Opinion ID: 496700
Heading Depth: 2
Heading Rank: 4

Heading: The Expansion Issue

Text: 85 Gencom launches two attacks on the Commission's analysis under this criterion. First, it argues that the Commission's final decision is internally inconsistent in its treatment of Gencom's somewhat novel system design. Brief for Gencom Inc. at 64-65. Second, it asserts that the Commission's consideration of the cost of Gencom's method of expansion conflicts with its earlier refusal to apply cost/benefit analysis to initial coverage under subissue (a)(1). We reject both of Gencom's arguments and affirm the FCC's decision to award no preference under this issue. 86 In its initial decision, the ALJ criticized Gencom's proposal as inconsistent with fundamental principles of cellular design technology. See supra p. 16. He based his conclusion on theoretical writings in the area which suggested that Gencom's plan to reuse adjacent channels within individual cells might lead to co-channel interference. See Phoenix Initial Decision, at p 44, J.A. at 20 (citing MacDonald, The Cellular Concept, 58 Bell Sys.Tech.J. 15 (1979)). In addition, the ALJ cited expensive cell-splits and the concomitant reallocation of channels to new cells as a second and independent flaw in Gencom's proposal. Phoenix Initial Decision at p 44, J.A. at 20. 87 In its final decision the Commission reversed the ALJ's criticism of Gencom's expansion proposal to the extent that a particular set of design principles was used to evaluate the non-conforming CMS' and Gencom's system proposals. Phoenix Final Decision, 56 Rad.Reg.2d (P & F) at 1608 (emphasis added). However, the Commission adopted the ALJ's criticism of Gencom's plan to the extent that it would require costly cell-splits to accommodate demand beyond the first year. Id. at 1609, J.A. at 47. 14 Gencom argues that the Commission did a complete about face on this issue, first rehabilitating its unique design in one breath and then essentially readopting the ALJ's criticisms of it in another. We disagree. 88 The FCC relied on its final decision in the Pittsburgh proceeding in reversing the ALJ's devotion to one particular model of cellular design. See Phoenix Final Decision, 56 Rad.Reg.2d (P & F) at 1609. In MCI Cellular Tel. Co., 96 F.C.C.2d 1015 (1984) (hereinafter Pittsburgh Final Decision ), aff'd, CMS (Pittsburgh), 782 F.2d 182 (D.C.Cir.1985), the Commission determined not to accord a per se preference to any particular arrangement of cells or channels within a cellular system. See Id. at 1029. Specifically, the Commission refused to adopt the MacDonald study's finding that the uniform arrangement of cells in a hexagonal grid was necessary to avoid co-channel interference between cells. Id. at 1030. The FCC indicated that it would not penalize an applicant merely because it chooses not to follow the conventional wisdom concerning cellular system design. Id. at 1029. 89 We see no inconsistency between the FCC's approach in its Pittsburgh decision and its Phoenix decision. The Pittsburgh decision stands for the proposition that a system will not be penalized strictly based on its unique design. It does not indicate that the FCC will not consider the pluses and minuses of both traditional and nontraditional designs outside of any preconceived notions concerning their relative merit. The FCC eschewed a right approach in its Pittsburgh decision in order to avoid discouraging innovation in system design. See Pittsburgh Final Decision, 96 F.C.C.2d at 1029. It would be ironic indeed if the Commission was thereby precluded from judging the relative worth of new system designs on their own merits. 90 The Phoenix decision is consistent with this policy. While disavowing rigid adherence to any one set of design principles, the Commission found Gencom's proposal, unique or not, suffered from independent expansion difficulties. We think that decision was a reasonable one. 91 Finally, Gencom contends that the Commission's consideration of the cost of its expansion plan under issue (b) conflicts with its refusal to consider the economic efficiency of coverage proposals under subissue (a)(1). 92 We reject this argument for several reasons. First, the ALJ's criticism of cell-splitting was not based on cost concerns alone. He noted that the reallocation of channels to new cells, which cell-splitting would necessitate, would also entail service deterioration while changes are being made, and difficulty in expanding to coordinate with adjacent systems. Phoenix Initial Decision at p 44, J.A. at 20. The Commission's initial Cellular Rulemaking specifically alluded to both cell-splitting and an applicant's ability to coordinate the use of its channels with neighboring cellular systems as relevant to the expansion analysis. See 86 F.C.C.2d at 502-03. 93 Moreover, the Commission's consideration of cost under the expansion issue differed markedly from the detailed analysis of coverage costs to expected revenues which Gencom urged the Commission to adopt under issue (a)(1). Under the expansion issue, the Commission simply noted, based on the evidence already before it, that Gencom's expansion costs would probably be greater relative to those of its two competitors. Thus none of the massive filings or attendant delay that the Commission feared would flow from adoption of a cost/benefit analysis of coverage was involved here. As a simple matter of procedure, we think the Commission could take notice of relative cost differences between expansion plans without obligating itself to engage in a wholly different analysis involving a massive influx of new evidence. The Commission has broad discretion to establish the relevant issues in a comparative licensing proceeding. See United States v. Storer Broadcasting Co., 351 U.S. 192, 203-04, 76 S.Ct. 763, 770-71, 100 L.Ed. 1081 (1956). We cannot say that discretion has been abused in this case.