Opinion ID: 740472
Heading Depth: 2
Heading Rank: 2

Heading: Mission

Text: 23 Mission first argues that the Commission was barred from considering its financial qualifications in 1992 because no party had excepted to the ALJ's determination in 1985 that Mission was financially qualified. Mission relies upon an agency rule that [a]ny objection not saved by exception filed pursuant to this section is waived. 47 C.F.R. § 1.277(a). As the Commission points out, however, that rule is a limitation upon parties, not upon the agency itself, which is authorized but not required (in § 1.279) to limit its review of those issues raised in exceptions. See Marlin Broadcasting of Central Florida, Inc. v. FCC, 952 F.2d 507, 514 (D.C.Cir.1992) (although party waives objection not raised in exceptions, Commission may raise any objection sua sponte). Nor is it the case, as Mission alleges, that by raising the issue of Mission's financial qualifications the Commission was reconsidering a question that it had previously decided; only the ALJ had ruled in Mission's favor, and the Commission's 1989 remand specifically instructed the Review Board to consider any other decisionally significant matters. 4 F.C.C.R. at 1789. 24 As a fallback, Mission contends that it was arbitrary and capricious for the Commission to raise the issue of its financial qualifications so many years after the ALJ had first determined that it was qualified. Mission asserts that it was prejudiced in that Mr. Little and the bank officers were by then unable to remember the details of their meeting. Mission would not have been prejudiced by the passage of time if it had relied more upon written documentation in order to certify its reasonable assurance of financial backing. Mission could at any time have asked the participants in the meeting to memorialize their accounts of the meeting, and presumably would have done so if the parties had reached any agreement beyond what is reflected in the bank's second letter to Mission. In short, although an applicant may rely upon oral testimony to demonstrate its financial qualifications, it does so at its peril. 25 In determining that Mission had failed to show that it was financially qualified, the Commission applied the test set out in Scioto Broadcasters, L.P., 5 F.C.C.R. 5158, 5160 (Rev. Bd.1990): 26 [I]n order for the Board to determine that an applicant has reasonable assurance of committed sources of funds from a lending institution, we will review the following [324 U.S.App.D.C. 309] factors: Whether (1) the bank has a long and established relationship with the borrower sufficient to infer that the lender is thoroughly familiar with the borrower's assets, credit history, current business plan, and similar data, or (2) the prospective borrower has provided the bank with such data, and the bank is sufficiently satisfied with the financial information (e.g., collateral guarantees) that, ceteris paribus, a loan in the stated amount would be forthcoming and that the borrower is fully familiar with, and accepts the terms and conditions of the proposed loan (e.g., payment period, interest rate, collateral requirements, and other basic terms). 27 The Commission concluded that Mission could not show that it had a reasonable assurance of financial backing either through the letter it procured from the Crocker National Bank or through testimony concerning Little's meeting with officers of that bank. Crocker was familiar with Little, but the bank officers knew almost nothing about Mission, its other principals, or its plans. Mission argues that the Commission's decision conflicts with Multi-State Communications, Inc. v. FCC, 590 F.2d 1117 (D.C.Cir.1978), in which we reversed the Commission's decision that an applicant for a broadcast permit had not demonstrated a reasonable assurance of its financial qualifications. In that case, however, the bank letter upon which the applicant relied had stressed that the bank was personally and favorably acquainted with several of the [applicant's] stockholders and that the bank expressly conditioned its intent to finance the applicant's venture upon the continuing participation of the stockholders named in the application. Id. at 1118. As the FCC points out, Crocker's letter to Mission evinces no such relationship between that bank and any of Mission's principals. 28 The Commission also notes that, unlike the letter at issue in Multi-State, neither the discussions between Little and the bank officers nor the letter from the bank addressed such basic provisions as the interest rate or term for the proposed loan. Mission argues that the FCC should not attach any significance to the specification of loan terms because the terms of any actual loan would ultimately be based upon market conditions when the loan was made. Surely, however, the FCC did not err in thinking that even the terms reached tentatively between a bank and an applicant for a broadcast permit would reflect the bank's knowledge of and confidence in the shareholders and their business plan. For this reason, the Commission reasonably considers it important to see evidence that the applicant has come to terms with a bank (or other source of financing), albeit subject to a change in market conditions. The noncommittal and vague nature of Crocker's letter and the inability of Mission's witnesses to recall any more specific discussion with the bank provide substantial evidence in support of the Commission's determination that Mission failed to show that it was financially qualified to operate a television station. 29 Finally, Mission argues that even if its certification did not meet the standard announced in 1990 in Scioto Broadcasting, the Commission's decision should still be vacated because that was a new standard that should not have been applied retroactively to Mission's 1984 application. Specifically, Mission argues that in cases decided prior to 1984 the Commission had accepted financial commitments that lacked any specific terms. The Commission correctly points out, however, that Mission did not make this argument before the agency and therefore cannot raise it now. See 47 U.S.C. § 405(a). In a footnote to its Reply Brief, Mission would confess and avoid its waiver on the ground that its competitor Solar explicitly raised the question of the Commission's changed standards. 30 The question then becomes whether Solar raised before the Commission the identical issue that Mission now wishes to present to the court. Natural Resources Defense Council v. EPA, 824 F.2d 1146, 1151 (D.C.Cir.1987). As we have seen (at page 260 n.) Solar argued before the Commission that the agency had retroactively applied to it a more stringent standard for determining whether an applicant may amend its financial certification. Solar's argument gave the Commission no occasion to [324 U.S.App.D.C. 310] pass upon Mission's quite different contention that the FCC required more detail for a bank letter to constitute a reasonable assurance of financing in 1992 than it had required when Mission filed its application in 1984. Therefore Mission may not pursue that argument on appeal.