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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 16, 2003 Decided October 28, 2003

No. 02-1312

CONSUMER ELECTRONICS ASSOCIATION,

PETITIONER,

v.

FEDERAL COMMUNICATIONS COMMISSION

AND UNITED STATES OF AMERICA,

RESPONDENTS.

NATIONAL ASSOCIATION OF BROADCASTERS AND

ASSOCIATION FOR MAXIMUM SERVICE TELEVISION, INC.,

INTERVENORS.

On Petition for Review of an Order of the

Federal Communications Commission

Jonathan Jacob Nadler argued the cause for petitioner.

With him on the briefs were Joseph P. Markoski, David A.

Nall, Angela M. Simpson, and David R. Siddall.

 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.
2

Joel Marcus, Counsel, Federal Communications Commission (FCC), argued the cause for respondents. With him on

the brief were John A. Rogovin, General Counsel, FCC, and

Daniel M. Armstrong, Associate General Counsel, FCC, R.

Hewitt Pate, Acting Assistant Attorney General, U.S. Department of Justice, and Catherine G. O’Sullivan and Andrea

Limmer, Attorneys, Department of Justice.

Donald B. Verrilli, Jr., argued the cause for intervenors.

With him on the brief were Ian Heath Gershengorn and

Robin M. Meriweather, Henry L. Baumann, National Association of Broadcasters (NAB), Jack N. Goodman, NAB, and

Valerie Schulte, NAB, and David Donovan, Association for

Maximum Service Television, Inc.

Before: GINSBURG, Chief Circuit Judge, ROBERTS, Circuit

Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge ROBERTS.

ROBERTS, Circuit Judge: The Consumer Electronics Association (CEA) is a trade association representing businesses in

the consumer technology industry, including designers and

manufacturers of televisions, DVD players, and VCRs. CEA

seeks review of a final order of the Federal Communications

Commission (FCC or Commission) requiring that all televisions with a display of 13 inches or greater and certain other

devices capable of receiving over-the-air television signals

(such as certain DVD players and VCRs) include a tuner

capable of receiving and decoding digital television (DTV)

signals. See In re Review of the Commission’s Rules and

Policies Affecting the Conversion to Digital Television, 17

F.C.C.R. 15,978 (2002) (Digital Tuner Order or Order). CEA

contends that the FCC lacks statutory authority to enact the

Digital Tuner Order, and that, even if the FCC has such

authority, the Order is an arbitrary and capricious abuse of it.

Finding the Digital Tuner Order to be a reasonable exercise

of the Commission’s authority under the All Channel Receiver
3

Act (ACRA), 47 U.S.C. § 303(s), we deny the petition for

review.

I.

Since the 1940s, television stations have broadcast their

programs over the air using an analog transmission standard

adopted by the National Television System Committee

(NTSC), and for almost all that time every television sold in

the United States has contained an analog tuner designed to

receive those NTSC signals and convert them into pictures

and sound. Today, digital technology permits television content to be broadcast as streams of binary data bits, allowing

broadcasters to transmit more information over a channel of

electromagnetic spectrum than is possible through analog

broadcasting. For example, an analog broadcaster can fit

only one video and two or three audio signals into a 6 MHz

broadcast channel; a DTV station can transmit up to four

such programs simultaneously (along with CD-quality audio

signals) across the same 6 MHz swath of spectrum. See In re

Advanced Television Systems and Their Impact upon the

Existing Television Broadcast Service, 10 F.C.C.R. 10,540,

10,541 ¶ 4 (1995) (Fourth Further Notice). Alternatively, a

digital broadcaster can transmit the television program in

high definition (HDTV) format — a wide-screen, ultra-high

resolution picture with movie theater-quality surround

sound — along with data such as program listings, sports

scores, and stock prices. See id. Moreover, reception of

over-the-air DTV broadcasts is less dependent on relative

signal strength and more resistant to interference than analog broadcasts, yielding dramatically enhanced picture and

sound quality. See In re Review of the Commission’s Rules

and Policies Affecting the Conversion to Digital Television,

15 F.C.C.R. 5257, 5266 ¶ 28 (2000) (Notice of Proposed Rule

Making).

DTV also promises more efficient use of scarce electromagnetic spectrum. Currently, while over 400 MHz of spectrum

is devoted to analog television broadcasting (enough for sixtyeight 6 MHz channels), the vulnerability of analog broadcasts

to interference means that only a few channels actually can

be used in any geographic area. See Fourth Further Notice,
4

10 F.C.C.R. at 10,549 ¶ 58. Particularly in the UHF band,

channels must be spaced far apart to avoid interference. See

In re Advanced Television Systems and Their Impact upon

the Existing Television Broadcast Service, 2 F.C.C.R. 5125,

5132 ¶¶ 59–60 (1987) (Notice of Inquiry). DTV does not have

this problem. Once television broadcasters have switched to

DTV, the FCC will be able to stack broadcast channels right

beside one another along the spectrum, and ultimately utilize

significantly less than the 400 MHz of spectrum the analog

system absorbs today. See In re Review of the Commission’s

Rules and Policies Affecting the Conversion to Digital Television, 16 F.C.C.R. 5946, 5951 ¶ 12 (2001) (Further Notice of

Proposed Rulemaking). The FCC can then reallocate the

spectrum no longer needed by broadcasters for other uses,

such as emergency and wireless communications.

In 1987, at the request of a coalition of television broadcasters, the FCC began to explore the possibility of using thennascent digital technology to broadcast television programming. See Notice of Inquiry, 2 F.C.C.R. at 5125 ¶ 2. By

1997, the Commission had adopted a standard for DTV

transmissions and had committed itself to the goal of abandoning analog broadcasting and switching all television broadcasts to DTV by the end of 2006. See In re Advanced

Television Systems and Their Impact upon the Existing

Television Broadcast Service, 12 F.C.C.R. 12,809, 12,850 ¶ 99

(1997) (Fifth Report and Order). Shortly thereafter, Congress adopted the Commission’s goal as its own, stating that

‘‘[a] television broadcast license that authorizes analog television service may not be renewed TTT for a period that extends

beyond December 31, 2006.’’ 47 U.S.C. § 309(j)(14)(A). Congress, however, also directed the FCC to grant extensions to

a television station if 15 percent or more of the television

households in its market cannot receive DTV programming

either from a cable or satellite service carrying such programming, or through a television or set-top box with a digital

tuner capable of processing over-the-air DTV signals. Id.

§ 309(j)(14)(B)(iii).

The FCC originally anticipated that market forces would

drive consumers to want and manufacturers to provide tuners
5

capable of receiving DTV signals, see, e.g., Fifth Report and

Order, 12 F.C.C.R. at 12,855–56 ¶ 113, but by 2001, the

Commission found that ‘‘DTV receivers are not yet available

in the market in large quantities, and certainly not in sufficient volume to support a rapid transition to an all-digital

broadcast television service.’’ Further Notice of Proposed

Rulemaking, 16 F.C.C.R. at 5985 ¶ 107. The FCC thus

requested comment on ‘‘whether a requirement to include

DTV reception capability in certain new television sets could

help to develop the production volumes needed to bring DTV

prices down to where they are more attractive to consumers

and thereby promote more rapid development of high DTV

set penetration.’’ Id. After receiving comments from numerous parties (including CEA, which opposed any digital

tuner requirement) the FCC issued its Digital Tuner Order

in August 2002. The FCC directed that, on a phased-in basis

starting in July 2004, all televisions sold in the United States

contain a digital tuner.1

The Commission found statutory authority for the Order in

the All Channel Receiver Act, 47 U.S.C. § 303(s). Digital

Tuner Order, 17 F.C.C.R. at 15,989–92 ¶¶ 24–31. ACRA

grants the FCC authority to require that televisions shipped

in interstate commerce for sale ‘‘be capable of adequately

receiving all frequencies allocated by the Commission to

television broadcasting.’’ 47 U.S.C. § 303(s). The FCC acknowledged that when ACRA was enacted in 1962, Congress

was addressing the ‘‘specific problem’’ of the ‘‘lack of TV sets

that could receive UHF channels.’’ Digital Tuner Order, 17

F.C.C.R. at 15,990 ¶ 26. The Commission nevertheless rejected the argument of CEA and others that ACRA’s grant of

1 The digital tuner mandate is phased in as follows: by July 1,

2004, 50 percent of televisions with screens sized 36 inches or

larger; by July 1, 2005, 100 percent of televisions 36 inches or

larger, and 50 percent of televisions with screens between 25 inches

and 36 inches; by July 1, 2006, 100 percent of televisions with

screens between 25 inches and 36 inches; and by July 1, 2007, 100

percent of televisions with screens between 13 inches and 24 inches,

and 100 percent of other devices (DVD players, VCRs, etc.) that

receive broadcast television signals. See Digital Tuner Order, 17

F.C.C.R. at 15,996 ¶ 40; 47 C.F.R. § 15.117(i)(1) (2003).
6

authority was so limited, concluding that ‘‘[w]hile Congress

discussed the need for a statutory remedy in [the UHF]

context, it crafted the statutory language more generally —

to address analogous situations that might arise in the future.’’ Id. And the Commission found that the problems it

faced in the transition to DTV, in fact, strongly resembled the

logjam of conflicting forces that stifled the development of

UHF broadcasting in the early 1960s.

Here, the Commission is faced with a similar problem —

that is, the reluctance of the public to buy DTV receivers

until there are DTV stations offering attractive DTV

programs, and the lack of incentive for broadcasters to

provide good attractive DTV programming in the absence of an audience which will attract advertisers. As

Congress and the Commission found in the UHF context,

requiring the manufacture of DTV receivers will address

the root cause of the problem, namely the lack of television receivers capable of receiving DTV signals.

Id. at 15,990 ¶ 27.

The Commission acknowledged that it had, in earlier administrative proceedings, rejected calls for a digital tuner

mandate, believing that market forces were sufficient to carry

out the DTV transition. Id. at 15,993 ¶ 32; see also Fifth

Report and Order, 12 F.C.C.R. at 12,855–56 ¶ 113. By 2002,

however, with the statutory 2006 deadline fast approaching,

the Commission had concluded that ‘‘insufficient progress is

being made towards bringing to market the equipment consumers need to receive broadcasters[’] DTV signals over-theair.’’ Digital Tuner Order, 17 F.C.C.R. at 15,993 ¶ 33. The

Commission decided that requiring digital tuners in all new

televisions on a phased-in basis would ‘‘provide the best

means for rapidly providing consumers with the means to

receive the DTV signals that are now being transmitted by

broadcasters while minimizing the impact of this requirement

on equipment manufacturers and consumers.’’ Id. at 15,995

¶ 39.
7

The Digital Tuner Order was published in the Federal

Register on October 11, 2002, and CEA filed its petition for

review that same day.

II.

A. Jurisdiction.

We are met at the outset with a suggestion that we lack

jurisdiction to consider CEA’s challenge. CEA — apparently

not wanting the sun to set on the Digital Tuner Order

unchallenged — filed its petition for review the very day the

Order was published in the Federal Register. Shortly before

oral argument, the FCC filed a letter noting that its rules

provide that ‘‘the time for seeking review of documents in

rulemaking proceedings begins the day after publication in

the Federal Register.’’ Letter of FCC, Sept. 11, 2003 (emphasis added). Citing our decision in Adams Telcom, Inc. v.

FCC, 997 F.2d 955 (D.C. Cir. 1993) and an unpublished order

in Time Warner Entm’t Co. v. FCC, No. 99–1500, 2000 WL

274211 (D.C. Cir. Feb. 8, 2000), the FCC surmised that its

rules, as construed by our cases, ‘‘can be read to suggest that

the Court lacks jurisdiction over a petition for review filed the

day of Federal Register publication.’’ Letter of FCC, Sept.

11, 2003 (emphasis added).

As a court of limited jurisdiction, we take seriously any

suggestion that we lack the authority to act — even one

raised at the eleventh hour and not embraced as an argument

but instead meekly noted. We begin our inquiry with the

text. The rule cited by the Commission provides that ‘‘the

first day to be counted when a period of time begins with an

action taken by the Commission TTT is the day after the day

on which public notice of that action is given.’’ 47 C.F.R.

§ 1.4(b). The rule further states that for all documents in

notice and comment rulemaking proceedings, the date of

public notice is the date of publication in the Federal Register. Id. § 1.4(b)(1). In Adams Telcom, we interpreted Rule

1.4(b)(1) to mean that, in notice and comment rulemaking

proceedings, ‘‘the time for seeking judicial review begins on

the day after the document is published in the Federal

Register.’’ 997 F.2d at 956. And in the unpublished order in
8

Time Warner, we relied on Adams Telcom to dismiss two

Time Warner petitions for review because they had been filed

on the same day as the publication of the order under review,

see Time Warner, 2000 WL 274211 — although, as a practical

matter, it made no difference because Time Warner, fearing

exactly this jurisdictional defect, had filed identical petitions

on the following day, see Time Warner Entm’t Co. v. FCC,

240 F.3d 1126 (D.C. Cir. 2001) (addressing merits of Time

Warner’s petition for review). Judge Williams dissented

from the order of dismissal, stating that he did not believe

that Rule 1.4(b) ‘‘is intended to foreclose filing a petition for

review on the day public notice is given, which petitioner

refers to as day 0.’’ Time Warner, 2000 WL 274211. The

majority of the panel, however, evidently believed itself bound

by Adams Telcom’s prior interpretation of Rule 1.4(b).

Certainly this court lacks jurisdiction to entertain a prematurely filed petition. See Western Union Tel. Co. v. FCC, 773

F.2d 375, 378 (D.C. Cir. 1985); 28 U.S.C. § 2344 (parties

aggrieved by final agency order ‘‘may, within 60 days after its

entry, file a petition to review the order’’) (emphasis added).

We believe, however, that the panel in Adams Telcom incorrectly paraphrased Rule 1.4(b) when it stated that ‘‘the time

for seeking judicial review begins on the day after the document is published in the Federal Register.’’ 997 F.2d at 956.

That is not what the rule says. See 47 C.F.R. § 1.4(b) (‘‘the

first day to be counted when a period of time begins with an

action taken by the Commission TTT is the day after the day

on which public notice of that action is given’’). Rather than

establishing a waiting period for seeking judicial review, Rule

1.4(b) operates as a rounding rule for the computation of

deadlines. The purpose of the rule is ‘‘to detail the method

for computing the amount of time within which personsTTTmust act in response to deadlines established by the

Commission’’; the rule specifies the method for ‘‘computing a

terminal date’’ for seeking judicial review — not a starting

date. 47 C.F.R. § 1.4(a), (d) example 9 (emphases added).

An interpretation of Rule 1.4(b) that interposes a jurisdictional waiting period before one may seek judicial review is

thus contrary not only to common sense, but to the text of
9

Rule 1.4 as well. We accordingly disavow the interpretation

of Rule 1.4(b) stated in Adams Telcom and the unpublished

order in Time Warner. We hold that a petition for review

filed after public notice, but still on the same day, is not

premature under 28 U.S.C. § 2344.2

B. Statutory Authority.

Satisfied that CEA was not guilty of a false start, we turn

now to its argument that the FCC had no authority under the

All Channel Receiver Act, 47 U.S.C. § 303(s), to issue the

Digital Tuner Order.

When a litigant challenges the Commission’s interpretation

of a statute that it administers, our review is governed by the

familiar dictates of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984).

‘‘We start our analysis, as always, by asking whether Congress has spoken to ‘the precise question at issue.’ ’’ Wells

Fargo Bank, N.A. v. FDIC, 310 F.3d 202, 205 (D.C. Cir. 2002)

(quoting Chevron, 467 U.S. at 842). To determine whether

Congress has so spoken, we apply ‘‘traditional tools of statutory interpretation — text, structure, purpose, and legislative

history.’’ Pharmaceutical Research & Mfrs. of Am. v.

Thompson, 251 F.3d 219, 224 (D.C. Cir. 2001). If it has, ‘‘the

inquiry is at an end; the court ‘must give effect to the

unambiguously expressed intent of Congress.’ ’’ FDA v.

Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000)

(quoting Chevron, 467 U.S. at 843). When the statute is

silent or ambiguous on the precise question in dispute, we

move to Chevron’s second step, and defer to the agency’s

interpretation if it offers a ‘‘permissible construction of the

statute.’’ Chevron, 467 U.S. at 843.

2 The problematic language in Adams Telcom is dicta — the case

involved calculating the filing deadline and not a petition for review

filed on the same day as the order sought to be reviewed — and

Time Warner is a nonbinding unpublished order. Nevertheless,

because this part of our decision rejects a prior statement of law, it

has been considered separately and approved by the full court. See

Irons v. Diamond, 670 F.2d 265, 268 n.11 (D.C. Cir. 1981).
10

‘‘We begin, as always, with the plain language of the statute

in question.’’ Citizens Coal Council v. Norton, 330 F.3d 478,

482 (D.C. Cir. 2003). Enacted in 1962, ACRA includes among

the ‘‘[p]owers and duties of [the] Commission,’’ 47 U.S.C.

§ 303 (title), the ‘‘authority to require that apparatus designed to receive television pictures broadcast simultaneously

with sound be capable of adequately receiving all frequencies

allocated by the Commission to television broadcasting.’’ Id.

§ 303(s). CEA concedes that ‘‘[o]n its face, ACRA appears to

authorize the Commission to take any action necessary to

ensure that television sets can adequately receive all over-theair broadcast signals.’’ Pet. Br. at 21. CEA’s objection is

that the Commission ‘‘relies almost entirely on a literal

reading of the statutory language,’’ id. — not the most

damning criticism when it comes to statutory interpretation.

Nevertheless, CEA contends that it should prevail under step

one of Chevron, because the legislative history of ACRA

unambiguously demonstrates that Congress limited the Commission’s power under the statute to ensuring only that

reception of UHF frequencies (channels 14–69) be comparable to that of VHF frequencies (channels 2–13). This argument is meritless.

It is true, as CEA argues, that we ‘‘may examine the

statute’s legislative history in order to ‘shed new light on

congressional intent, notwithstanding statutory language that

appears superficially clear.’ ’’ National Rifle Ass’n v. Reno,

216 F.3d 122, 127 (D.C. Cir. 2000) (quoting Natural Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1127

(D.C. Cir. 1995)). On the other hand, only rarely have we

relied on legislative history to constrict the otherwise broad

application of a statute indicated by its text, see, e.g., American Scholastic TV Programming Foundation v. FCC, 46 F.3d

1173, 1180 (D.C. Cir. 1995), and just recently we reiterated

that ‘‘[w]hile such history can be used to clarify congressional

intent even when a statute is superficially unambiguous, the

bar is high.’’ The Williams Cos. v. FERC, No. 02–5056, slip.

op. at 8 (D.C. Cir. Oct. 10, 2003). There is good reason for

this; the Supreme Court has consistently instructed that

statutes written in broad, sweeping language should be given
11

broad, sweeping application. See New York v. FERC, 122

S. Ct. 1012, 1025 (2002) (where Congress uses broad language, evidence of a specific ‘‘catalyz[ing]’’ force for the

enactment ‘‘does not define the outer limits of the statute’s

coverage’’); PGA Tour, Inc. v. Martin, 532 U.S. 661, 689

(2001) (‘‘[T]he fact that a statute can be applied in situations

not expressly anticipated by Congress does not demonstrate ambiguity. It demonstrates breadth.’’ (internal quotation marks omitted)).

This case does not present the very rare situation where

the legislative history of a statute is more probative of

congressional intent than the plain text. CEA’s lone example, American Scholastic TV, is inapposite. There we reviewed the Commission’s interpretation of a now-repealed

provision of the 1984 Cable Act. The provision in question

stated that ‘‘[i]t shall be unlawful for any common carrier TTT

to provide video programming directly to subscribers in

its telephone service areaTTTT’’ 47 U.S.C. § 533(b)(1) (repealed). The Commission found that the provision did not

extend to video programming delivered via wireless transmission. See American Scholastic TV, 46 F.3d at 1177. In

upholding the Commission’s interpretation, we found that

although the particular provision appeared, on its face, to

enact a flat ban on the transmission of all video programming,

other provisions of the same section created an ambiguity as

to whether the subsection at issue was intended to apply

outside of the cable context. Id. at 1179. We also relied on

Congress’s ‘‘singular focus’’ on cable programming throughout its consideration of the eponymous Cable Act. Id. at

1179–82. Finding the statutory provision ambiguous, we

upheld the Commission’s interpretation under step two of

Chevron as a permissible construction of the statute. Id. at

1182.

American Scholastic TV is thus distinguishable for two

separate and equally compelling reasons. First, in that case

we relied on more than just legislative history; we also relied

on the text of subsections neighboring the provision in dispute. Id. at 1179. CEA does not point to any similar

provision in the Telecommunications Act indicating that

ACRA is meant to apply only to analog broadcasting. Second, in American Scholastic TV, we found only that the
12

provision at issue was ambiguous and that the agency’s

construction was permissible. Id. at 1181–82. CEA asks for

much more — a finding that the legislative history and

structure of ACRA unambiguously foreclose the plain meaning of the text of the statute.3

In any event, the legislative history invoked by CEA does

not demonstrate that Congress meant to limit ACRA’s application to the analog context. That history does show that

Congress was most immediately concerned with empowering

the FCC to address the problem of UHF reception. See, e.g.,

S. Rep. No. 1526, 87th Cong., 2d Sess. 2–4 (1962); H.R. Rep.

No. 1559, 87th Cong., 2d. Sess. 2–5 (1962). But, as the

Commission found in the Digital Tuner Order, nothing in the

legislative history compels (or even suggests) the conclusion

that Congress intended to limit the statute to that specific

application. Digital Tuner Order, 17 F.C.C.R. at 15,989–90

¶ 25.4

 The use of broad language in ACRA — speaking only

of ‘‘receiving all frequencies allocated by the Commission to

television broadcasting,’’ 47 U.S.C. § 303(s) (emphasis add3 In support of its more limited reading of ACRA, CEA also

invokes our decision in Electronic Industries Ass’n v. FCC, 636

F.2d 689 (D.C. Cir. 1980) (EIA), but its reliance on that case is

similarly misplaced. In EIA we struck down an FCC order, issued

under ACRA, that required televisions to provide enhanced UHF

reception. We held that ACRA’s term ‘‘adequately receiving’’

indicated that the FCC’s authority under the statute was limited to

ensuring ‘‘adequate’’ reception of channels, and did not extend to

providing for enhanced reception. Id. at 698. We did not, in EIA,

confront the issue of whether the FCC’s authority in ACRA was

limited to analog broadcasting or the VHF and UHF frequency

bands.

4 We also find unpersuasive CEA’s references to two recent

episodes of congressional inaction on the question of whether to

mandate the inclusion of digital tuners in televisions. ‘‘Congressional inaction lacks persuasive significance because several equally

tenable inferences may be drawn from such inaction, including the

inference that the existing legislation already incorporated the

offered change.’’ Pension Benefit Guaranty Corp. v. LTV Corp.,

496 U.S. 633, 650 (1990) (internal quotation marks omitted).
13

ed) — to solve the relatively specific problem of UHF reception, militates strongly in favor of giving ACRA broad application. See Lousiana Pub. Serv. Comm’n v. FCC, 476 U.S.

355, 373 (1986) (when narrow language will suffice to solve

the particular problem at issue, Congress’s choice of broad

language demonstrates the statute’s intended breadth of application). We should ‘‘not resort to legislative history to

cloud a statutory text that is clear.’’ Ratzlaf v. United States,

510 U.S. 135, 147–48 (1994); accord Air Transport Ass’n of

Canada v. FAA, 323 F.3d 1093, 1096 (D.C. Cir. 2003) (‘‘ordinarily, we do not read legislative history to create otherwise

non-existent ambiguities’’). We decline CEA’s invitation to

do so here.

Because the FCC’s interpretation is not foreclosed by

Chevron step one, we proceed to the Chevron step two

inquiry — whether the FCC’s interpretation of the statute is

reasonable. Here, however, CEA advances no additional

argument beyond those already discussed as part of step one,

and so we have no basis for finding the Commission’s interpretation unreasonable. In any event, the language of ACRA

plainly admits of the Commission’s interpretation, and it

therefore is a permissible construction of the statute.

C. APA Review.

We turn to CEA’s arguments that the Digital Tuner Order

runs afoul of the Administrative Procedure Act’s requirements of reasoned decisionmaking. Under the APA, we may

vacate the Commission’s Digital Tuner Order only if it is

‘‘arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.’’ 5 U.S.C. § 706(2)(A). Our review is

thus necessarily deferential; we presume the validity of the

Commission’s action and will not intervene unless the Commission failed to consider relevant factors or made a manifest

error in judgment. Office of Communication, Inc. of the

United Church of Christ v. FCC, 327 F.3d 1222, 1224 (D.C.

Cir. 2003).

CEA contends that in the Order the FCC: (1) addressed a

problem that does not exist; (2) chose an irrational means to

ensure that households can access DTV; and (3) failed to
14

assess reasonably the costs of its mandate to consumers. We

find each of these arguments unpersuasive.

1. CEA first argues that digital tuners are presently

commercially available in a quantity sufficient to meet the

congressional timetable and that, therefore, the Digital Tuner

Order, by ordering the manufacture of more digital tuners,

seeks to solve a problem that does not exist. While it is true

that the FCC must ‘‘do more than ‘simply posit the existence

of the disease sought to be cured,’ ’’ the Commission is

entitled to ‘‘appropriate deference to predictive judgments

that necessarily involve the expertise and experience of the

agency.’’ Time Warner Entm’t Co., 240 F.3d at 1133 (quoting Turner Broadcasting Sys. v. FCC, 512 U.S. 622, 664

(1994)).

The Commission is not crying wolf. Widespread ability

among consumers to receive DTV signals is a prerequisite to

meeting Congress’s 2006 target date for the completion of the

DTV conversion and the cessation of analog broadcasting.

See 47 U.S.C. § 309(j)(14)(A). Congress has decreed that, its

target date notwithstanding, analog broadcasting must continue in markets where at least 15 percent of households are

unable to receive DTV. Id. § 309(j)(14)(B). Seizing upon the

FCC’s statement that, at the time of the Order, there were

‘‘17 models of set-top DTV tuners and 23 models of television

receivers with integrated DTV tuners currently on the market,’’ Digital Tuner Order, 17 F.C.C.R. at 15,994 ¶ 35, CEA

argues there is ample availability of over-the-air DTV digital

tuners in the marketplace. CEA here fundamentally misconstrues the nature of the problem: it is not the lack of digital

tuners for sale that is stifling the growth of DTV and

jeopardizing the congressional target date; it is ‘‘the reluctance of the public to buy’’ them. Id. at 15,990 ¶ 27; see also

id. at 15,993 ¶ 34 (‘‘While TTT DTV services reach more than

86% of the nation, the number of consumers with DTV

capable receivers is still very low.’’).

The FCC found that a logjam was blocking the development of DTV: broadcasters are unwilling to provide more

DTV programming because most viewers do not own DTV

equipment, and the lack of attractive DTV programming
15

makes consumers reluctant to invest more in DTV equipment,

which, in turn, reinforces the broadcasters’ decision not to

invest more in DTV programming. See id. at 15,990 ¶ 27.5

As evidence of this diagnosis, the FCC referred to CEA sales

data revealing that, in 2001, approximately 200,000 DTV

tuners were sold nationwide. See id. at 15,993 ¶ 34. Only 0.2

percent of the 105 million television-viewing households in the

nation gained over-the-air DTV capability in 2001. See id. at

15,994 ¶ 35. The FCC also observed that cable and satellite

television subscription services were not filling the gap, noting that the set-top boxes necessary to decode the digital

signals transmitted over a cable or satellite system ‘‘are not

yet widely-deployed.’’ Id. at 15,996 ¶ 36. Consequently,

‘‘[m]ost cable and [satellite] systems are currently carrying

few, if any, digital broadcast signals.’’ Id. at 15,998 ¶ 44.

The Commission’s conclusion that the nation was making

‘‘insufficient progress’’ in the conversion to DTV, id. at 15,993

¶ 33, was thus based on substantial evidence.

2. Pointing out that 85 percent of households receive

television service from a cable or satellite provider, CEA next

argues that a requirement that all televisions include an overthe-air tuner is not a rational means to promote DTV conversion. CEA argues that the Digital Tuner Order forces cable

and satellite households to purchase a digital tuner they do

not want and will not use. This argument fails. First, as a

general matter, the very nature of the authority conferred by

ACRA assumes that the Commission may impose costs on

consumers for features they do not want. For some consumers, that is doubtless the consequence of the transition from

analog to DTV itself. That transition is not a market-driven

migration to a new technology, but rather the unambiguous

command of an Act of Congress. See 47 U.S.C.

§ 309(j)(14)(A). Given Congress’s instruction to end analog

5 As previously noted, the Commission explained that this logjam

was similar in nature to that which blocked development of UHF

channels in the early days of television — a logjam that led to the

enactment of ACRA and the mandate that tuners be capable of

receiving UHF signals. Digital Tuner Order, 17 F.C.C.R. at 15,990

¶ 27.
16

broadcasts by 2007 and the Commission’s finding that there

was no ‘‘trend developing that [would] rapidly provide U.S.

households with the ability to receive DTV signals and bring

the DTV transition to completion,’’ Digital Tuner Order, 17

F.C.C.R. at 15,994 ¶ 35, the Commission reasonably determined to take action to bring digital tuners to ‘‘the market in

quantity and at reasonable prices,’’ id. at 15,993 ¶ 33, so that

the DTV transition may move at the pace required by Congress.

The Commission reasonably determined that a phased-in

requirement that all televisions contain a digital tuner would

necessarily increase production volumes and, through economies of scale, lower the price of digital tuners for all television

purchasers. See id. at 15,995 ¶ 39 (‘‘prices are declining and

will decline even faster as economies of scale are achieved

with increasing volumes of production and production efficiencies are introduced over time’’). This will make the purchase

of DTV equipment more attractive to consumers generally,

and help break the logjam discerned by the Commission.

CEA objects that this is requiring cable and satellite viewers

who do not need over-the-air DTV tuners to saddle some of

the cost of making the tuners more affordable for those who

do, but such a shifting of the benefits and burdens of a

regulation is well within the authority of the responsible

agency.6

6 Additionally we note that subscribers to cable and satellite

television services may avoid any additional costs associated with

the purchase of an over-the-air digital tuner by purchasing a

monitor — essentially a display screen without the capability to

tune over-the-air broadcasts — instead of a television set. The

FCC noted in the Order that monitors used to view cable or

satellite television (but incapable of viewing over-the-air broadcasts)

‘‘would be permissible under our rules.’’ 17 F.C.C.R. at 16,003 ¶ 56;

see also id. at 16,003 n.86 (‘‘The all-channel reception provisions of

Section 15.117(b) of the rules, and indeed the ACRA authority

underlying those provisions, would not apply to receivers that did

not have any capability for receiving broadcast signals over-theair.’’).
17

In addition, because cable and satellite services are carrying few DTV signals, ‘‘a digital tuner may be the only access

a[ ] [cable or satellite] household has to many digital broadcast services during the transitionTTTT [A] tuner requirement would at least provide [cable and satellite] consumers

access to the digital broadcast signals in their market.’’

Digital Tuner Order, 17 F.C.C.R. at 15,998 ¶ 44. Applying

the digital tuner mandate to all televisions not only promotes

the DTV transition, but does so in a manner consistent with

what the FCC found to be consumer expectations that ‘‘the

television they purchase TTT be able to receive over-the-air

broadcast signals.’’ Id. And cable and satellite viewers also

benefit from the breaking of the DTV logjam — as DTV

programming becomes more attractive due to the greater

penetration of DTV equipment, cable and satellite services

can be expected to provide more of that programming to their

customers. See id. at 15,990 ¶ 27.7

3. Finally, CEA argues that the Commission unreasonably assessed the costs of the digital tuner requirement to

consumers. CEA maintains that when the Commission was

faced with broadly differing estimates of the unit cost of a

digital tuner, it failed to make any independent assessment of

7 Shortly before argument in this case, the FCC announced the

adoption of ‘‘plug and play’’ rules governing the compatibility between cable television and digital television sets. See FCC Press

Release, FCC Eases Digital TV Transition for Consumers, 2003

WL 22097536 (Sept. 10, 2003). Under the new ‘‘plug and play’’

rules, televisions labeled as ‘‘DTV Ready’’ must include circuitry

that decodes a DTV signal from any cable provider, eliminating the

need for any set-top ‘‘cable box.’’ Id. Televisions labeled ‘‘Digital

Cable Ready’’ must also include an over-the-air digital tuner, id.,

apparently a relatively noncontroversial requirement since the additional cost is minimal once the circuitry for decoding the cableprovided DTV signal is embedded. See id., statement of Commissioner Kevin J. Martin (stating that it is the expectation of the

Commission that ‘‘manufacturers can now incorporate digital broadcast and cable reception capabilities for approximately the same

cost as the digital broadcast tuner alone’’). These new rules,

however, remain subject to reconsideration by the Commission and

to judicial review, and, indeed, have not yet been published in the

Federal Register. The ‘‘plug and play’’ rules therefore do not affect

our analysis or otherwise influence our decision in this case.
18

the varying estimates, but rather concluded, without any

analysis, that the costs were ‘‘within an acceptable range.’’

Id. at 15,998 ¶ 42. The Commission’s analysis of the varying

cost estimates was hardly a model of thorough consideration.

Nevertheless, our review of the record convinces us that,

given the uncertainty of cost projections and the inherent

unreliability of all available information, the Commission’s

assessment meets the minimum standard for reasoned decisionmaking.

For as long as the Commission has managed the DTV

transition, it has gathered information concerning economies

of scale. See In re Advanced Television Systems and Their

Impact upon the Existing Television Broadcast Service, 7

F.C.C.R. 3340, 3354 ¶ 53 & n.154 (1992) (citing comments

from electronics manufacturers for the proposition that by

the conversion date ‘‘the cost of [advanced] receivers should

have declined from the level of initial prices, as a result of

increased consumer acceptance and higher volume sales’’);

Advanced Television Systems and Their Impact upon Existing Television Broadcast Service, 7 F.C.C.R. 6924, 6958 ¶ 45

& n.161 (1992) (citing broadcast industry studies to state

‘‘equipment costs [will] decline as a result of production scale

and learning curve economies’’); Fourth Further Notice, 10

F.C.C.R. at 10,548 ¶ 51 (‘‘Given the degree of competition that

exists between suppliers of electronic equipment, and expected economies of scale resulting from the proliferation of

digitally based media, we anticipate that declining costs will

translate into reduced prices and increased sales of digital

receivers and converters to consumers.’’).

It was against this backdrop that the Commission, in the

Further Notice of Proposed Rulemaking that immediately

preceded the Digital Tuner Order, sought comments on ‘‘the

initial projected costs of [the digital tuner] requirement as

well as realistic estimates of those costs over time.’’ Further

Notice of Proposed Rulemaking, 16 F.C.C.R. at 5985 ¶ 107.

As to the initial cost of including digital tuning capability in

television sets, the Commission received comments from manufacturers and broadcasters with estimates ranging from

$169 to $250. See Digital Tuner Order, 17 F.C.C.R. at
19

15,983–85, ¶¶ 12, 13, 16. CEA estimated the initial incremental cost at $200. Id. at 15,985 ¶ 16. As to the estimated cost

in 2007 (after completion of the conversion), consultants hired

by the broadcast industry submitted a $16 estimate, while

three manufacturers predicted costs from $50–$75. Id. at

15,997–98 ¶ 42. CEA, by contrast, insisted there would be no

cost reduction ‘‘for the foreseeable future.’’ Id. at 15,985 ¶ 16.

CEA’s grim prediction was inconsistent with the Commission’s long experience with economies of scale, and the Commission was justified in dismissing it as ‘‘unsupported.’’ See

id. at 15,998 n.73. The Commission similarly discounted the

outlying $16 estimate, noting its ‘‘methodological shortcomings.’’ Id. at 15,998 ¶ 42.

The Commission was thus left with long-term estimates of

the incremental cost of a digital tuner ranging from $50 to

$75, each offered up by an entity involved in the manufacture

of digital tuners. The Commission did not subject these

estimates to much in the way of rigorous analysis. But given

the history of rapidly declining prices in other consumer

electronic markets, and because CEA never pointed out possible biases of the commenting firms or presented affirmative

evidence supporting its own $200 estimate, we cannot say that

it was unreasonable for the FCC to conclude — on the basis

of admittedly imperfect evidence and inherent uncertainty —

that the costs of a digital tuner would likely fall to $50–$75 by

2007. See AT&T v. FCC, 832 F.2d 1285, 1291 (D.C. Cir. 1987)

(‘‘When TTT an agency is obliged to make policy judgments

where no factual certainties exist TTT we require only that the

agency so state and go on to identify the considerations it

found persuasive.’’ (internal quotation marks omitted)). We

therefore defer to the Commission’s predictive judgment.

See Melcher v. FCC, 134 F.3d 1143, 1151, 1152 (D.C. Cir.

1998) (‘‘our review of the FCC’s exercise of its predictive

judgment is particularly deferential’’ because where ‘‘the

FCC must make judgments about future market behavior

with respect to a brand-new technology, certainty is impossible’’).

Having adequately estimated the long-range costs of the

digital tuner mandate within a range sufficient for the task at

hand, the Commission assessed the benefits of the Order —
20

principally speeding the congressionally-mandated conversion

to DTV and reclaiming the analog spectrum, see Digital

Tuner Order, 17 F.C.C.R. at 15,994 ¶ 35 — and found the

estimated costs to consumers to be ‘‘within an acceptable

range.’’ Id. at 15,998 ¶ 42. The Supreme Court has emphasized that ‘‘a court is not to substitute its judgment for that of

the agency,’’ Motor Vehicle Mfrs. Ass’n of Am. v. State Farm

Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), a point we have

taken to be ‘‘especially true when the agency is called upon to

weigh the costs and benefits of alternative polices.’’ Center

for Auto Safety v. Peck, 751 F.2d 1336, 1342 (D.C. Cir. 1985)

(Scalia, J.); see also Office of Communication of United

Church of Christ v. FCC, 707 F.2d 1413, 1440 (D.C. Cir. 1983)

(‘‘cost-benefit analyses epitomize the types of decisions that

are most appropriately entrusted to the expertise of an

agency’’). We will not here second-guess the Commission’s

weighing of costs and benefits.

The petition for review is denied.