Opinion ID: 2976711
Heading Depth: 3
Heading Rank: 3

Heading: Arbitrary and Capricious Analysis

Text: As their final ground for relief, petitioners challenge the FCC’s rule-making activity as arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the law. Specifically, petitioners insist that the Order is based on a record replete with “allegations against LFAs which are anonymous, hearsay-based, inaccurate, and outdated.” (Petitioner ACM’s Br. 7.) Notwithstanding petitioners’ contention, we conclude that the FCC’s rulemaking activity was rooted in a sufficient evidentiary basis. The contours of judicial review for arbitrary and capricious agency behavior are well-established. Courts deem agency action to be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983). Likewise, agency action is “not in accordance with the law” when “it is in conflict with the language of the statute relied upon by the agency.” City of Cleveland v. Ohio, 508 F.3d 827, 838 (6th Cir. 2007). Pursuant to arbitrary-and-capricious review, we must canvass the record to determine whether there exists a “rational connection between the facts found and the choice made.” State Farm Mut. Auto Ins. Co., 463 U.S. at 43 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)). Upon conducting this searching inquiry, we are required to grant “controlling weight” to the agency’s regulatory activity “unless it is plainly erroneous or inconsistent with” the underlying statute. Battle Creek Health System, 498 F.3d at 409. Turning to the record, it appears that the FCC spearheaded its regulatory activity only after pursuing a more than adequate fact-finding endeavor. That is, there is ample record evidence supporting the Commission’s finding that the operation of the franchising process had impeded competitive entry in multiple ways. Prior to promulgating the Order, the FCC obtained a massive record consisting of 465 comments. These 465 comments created a picture of excessive delay in the grant of new franchises. For example, Verizon’s comments indicated that, of its 113 franchise negotiations pending as of March 2005, only ten resulted in franchise grants after one year. Likewise, comments from petitioner NTCA reflected that a “common complaint . . . is that applications for franchising authority languish, unreasonably delaying the franchise process and the ability of competitors to offer service.” (JA 1587.) Similar comments from BellSouth and other service providers make clear that the Order’s attempt to remedy the problem of undue delay was consistent with the evidence before the Commission and represents a “rational connection between the facts found and the choice made.” State Farm Mut. Auto Ins. Co., 463 U.S. at 43 (quoting Burlington Truck Lines, 371 U.S. at 168). Nos. 07-3391/3569/3570/3571/3572/3573/ Alliance for Community Media Page 20 3574/3673/3674/3675/3676/3677/3824 v. FCC In a similar vein, the 465 comments presented to the Commission contained substantial evidence that build-out requirements were posing significant obstacles to new entrants in providing video and broadband services. For example, comments submitted by service provider Qwest indicated that it withdrew franchise applications in eight different regions due to economically burdensome build-out requirements. Likewise, the record demonstrated that LFAs were imposing various demands on service providers, including those unrelated to cable service, those involving excessive franchise fees, and those involving excessive PEG requirements, that were significantly escalating prospective entrants’ costs and thereby deterring entry. Based on the foregoing, we conclude that the administrative record fully supported the agency’s rulemaking and belies any claims of arbitrary or capricious regulatory activity.