Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-03-01082/USCOURTS-caDC-03-01082-0/pdf.json

Parties Involved:
Advanced Communications Corporation
Appellant
EchoStar Satellite Corporation
Intervenor
Federal Communications Commission
Appellee

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 16, 2004 Decided July 30, 2004

No. 03-1082

ADVANCED COMMUNICATIONS CORPORATION,

APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION,

APPELLEE

ECHOSTAR SATELLITE CORPORATION,

INTERVENOR

Appeal of an Order of the

Federal Communications Commission

Robert Corn–Revere argued the cause for appellant. With

him on the briefs was Pamela C. Cooper.

Stewart A. Block, Counsel, Federal Communications Commission, argued the cause for appellee. With him on the brief

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #03-1082 Document #839643 Filed: 07/30/2004 Page 1 of 11
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were John A. Rogovin, General Counsel, and Daniel M.

Armstrong, Associate General Counsel.

Pantelis Michalopoulos argued the cause and filed the

brief for intervenor. Alice E. Loughran entered an appearance.

Before: ROGERS and GARLAND, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge: Advanced Communications Corporation (ACC) appeals from an order of the Federal Communications Commission (FCC) denying the company’s petition to reopen the record in a proceeding closed nearly a

decade ago. Because we conclude that the Commission did

not abuse its discretion in declining to reopen, we affirm the

decision below.

I

The history of the Commission’s earlier ACC proceeding is

set forth in detail in our previous opinion involving this

dispute, and we therefore provide only the necessary background here. See Advanced Communications Corp. v. FCC,

84 F.3d 1452, 1996 WL 250460 (D.C. Cir. May 3, 1996)

(unpublished table decision) (Advanced I).

In 1984, the FCC awarded ACC a conditional construction

permit to provide direct broadcast satellite (DBS) service. In

the interest of ‘‘ensur[ing] the prompt use of DBS spectrum

resources,’’ id. at *1, FCC rules required ACC to satisfy two

due diligence requirements applicable to all DBS permittees.

First, ACC had to ‘‘ ‘begin construction or complete contracting for construction’ ’’ within one year of receiving the permit.

Id. (quoting 47 C.F.R. § 1001.19(b)). Second, ACC had to

commence operating its system within six years of receiving

the construction permit. Id. The company fulfilled the first

requirement, and in 1986 it was assigned channels at two

orbital locations. Despite a four-year extension, however,

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ACC failed to meet the second requirement. In April 1995,

the FCC’s International Bureau denied ACC’s request for a

second four-year extension to construct, launch, and operate a

DBS system, and it cancelled ACC’s construction permit.

On October 16, 1995, the Commission affirmed the denial of

the extension and the cancellation of ACC’s permit. Advanced Communications Corp., 11 FCC Rcd 3399, 3400

(1995) (hereinafter 1995 Order). Commissioners Quello and

Barrett dissented. Id. at 3430, 3435. In a notice of proposed

rulemaking published shortly thereafter, the Commission proposed to reassign the reclaimed channels and orbital locations

(hereinafter collectively referred to as ‘‘spectrum’’) by auction. In the Matter of Revision of Rules and Policies for the

Direct Broadcast Satellite Service, 11 FCC Rcd 1297, 1298

(1995). Commissioner Barrett again dissented. Id. at 1349.

The proposal was ultimately adopted, and MCI Communications and EchoStar Communications won the subsequent

auction for a total price of more than $700 million. MCI later

assigned its spectrum to EchoStar, which currently provides

DBS service to millions of customers nationwide.

ACC appealed the 1995 Order to this court, making three

arguments: (1) the FCC’s decision constituted an arbitrary

departure from the agency’s precedents; (2) the FCC failed

to provide a reasoned explanation for its decision; and (3) in

deciding to deny ACC’s requested extension, the FCC improperly considered the revenues that would be gained from

the auction of ACC’s spectrum. Advanced I, 1996 WL

250460, at *2. The last argument, of particular importance

here, was based on a claim that consideration of revenues by

the FCC would violate section 309(j)(7)(A) of the Communications Act, which provides:

In making a decision pursuant to section 303(c) of this

title to assign a band of frequencies to a use for which

licenses or permits will be issued pursuant to this subsection, TTT the Commission may not base a finding of

public interest, convenience, and necessity on the expecUSCA Case #03-1082 Document #839643 Filed: 07/30/2004 Page 3 of 11
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tation of Federal revenues from the use of a system of

competitive bidding under this subsection.

47 U.S.C. § 309(j)(7)(A).

On May 3, 1996, this court rejected ACC’s appeal. We

concluded that the FCC’s decision was consistent with its

precedents, and that it included a reasoned explanation for

the disposition. Advanced I, 1996 WL 250460, at *3–4. We

also found that, ‘‘[w]hile the Commission was aware that

substantial sums could be realized from the sale of any orbital

slots and channels recovered from ACC, the Order d[id] not

base its denial of ACC’s renewal application on the expectation of such revenues.’’ Id. at *4 (internal citation omitted).

‘‘Rather,’’ we said, ‘‘the Commission’s decision was predicated

on ACC’s failure to achieve any concrete progress toward the

actual construction of its DBS system during its first extension period.’’ Id. (internal quotation marks omitted). And

we concluded that ACC had ‘‘pointed to nothing in the record

that is sufficient to overcome the strong presumption of

agency regularity.’’ Id. In light of that conclusion, we found

it unnecessary to decide ‘‘whether the Commission was in fact

barred by law from taking into account the expected impact

on federal revenues.’’ Id.

ACC continued to pursue its case in other fora. In 1998,

ACC sued MCI in Arkansas federal court, alleging tortious

interference with contract and again claiming that the FCC

had denied ACC’s request for an extension because of the

revenues that an auction would bring. The district court held

that Advanced I collaterally estopped ACC from relitigating

the revenues issue, Advanced Communications Corp. v. MCI

Communications Corp., 101 F. Supp. 2d 1154, 1159–60 (E.D.

Ark. 2000), and the Eighth Circuit affirmed, 263 F.3d 793, 795

(8th Cir. 2001). In October 2001, ACC petitioned this court

for a writ of mandamus directing the FCC to invalidate the

1995 Order in light of two affidavits that it had recently

obtained from (by then) former Commissioners Barrett and

Quello. We denied the petition, declaring that it provided no

justification for the extraordinary remedy of mandamus. In

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re: Advanced Communications Corp., 2001 WL 1699340, at

*1 (D.C. Cir. Dec. 19, 2001).

In April 2003, Advanced petitioned the Commission to

reopen the record for further proceedings based on what it

contended was new evidence that the 1995 Order had been

the product of improper considerations. The new evidence

consisted of the aforementioned affidavits by the two Commissioners who had dissented from the 1995 Order. The

identically worded affidavits, signed in October 2001, declared

the affiants’ view that ‘‘at least one of the Commissioners in

the majority based his or her decision in the Advanced Order

on the expectation of Federal revenues that would result from

the reassignment by auction of the channels and orbital

locations previously assigned to ACC.’’ Affidavit of James H.

Quello (J.A. 529); Affidavit of Andrew C. Barrett (J.A. 536).

The FCC denied ACC’s petition to reopen the record, concluding that the ‘‘new evidence that Advanced submits is

nothing more than another attempt to re-argue the issue that

it has presented in numerous prior court proceedings.’’ Advanced Communications Corp., 18 FCC Rcd 2926, 2929

(2003) (hereinafter 2003 Order). The affidavits, the FCC

said, failed to meet the ‘‘strong showing of sufficiency of

evidence’’ required to overcome the public interest in orderly

and final agency action. Id. at 2930.

II

Before proceeding to the merits, we must say a few words

about the standards of review applied by this court and the

FCC.

1. ‘‘[A] petition seeking review of an agency’s decision not

to reopen a proceeding is not reviewable unless the petition is

based upon new evidence or changed circumstances.’’ Southwestern Bell Tel. Co. v. FCC, 180 F.3d 307, 311 (D.C. Cir.

1999). Where, as in this case, the petition is based on a claim

of new evidence, we do have jurisdiction to review, but we

may reverse only upon ‘‘a showing of the clearest abuse of

discretion.’’ Interstate Commerce Comm’n v. Brotherhood of

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Locomotive Eng’rs, 482 U.S. 270, 278 (1987) (internal quotation marks omitted).

Additional considerations further confirm the need for a

deferential standard of review. Where, as here, the petition

for reopening comes not before judicial review but after, and

not immediately after but long after, we are loathe to overturn settled expectations. See Greater Boston Television

Corp. v. FCC, 463 F.2d 268, 288–89 (D.C. Cir. 1971) (noting

that ‘‘investments may be made in reliance on such an order,’’

and that at some point ‘‘the public interest in finality is

dominant over the public interest in possibly improving the

administrative result on further consideration’’). Moreover,

where, as here, the petition seeks an inquiry into the motives

of decisionmakers whose decision is reflected in official findings, ‘‘there must be a strong showing of bad faith or improper behavior’’ before a court will permit such an inquiry.

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S.

402, 420 (1971); see Checkosky v. SEC, 23 F.3d 452, 489 (D.C.

Cir. 1994) (declaring that ‘‘[a]gency opinions, like judicial

opinions, speak for themselves’’); see also PLMRS Narrowband Corp. v. FCC, 182 F.3d 995, 1002 (D.C. Cir. 1999); San

Luis Obispo Mothers for Peace v. NRC, 789 F.2d 26, 44–45

(D.C. Cir. 1986).1

1 The FCC urges us to regard ACC’s appeal not as a request to

reopen agency proceedings, but as one to recall the mandate we

issued in Advanced I. According to the Commission, it does not

have authority to reopen that closed proceeding unless we first

recall the mandate that affirmed the 1995 Order. Moreover, the

Commission continues, we may not issue such a recall except in

‘‘exceptional circumstances,’’ upon a ‘‘showing of ‘good cause’ and

the need to ‘prevent injustice.’ ’’ Greater Boston, 463 F.2d at 277–

78. To resolve this case, however, there is no need to decide

whether ACC’s appeal must be styled as a request to recall our

mandate, rather than as one to review a refusal to reopen. Compare Greater Boston, 463 F.2d at 291 (denying an FCC request to

recall the court’s mandate to permit the agency to hear argument

regarding whether to reopen a comparative licensing proceeding),

with Standard Oil Co. v. United States, 429 U.S. 17, 18 (1976)

(holding that, although ‘‘Courts of Appeals have required appellate

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2. The FCC’s own standard for reopening a closed proceeding reflects many of these same considerations. As the

FCC explained, ‘‘[u]nder ordinary circumstances,’’ an applicant seeking to reopen a proceeding after the close of the

record must show:

(1) that it relies on new or newly discovered evidence

that could not, through the exercise of due diligence,

have been discovered earlier; (2) that the new evidence,

if proven, would raise a substantial and material question

of fact affecting the ultimate outcome of the proceeding;

and (3) that there is a substantial likelihood of proving its

potentially disqualifying allegations if the case is remanded for further review.

2003 Order, 18 FCC Rcd at 2930 n.20 (citing, inter alia, Eve

Ackerman, 8 FCC Rcd 4205, 4205 (1993)); see also 47 U.S.C.

§ 405(a); 47 C.F.R. § 1.106(b)(2)(i)-(ii), (c). This test requires ‘‘a particularly strong showing of substantive sufficiency for post-hearing motions to reopen the record,’’ and reflects the Commission’s effort to balance the ‘‘interest in

preserving finality and expediting service to the public

against the benefits of future litigation.’’ Eve Ackerman, 8

FCC Rcd at 4205, ¶ 6. The FCC has generally employed this

test when the petition to reopen comes before judicial review

has taken place. See, e.g., id.; Omaha TV 15, Inc., 4 FCC

Rcd 730 (1988); Apogee, Inc. et al., 59 Rad. Reg. 2d (P&F)

941 (1986). In this post-review case, the FCC further raised

the threshold for reopening: ‘‘[G]iven the time that has

passed since the termination of the Advanced proceeding, and

the use that has been made of the satellite orbital locations

and frequencies, the burden is extraordinarily high.’’ 2003

Order, 18 FCC Rcd at 2930–31. Since our own standard of

review reflects these same considerations, we can hardly

leave before the District Court could reopen a case which had been

reviewed on appeal,’’ the ‘‘arguments in favor of requiring appellate

leave are unpersuasive’’). As just discussed, our standard of review

for denials of reopenings is itself highly deferential, and if there is a

material difference between that standard and the one applicable to

recalls, it is of no consequence here.

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regard the FCC’s decision to take them into account as

unreasonable.

3. In sum, the task confronting ACC is a difficult one. It

must show that the proffered evidence clears the high hurdle

required by the FCC to reopen a closed record, and that it

does so by such a margin that it meets this court’s own high

threshold for reversing the agency’s refusal to reopen. But

we have already paid far more attention to the height of the

bar than is necessary. As we shall see, ACC’s asserted ‘‘new

evidence’’ falls short of justifying reopening even under the

standard the FCC applies in ‘‘ordinary circumstances.’’

III

ACC presented to the Commission what it regarded as new

evidence showing that, in denying ACC’s request for a permit

extension, at least one Commissioner based his decision on

the impact it would have on federal revenues. In determining whether to reopen the 1995 proceeding in light of that

evidence, the Commission assumed — without deciding — the

validity of ACC’s premise: that a decision based on revenue

considerations would have violated 47 U.S.C. § 309(j)(7)(A).

We proceed in the same manner.

The ‘‘new’’ evidence proffered by ACC consisted of the

sworn affidavits of former Commissioners Quello and Barrett.

The affidavits were identical, and stated, in pertinent part:

[B]ased on my deliberations with the other Commissioners, at least one of the Commissioners in the majority

based his or her decision in the Advanced Order on the

expectation of Federal revenues that would result from

the reassignment by auction of the channels and orbital

locations previously assigned to ACC, which I believe

violates 47 U.S.C. § 309(j)(7)(A).

Affidavit of James H. Quello (J.A. 529); Affidavit of Andrew

C. Barrett (J.A. 536). The Commission reasonably concluded

that the affidavits were insufficient to justify reopening the

1995 proceeding.

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First, whether or not this evidence was available in 1995,

ACC offers no reason why it ‘‘could not, through the exercise

of due diligence, have been discovered earlier’’ than October

2001. Eve Ackerman, 8 FCC Rcd at 4205, ¶ 6; see W.S.

Butterfield Theatres, Inc. v. FCC, 237 F.2d 552, 555 (D.C. Cir.

1956) (‘‘Delay in seeking reopening of the record is a factor to

be weighed in the exercise of the Commission’s discretion.’’).

Even if ACC could not have been expected to obtain the

affidavits while Barrett and Quello were still Commissioners,

both were gone from the Commission by November 1997, see

Intervenor’s Br. at 18, and ACC has not explained why the

affidavits could not have been procured soon thereafter.

During the following four years, third parties like MCI and

EchoStar relied on the finality of the 1995 Order in ordering

their investments and operations. That good faith reliance on

a final administrative determination rightly weighed heavily

in the agency’s decision not to reopen the proceeding. See

Greater Boston, 463 F.2d at 289, 291.

Second, the affidavits themselves are insufficient to raise a

‘‘substantial and material question of fact affecting the ultimate outcome’’ of the 1995 proceeding. Eve Ackerman, 8

FCC Rcd at 4205, ¶ 6. The affidavits are wholly conclusory,

lacking specificity regarding the identity of the allegedly

miscreant Commissioner, or the date or contents of his or her

offending statements. The affiants do not state what it was

about their ‘‘deliberations with the other Commissioners’’ that

formed the basis for their conclusion that at least one rested

his or her decision on the expectation of federal revenues.

Nor does ACC offer any explanation for why the affidavits

fail to provide such specificity. The company does not, for

example, contend that compulsory process is needed to extract more information from the affiants. To the contrary,

ACC concedes that its counsel had access to the former

Commissioners; indeed, ACC confesses that its own counsel

drafted the affidavits. Oral Arg. Tape at 1:58 (D.C. Cir. Jan.

16, 2004). On their face, then, the affidavits may reflect

nothing more than the common refrain of many dissenting

opinions: the majority’s position seems so ‘‘wrong’’ that it

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‘‘must’’ have been the product of inappropriate policy considerations.

Third, to the extent that the affiants have something more

specific in mind, ACC has not shown that it is truly new or

likely to alter the outcome of the 1995 proceeding. In

Advanced I, ACC made the same argument that it does here:

that the FCC based its denial of ACC’s request for a second

extension on the Commission’s consideration of the revenues

to be gained from the auction of ACC’s spectrum. See

Advanced I, 1996 WL 250460, at *2. In support of that

contention, ACC offered three pieces of evidence. First,

ACC pointed to public statements that then-Chairman Reed

Hundt made in 1995 — in congressional testimony and in a

speech at the National Consumers Week Symposium —

emphasizing the revenue generated by spectrum auctions.

See Brief for Appellants at 17, Advanced I (J.A. 158) (quoting

Hundt’s June 1995 testimony ‘‘referring to Commission as

‘the largest single government profit center’ because of auction revenues’’); id. (quoting Hundt’s October 1995 speech

declaring ‘‘that ‘FCC stands for Federal Cash Cow’ and that

the agency is ‘the goose that lays the golden eggs’ ’’). Second, ACC noted an October 10, 1995 letter from MCI to the

Commission — cited in the 1995 Order — that offered ‘‘an

opening bid of $175 million’’ if an auction were held for ACC’s

reclaimed spectrum. Id. at 19 (J.A. 160) (quoting 1995 Order,

11 FCC Rcd at 3424 n.127). Finally, ACC pointed to Commissioner Barrett’s dissent from the 1995 rulemaking notice

that proposed holding an auction for the reclaimed spectrum.

In his dissent, Barrett revealed that, ‘‘prior to rendering a

decision in the Advanced Order, one of my colleagues asked

me whether this alleged opening bid [by MCI] would persuade me that auctioning the 27 channels was appropriate.’’

Id. at 21 (quoting Statement of Commissioner Andrew C.

Barrett, In the Matter of Revision of Rules and Policies, 11

FCC Rcd at 1351 n.5).

Notwithstanding this evidence, the Advanced I court concluded that ‘‘nothing in the record TTT [was] sufficient to

overcome the ‘strong presumption of agency regularity.’ ’’

1996 WL 250460, at *4 (quoting Louisiana Ass’n of Indep.

Producers v. FERC, 958 F.2d 1101, 1111 (D.C. Cir. 1992)).

As we have discussed, the new affidavits themselves add

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nothing that would change this conclusion. Hence, the remaining question — which we put to ACC at oral argument — is this: what is the most that the former Commissioners can be expected to say at a reopened proceeding in

support of the conclusion recited in their affidavits? Conceding that he would be speculating, ACC counsel stated that the

affiants might testify that Chairman Hundt had said, in the

privacy of the Commission’s deliberations, precisely what he

had been saying in public: that auctioning off reclaimed

spectrum would generate substantial revenue. Oral Arg.

Tape at 3:30 (D.C. Cir. Jan. 16, 2004).

But even if a reopened proceeding produced such evidence,

it would not be enough to change the original outcome. This

court has already held in Advanced I that Hundt’s public

statements were insufficient to undermine the validity of the

1995 Order. We do not see why knowing that Hundt said in

private what he had been proclaiming in public should make a

difference. Indeed, Commissioner Barrett’s 1995 dissent intimated that something just like that had transpired, yet it

proved inadequate to sway the court in Advanced I. And as

we said in PLMRS Narrowband Corp. v. FCC, even direct

evidence that a Commissioner ‘‘flirted with an impermissible

rationale’’ during an agency’s decisionmaking process is generally insufficient to require reversal of the agency’s final

decision. 182 F.3d at 1001–02. The current Commission —

no member of which was serving in 1995 — has concluded

that ACC’s new evidence fails to meet the ‘‘strong showing of

sufficiency of evidence’’ required to overcome the interest in

administrative finality. 2003 Order, 18 FCC Rcd at 2930.

We detect nothing unreasonable in that conclusion.

IV

For the foregoing reasons, the FCC’s order denying Advanced’s petition is

Affirmed.

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