusion about LEC 

eligibility in the case of LMDS than in the earlier technologies. In balancing the advantages and disadvantagesin 

terms of competition and technological developmentof 

granting incumbent LECs unrestricted access to a new wireless technology, the FCC's Order indicates that there are at 

least three important factors that differentiate the LMDS 

situation.

The first factor is the number of licenses available per area. 

In the earlier cases, there were several licenses available in 

each market. With LMDS, in contrast, the Commission 

found "that the temptation for preemptive acquisition is particularly compelling ... because of the unusually large size of 

the LMDS spectrum allocation. A single, large spectrum 

block of relatively unused spectrum will be auctioned in each 

service area." Order ¶ 173.

The second factor, which is related to the first, is the 

unprecedented capacity of an 1,150 megahertz LMDS license, 

which is the single biggest license that the FCC has ever 

issued. As the FCC's Order explains:

LMDS licenses may be used to provide service in the 

local MVPD [Multichannel Video Programming Distributor] market, the local telephone market, a broadband 

data market, or a combination of these possibilities.... 

LMDS offers a significant amount of capacity, larger 

than currently available wireless services. For instance, 

according to TI [Texas Instruments, Inc.], the LMDS 

system they have manufactured for use in other countries can be used to serve 16,000 telephone subscribers, 

in each LMDS cell with a three-mile radius, concurrently 

with about 200 video-on-demand channels....

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....

... [T]he capacity of an LMDS license is unprecedented.

Id. ¶¶ 170, 173. In other words, a single LMDS license can 

simultaneously support 16,000 telephone calls and 200 video 

channels on demand, a capacity that makes the FCC extremely wary about the possibility that incumbent LECs would 

devote their in-region LMDS licenses only to communications 

services that do not compete with the LECs' existing telephone services.

The third differential factor is that the FCC's earlier 

decisions, none of which purported to announce any general 

policy against eligibility restrictions on LECs, were made at a 

time when the prospects for generating competition in the 

local telephone market, and for developing new technologies 

without maximum participation from incumbent LECs, were 

significantly less. The FCC's Order observes:

We recognize that as a result of ongoing technological 

changes and passage of the 1996 Act, there are other 

sources of potential and actual competition to the incumbent LEC and cable firms in the local telephony and local 

MVPD [Multichannel Video Programming Distributor] 

markets. For multichannel video distribution, likely 

sources of competition include open video systems (OVS), 

MMDS [Multichannel Multipoint Distribution Service], 

DBS [Direct Broadcast Satellite], FSS [Fixed Satellite 

Service] program distributors, and satellite master antenna television systems. For fixed voice and broadband 

data services, the competitive alternatives include new 

facilities-based, wireline entrants, such as interexchange 

carriers (IXCs), competitive access providers (CAPs), 

and cable firms, non-facilities-based entrants utilizing the 

new local competition provisions of the 1996 Act, and a 

variety of wireless possibilities, including PCS [Personal 

Communications Service] and cellular service providers. 

In many of the foregoing cases, LECs may enter MVPD 

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markets and cable television firms may enter local exchange markets.

Id. ¶ 163.

In light of the discussion in the FCC's Order that reviews 

these three differential factors, we find that the Commission 

has adequately explained why it came to a different conclusion about LEC eligibility in the case of LMDS than it 

reached in earlier cases involving different technologies.

2. The LECs' Claim That the FCC Order is Not Supported by Substantial Record Evidence or Market 

Analysis

a. The LECs' Challenge to the FCC's Conclusion That 

LECs Might Acquire Exclusive LMDS Licenses in 

Order to Preempt Competition in Their Local Telephone Markets

The LECs' second argument challenges the three propositions that they contend underlie the FCC's "preemptive acquisition" rationale: (1) that the LECs exercise monopoly 

power; (2) that a LEC could prevent in-region competition 

from eroding this monopoly power by acquiring the LMDS 

license for its service area; and (3) that an unaffiliated entity 

would likely use a LMDS license to compete both in the local 

telephony market and in the local subscriber video market.

The LECs contend that the first premise, that of monopoly 

power, is factually inaccurate. Here, they cite to the existing 

regulatory scheme that is designed to counteract the LECs' 

monopoly position. They further observe that in one recent 

proceeding the FCC itself found that "applicable statutory 

and regulatory safeguards [were] likely to be sufficient to 

prevent the BOCs [Bell Operating Companies] from improperly allocating costs between their monopoly local exchange 

and exchange access services and their affiliates' competitive 

interLATA services to such an extent that their interLATA 

affiliates would be able to eliminate other interLATA service 

providers and subsequently earn supra-competitive profits by 

charging monopoly prices." In the Matter of Regulatory 

Treatment of LEC Provision of Interexchange Services Originating in the LEC's Local Exchange Area, at ¶ 104 (released 

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Apr. 18, 1997). All that statement demonstrates, however, is 

the FCC's belief that, in the particular context of interLATA 

affiliate services, regulatory controls would be able to offset 

the risk of LECs abusing their monopoly. The LECs have 

not shown that the FCC's conclusion in the present case, that 

the LECs would likely resist competing against themselves in 

the telephony market, is unreasonable or that it lacks substantial evidence in the record. As the FCC's Order elaborates, the Commission's judgment about the precise situation 

at issue in this case rests not only on economic theory and 

analysis, but on predictive comments from the Department of 

Justice, the Federal Trade Commission, and several state 

attorneys general, three outside economists' conclusions that 

LECs have substantial market power and are likely to behave 

preemptorily, as well as the agency's own expertise. See

Order ¶¶ 157-78. Moreover, the FCC has found in recent 

proceedings other than the one petitioners cite that LECs do 

currently exercise monopoly power over the provision of local 

telephone service and that eroding that power is in the public 

interest. See id. ¶ 163 & n.251.

The LECs challenge the FCC's second and third premises 

for the eligibility restrictionthat a LEC could prevent competition from eroding its monopoly power by acquiring the 

LMDS license for its service area and that an unaffiliated 

entity would likely use a LMDS license to compete both in 

the local telephony and local subscriber video marketsas 

unduly speculative. With regard to the second premise, the 

LECs contest the relevance of an analogy that the FCC's 

Order draws to anticompetitive behavior that occurred in the 

cable industry in the early 1990s when satellite broadcast 

service providers emerged as potential competitors to local 

cable companies. See id. ¶¶ 166-69. In that situation, incumbent, monopolist local cable companies "were alleged to have 

stifled competition from their non-cable competitors, such as 

DBS [Direct Broadcast Satellite] operators, and to have 

attempted to suppress the development of DBS technology as 

a competitor to cable television service." Id. ¶ 166. The 

LECs point to what they regard as controlling distinctions 

between that case and the present one, noting particularly 

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that the earlier case involved different market conditions and 

that the anticompetitive concern in the cable situation 

stemmed from the vertical integration between certain cable 

operators and programmers, whereas vertical integration is 

not a factor in the present case. With regard to the third 

premise, the LECs observe that the FCC has not established 

that LMDS will be used by non-LEC licensees to compete 

with the existing local telephone network, pointing to portions 

of the Order that instead state that "[i]t is expected that 

many [of the telecommunications services that may be provided in LMDS] may be offered in the local telephony marketplace as an alternative to the wired telephone network." Id.

¶ 210 (emphasis added); see also id. ¶ 176 ("[W]e do not know 

at this time whether the LMDS spectrum is best used for 

local telephone, video, or something else."). The LECs also 

point to other means by which competitors can enter the local 

exchange market, although the FCC is substantially less 

confident that these other technologies will actually create 

significant competition in the local telephone market. See id.

¶¶ 164-65.

In considering these claims, we must keep in mind our 

standard of review. As both the Supreme Court and this 

circuit have made clear, our review of the FCC's exercise of 

its predictive judgment is particularly deferential. In FCC v. 

National Citizens Committee for Broadcasting ("NCCB"), 

436 U.S. 775 (1978), another case in which FCC rulemaking 

that established eligibility criteria for communications licenses was challenged as arbitrary, the Supreme Court held that 

the FCC was not required to "conclusively establish" the 

factual validity of the agency's premises. Id. at 796. As the 

Supreme Court explained,

to the extent that factual determinations were involved in 

the Commission's decision ..., they were primarily of a 

judgmental or predictive nature.... In such circumstances complete factual support in the record for the 

Commission's judgment or prediction is not possible or 

required; "a forecast of the direction in which future 

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public interest lies necessarily involves deductions based 

on the expert knowledge of the agency."

Id. at 813-14 (quoting FPC v. Transcontinental Gas Pipe 

Line Corp., 365 U.S. 1, 29 (1961)). This circuit has similarly 

noted that our arbitrary or capricious review of the FCC

is a narrow one; we must affirm the decision if we find 

that it is not contrary to law, that it is supported by 

substantial evidence and based upon a consideration of 

the relevant factors, and if we determine that the conclusions reached have a rational connection to the facts 

found. FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 803, 814-15 (1978); NAACP v. FCC,

682 F.2d 993, 997-98 (D.C. Cir. 1982). When, as in this 

case, "an agency is obliged to make policy judgments 

where no factual certainties exist or where facts alone do 

not provide the answer," our role is more limited; we 

require only that the agency "so state and go on to 

identify the considerations it found persuasive." National Ass'n of Regulatory Util. Comm'rs v. FCC, 737 F.2d 

1095, 1140 (D.C. Cir. 1984) ("NARUC") (internal quotations omitted), cert. denied, 469 U.S. 1227 (1985).

AT&T v. FCC, 832 F.2d 1285, 1291 (D.C. Cir. 1987).

These precedents indicate why the LECs' arguments cannot prevail. Where, as here, the FCC must make judgments 

about future market behavior with respect to a brand-new 

technology, certainty is impossible. The Commission must 

rely (within the limits of reason and rationality) on its expertise and its evaluation of the existing evidence in deciding 

whether the risk of harm is large and/or important enough to 

merit regulatory action. Our review for arbitrariness does 

not demand total assurance on the part of the agency; such a 

standard would substantially hobble agencies working in new 

and rapidly developing fields. In this light, it is not unreasonable for the FCC to have drawn guidance from another 

recent situation in which a local communications monopoly 

actively set about suppressing the development of a new 

technology that could foster competition in its market. Similarly, the FCC's prediction that an unaffiliated entity will be 

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more likely than a LEC to use a LMDS license to compete 

both in the local telephony and local subscriber video markets 

is plausibly rooted in the unprecedented size and capacity of a 

LMDS license and in the unprecedented opportunity to foster 

competition in the local telephone market that the current 

window of opportunity may represent.

b. The LECs' Argument That the FCC Order Cannot be 

Justified as a Way to Afford Opportunities to Small 

Providers

In paragraph 159 of their Order, the FCC Commissioners 

note that: "Our primary goal in the present proceeding is to 

encourage efficient competition in the telephony and MVPD 

markets. We have also expressed a corresponding concern 

with providing opportunities for smaller operators. These 

objectives are drawn from the direction given us by Congress." The rest of the Order continues to place the smaller 

operator rationale in a distinctly secondary status, and the 

FCC does not highlight it before this court.

In challenging this latter rationale, the LECs rely on the 

reasoning in Cincinnati Bell Telephone Co. v. FCC, 69 F.3d 

752 (6th Cir. 1995), a Sixth Circuit case holding that eligibility 

rules that restricted cellular communications providers from 

participating in Personal Communications Service ("PCS") 

auctions were arbitrary because inadequately explained, see 

id. at 756. The Cincinnati Bell opinion noted that the 

eligibility restriction at issue there, like the one in the instant 

case, permitted incumbent monopolists to acquire new licenses as long as they did so outside of their current geographic 

service areas, and reasoned that the restriction would therefore do little if anything to stem the accretion of communications giants, while disproportionately hurting smaller providers who would most likely only be financially able to offer new 

communications services within their existing service area. 

Id. at 764.

Considering the FCC's downplaying of the smallerprovider-based rationale before this court and in its Order, 

we need not tarry on the argument long. We note, however, 

that the Sixth Circuit's case involved a different technology 

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and a different market. The Sixth Circuit had before it only 

the question of cellular communications provider access to 

PCS. Moreover, the Cincinnati Bell court addressed this 

question in 1995, a year before Congress passed the 1996 

Telecommunications Act, which was intended, inter alia, to 

make the development of competition in the telephony market 

a more realistic possibility. As indicated above (see II.A.1.), 

the FCC's Order adequately differentiates LMDS from earlier technologies like PCS, and present market conditions from 

those prevailing before the passage of the 1996 Act. In this 

light, the Sixth Circuit's opinion gives us no reason to question the reasonableness of the FCC Commissioners' judgment 

that restricting the power of incumbent local telephone company monopolists to acquire the LMDS license for their 

existing service area will promote competition. Certainly, it 

is reasonable to believe that many smaller providers who do 

not currently hold LEC monopolies will benefit if the FCC's 

Order prevents the incumbent LECs monopolists from dominating the LMDS market to the exclusion of smaller potential 

competitors.

We accordingly find that the LECs' challenges to the 

FCC's Order all fail.

B. The Rural LEC Petitioners

The FCC's eligibility restriction applies to rural LECs as 

well. The rural telephone companies argue that including 

them in this restriction violates 47 U.S.C. § 309(j)(3)-(4). 

Section 309(j)(3)(A)-(B) states that, in designing systems of 

competitive bidding, the FCC "shall seek to promote" a series 

of objectives, including, inter alia, "(A) the development and 

rapid deployment of new technologies, products, and services 

for the benefit of the public, including those residing in rural 

areas, without administrative or judicial delays" (emphasis 

added) and "(B) promoting economic opportunity and competition and ensuring that new and innovative technologies are 

readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses 

among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by 

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members of minority groups and women" (emphasis added). 

Section 309(j)(4)(D) provides that "[i]n prescribing regulations 

pursuant to paragraph (3), the Commission shall ... (D) 

ensure that small businesses, rural telephone companies, and 

businesses owned by members of minority groups and women 

are given the opportunity to participate in the provision of 

spectrum-based services, and, for such purposes, consider the 

use of tax certificates, bidding preferences, and other procedures" (emphasis added). We agree that these statutory 

provisions evidence a particular congressional concern for 

rural consumers and rural LECs, but find that the FCC's 

decision to include rural LECs in its three-year eligibility 

restriction on acquisition of an in-region LMDS license ultimately does not violate section 309(j)(3)-(4).

1. The Rural LECs' Argument Under Chevron's First 

Step

The rural LECs argue, first, that the FCC's inclusion of 

rural telephone companies in its eligibility restriction contravenes the plain language of section 309(j)(3)-(4) and therefore 

fails under the first prong of Chevron, U.S.A., Inc. v. Natural 

Resources Defense Council, Inc., 467 U.S. 837 (1984). This 

prong of the two-part Chevron test asks only "whether Congress has directly spoken to the precise question at issue. If 

the intent of Congress is clear," of course, "the court, as well 

as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43. According to the 

rural LECs, section 309(j)(4)(D) requires the FCC to "ensure" through its auction rules that LMDS licenses are 

actually disseminated to rural telephone companies, and section 309(j)(3)(B) mandates that rural telephone companies be 

"given the opportunity to participate in the provision of" 

LMDS. Joint Brief of Intervenors Rural Telecommunications Group and Independent Alliance in Support of Petitioner National Telephone Cooperative Association, at 8-10 ("Rural LEC Brief"). We cannot see how the plain language or 

clear meaning of section 309(j) bars the FCC from imposing 

the eligibility restriction on rural LECs at issue here.

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a. Section 309(j)(3)

First, keep in mind that section 309(j)(3) grants the FCC 

the authority to establish eligibility restrictions on communications licenses. See 47 U.S.C. § 309(j)(3) ("In identifying 

classes of licenses and permits to be issued by competitive 

bidding, in specifying eligibility and other characteristics of 

such licenses and permits, and in designing the methodologies for use under this subsection, the Commission shall 

include safeguards to protect the public interest in the use of 

the spectrum and shall seek to promote the purposes specified in section 151 of this title and the following objectives 

....") (emphasis added); see also Cincinnati Bell, 69 F.3d at 

762 ("A plain reading of Section 309(j)(3)(B), which directs the 

FCC to promote 'economic opportunity and competition ... 

by avoiding excessive concentration of licenses and disseminating licenses among a wide variety of applicants,' indicates 

that Congress clearly conferred authority on the FCC to 

place restrictions and limitations on the bidding process.").

Second, section 309(j)(3)(B) does not state that rural telephone companies must be "given the opportunity to participate in the provision of" LMDS. Instead, it requires the 

FCC to "seek to promote" a number of objectives, including 

"promoting economic opportunity and competition and ensuring that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide 

variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women." This provision is subject to a 

variety of reasonable interpretations. Most importantly, it 

articulates a number of potentially conflicting objectives, including both the promotion of competition and the dissemination of licenses to rural telephone companies. "[O]nly the 

Commission may decide how much precedence particular 

policies will be granted when several are implicated in a 

single decision." Mobiletel, Inc. v. FCC, 107 F.3d 888, 895 

(D.C. Cir. 1997). In this case, the Commission determined 

that allowing incumbent LECs, including incumbent rural 

LECs, to participate without restriction in bidding for inregion LMDS licenses would ultimately inhibit the developUSCA Case #97-1393 Document #329018 Filed: 02/06/1998 Page 20 of 42
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ment and use of the LMDS spectrum, whereas the FCC's 

eligibility restriction on rural LECs would "promote economic 

opportunity and competition, and ... avoid excessive concentration of licenses by disseminating licenses among a wide 

variety of applicants." Order ¶ 181. In addition, while section 309(j)(3)(B) calls for the wide dissemination of licenses, it 

lists a number of indications of diversity, rather than confining its concern to rural telephone companies. Moreover, 

section 309(j)(3)(B) refers to "new and innovative technologies" as a group, indicating that diversity within this group 

might be enough to meet the statute's requirements even if 

the licensees for one technology within this group are less 

diverse. Finally, as we discuss below, the FCC concluded 

that many rural LECs would actually to able to acquire inregion LMDS licenses under its Order.

b. Section 309(j)(4)

Section 309(j)(4)(D) does not state that the FCC must 

"ensure" through its auction rules that licenses for LMDS, 

which is a spectrum-based service, are actually disseminated 

to rural telephone companies. Instead, it insists only that 

rural telephone companies have "the opportunity to participate in the provision of spectrum-based services" and accordingly instructs the FCC to "consider the use of tax certificates, bidding preferences, and other procedures" (emphasis 

added). The meaning of "opportunity" in the context of 

section 309(j)(4)(D) is necessarily ambiguous. At the extremes, the term is capable of supporting a range of interpretations extending from the licensee guarantees that the rural 

LECs advocate to a regime in which there are no guarantees 

(and perhaps little realistic chance) that rural LECs will 

actually end the day with access to LMDS. Under the threeyear eligibility restriction in issue, a rural LEC does have an 

"opportunity" to: (a) acquire LMDS licenses immediately in 

all areas but its existing service area; (b) acquire a LMDS 

license in its existing service area once three years have 

passed; (c) bid immediately for a smaller LMDS license (150 

megahertz instead of 1,150 megahertz) in its service area; (d) 

acquire the LMDS license for its service area as long as the 

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LEC does not provide telephone service to more than ten 

percent of the population within the basic trading area 

("BTA") assigned to each LMDS license; (e) acquire an inregion LMDS license immediately on the condition that the 

LEC divest its overlapping telephone interests; and (f) seek a 

waiver of the eligibility restriction, subsequent to the initial 

award of LMDS licenses, upon a showing of good cause. See

Order WW 178-80, 188, 160. Moreover, section 309(j)(4)(D), 

like section 309(j)(3)(B), speaks of "spectrum-based services" 

as a unit, rather than stating that rural telephone companies 

must have access to each spectrum-based service. Finally, 

section 309(j)(4)(D) does not mandate that the rural LECs 

receive preferential treatment in the form of "tax certificates, 

bidding preferences, and other procedures"; it just instructs 

the FCC to "consider" that possibility.

In short, we do not believe that the present eligibility 

restriction violates the text or intent of section 309(j)(3)(B) or 

section 309(j)(4)(D) so as to violate the first prong of the 

Chevron test.

One of the rural LEC petitioners, the National Telephone 

Cooperative Association ("NTCA"), also makes a brief argument under Chevron's second prong. NTCA contends that 

the FCC abused its discretion by ignoring section 309(j)'s 

concern for rural residents and rural LECs, and the 1996 

Telecommunications Act's overarching desire to foster competition. This argument is baseless for the reasons elaborated 

elsewhere in this opinion. The FCC's imposition of the threeyear eligibility restriction on rural LECs is fully consistent 

with a reasonable interpretation of section 309(j), (see II.B.1.), 

and the Commission has clearly explained its basis for believing that this eligibility restriction will foster competition, see, 

e.g., Order ¶ 162.

2. The Rural LECs' Argument That Including Them in 

the Eligibility Restriction Was Arbitrary and Capricious

The rural telephone companies also argue that the FCC 

has failed to supply a reasoned basis in the record for its 

decision to include the rural LECs in the LMDS eligibility 

restriction. They accordingly contend that the application of 

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the in-region eligibility restriction to rural telephone companies is arbitrary and capricious, an abuse of discretion, and 

otherwise contrary to law.

a. The Claim That the FCC Lacks Support for its 

Predictions and That the Commission's Actions Fail 

to Satisfy the FCC's Stated Objectives

The rural telephone companies engage in the same error 

that the LECs committed: They assert that the FCC was 

required to establish "that limiting rural telephone company 

participation is necessary to ensure that rural America receives LMDS at reasonable charges." Rural LEC Brief, at 

13-14 (emphasis added). The rural LECs do not locate this 

requirement in any statute, but instead point to a statement 

in the FCC's Order that appears in the introduction to the 

Commission's explanation of its decision to impose an eligibility restriction:

Our overall goal in assessing the need to restrict the 

opportunity of any class of service providers to obtain 

and use spectrum to provide communications services has 

been to determine whether the restriction is a necessary

step in ensuring that consumers will receive efficient 

communications services at reasonable charges. Since 

we are of the view that competitive markets are the most 

direct and reliable means for ensuring that consumers 

receive the benefits described in the Communications 

Act, we have evaluated the need for spectrum licensing 

restrictions in terms of whether the restrictions are 

necessary to promote competition in the telecommunications marketplace and whether these restrictions are 

otherwise consistent with our obligation to promote the 

public interest.

Order ¶ 157 (emphasis added). We believe that the rural 

LECs have over-read this introductory passage, which speaks 

in general terms about "any class of service providers," any 

"communications service," and eligibility restrictions as a 

category. Id. As the FCC's Order makes clear when it 

begins its detailed discussion of the Commissioners' decision 

to impose a three-year eligibility restriction on LEC acquisiUSCA Case #97-1393 Document #329018 Filed: 02/06/1998 Page 23 of 42
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tion of in-region LMDS licenses, the Commission did not 

concludeor believe that it needed to concludethat imposing the eligibility restriction on rural LECs was a necessary, 

unavoidable step if the Commission was "to ensure that rural 

America receives LMDS at reasonable charges." Rather, the 

FCC determined that: "[t]he [last] element of our inquiry is 

whether eligibility restrictions are the best means of achieving 

our goal of increasing competition in the LEC and MVPD 

markets. We find that they are" Id. ¶ 176 (emphasis added); 

see also id. ¶ 162 ("[W]e find on balance that a policy favoring 

restricted eligibility for a limited time would result in the 

greatest likelihood of increased competition in the local telephony and MVPD markets.") (emphasis added).

The rural LECs also argue that, even if the FCC's Order 

defends its eligibility restriction as the "best" approach rather 

than the "necessary" one, the FCC cannot rely on economic 

theory, its evidence indicating that LECs exercise monopoly 

power, and its predictive judgment as to the future behavior 

of markets in deciding to include the incumbent rural LECs 

in its eligibility restriction. Instead, the rural LECs contend, 

the FCC had to provide what the rural telephone companies 

characterize as "supporting data," which would presumably 

contain more specific and exact factual information. Rural 

LEC Brief, at 15. NCCB and AT&T defeat this claim. Both 

cases recognize that where, as here, the FCC has to establish 

eligibility criteria based on how it predicts the market and 

regulated entities will react, "complete factual support in the 

record for the Commission's judgment or prediction is not 

possible or required; 'a forecast of the direction in which 

future public interest lies necessarily involves deductions 

based on the expert knowledge of the agency.' " NCCB, 436 

U.S. at 814 (quoting FPC v. Transcontinental Gas Pipe Line 

Corp., 365 U.S. 1, 29 (1961)). "When, as in this case, 'an 

agency is obliged to make policy judgments where no factual 

certainties exist or where facts alone do not provide the 

answer,' our role is more limited; we require only that the 

agency 'so state and go on to identify the considerations it 

found persuasive.' " AT&T, 832 F.2d at 1291 (quoting NaUSCA Case #97-1393 Document #329018 Filed: 02/06/1998 Page 24 of 42
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tional Ass'n of Regulatory Util. Comm'rs v. FCC, 737 F.2d 

1095, 1140 (D.C. Cir. 1984)).

Here, the FCC acknowledged that absolute certainty was 

impossible, but presented its reasoning clearly, cogently, and 

based on the agency's best understanding of the available 

information. This explanation is too lengthy to present completely here, but the following passage from the Order summarizes many of its essential points:

Based on the record here, standard economic theory, 

our experience, an analogous situation in the cable TV 

industry, and our assessment of competitive and regulatory developments in the local telephony and MVPD 

[Multichannel Video Programming Distributor] markets, 

we find on balance that a policy favoring restricted 

eligibility for a limited time would result in the greatest 

likelihood of increased competition in the local telephony 

and MVPD markets. By restricting in-region LEC and 

cable companies, we ensure the entry of a new LMDS 

operator that could provide competition in the LEC 

market, the MVPD market, or both. An incumbent, on 

the other hand, would have a strong incentive to obtain 

an LMDS license in order to prevent a new entrant from 

obtaining the license and competing directly in the incumbent's current market. In so doing, such an incumbent will have forestalled market entry by an entity that 

could provide both telephony and MVPD and will have 

deprived consumers of an opportunity to choose between 

a possible two providers in each market and the lower 

prices for such services that consumer choice necessarily 

implies. Furthermore, either incumbent would have no 

incentive to use the LMDS spectrum to provide the 

service in which it has market power because this could 

result in lower prices for the service, and lower profits. 

By temporarily restricting incumbents' eligibility to acquire in-region LMDS licenses, this policy maximizes the 

likelihood of increasing competition in both the LEC and 

MVPD markets.

As we have unanimously observed in recent proceedings, both incumbent LECs and cable television firms 

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currently possess substantial market power. An inregion LMDS license would be valuable to these firms 

not only because they could use it as other firms would, 

but also because, by obtaining the license, they could 

preserve excess profits that an independent LMDS competitor would erode....

....

Our concern regarding LEC and cable eligibility is 

educated by the substantial record collected in this proceeding on the capabilities of LMDS.... LMDS offers 

a significant amount of capacity, larger than currently 

available wireless services.... [W]e believe that the 

likelihood that LMDS can increase competition in either 

the local multichannel video or local telephone exchange 

markets (or both simultaneously) is high and warrants 

analysis in order to determine whether in-region LEC 

and cable TV incumbents should be permitted to acquire 

and hold initial licenses.

While all bidders in an auction for LMDS licenses can 

be expected to base their bids on their individual assessment of the most efficient use of the spectrum, LECs 

and cable companies assessing the value of in-region 

LMDS licenses would have the additional incentive to 

protect their market power and preserve a stream of 

future profits.

Order ¶¶ 162-63, 170-71. We find that this explanation is 

both reasonable and adequate support for the FCC's predictive judgment.

b. The Claim That the FCC Failed to Consider Record 

Evidence

The rural LECs next argue that the FCC's Order failed to 

address comments in the record from the rural telephone 

community that contended that an in-region eligibility restriction on rural LECs "would harm the ability of rural telephone 

companies to provide LMDS in their service areas." Rural 

LEC Brief, at 17. This argument is somewhat odd. One 

would naturally expect that an eligibility restriction on rural 

LEC acquisition of in-region LMDS licenses would, by its 

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very nature, "harm"to some degree"the ability of rural 

telephone companies to provide LMDS in their service areas"; that, in fact, is the restriction's purpose. Indeed, no 

one, including the FCC, disputes this point, although the FCC 

has determined for the reasons elaborated below that ultimately the in-region restriction will have a relatively small 

impact on the rural LECs' ability to participate in the LMDS 

auction. See Order ¶¶ 179-80. We believe the real question 

presented here is whether the FCC can exercise its judgment 

that a restriction on the incumbent rural LECs is merited in 

order to counteract the rural LECs' present monopoly power. 

Moreover, while the rural LECs assert that the FCC failed to 

consider "record evidence," they point to no evidence in the 

record. Instead, the portions of the record that the rural 

LECs cite simply assert that the eligibility restriction will 

harm rural LECs. See Rural LEC Brief, at 17, citing Joint 

Appendix, at 665-67, 672-74, 765-66, 774-76.

The rural LECs go on to cite the Order at paragraph 179 

for the proposition that the FCC has established a standard 

whereby "in order for a rural telephone company to be 

entitled to an opportunity to participate in a new service, the 

rural telephone company must first demonstrate that it is the 

only entity that can provide the service [in rural areas]." Id.

Instead, however, paragraph 179 only rejects the rural LECs'

contention "that they are the only entities that can provide 

service in their service territories." It reads:

Commenters from the rural telephone community .... 

reason that unless rural telephone companies are able to 

participate in the LMDS market, consumers in rural 

areas are likely to be deprived of the benefits of this new 

service. We agree that it would be undesirable to impair 

the provision of LMDS service to rural consumers. Although we have decided to impose some short-term 

restrictions in LECs, including rural telephone companies, we do not believe that these restrictions, as crafted, 

will hinder the introduction of LMDS in rural areas. 

Rural LECs have not made the case that they are the 

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only entities that can provide LMDS in their service 

territories.

Order ¶ 179.

The rural LECs have mischaracterized the FCC's rationale 

for its Order and pointed to no record evidence that the 

Commission failed to consider.

c. The Claim That the FCC's Conclusion That the 

Eligibility Restriction Will Not Compromise Rural 

Telephone Company Participation in LMDS is Arbitrary and Capricious

As we indicated above (see II.B.2.b.), we have not been able 

to find (and, for the reasons discussed above, would not 

expect to find) any statement within the FCC's Order asserting that the eligibility restriction will have no negative effect 

on rural LEC participation in LMDS. Instead, the FCC's 

Order "conclude[s] that the interests of rural telephone companies are adequately addressed by the LMDS rules we 

adopt herein," Order ¶ 362, and explains the various opportunities that remain open to rural LECs. We evaluate the 

specific claims that the rural LECs make about that FCC 

conclusion in this light.

1. The Claim That the FCC's Conclusion That Rural 

Telephone Companies Will Not Trigger the Eligibility Restriction is Arbitrary and Capricious

The rural LECs take issue with the FCC's determination 

that "because rural LECs are generally small, they are 

unlikely to have the degree of overlap with BTAs [basic 

trading areas] necessary ... to trigger our eligibility restriction." Id. ¶ 180. This statement refers to the fact that the 

FCC's eligibility restriction only applies to a LEC if ten 

percent or more of the population in the BTA that the desired 

LMDS license covers is also within the LEC's authorized 

telephone service area. See id. ¶ 188. This determination 

appears in the FCC's Order as one of several reasons why the 

FCC concluded that its restriction on rural LECs will not 

"hinder the introduction of LMDS in rural areas." Id. ¶ 179. 

The rural LECs argue that the FCC's prediction of relatively 

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modest effects on rural LEC eligibility is arbitrary and 

capricious because the application of the restriction turns on 

the overlap between a LMDS license's BTA and a LEC's 

telephone service area, rather than on the size of a rural 

LEC. However, it is not difficult to see a logical connection 

between the FCC's overlap criteria and a rural LEC's size: 

The smaller a LEC, the less likely it is to be servicing a 

customer base that constitutes ten percent or more of the 

population within a BTA, particularly because the BTAs for 

LMDS licenses, which are quite large, have no necessary 

correlation to the boundaries of rural telephone companies' 

service areas. See id.¶¶ 135, 138, 180.

The rural LECs also claim that the FCC's determination is 

arbitrary and capricious because the FCC did not "conduct an 

analysis of the actual degree of overlap between LMDS 

license areas and rural telephone company service areas." 

Rural LEC Brief, at 19. The rural telephone companies do 

not claim to have the detailed information that such an 

analysis covering hundreds of rural LECs would require, or 

to have offered to collect it for the FCC; they argue, instead, 

that the FCC should have secured this information during its 

rulemaking. Given that all the data needed for an overlap 

analysis presumably existsthe boundaries of the BTAs for 

LMDS licenses and the current authorized service areas for 

rural LECs are both establishedthe FCC might profitably 

have undertaken such a factual investigation. However, we 

do not believe that the comprehensive factual analysis that 

the rural LECs would have liked was actually required of the 

FCC in this case. The FCC was entitled to conduct, and did 

conduct, a general analysis based on informed conjecture. 

Specifically, a BTA is typically constructed around an "urban 

commercial center," where the population of the BTA will be 

most concentrated; BTAs are not designed to follow the same 

lines as rural LEC service areas. Order ¶ 138. BTAs also 

tend to be quite large: The FCC divided the fifty states into 

only 487 BTAs. See id. ¶ 135. The FCC accordingly drew a 

reasonable inference from its general knowledge that "rural 

LECs are generally small," and concluded that rural LECs 

were "unlikely" to have the necessary overlap, although some 

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number of rural LECs will presumably meet the overlap 

requirement's threshold. Id. ¶ 180.

In the final analysis, the number of rural LECs that will or 

will not fall within the ten percent overlap rule was not the 

determinative issue. The FCC was operating on the premise 

that if a LEC services a customer base that constitutes more 

than a small percentage of a BTA, then the risk of impeded 

competition in the telephony market is great enough to 

warrant an in-region eligibility bar. The exact percentage of 

rural LECs covered under a ten percent overlap rule was not 

the primary question, and the precise identification of that 

percentage through a detailed and expensive study would not 

likely have led the FCC to a different conclusion about 

whether to impose a ten percent overlap rule.

2. The Claim That the Divestiture Provision Does 

Not Reduce the Adverse Impact on Rural Telephone Companies

Under the FCC's Order, a LEC can buy a LMDS license 

as long as it divests itself of any overlapping service areas or 

interests within ninety days. See id. ¶ 194; see also id. ¶ 180. 

The FCC observed in a footnote that:

Such flexibility should be particularly useful for those 

rural LECs that may have overlapping ownership interests in a BTA. Although we anticipate that most rural 

LECs would not have sufficient overlap of their authorized service area with the LMDS service area to be 

affected by the eligibility restrictions we are adopting, 

the additional flexibility to divest such overlapping ownership interests should further ameliorate any potential 

negative impact on these entities.

Id. ¶ 194 n.302. The rural LECs argue that, in fact, this 

divestiture provision will be "singularly unhelpful" to them 

"because the areas rural telephone companies have a desire 

and ability to serve are those within and adjacent to their 

service area." Rural LEC Brief, at 20.

We do not believe that this claim renders the FCC's 

decision to include rural LECs in its eligibility restriction 

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arbitrary or capricious. Someperhaps even a largepercentage of rural LECs will not find the divestiture provision 

in the FCC's Order an attractive solution to all their "problems." But that does not mean that the availability of this 

option does not increase a rural LEC's flexibility, nor does it 

mean that the divestiture provision will not help some rural 

LECs. And we see no evidence that the FCC is claiming 

more for its divestiture provision than that.

3. The Claim That the FCC's Conclusion That Geographic Partitioning Will Ensure the Dissemination of Licenses to Rural Telephone Companies is 

Arbitrary and Capricious

One of the reasons that the FCC cited in support of its 

conclusion that its eligibility restriction will not impede the 

introduction of LMDS in rural areas was that

to the extent any LEC is unsuccessful in the LMDS 

auction, it will still have the opportunity to participate

subject to the eligibility rulesby either acquiring spectrum from an LMDS licensee through the partitioning 

and disaggregation rules we are adopting, or by contracting (in a way that does not circumvent any applicable 

ownership and control requirements and does not raise 

competitive concerns) with the LMDS licensee to provide 

service in its telephone market area.

Order ¶ 180. The rural LECs argue that the FCC's partitioning rules are "effectively ... useless" for rural LECs 

because if the customer base of a rural LEC constitutes more 

than ten percent of the population in a BTA, partitioning the 

BTA will not enable the LEC to avoid the FCC's ten percent 

overlap rule. Rural LEC Brief, at 21. We agree that the 

partitioning rules would be more useful to rural LECs seeking to offer in-region LMDS service if they provided a means 

to circumvent the ten percent overlap rule. However, that is 

not the purpose of the partitioning rules. Rather, the FCC 

intended for its partitioning rules to help rural LECs by 

making ownership of a LMDS service more affordable. With 

the assistance of these rules, a rural LEC seeking to provide 

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LMDS service does not have to garner sufficient capital to 

purchase and then effectively utilize an entire LMDS license; 

instead, a rural LEC can buy or lease part of a LMDS license 

from its original owner. See Order ¶ 141 ("We determined 

that the issue of geographic partitioning should be considered 

to enable LMDS licensees to recoup some of their initial 

licensing and construction costs, while providing a method for 

entities with specific local concerns or insufficient capital to 

purchase rights for the entire service area, to acquire a 

portion of the geographic area originally licensed."); id.

¶ 145 ("[T]he nature of the LMDS cell structure makes 

disaggregation and partitioning powerful tools for licensees to 

concentrate on core areas or to deliver services to isolated 

complexes, such as rural towns or university campuses, that 

do not lie within major market areas. We further believe 

that disaggregation and partitioning will provide opportunities for small businesses seeking to enter the MVPD and local 

telephony marketplaces."); id. ¶ 362 ("[T]he degree of flexibility we will afford in the use of this spectrum, including 

provisions for partitioning or disaggregating spectrum, should 

assist in satisfying the spectrum needs of rural telephone 

companies at low cost."). We find the FCC's conclusion, that 

its partitioning rules will help rural LECs acquire LMDS 

licenses by making smaller, more affordable licenses potentially available, reasonable.

The rural LECs go on to assert that only six partitioning 

deals have thus far been consummated in auction-licensed 

services and argue, citing a trade periodical, that licensees 

are reluctant to enter into partitioning agreements with small 

and/or rural entities due to transaction costs and the difficulty 

of earning a profit. We reject this argument on two grounds. 

First, the FCC's partitioning rules at issue here govern the 

implementation of a new technology in a brand-new market. 

These are the precise sorts of circumstances in which the 

Commission's predictive judgment demands great deference, 

see NCCB, 436 U.S. at 813-14; AT&T, 832 F.2d at 1291, and 

in this case the FCC's Order explains the technologicallybased reasons for the Commission's conclusion that partitioning will be an attractive option for LMDS licensees. The 

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Order, for instance, "observ[es] that continued technological 

improvements may reduce the amount of spectrum required 

to provide a full range of services." Order ¶ 140. The Order 

also cites with approval comments in the record "contend[ing] 

that the relatively high cost of LMDS construction and the 

shorter transmission paths it provides, in addition to the 

limitation of service to consumers within reach of cell transmitters, lend support for the Commission's proposals with 

regard to geographic partitioning." Id. ¶ 143. Second, even 

if rural LECs will encounter difficulties in finding parties 

willing to contract with them for part of a LMDS license, we 

do not believe that this would make it arbitrary or capricious 

for the FCC to list its partitioning rules as one of the actions 

it is taking to promote LMDS service in rural areas.

3. The Argument That the Application of the In-Region 

Eligibility Restriction to Rural Telephone Companies 

Hinders the Rapid Deployment of LMDS to Rural 

America and is Arbitrary and Capricious

a. The Claim That There is No Evidence to Support the 

FCC's Conclusion That Competitive Forces Will Ensure the Provision of LMDS to Rural America

The rural LECs challenge the FCC's statement that "we 

do not believe that these [eligibility] restrictions, as crafted, 

will hinder the introduction of LMDS in rural areas.... [I]f 

it is profitable to provide service in rural areas, a licensee 

should be willing to do so, either directly or by partitioning 

the license and allowing another firm to provide service." Id.

¶¶ 179-80. The rural LECs argue that such reliance on the 

market is "outrageous" in this context because, historically, 

rural areas have not attracted many potential competitors. 

Rural LEC Brief, at 25. Although the rural LECs do not 

assert that they will be able to provide LMDS service in rural 

areas at less expense than other possible providers, they 

claim that they have a natural interest in providing additional 

communications services in rural areas where they are already operating.

We do not find this argument persuasive. First, in making 

a predictive judgment about the future operation of the 

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brand-new market in LMDS, the FCC is entitled to a very 

substantial measure of deference and is clearly not required 

to rely on the history of other markets in other technologies. 

See NCCB, 436 U.S. at 813-14; AT&T, 832 F.2d at 1291. 

Second, the rural LECs have not indicated why they would be 

able to provide LMDS in rural markets if provision of that 

service would in fact be unprofitable. They have presented 

no evidence and made no argument, for instance, that they 

would be able to provide LMDS in rural areas at less expense 

than potential competitors would incur. In this light, it 

seems perfectly soundindeed commonsensicalfor the 

FCC to conclude that the rural LECs can only want increased access to the rural LMDS market precisely because 

they think that this market will be profitable (or possibly 

because they want to protect their telephone monopolies).

b. The Claim That the FCC Gave No Consideration to 

the Universal Service Principles Set Forth in Sections 309(j)(3)(A) and 254(b)(3) When It Imposed the 

Eligibility Restriction on Rural Telephone Companies

47 U.S.C. § 309(j)(3)(A) provides that the FCC "shall seek 

to promote," inter alia, "the development and rapid deployment of new technologies, products, and services for the 

benefit of the public, including those residing in rural areas,

without administrative or judicial delays" (emphasis added). 

47 U.S.C. § 254(b)(3) provides that:

Consumers in all regions of the Nation, including lowincome consumers and those in rural, insular, and high 

cost areas, should have access to telecommunications and 

information services, including interexchange services 

and advanced telecommunications and information services, that are reasonably comparable to those services 

provided in urban areas and that are available at rates 

that are reasonably comparable to rates charged for 

similar services in urban areas.

(emphasis added).

We believe that the rural LECs err in their claim that the 

FCC's Order does not adequately consider the universal 

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service principles set forth in these sections. To be sure, the 

FCC's Order does not address this issue by name; its explicit 

reference to the universal service goals in the context of 

providing LMDS to rural areas is limited to a paragraph. 

See Order ¶ 271 & n.403. But the Order does make clear that 

the FCC did consider the substance of the universal service 

issue. As a key passage of the Order on rural LECs explains, the FCC Commissioners "agree[d] that it would be 

undesirable to impair the provision of LMDS service to rural 

customers." Id. ¶ 179. The Commissioners concluded, however, that the Order's eligibility restriction would not in fact 

"hinder the introduction of LMDS in rural areas" for the 

series of reasons discussed throughout this section. Id. In 

this light, the rural LECs' argument devolves into a rehashing of the contention, rejected above, that the FCC was 

arbitrary or capricious in disagreeing with the rural LECs' 

claim that the eligibility restriction will leave rural areas 

without LMDS service.

c. The Claim That the FCC's Performance Requirements When Coupled With the Eligibility Restriction 

Mean That Rural America Will Not Receive LMDS 

in Direct Violation of Section 309(j)(4)(B)

47 U.S.C. § 309(j)(4)(B) states that "the Commission shall"

include performance requirements, such as appropriate 

deadlines and penalties for performance failures, to ensure prompt delivery of service to rural areas, to prevent 

stockpiling or warehousing of spectrum by licensees or 

permittees, and to promote investment in and rapid 

deployment of new technologies and services.

(emphasis added). In its Order, the FCC decided to

adopt very flexible build-out requirements for LMDS. 

Specifically, we will require licensees to provide "substantial service" to their service area within 10 years. 

Although LMDS licensees will have incentives to construct facilities to meet the service demands in their 

licensed service area, we believe that minimum construction requirements can promote efficient use of the specUSCA Case #97-1393 Document #329018 Filed: 02/06/1998 Page 35 of 42
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trum, encourage the provision of service to rural, remote, 

and insular areas, and prevent the warehousing of spectrum.

....

... [F]or an LMDS licensee that chooses to offer 

point-to-multipoint services, a demonstration of coverage 

to 20 percent of the population of its licensed service area 

at the 10-year mark would constitute substantial service.

Order ¶¶ 266, 270. The Order went on to state that:

We believe that these build-out provisions fulfill our 

obligations under Section 309(j)(4)(B). We also believe 

that the auction and service rules which we are adopting 

for LMDS, together with our overall competition and 

universal service policies, constitute effective safeguards 

and performance requirements for LMDS licensing. Because a license will be assigned in the first instance 

through competitive bidding, it will be assigned efficiently to a firm that has shown by its willingness to pay 

market value its willingness to put the license to its best 

use. We also believe that service to rural areas will be 

promoted by our proposal to allow partitioning and 

disaggregation of LMDS spectrum.

Id. ¶ 271.

The rural LECs argue that these relatively undemanding 

performance requirements, together with the eligibility restriction on rural LECs, will hinder the delivery of LMDS to 

rural areas. In their view, LMDS licensees offering point-tomultipoint services will meet the requirement that they cover 

twenty percent of the population in their licensed service 

areas within ten years by serving urban areas and avoiding 

rural ones; once the licensees' build-out benchmarks are met, 

the rural LECs continue, the licensees will lack any incentive 

(given the high transaction and other costs associated with 

serving sparsely populated regions) to negotiate partitioning 

agreements with businesses seeking to serve rural areas. 

This is not an implausible scenario. However, it does not 

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render the Commission's alternate predictive judgment unreasonable.

The FCC concluded, based on its prior analogous experience with Wireless Communications Services ("WCS"), that 

strict build-out requirements might discourage the acquisition 

of LMDS licenses, given the wide variety of services that 

LMDS can potentially support and the substantial uncertainties that presently exist as to the best uses for LMDS. See 

id. ¶ 267. In light of this danger, the Commission decided to 

adopt liberal build-out requirements.

We agree that this decision is a reasonable interpretation of 

section 309(j)(4)(B), a provision that endorses three different, 

and potentially competing, goals. First, the FCC's reasoning 

was clearly in accord with section 309(j)(4)(B)'s concern that 

the agency "promote investment in and rapid deployment of 

new technologies and services." 47 U.S.C. § 309(j)(4)(B). 

Moreover, if strict build-out requirements pose a threat to the 

rapid development of the LMDS spectrum, that danger will 

also threaten section 309(j)(4)(B)'s goal of "ensur[ing] prompt 

delivery of service to rural areas." Id. As for section 

309(j)(4)(B)'s third goal, "prevent[ing] stockpiling or warehousing of spectrum by licensees or permittees," id., the FCC 

Commissioners decided, in their expert judgment, that this 

danger did not loom large enough to mandate stricter buildout requirements. They also expressly "reserve[d] the right 

to review our liberal construction requirements in the future 

if we receive complaints related to Section 309(j)(4)(B), or if 

our own monitoring initiatives or investigations indicate that a 

reassessment is warranted." Order ¶ 272.

C. The Waiver Applicant Petitioners

The waiver applicant petitioners seek review of the FCC's 

decision, released on January 8, 1993, while the Commission 

was devising its current LMDS regime, that denied them 

waivers of the rules that formerly governed use of the 

spectrum now designated for LMDS. See first NPRM ¶¶ 51-

53. The rejected waiver applicants filed petitions with the 

FCC for reconsideration on February 8, 1993. Concurrently, 

the rejected applicants filed petitions for review with this 

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court. See Brief of Petitioners James L. Melcher, et al., at 3; 

Order ¶ 385 n.595. On April 15, 1993, this court ordered 

those latter petitions held in abeyance pending completion of 

the FCC proceeding. On March 13, 1997, the FCC denied 

the rejected applicants' petitions for reconsideration. See 

Order ¶¶ 383-406. Many of the rejected applicants did not 

then file timely new appeals with this court. However, at 

least two rejected applicants, Celltel Communications Corporation ("Celltel") and CT Communications Corporation 

("CT"), who had dismissed their petitions for reconsideration 

that were before the FCC, filed timely new petitions for 

review with this court on August 11, 1997. This court consolidated these two petitions into the present case on September 

8, 1997.

The FCC argues that TeleSTAR, Inc. v. FCC, 888 F.2d 132 

(D.C. Cir. 1989) (per curiam), and Wade v. FCC, 986 F.2d 

1433 (D.C. Cir. 1993) (per curiam), establish that the filing of 

a petition for reconsideration before the FCC makes the 

challenged FCC order nonfinal, and therefore nonreviewable 

by this court, as to the petitioning party.3 The Commission 

asserts that the rejected waiver applicants' petitions for review before this court should accordingly be dismissed as 

incurably premature. We agree that the petitions before this 

court from large numbers of the rejected waiver applicants 

raise serious prematurity problems. TeleSTAR, Inc. considered the precise question of "whether a petition for review, 

unripe because of the pendency of a request for agency 

reconsideration, ripens so as to vest this court with jurisdiction once the agency issues its final decision on reconsideration." TeleSTAR, Inc., 888 F.2d at 133. It held "that this 

court does not have jurisdiction to consider the prematurelyfiled petition for review, even after the agency rules on the 

rehearing request. In order to obtain review of a now-final 

agency order, a new petition for review must be filed." Id.

As the court explained:

__________

3

In addition, the rejected waiver applicants themselves concede 

that nearly every issue raised in this appeal was not raised before 

the agency.

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While final agency action can ripen an issue for appellate review, the filing of a challenge to agency action 

before the agency has issued its decision on reconsideration is incurably premature. We hold therefore that 

when a petition for review is filed before the challenged 

action is final and thus ripe for review, subsequent action 

by the agency on a motion for reconsideration does not 

ripen the petition for review or secure appellate jurisdiction. To cure the defect, the challenging party must file 

a new notice of appeal or petition for review from the 

now-final agency order. We develop this bright line test 

to discourage the filing of petitions for review until after 

the agency completes the reconsideration process. If a 

party determines to seek reconsideration of an agency 

ruling, it is a pointless waste of judicial energy for the 

court to process any petition for review before the agency has acted on the request for reconsideration.

Id. at 134 (citation omitted); see also Wade, 986 F.2d at 1434 

("The danger of wasted judicial effort that attends the simultaneous exercise of judicial and agency jurisdiction arises 

whether a party seeks agency reconsideration before, simultaneous with, or after filing an appeal or petition for judicial 

review.") (citation omitted).

However, we do reach the merits of the petitions before 

this court from Celltel and CT, who have presented petitions 

that were not premature.

This court held in Turro v. FCC, 859 F.2d 1498 (D.C. Cir. 

1988), that:

Our standard for reviewing the FCC's denial of a 

request for waiver of an agency rule is very deferential. 

As we stated in WAIT Radio v. FCC, 459 F.2d 1203, 1207 

(D.C. Cir.), "An applicant for waiver faces a high hurdle 

even at the starting gate. On its appeal to this court, the 

burden on [the petitioner] is even heavier. It must show 

that the Commission's reasons for declining to grant the 

waiver were so insubstantial as to render that denial an 

abuse of discretion."

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Id. at 1499 (citations omitted); see also Orange Park Florida 

T.V., Inc. v. FCC, 811 F.2d 664, 669 (D.C. Cir. 1987) ("[I]t is 

elementary that the judiciary may disturb a Commission 

refusal to waive its rules only in the event of an abuse of 

discretion."). In Turro, the FCC had "concluded that it was 

preferable to address the policy concerns raised by Turro in a 

rulemaking proceeding and not in the context of an ad hoc 

waiver proceeding." Turro, 859 F.2d at 1500. The court 

found that "[t]his decision to proceed by rulemaking is entitled to considerable deference." Id.

In this case, the FCC had received hundreds of waiver 

requests971 in totalseeking authority to provide point-tomultipoint services on the 28 GHz band, rather than the 

point-to-point services then-authorized. See first NPRM 

¶¶ 51-53. The FCC also had pending before it three petitions 

for rulemaking, two supporting the designation of the 28 GHz 

band for point-to-multipoint services, and one opposing such a 

designation. See id. ¶¶ 1-13. The Commission denied the 

waiver requests as a group and proceeded instead with notice 

and comment rulemaking on the use of the spectrum at issue. 

As the FCC explained, it had concluded, based on the number 

of waiver applications and the size of their requests for 

spectrum space, that granting the waivers would result in a 

de facto reassignment of the 28 GHz banda band that other 

parties wanted to use for different, incompatible purposes. 

See id. WW 51-53; Order ¶ 388. Moreover, the Commission 

found that the waivers raised common policy questions, involving both the best use of the 28 GHz band and the 

additional rules that would be needed to govern new uses of 

that band, questions that would best be addressed in a 

rulemaking proceeding. See Order ¶¶ 389, 402-04, 406.

The FCC's reasoning in this regard was not only rational, 

but highly sound. The 971 waiver applicants were essentially 

seeking to use the waiver process as a means of getting the 

28 GHz band reassigned. Their petitions raised systemic 

issues most appropriately considered in a rulemaking proceeding that offered all interested parties the opportunity to 

comment and gave the agency the opportunity to proceed in a 

more thorough and fair manner. See National Small ShipUSCA Case #97-1393 Document #329018 Filed: 02/06/1998 Page 40 of 42
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ments Traffic Conference, Inc. v. ICC, 725 F.2d 1442, 1447-48 

(D.C. Cir. 1984) ("Notice-and-comment procedures ... are 

especially suited to determining legislative facts and policy of 

general, prospective applicability.").

Moreover, the FCC has adequately distinguished its earlier 

decision, in January 1991, to grant a waiver permitting Hye 

Crest Management, Inc. to provide point-to-multipoint service 

on the 28 GHz band. When Hye Crest applied for a waiver, 

it was the only such applicant. Its proposal was unique and 

untried. The FCC determined that, "under the circumstances of this proceeding," a formal rulemaking to consider 

changing the designation of the 28 GHz band was "premature" and that a waiver should be granted as the most 

efficient way to introduce point-to-multipoint service into New 

York City (the area in which Hye Crest sought to operate). 

In re Application of Hye Crest Management, Inc., 6 F.C.C.R. 

332, at ¶ 18 (released Jan. 18, 1991). The Commission concluded that "grant of the waiver request does not establish a 

precedent that will ultimately lead to the de facto reallocation 

of the 28 GHz band" and stated that it "[did] not anticipate 

that our action today will result in an onslaught of waiver 

requests." Id. ¶ 19. The FCC also observed that "[s]hould 

the proposal prove to be a success and the public benefits 

anticipated become a reality, a general investigation into 

alternate uses of the 28 GHz band would then be appropriate 

for consideration." Id. ¶ 18. In contrast, by the time that 

the FCC acted on the instant waiver applications, a number 

of manufacturers had begun developing equipment to offer 

point-to-multipoint services on the 28 GHz band and the 

agency had received almost a thousand requests for waivers 

to use the band for that purposeso many that granting 

them all would have amounted "to a de facto reallocation of 

the 28 GHz band." First NPRM ¶¶ 51-53. To be sure, some 

of those rejected waiver applicants had filed their applications 

for waiver as early as 1991, in the early days of what was to 

become a deluge of requests. But this court has held that the 

filing of a waiver application does not create a legal interest 

that restricts the discretion vested in the FCC or compels the 

agency to review the request as if no time had passed or 

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circumstances changed since the moment the request was 

filed. See Chadmoore Communications, Inc. v. FCC, 113 

F.3d 235, 241 (D.C. Cir. 1997) (citing Hispanic Info. &

Telecomms. Network v. FCC, 865 F.2d 1289, 1294-95 (D.C. 

Cir. 1989); Schraier v. Hickel, 419 F.2d 663, 667 (D.C. Cir. 

1969)). By the time the FCC acted in this case, the circumstances that the FCC had expressly believed would not 

develop when it granted Hye Crest's waiver had in fact come 

to pass, so that the agency's reasons for granting the earlier 

waiver no longer applied.

CONCLUSION

We accordingly deny the petitions for review from all of the 

petitioners in this case.

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