Source: https://law.justia.com/cases/federal/appellate-courts/cadc/97-1245/97-1245b-2011-03-24.html
Timestamp: 2019-04-18 20:32:49+00:00

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Carl W. Northrop argued the cause for the petitioners and intervenors. Timothy E. Welch, Kenneth E. Hardman, John D. Pellegrin, Frederick M. Joyce, Kenneth D. Patrich and Robert L. Hoggarth were on brief. Ray M. Senkowski, Chris- tine M. Crowe and David A. Gross entered appearances.
I. Klein, Assistant Attorney General, United States Depart- ment of Justice, and Robert B. Nicholson and Andrea Lim- mer, Attorneys, United States Department of Justice, were on brief. Daniel M. Armstrong, Associate General Counsel, and Gregory M. Christopher, Counsel, Federal Communica- tions Commission, entered appearances.
Before: Williams, Sentelle and Henderson, Circuit Judges.
__________ 1 Common carrier paging licensees "gain[ ] the exclusive use of the licensed frequency within their protected service area." PSWF Corp. v. FCC, 108 F.3d 354, 355 (D.C. Cir. 1997). Private carrier paging licensees, on the other hand, "ha[ve] to share their allotted frequency with other such licensees operating in the same geo- graphic area." Id.
2 Applications are considered "mutually exclusive" if only one can be granted because they seek the same license or different licenses that would interfere with each other. See Lakeshore Broadcasting, Inc. v. FCC, 199 F.3d 468, 470 (D.C. Cir. 1999) (citing Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 333 (1945)).
licensees and that the algorithm the FCC used to identify pending mutually exclusive applications violates the Paper- work Reduction Act of 1995 (PRA), 44 U.S.C. ss 3501 et seq. For the reasons set out below we reject each of these arguments and deny the petitions for review.
Before 1996 the FCC allocated licenses for common carrier paging and exclusive private carrier paging service spectrum under the traditional site-specific licensing scheme which required a separate license for each paging transmitter site. Each license application proposed a transmission frequency and set out technical information on the proposed station, including its potential for electrical interference with adjacent stations. See 47 C.F.R. s 22.529 (1996); id. s 22.559. Once an applicant filed, the FCC reviewed each site-specific appli- cation preliminarily for formal compliance and issued public notice of acceptance of filing. See id. s 22.120. Generally, if an applicant's proposed service would overlap and interfere with an incumbent licensee's transmission, the application was denied. See id. s 22.537(a). When mutually exclusive site- specific applications were filed, a single applicant was selected by lottery. See id. s 22.131(c)(1).
to be awarded." Second R&O, 12 F.C.C.R. at 2794. A successful bidder faces "automatic cancellation" of the license if it does not either (1) "provide coverage to one-third of the population within three years of the license grant, and to two- thirds of the population within five years of the license grant" or (2) "provide substantial service to the geographic license area within five years of license grant." Id. at 2765.
In contemplation of the new geographic system, the FCC imposed a filing freeze as of February 8, 1996. On February 19, 1997 the Commission released its Second Report and Order outlining the auction procedures for the new geograph- ic licenses and authorizing the Wireless Telecommunications Bureau to dismiss all pending exclusive paging applications and to either grant or dismiss all pending non-mutually exclusive paging applications. On June 24, 1999 the FCC issued its Third Report and Order affirming the geographic licensing scheme but somewhat modifying its procedures. On August 12, 1999 the FCC issued a public notice announcing the relevant auction procedures for the geographic paging licenses. See Auction of 929 MHz Paging Serv. Spectrum, Public Notice (1999). Applicants for the licenses filed their Short Forms on January 20, 2000 and deposited their upfront payments on February 7, 2000. On February 24, 2000 the FCC conducted the auction.
Six petitions for review of the FCC's rulemaking have been filed at various points in the proceedings and have been consolidated for consideration here.
and dismissed license applicants (applicant petitioners),4 chal- lenge the FCC's new geographic licensing scheme on three grounds. We address--and reject--each ground in turn.
__________ these petitioners or any subgroup of them will be identified as "licensee petitioners."
4 These petitioners, whose applications, filed between November 15, 1995 and February 8, 1996, were dismissed without action because the FCC considered them mutually exclusive, are Robert L. Wagner, Melvia M. Woods, Robert Horn, John Piskor, Mo- hammed Siddiqui and Lenard Travis.
5 The intervenors include AirTouch Paging, Arch Communications Group, Inc., Metrocall, Inc., Nationwide Paging, Inc. and Power- Page, Inc.
dard set forth in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-843, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984), by which the court considers 'whether Congress has directly spoken to the precise question at issue,' id. at 842, and if it has not, 'whether the agency's answer is based on a permissible construction of the statute.' Id. at 843." Community Television, Inc. v. FCC, Nos. 98-1106 et al., slip op. at 5 (D.C. Cir. 2000). We conclude that, while the cited statutory language is ambiguous, the Commission has reasonably construed it to authorize the challenged auctions.
The petitioners first argue modified licenses are not "ini- tial" licenses for which section 309(j)(1) authorizes competitive bidding. In order for a license to be considered initial under section 309(j)(1), "a newly issued license must differ in some significant way from the license it displaces." Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 970 (D.C. Cir. 1999). In Fresno we noted that "nothing in the text of [section 309(j)] forecloses [the FCC] from considering a license 'initial' if it is the first awarded for a particular frequency under a new licensing scheme, that is, one involving a different set of rights and obligations for the licensee." Id. The FCC reasonably treated the incumbent licensees' applications for modification under the new geographic system as applications for "initial" licenses under such a "new licensing scheme." The petitioners note that the two licensing schemes provide the same paging service on the same frequencies, basically provide fill-in sites and maintain the same licensee buildout requirements. Nevertheless, they themselves acknowledge, as they must, that the geographic license scheme has wrought 34fundamental alterations to the paging industry's market structure and licensing schemes.34 Petitioners' Br. 30. Under the geographic scheme non-incumbents can compete for the available spectrum, however much remains, on equal footing with incumbents and successful applicants have far greater freedom in selecting transmitter locations; yet at the same time new licensees assume much more responsibility for researching site locations to protect incumbents from interference. Given the new scheme's 34fundamental34 alterations, we hold the FCC reasonably treated modification applications by incumbents as 34initial34 applications within the meaning of section 309(j)(1).
__________ 6 The petitioners also challenge the "substantial service" standard as too vague to permit the FCC to provide notice to licensees of license termination, as required under 5 U.S.C. s 558(c). We find adequate notice is provided, however, in the review procedure the FCC requires before automatic termination can occur. See Brief of Respondents at 28.
F.C.C.R. at 2767.7 Geographic licensees, by contrast, enjoy no similar protection from interference. Because of this distinc- tion, we conclude the FCC reasonably accorded the two groups different treatment.
__________ 7 In addition, geographic licensees are required to provide con- struction information upon request. See 47 C.F.R. s 22.529(c).
8 PRA section 3507(a) provides that "[a]n agency shall not con- duct or sponsor the collection of information unless in advance of the adoption or revision of the collection of information ... the agency has" submitted the proposed collection of information to the OMB Director, "the [OMB] Director has approved the proposed collection of information ...; and ... the agency has obtained from the [OMB] Director a control number to be displayed upon the collection of information." 44 U.S.C. s 3507(a).
9 The FCC contests our jurisdiction over the claims of those applicant petitioners who did not file a petition for reconsideration of the FCC's dismissal of their applications. See 47 U.S.C. s 155(c)(7). The FCC concedes, however, that the court has juris- diction over at least one of the petitions. See Brief of Respondents at 32. The PRA issue is therefore squarely before the court.
__________ 10 The petitioners' alternative argument that the algorithm vio- lates the Administrative Procedure Act, 5 U.S.C. s 553, because promulgated without public notice and comment is waived because the argument was raised for the first time in the petitioners' reply brief. See Grant v. United States Air Force, 197 F.3d 539, 543 (D.C. Cir. 1999) ("[A]n argument first made in a reply brief comes too late.") (citing Fraternal Order of Police v. United States, 173 F.3d 898, 902-03 (D.C. Cir. 1999)).

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