Court Opinion

ID: 185357
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:31:03+00
Date Added: 2024-06-11T17:26:15.216170
License: Public Domain

237 F.3d 683 (D.C. Cir. 2001)
Bachow Communications, Inc., et al., Appellants/Petitionersv.Federal Communications Commission  and United States of America, Appellees/RespondentsColumbia Millimeter Communications, L.P., et al., Intervenors
Nos. 99-1346, 99-1347, 99-1360, 99-1361, 99-1362, 99-1363, 99-1364, 99-1365, 99-1391, 99-1392, 99-1393, 99-1394 & 99-1533
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 1, 2000Decided February 6, 2001

On Appeals From and Petitions for Review of Orders of the Federal Communications Commission
Robert L. Corn-Revere argued the cause for appellants/petitioners.  With him on the briefs were Catherine E. Stetson, Walter H. Sonnenfeldt, Robert J. Keller, Thomas J. Dougherty, Jr., Christa M. Parker, Louis Gurman, and E. Ashton  Johnston.  Doane F. Kiechel III entered an appearance.
Pamela L. Smith, Counsel, Federal Communications Commission, argued the cause for appellees/respondents.  With  her on the briefs were Christopher J. Wright, General Counsel, Daniel M. Armstrong, Associate General Counsel, Joel I.  Klein, Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Andrea Limmer, Attorneys. Roberta L. Cook, Counsel, entered an appearance for appellee  Federal Communications Commission.
Before:  Edwards, Chief Judge, Sentelle and Randolph,  Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge:

1
The issues in these consolidated  cases center on the Federal Communications Commission's  conversion of its system for awarding licenses in the 39 GHz  (gigahertz) band from a comparative application process to a  public auction.  The 39 GHz band, comprising the 38.6 to 40.0  GHz frequencies on the electromagnetic spectrum, appears to  have attracted little commercial interest until the mid-1990s,  when newly developed technology became available.  Until  late 1995, the Commission processed non-mutually exclusive  applications (that is, applications having no competition for  the same frequency and territory),1 but resolved mutually  exclusive applications by holding a comparative hearing.

2
Increased commercial interest in the 39 GHz band rendered the comparative application system impracticable. From January to November 1995 alone, the Commission  received more than 2,100 applications for licenses.  In late 1994 the Commission also received a telecommunications industry association petition for rulemaking.  In response to  the petition and the growing number of applications, the  Commission considered changing its method of allocating  licenses and eventually adopted a competitive bidding system.

3
The Commission commenced the transition on November  13, 1995, by imposing, without notice and opportunity for  comment, an application freeze.  See 11 F.C.C.R. 1156 (Nov.  13, 1995).  In the course of two Notices of Proposed Rulemaking and two reconsideration orders issued between December 1995 and July 1999, the Commission implemented  interim licensing procedures and disposed of applications still  pending under the comparative application system.  It dismissed without prejudice applications that were not filed at  least 30 days before the November 13, 1995, freeze date, or,  in Commission parlance, that were not "ripe."  It also dismissed "ripe" applications--those filed at least 30 days before  the freeze date--that were mutually exclusive with other  applications on the freeze date and whose mutual exclusivity  had not been resolved by amendment or voluntary dismissal  by December 15, 1995, the cut-off date for amendments.  See  11 F.C.C.R. 4930 (Dec. 15, 1995);  12 F.C.C.R. 2910 (Jan. 17,  1997);  12 F.C.C.R. 18,600 (Nov. 3, 1997);  14 F.C.C.R. 12,428  (July 29, 1999).  Conversely, the Commission processed applications filed at least 30 days before November 13, 1995, and  that were not mutually exclusive on that date or that had  their mutual exclusivity resolved by amendment or voluntary  dismissal by December 15, 1995.2

I.

4
The private parties--the appellants and petitioners--object  to the Commission's dismissal of their pending applications, to  the 30-day ripeness period, and to the amendment cut-off. They do not contest the application freeze itself or the  Commission's adoption of a competitive bidding system.

A. Dismissal of Applications

5
Once the Commission decided to adopt new licensing rules  for the 39 GHz band, it had to choose the effective date of the  rules and dispose of applications still pending under the old  regime.  As appellants see it, the Commission's decision to  dismiss all pending mutually exclusive applications was arbitrary and capricious.  Naturally, they hoped to avoid having  to start the application process all over again in a public  auction.  We have, however, recognized the Commission's  authority to change license allocation procedures midstream. See Maxcell Telecom Plus, Inc. v. FCC, 815 F.2d 1551 (D.C.  Cir. 1987) (upholding change from comparative application  system to lottery);  DIRECTV, Inc. v. FCC, 110 F.3d 816  (D.C. Cir. 1997) (upholding change from pro rata distribution  policy to competitive bidding).

6
In deciding to dismiss applications that either did not  satisfy the 30-day ripeness requirement or were mutually  exclusive, the Commission balanced the need to implement  the new regulatory regime against the effect of upsetting the  expectations of appellants and others.  We perceive no error  in its resolution of these opposing interests.  The Commission  reasonably feared that processing mutually exclusive applications under an antiquated and burdensome comparative application system would diminish the efficiency gains expected  from competitive bidding.  See 12 F.C.C.R. at 18,642.

7
In appellants' view, their side of the balance weighs much  heavier because they obtained rights against prospective competitors who were foreclosed from applying by the Commission's cut-off rules.  Under rules existing when appellants  filed, public notice of the filing of the first application for a  given license triggered a 60-day filing window;  that is,  competing applicants had to file within 60 days of the public  notice or lose their right to file.  See 47 C.F.R.  § 21.31(b)(2)(i) (1995).3  Several applicants for 39 GHz licenses filed more than 60 days before the freeze order, yet saw  their applications dismissed because of mutual exclusivity. Upon reaching the sixtieth day following public notice of the  first application but before the freeze order, the filing rule  theoretically should have closed the application pool to competing filers, protecting these applications from additional  competition.  Appellants complain that the application freeze  and subsequent dismissal of pending mutually exclusive applications defeated the cut-off rule by permitting people who  would have been closed out of applicant pools in the comparative application system to bid for the same licenses in the  public auction.4  In their words, "the Commission's decision  effectively required pending mutually exclusive applicants to  bid against new applicants filing years after the established  cut-off dates."  Brief for Appellants at 58.

8
Appellants claim that McElroy Electronics Corp. v. FCC,  86 F.3d 248 (D.C. Cir. 1996), renders the Commission's  actions arbitrary.  See Brief for Appellants at 57-60.  In  McElroy, we recognized that "as against latecomers, timely  filers who have diligently complied with the Commission's  requirements have an equitable interest in enforcement of the  cut-off rules." 86 F.3d at 257.  That equitable interest arose  in circumstances not present here.  The appellants in McElroy filed cellular applications even though the Commission  had not yet formulated rules for those licenses.  See id. at  250.  The Commission dismissed the applications as premature and later established a one-day filing window.  On the  filing date, which was approximately five years after the  appellants had filed, 517 applicants filed for the Los Angeles  licenses and 494 filed for the Minneapolis licenses.  See id. at  251.  The first time McElroy came to this court, we ordered  the Commission to reinstate, nunc pro tunc, the applications  previously dismissed as premature.  See McElroy Elec. Corp.  v. FCC, 990 F.2d 1351 (D.C. Cir. 1993).  The Commission  then decided that the reinstated applicants would have to  enter a lottery with those who filed under the later one-day  window, reasoning that the public notices announcing appellants' applications did not establish a deadline for competing  applications.  See 86 F.3d at 252.  We reversed, citing the  Commission's "notice and cut-off procedure under which the  applications at issue ... were filed, [wherein] competing  applicants were entitled to participate in a comparative hearing or lottery only if they filed their applications within 'sixty  (60) days after the date of the public notice listing the first of  the conflicting applications as accepted for filing'."  Id. at 253. The issue was "whether the public notices gave sufficient  notice of [the Commission's acceptance of appellants' applications for filing] to cut off third parties' rights."  Id.  We  found the public notice sufficient to trigger the 60-day cut-off  period.  See id. at 257.

9
McElroy stands for the proposition that the Commission  must follow its own rules.  See, e.g., Reuters Ltd. v. FCC, 781 F.2d 946, 950 (D.C. Cir. 1986).  It does not create some  generalized right to exclude competitors.  The "equitable  interest" in McElroy was the applicants' interest in the  Commission enforcing its filing and notice rules, not an  interest in preventing the Commission from changing them. As we have recognized before, the Commission may make  midstream rule adjustments, even though it disrupts expectations and alters the competitive balance among applicants. See Maxcell, 815 F.2d 1551;  DIRECTV, 110 F.3d 816.

10
Moreover, any interest in enforcement of cut-off rules is  just that--an interest, not a vested right:  "timely applicants  have no 'vested right against challenge from untimely competitors,' in the sense of precluding the FCC from ever  granting a cut-off waiver, but they certainly have an equitable

11
interest whose weight it is 'manifestly within the Commission's discretion to consider'."  Florida Inst. of Tech. v. FCC,  952 F.2d 549, 554 (D.C. Cir. 1992).  The Commission's authority to change rules that affect pending applications is bounded  by principles of retroactivity, not by an abstract interest in  excluding competitors.  McElroy holds only that if the Commission decides to process timely applications, it generally  may not also process competing applications filed out of time. The case does not govern the present situation in which the  Commission decides, without violating its rules, not to process  pending mutually exclusive applications at all.5

12
Even if McElroy stood for all that appellants read into it,  they could not have obtained any "equitable interest" to  immunize their applications against dismissal.  The most they  could have obtained is the relief we granted in McElroy--an  order requiring dismissal of applications filed after the cut-off  date.  See 86 F.3d at 259.  McElroy does not require the  Commission to process all applications pending under an  obsolete license allocation system just because applicants who  were otherwise cut off might re-apply in a new system.6

B. The Ripeness Period

13
The Commission imposed a ripeness period co-extensive  with the time period in which competitors had the right to file  competing applications.  The point apparently was to avoid  granting applications under the old system when the time  period for others to file a mutually exclusive application had  not yet expired.  The Commission originally used a 60-day  period, representing the period during which prospective  applicants could file competing applications under the Commission's rules.See 47 C.F.R. § 21.31(b) (1995);  but see  supra note 3 (contemplating shorter filing period under some  circumstances).  It later shortened the period to 30 days,  explaining that "it is our practice to process applications as  soon after the close of the 30-day public notice period as  possible."  See 14 F.C.C.R. at 12,430 & 12,449;  see also 47  C.F.R. § 101.37(c) (1998) (Commission cannot grant application until 30 days after application appears on public notice).

14
The Communications Act, with a few exceptions not relevant here, forbids the Commission to grant an application  "earlier than thirty days following issuance of public notice by  the Commission of the acceptance for filing of such application or of any substantial amendment thereof."  47 U.S.C.  § 309(b).  The Commission reasonably determined that its  ripeness period "will assure fairness to potential applicants  who were precluded by the freeze from filing competing  applications in time to be entitled to comparative consideration."  11 F.C.C.R. at 4989 n.197.  Had the Commission  granted applications filed less than 30 days before the freeze  date, it would have denied potential competing applicants the  30-day filing period the Act guarantees them.

15
The Supreme Court long ago recognized the procedural  rights the Communications Act guarantees to those who file  mutually exclusive applications.  Ashbacker Radio Corp. v.  FCC, 326 U.S. 327 (1945), held that the Commission could not  grant one mutually exclusive application without holding the  comparative hearing required by the Communications Act. See also McElroy, 86 F.3d at 253.  In Kessler v. FCC, 326 F.2d 673 (D.C. Cir. 1963), we decided that Ashbacker procedural rights apply also to potential applicants whose applications would have been mutually exclusive but for an application freeze.  In Kessler, the Commission froze applications  effective close-of-business on May 10, 1962.  Appellants in  that case filed applications between May 11 and June 15,  1962.  Some of the late applicants claimed their applications  were mutually exclusive with applications on file.  Unlike the  present case, the Commission employed no ripeness period; it processed all applications pending on the freeze date.  We  held that the Commission's refusal to process mutually exclusive applications filed after the freeze but that were otherwise  timely denied those applicants their Ashbacker rights:  "those  appellants who tendered applications which are, or become, in  fact mutually exclusive with an application pending on May  11, 1962, or one accepted for filing since that date, are  entitled to participate in a comparative hearing on that application under the Ashbacker case--if any grant is to be  made--and [ ] the Commission may not deprive them of this  right when their applications were timely but were rejected  only because of a temporary freeze on accepting new applications." 326 F.2d at 687-88.  We reasoned that "the substantial effect of a contrary view would be not only to freeze the acceptance for filing of a timely application but to freeze new  applicants permanently out of a right of substance--the comparative hearing on the pending application to which they are  entitled when their application is timely."  Id. at 688.

16
Kessler's reasoning applies here.  Without the ripeness  period, the Commission could have granted applications filed  less than 30 days before the freeze date, abrogating the  Ashbacker rights of prospective applicants who could have  filed timely competing applications but for the freeze.  The  ripeness period quite sensibly guarantees that all applications  that are granted were on public notice for the 30 days  required by the Communications Act.  See 47 U.S.C.  § 309(b).7

C. The Amendment Cut-Off

17
The Commission apparently intended the November 13,  1995, freeze to cut off amendments as well as applications. But the freeze order specified only the latter.  See 11  F.C.C.R. 1156.  Despite this oversight, the Commission, in  the first Notice of Proposed Rule Making and Order it issued  on December 15, 1995, stated that the November 13 freeze  applied to amendments, except for a limited class of license  modification amendments.  See 11 F.C.C.R. at 4988-90.  In  its first Reconsideration Order, issued on January 17, 1997,  the Commission changed the cut-off date for amendments of right from November 13, 1995, the application freeze date, to  December 15, 1995, the date it promulgated the interim  licensing procedures.8  The Commission recognized that it  was the December 15 order, not the November 13 order, that  "suspended any further action on these amendments."  12  F.C.C.R. at 2918.

18
The amendment cut-off precluded private resolution of  mutual exclusivity after December 15, 1995.  It was no longer  possible for amendments (or, apparently, voluntary dismissals) to cure mutual exclusivity and render an application  eligible for processing under the old regime.  Appellants  claim they had a substantive right to cure mutual exclusivity  that may not be abrogated without notice and comment. Relying on Ashbacker, they insist that "the right of competing  applicants to simultaneous consideration under Ashbacker is a  'right of substance' " and that "equally of substance is an  applicant's right to avoid consolidated treatment and its unintended consequences by means of conflict-resolving minor  amendments and voluntary dismissals."  Brief for Appellants  at 46.

19
The "right to avoid consolidated treatment" finds no support in Ashbacker or any other authorities the appellants  have brought to our attention.  The right to amend is no  more substantive than the right to file an application in the  first place, which we have previously held the Commission  may suspend without notice and comment.  See Kessler, 326 F.2d at 682;  Neighborhood TV Co. v. FCC, 742 F.2d 629, 637  (D.C. Cir. 1984).  Like the rules governing the filing of  applications, rules permitting (or suspending) amendments  are "rules of agency organization, procedure, or practice"  exempt from the Administrative Procedure Act's notice and  comment requirement.  See 5 U.S.C. § 553(b)(A);  James V.  Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 280-82 (D.C.  Cir. 2000);  JEM Broad. Co. v. FCC, 22 F.3d 320, 326-28 (D.C. Cir. 1994) (FCC "hard look" rules prohibiting amendment did not require notice and comment:  "we conclude that  a license applicant's right to a free shot at amending its  application is not so significant as to have required the FCC  to conduct notice and comment rulemaking, particularly in  light of the Commission's weighty efficiency interests."); Maxcell, 815 F.2d at 1561 (stating but not deciding that a  "cut-off rule arguably may be understood as an 'interpretive'  rule, a rule of agency 'procedure' or of agency 'practice', any  of which is exempt from the notice and comment requirements").

20
We also reject appellants' claim that the amendment cut-off  was arbitrary and capricious.9  Appellants' panoply of argumentsin this regard reduce to a central premise:  refusal to  accept amendments after December 15, 1995, "artificially  preserved mutual exclusivity with respect to [39 GHz] applications, creating the fiction that applications that were mutually exclusive before December 15, 1995, remained so even  after their frequency conflicts had been resolved" in violation  of Ashbacker.  Brief for Appellants at 49-50 (emphasis omitted).  Appellants read Ashbacker far too broadly.10  In the  Court's words:  "We only hold that where two bona fide  applications are mutually exclusive the grant of one without a  hearing to both deprives the loser of the opportunity which  Congress chose to give him."  Ashbacker, 326 U.S. at 333; see also Maxcell, 815 F.2d at 1561 ("Ashbacker therefore  simply is irrelevant to a situation where a license applicant  complains that its application was not considered due to a  'regulation' that 'for orderly administration, requires an application ... to be filed within a certain date'.");  Reuters, 781 F.2d at 951 (criticizing an attempt to bootstrap a fairness  argument onto Ashbacker's narrow holding).  Ashbacker constrains only the grant of mutually exclusive applications;  it  does not touch the Commission's authority to dismiss or  suspend amendments of mutually exclusive applications.

II.

21
Appellants contend that the Commission's treatment of  their applications violated 47 U.S.C. §§ 309(j)(6)(E) and  309(j)(7).  We hold the former was not violated and the latter  does not apply.

A. Section 309(j)(6)(E)

22
The Communications Act permits the Commission to adopt  a system of competitive bidding to resolve mutually exclusive  applications subject to "obligations described in paragraph  (6)(E)."  47 U.S.C. § 309(j)(1).  Paragraph (6)(E) of subsection 309(j) states that "nothing in [the subsection authorizing  competitive bidding], or in the use of competitive bidding,  shall be construed to relieve the Commission of the obligation  in the public interest to continue to use engineering solutions,  negotiation, threshold qualifications, service regulations, and  other means in order to avoid mutual exclusivity in application and licensing proceedings."  47 U.S.C. § 309(j)(6)(E).

23
In appellants' view, subsection (j)(6)(E) requires the Commission to permit private resolution of mutual exclusivity. We think the obligation that provision imposes on the Commission in designing a competitive bidding system is something less than allowing license applicants to file applications  or amend them at will under an obsolete licensing system. Subsection (j)(6)(E) affirms Congress' view that statutory  competitive bidding authority does not wholesale replace "engineering solutions, negotiation ... and other means" to  avoid mutual exclusivity;  it does not, as appellants would  have it, forbid resort to competitive bidding unless no other  means to resolve mutual exclusivity are available.  In Benkelman Telephone Co. v. FCC, 220 F.3d 601, 606 (D.C. Cir.  2000), we rejected the argument that the Commission created "artificial" mutual exclusivity in adopting a competitive bidding system:  "having found the policy changes in the public  interest, the Commission was authorized to implement them  without regard to section 309(j)(6)(E)[,] which imposes an  obligation only to minimize mutual exclusivity 'in the public  interest' and 'within the framework of existing policies'." Orion Communications Ltd. v. FCC, 213 F.3d 761 (D.C. Cir.  2000), also refutes appellants' contention.  There we held that  the Commission is not required to allow bidders to use  negotiated settlements to reduce mutual exclusivity;  settlements may be " 'other means' of avoiding mutual exclusivity,  but the statute cannot be read to direct the FCC to adopt all  other means available."  Id. at 763.  As we stated in DIRECTV, "nothing in § 309(j)(6)(E) requires the FCC to adhere to a policy it deems outmoded 'in order to avoid mutual  exclusivity in ... licensing proceedings';  rather, that provision instructs the agency, in order to avoid mutual exclusivity,  to take certain steps, such as the use of an engineering  solution, within the framework of existing policies." 110 F.3d  at 828;  see also Orion, 213 F.3d at 763;  Benkelman, 220 F.3d  at 605.

B. Section 309(j)(7)

24
Title 47, U.S.C. § 309(j)(7) restricts consideration of the  public fisc in certain of the Commission's decisions.11  As the introductory clauses of § 309(j)(7)(A) & (B) indicate, the  restriction pertains only to three types of decisions, none of  which is implicated here.  The covered decisions concern  assignment of bands of frequencies to classes of stations  under 47 U.S.C. § 303(c), development of alternative payment  methods under 47 U.S.C. § 309(j)(4)(A), and area designations and bandwidth assignments under 47 U.S.C.  § 309(j)(4)(C).  Section 309(j)(7) does not restrict the Commission's choice of an overall license allocation mechanism.

25
* * *

26
The Commission's dismissal of pending 39 GHz applications, use of a 30-day "ripeness" period, and imposition of an  amendment cut-off date were reasonable and in accordance  with law.  We therefore deny the petitions for review and  affirm the Commission's orders.12

27
So ordered.

Notes:

1
 See, e.g., 47 C.F.R. § 101.45(a) ("the Commission will consider  applications to be mutually exclusive if their conflicts are such that  the grant of one application would effectively preclude by reason of  harmful electrical interference, or other practical reason, the grant  of one or more of the other applications").

2
 The Commission made other changes to the licensing system  not relevant to this appeal.  For example, it replaced applicant defined rectangular service areas with Commission-defined geographic areas.  See 12 F.C.C.R. at 18,610.

3
 The filing rule also provided a shorter time period, but not less  than 30 days, in cases where the Commission "takes final action on  the previously filed application."  47 C.F.R. § 21.31(b)(2)(ii) (1995).

4
 We doubt whether 39 GHz licenses in the public auction are  really the same as the licenses in the comparative application  system.  As noted previously, the Commission changed the manner  in which it designated service areas for those licenses, in part to  reduce mutual exclusivity problems.  See supra note 2;  12 F.C.C.R.  at 18,610.  Because an application pool consists of a set of mutually  exclusive applications or chains of mutually exclusive applications,  see 47 C.F.R. § 21.31(b) (1995), licensing changes that alter mutual  exclusivity presumably will also alter application pools.  In any  event, we find the Commission's dismissal of pending mutually  exclusive applications lawful regardless of the identity of licenses in  the comparative application and competitive bidding systems.

5
 In Title III of the Balanced Budget Act of 1997, Congress  amended the Communications Act to include a right to exclude  competitors.  See Pub. L. No. 105-33, § 3002(a)(3), 111 Stat. 251,  260 (1997) (codified at 47 U.S.C. § 309(l )).  That provision states: "With respect to competing applications for initial licenses or construction permits for commercial radio or television stations that  were filed with the Commission before July 1, 1997, the Commission  shall (1) have the authority to conduct a competitive bidding proceeding pursuant to subsection (j) to assign such license or permit; [and] (2) treat the persons filing such applications as the only  persons eligible to be qualified bidders for purposes of such proceeding."  47 U.S.C. § 309(l ).  Neither party cited this provision. In any event, it would not affect our analysis because appellants  have not alleged that the Commission has permitted entities who  did not apply before July 1, 1997, to bid for licenses.

6
 We also reject appellants' argument that the Commission departed from its own precedents in dismissing pending applications. See Brief for Appellants at 62-65.  Prior instances in which the  Commission has adopted a new license allocation system yet processed applications pending under the old one rested on different  fact-specific cost/benefits balances the Commission drew under  Maxcell.  See 815 F.2d at 1554;  Brief for Appellee/Respondents at  20-21.  In the wireless cable services order appellants cite, the  Commission expressly premised its decision "on the basis of this  record."  10 F.C.C.R. 9589 (1995) (para. 92).  Significantly, that  order involved a small number of pending applications.  Id. at para.  89;  cf. Kessler v. FCC, 326 F.2d 673, 686 (D.C. Cir. 1963) ("Nor do  we dispute the Commission's judgment in this instance that equitable considerations required or at least justified the processing of  pending applications where an analysis showed that they involved  potential grants not so numerous as to frustrate the ends sought in  the rule making proceeding.").  Similarly, in the commercial broadcast and ITFS proceedings, the Commission found that "the reopening of filing windows would certainly not expedite the disposition of the pending applications or the commencement of service to  the public, but would produce further delays."  13 F.C.C.R. 15,920  (1998) (para. 108).

7
 Appellants cite the principle that Ashbacker "applies not to  prospective applicants, but only to parties whose applications have  been declared mutually exclusive."  Brief for Appellants at 28  (quoting Reuters Ltd. v. FCC, 781 F.2d 946, 951 (D.C. Cir. 1986)). We have held that not everybody interested in a telecommunications license has a right to a comparative hearing, that the right  inheres in those who actually file timely, mutually exclusive applications.  See Reuters, 781 F.2d at 951.  But we have also held that  Ashbacker rights inhere in potential applicants whose right to file a  timely competing application is frustrated by a Commission freeze  order.  See Kessler, 326 F.2d at 686-88.  There is such a class of  potential applicants in this case--those whose timely applications  would be mutually exclusive with applications filed in the 30 days  preceding November 13, 1995--and Ashbacker applies to them.

8
 Commission rules at the time defined an amendment of right as  an amendment that "cures a mutually exclusive situation without  creating a new one."  12 F.C.C.R. at 2918;  47 C.F.R. §§ 101.29 &  101.45 (1997).

9
 Contrary to appellants' assertion, the Commission provided a  reasoned basis for its action.  The Commission adequately explained that "accepting and processing such amendments would  burden Commission resources and could lead to results inconsistent  with our intent in this proceeding to update the regulatory structure of the 39 GHz band in light of contemporary market conditions."  14 F.C.C.R. at 12,437-38;  see also id. at 12,447 (The  Commission "froze new applications for 39 GHz licenses because of  its concern that applications filed under the former rules may not  conform to the technical and service requirements being considered. For the same reason, it froze certain amendments to pending 39  GHz applications....");  Maxcell, 815 F.2d at 1555 (accepting Commission's efficiency justification for change from comparative application system to lottery).

10
 The right to a hearing recognized in Ashbacker applies only in  a comparative application system.  See 47 U.S.C. § 309(a) & (e)  (Communications Act hearing provision for applications to be granted on the basis of "public interest, convenience, and necessity").  It  does not apply when licenses are allocated by lottery or auction. See 47 U.S.C. § 309(i) & (j);  McElroy, 86 F.3d at 253 n.5.

11
 Section 309(j)(7)(A) states:  "In making a decision pursuant to  section 303(c) of this title to assign a band of frequencies to a use for which licenses or permits will be issued pursuant to this  subsection, and in prescribing regulations pursuant to paragraph  4(C) of this subsection, the Commission may not base a finding of  public interest, convenience, and necessity on the expectation of  Federal revenues from the use of a system of competitive bidding  under this subsection."  Section 309(j)(7)(B) states:  "In prescribing  regulations pursuant to paragraph (4)(A) of this subsection, the  Commission may not base a finding of public interest, convenience,  and necessity solely or predominantly on the expectation of Federal  revenues from the use of a system of competitive bidding under this  subsection."

12
 We have considered appellants' other contentions and reject them.