Opinion ID: 2807858
Heading Depth: 3
Heading Rank: 1

Heading: With respect to the Commission’s decision to

Text: establish a 39-month go-dark period, we perceive nothing arbitrary or capricious about the Commission’s choice of that cut-off point. The Commission chose a 39-month period based on the combination of a three-month period within which to apply for a construction permit and a 36-month 29 period within which to transfer facilities to the new channel. Although Sinclair submits that the period is unduly brief, a number of commenters on the broadcaster side, including NAB, pushed for a still shorter period of less than 36 months. Order, ¶ 568 n.1604. Moreover, the Commission’s choice accords with FCC rules requiring licensees constructing entirely new facilities to do so within three years. Id. ¶ 568; see 47 C.F.R. § 73.3598(a). And the transition period also coheres with the Spectrum Act’s requirement that the Commission reimburse reassigned broadcasters for their relocation expenses within three years of the forward auction. Order, ¶ 568; see 47 U.S.C. § 1452(b)(4)(D). Sinclair argues that the Commission failed to account for significant resource and labor shortages in the supply of broadcast-television construction services, which it predicts will only grow during the repacking process under the pressure of increased demand. The Commission specifically noted those concerns, however, and explained that the transition would proceed in phases to “eliminat[e] the need for all stations to obtain their equipment or schedule a tower crew at the same time.” Order, ¶ 571. In addition, the Commission expects service providers to respond to the surge in demand, id., a predictive judgment about a matter within its expertise to which we accord “substantial deference.” See Nuvio Corp. v. FCC, 473 F.3d 302, 306-07 (D.C. Cir. 2006). To be sure, the Commission, while expecting the vast majority of relocated broadcasters to meet the 39-month deadline, acknowledged that some stations might face challenges in doing so. Order, ¶ 569. But the Commission determined that extending the go-dark deadline beyond 39 months “could depress forward-auction participation or the value of investments made by forward auction winners,” some of whom would already have to wait three years before 30 enjoying the fruits of their investments. Id. ¶ 572 & n.1613. We find that the Commission reasonably balanced the Spectrum Act’s competing imperatives. Cf. Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 971 (D.C. Cir. 1999). 2. Sinclair fares no better with respect to its challenge concerning the requirement that “at least two competing licensees participate in the reverse auction” before the Commission accepts and transfers a broadcaster’s relinquished spectrum. 47 U.S.C. § 309(j)(8)(G)(ii). The Commission interpreted the requirement to be met if two broadcast licensees who lack common control successfully submit applications to take part in the reverse auction. Order, ¶¶ 413-14. According to that interpretation, as long as a broadcaster presents a complete application and complies with the auction rules, it need not actually tender a bid to be considered an auction “participant.” Id. ¶ 413. Moreover, the two broadcasters need not operate in a common geographic market or channel location to be considered “competing.” Id. ¶ 414. The statutory language does not foreclose the Commission’s interpretation at Chevron step one. Sinclair maintains that a broadcaster only can be said to “participate” in the auction if the broadcaster accepts the Commission’s offer for its license. But the ordinary meaning of “participate” is to “take part in something (as an enterprise or activity) usually in common with others.” Webster’s Third New International Dictionary, Unabridged (online ed. 2015). Just as one could be said to “take part” in an ordinary auction by arriving at the auction house and considering whether to bid on the offerings, a broadcaster could be said to “take part” in the reverse auction by demonstrating eligibility and considering the Commission’s opening price. The statute’s use of the participial adjective “competing” is likewise 31 ambiguous. To “compete” is to “seek or strive for something (as a position, possession, reward) for which others are also contending,” or to “vie with another or others for or as if for a prize.” Webster’s Third New International Dictionary, Unabridged (online ed. 2015). But the statute does not say what the broadcasters must compete for. See 47 U.S.C. § 309(j)(8)(G)(ii). The Commission resolved those ambiguities by adopting a sensible interpretation in the context of the reverse auction’s design. With regard to “participate,” the Commission reasoned that “the knowledge that another [licensee] might bid will create competitive pressure for a second bidder to accept lower incentive payments than it would absent any competition,” even if the other licensee does not in fact submit a bid. Order, ¶ 413 (emphasis added). And with regard to “competing,” the Commission explained that, under its auction design framework, “regardless of their pre-auction geographic or channel location, all participants in the reverse auction will compete to receive incentive payments from the same limited source—the aggregate proceeds of the forward auction.” Id. ¶ 414. The Commission, as Sinclair argues, adopted a broad understanding of the two-participant requirement: theoretically, the Commission’s rule would be met if any two broadcasters anywhere in the country submit compliant applications and one of them accepts the Commission’s opening offer for its license. Congress, however, enacted no specification that the two licensees must occupy the same geographic market or possess licenses covering substantially the same contour. Congress instead granted the Commission definitional discretion to be exercised in the context of the particular incentive auction the Commission ultimately designed. 32 Sinclair does not purport to offer a better interpretation of “competing” in the context of the reverse auction for broadcast spectrum. And we are hard-pressed to come up with one. That two broadcasters may compete in the provision of television service in a particular geographic market fails to determine the broadcasters’ relationship in connection with the reverse auction. The Commission will offer buy-out prices in that auction on a station-by-station basis, with the prices getting lower in each round. Id. ¶¶ 450, 453. The prices will take into account not only the station’s geographic location but also its potential to cause interference to other stations, because the latter could affect the Commission’s flexibility in making reassignments during the repacking process. Id. ¶ 450. As the Commission explained, “the interdependent nature of the repacking process, where repacking one station may have widespread effects across geographic areas with possible nationwide band plan implications, means that participants will be affecting, and competing with, licensees far beyond their contour, DMA [Designated Market Area], or channel.” Id. ¶ 414. Given the myriad ways in which one broadcaster’s spectrum offerings could be said to be “competing” with the offerings of another, the Commission reasonably settled on a definition focused on the one way in which all broadcasters unquestionably interact with one another in the reverse auction: they all vie for the same limited pool of forward-auction proceeds. The Commission, moreover, persuasively explained why it rejected a geography-based definition of “competing.” Such a rule “could mean that an otherwise willing and eligible broadcast television licensee would not be allowed to bid in the reverse auction if it is the only participant in its DMA.” Id. ¶ 415. We agree with the Commission that if a wireless provider stands willing to pay enough in the forward auction to cover the broadcast licensee’s buy-out price and other 33 associated expenses, there is no apparent reason to deny the Commission the ability to accept the broadcaster’s bid to relinquish that spectrum. To require the Commission to forgo the spectrum merely because no other broadcaster in the same geographic market wishes to sell “would limit the Commission’s ability to allow market forces to determine the highest and best use of spectrum” and prevent acquisition of adequate spectrum to allow the auction to close. Id. We are unable to conclude that Congress intended to bring about such a result.