Court Opinion

ID: 769218
Source: CourtListenerOpinion
Date Created: 2012-04-18 09:53:21+00
Date Added: 2024-06-11T17:55:41.359877
License: Public Domain

216 F.3d 1154 (D.C. Cir. 2000)
AMSC Subsidiary Corporation, Appellantv.Federal Communications Commission, AppelleeGlobalstar, L.P., et al., Intervenors
No. 99-1513
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 17, 2000Decided July 11, 2000Rehearing and Rehearing En BancDenied Sept. 1, 2000*

Appeal of an Order and Authorization of the Federal Communications Commission
Bruce D. Jacobs argued the cause for appellant.  With him  on the briefs were Barry H. Gottfried, Lon C. Levin and  Hadrian R. Katz.
Philip L. Malet, William D. Wallace and William F. Adler  were on the briefs for intervenors supporting appellant.
Gregory M. Christopher, Counsel, Federal Communications  Commission, argued the cause for appellee.  With him on the  brief were Christopher J. Wright, General Counsel, and Daniel M. Armstrong, Associate General Counsel.
Gregory C. Staple and R. Edward Price were on the brief  for intervenors supporting appellee.
Before:  Ginsburg, Randolph, and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge:

1
AMSC Subsidiary Corporation  petitions for review of the Federal Communications Commission's decision to license mobile earth terminals (METs) to  receive Mobile Satellite Service (MSS) from a foreign-licensed  satellite in the Upper L-band of the electromagnetic spectrum.  See In re Applications of SatCom, Order & Authorization, 14 F.C.C.R. 20,798, 20,798 p 1 (1999).  AMSC claims the  Commission effectively modified its license to provide MSS in  the Upper L-band without affording it the hearing required  by   316 of the Communications Act of 1934.  AMSC also  claims the Commission's decision was arbitrary and capricious  because it abandoned without explanation the agency's longstanding policy against authorizing more than one MSS system to operate in the Upper L-band.  In addition, two  intervenors claim the Commission could not lawfully allow  METs in the United States to use a satellite that is not itself  licensed by the Commission to serve the United States. Finding no merit in AMSC's claims, and not reaching that of  the intervenors, we deny the petition for review.

I. Background

2
MSS is a realtime voice and data telecommunications service provided to and from METs located anywhere within the  transmission area of the satellite.  MSS can be used on land,  including areas too sparsely settled to support cellular or  other land-based telecommunications services, at sea, or in  the air.  In a typical MSS system, a MET transmits to the  satellite on one frequency and the satellite simultaneously  transmits back to the MET on another frequency.  The satellite also communicates with a fixed earth terminal that is  connected to the public switched telephone network, thereby  allowing direct communications between a MET and an ordinary telephone.

3
The technical characteristics of MSS create a unique interference problem.  A MET uses a nearly omnidirectional  antenna to communicate with an MSS satellite, and is incapable of discriminating among transmissions from different  MSS satellites;  likewise, an MSS satellite transmits indiscriminately to a large geographic area.  Therefore, if satellites or METs in two MSS systems covering the same geographic area transmit on the same frequency, then their  signals will interfere with one another and one or both signals  will not be useful.  This can occur even if the two METs are  thousands of miles apart.  Because of this problem, no two  MSS systems can operate on the same frequencies insofar as  the footprints of their satellites overlap.

A. AMSC's License

4
In 1985 the Commission proposed to license an MSS system to serve the United States in the 28 MHz that comprise  the Upper L-band.  After receiving comments on its proposal, the Commission estimated that the minimum spectrum  needed for a viable MSS system was 20 MHz;  considering  that estimate, the limited amount of spectrum available, and  the high cost of building an MSS system, the Commission  decided to license only one system.  See In re Amendment of  Parts 2, 22 and 25 of the Commission's Rules, Second Report  & Order, 2 F.C.C.R. 485, 486 p 6 (1987) (Upper L-band  Licensing Order).  The Commission therefore ordered the  license applicants to form a consortium for the purpose of  developing a single MSS system;  in 1989 the Commission  licensed that consortium, AMSC, to provide MSS in the  United States using the entire Upper L-band.  See In re  Amendment of Parts 2, 22 and 25 of the Commission's Rules,  Memorandum Opinion, Order & Authorization, 4 F.C.C.R.  6041, 6058 p 121 (1989) (AMSC Licensing Order).

5
In addition to AMSC's, there are four MSS satellites  transmitting to all or parts of North America in the Upper L- band:  TMI (licensed by Canada), Telecomm (licensed by  Mexico), TMSat (licensed by Russia), and Inmarsat (licensed  by the United Kingdom).  If AMSC transmitted on all the  frequencies in the Upper L-band, its signals would interfere  with those of the other MSS operators.  Therefore, although  it licensed AMSC to use the entire Upper L-band, the  Commission expressly conditioned AMSC's use of the license  upon the outcome of "international coordination," id. at 6048  p 52, that is, the multilateral negotiating process used to avoid  interference among carriers licensed by different nations to  operate in the same band of spectrum.  Thus, in the jargon of  the trade, AMSC is authorized to operate only in those  portions of the Upper L-band that are "coordinated for" its  use.  Order & Authorization, 14 F.C.C.R. at 20805 p 14.

B. International Coordination

6
The Commission, representing the United States in negotiations with the other four affected nations, sought to coordinate 20 MHz of spectrum in the Upper L-band for the  exclusive use of AMSC.  Because the combined spectrum  demands of the five different licensees far exceeded the  amount of spectrum available, the five nations were unable to  reach a permanent coordination agreement and the Commission was unable to secure 20 of the 28 MHz for AMSC.  In  1996, however, the five nations did enter into an interim  agreement (known as the Mexico City Memorandum of Understanding (MOU)) under which, pending a permanent coordination agreement, the Upper L-band would be coordinated  on a yearly basis by agreement among the five MSS operators themselves.  See Order & Authorization, 14 F.C.C.R. at  20802 p 18.

7
Under the Mexico City MOU, the amount of spectrum  coordinated for each MSS system can change from year to  year.  See id. The key variables guiding negotiations among  the five operators are their (1) present spectrum usage and  (2) projected near-term needs.  The five operators were able  to reach agreements for 1997, 1998, and 1999 but not for 2000.See id. at 20814 p 34.

C. DISCO   II

8
As mentioned above, the Commission determined in the  Upper L-band Licensing Order that it would license only one  MSS system in the Upper L-band.  The adoption by the  United States in 1997 of the WTO Agreement on Basic  Telecommunications Services, however, obligated the United  States to open its satellite markets to foreign systems licensed by other WTO member countries.  See Fourth Protocol to the General Agreement on Trade in Services (GATS)  (April 30, 1996), 36 I.L.M. 336 (1997) (entered into force Jan.  1, 1998).  The Commission therefore adopted procedures to  give satellite systems licensed by other countries access to  the U.S. market.  See In re Amendment of the Commission's  Regulatory Policies to Allow Non-U.S. Licensed Space Stations to Provide Domestic and International Satellite Service  in the United States, Report & Order, 12 F.C.C.R. 24,094  (1997) (DISCO II).

9
In addition to allowing a satellite operator licensed by a  foreign country to apply for a U.S. license in the same way  that a would-be domestic operator applies for a license to  serve customers in the United States, that is, through a  "space station processing round," the Commission established  a second mechanism by which a foreign system could get  access to the U.S. market:  Earth stations located in the  United States could apply for a license to receive service from  a satellite licensed by another country even if that satellite  was not itself licensed to serve the United States.  See id. at  24173-74 p p 183-88.  The Commission announced it would  grant these earth station licenses if doing so was in the public  interest, see id. p 186, taking into account "competition in the  United States[,] ... spectrum availability, eligibility ... and  operating requirements, and national security, law enforcement, foreign policy, and trade issues," id. at 24106 p 29.

10
Concerning spectrum availability--the one factor in the  DISCO II public interest analysis that is relevant to this  case--the Commission acknowledged that the WTO agreement did not require it to authorize a satellite licensed by a  foreign country to serve customers in the United States if there was inadequate spectrum:  "[The Commission does] not  expect to require existing U.S. satellite systems to change  their licensed operating parameters or to decrease their  capacity in order to accommodate additional non-U.S. systems."  Id. at 24158 p 147.  If the foreign satellite operator  sought access to the U.S. market by applying for earth  station licenses for U.S. customers to use its satellite, then  the Commission indicated that in assessing spectrum availability as part of the public interest analysis it would:

11
determine whether, and to what extent, the proposed U.S. service will impact existing operations in the United States....  [In] exceptional cases where grant would create debilitating interference problems or where the only technical solution would require U.S.-licensed systems to significantly alter their operations[,] we would impose technical constraints on the foreign system's operations in the United States or, in cases where any such measures would be insufficient to remedy the technical problem, deny the request.Id. at 24159 p 150.  AMSC did not petition for review of  DISCO II.

12
D. The Order & Authorization Shortly after DISCO II was released, SatCom Systems,  Inc., a U.S. company, and TMI Communications, the company  that operates the MSS satellite system licensed by Canada,  each applied to the Commission for earth station licenses that  would allow up to 125,000 new METs in the United States to  use the TMI satellite for MSS in the Upper L-band.  See  Order & Authorization, 14 F.C.C.R. at 20799 p p 2-3.  The  Commission reviewed the license applications under the public interest analysis announced in DISCO II.  On the issue of  spectrum availability, the Commission concluded that the new  METs would have no effect upon AMSC's existing operations. See id. at 20810 p 25.  Although the METs would be licensed  to receive MSS from the TMI satellite throughout the Upper  L-band, their licenses would be conditioned upon receiving  service only in those portions of the Upper L-band coordinated for the use of the TMI satellite, see id. at 20826 p p 63-64,  and not on spectrum coordinated for AMSC.

13
This license condition comes into play, however, only when  there is a coordination agreement in effect.  See id. As AMSC  pointed out to the Commission, the existing coordination  agreement was set to expire on December 31, 1999--less than  two months after the Commission adopted the Order &  Authorization.  If no new coordination agreement was  reached, AMSC argued, then the new METs would be free to  operate anywhere in the Upper L-band, potentially interfering with AMSC's licensed MSS operations.

14
The Commission responded to this concern by further  conditioning the new earth station licenses upon noninterference with AMSC (and all other MSS operations):

15
In the absence of any continuing operator-to-operator agreement in the L-band, SatCom and TMI's opera-tions[,] like those of AMSC ... will be on a non-interference basis until a future operator-to-operator agreement is reached. Id. at 20814 p p 33-34;  see also id. at 20826 p p 63-64.  Finding that the requested earth station licenses satisfied this and  the other public interest requirements laid out in DISCO II,  the Commission granted earth station licenses to SatCom and  TMI.

II. Analysis

16
AMSC petitions this court for review of the Order &  Authorization, raising two challenges:  (1) the Commission in  effect modified AMSC's license without affording it the hearing required by   316 of the Communications Act;  and (2)  the Commission, without giving a reasoned explanation, reversed its longstanding policy of having only one MSS licensee in the Upper L-band.  The Intervenors raise a different  claim:  The Commission could not allow METs in the United  States to use a satellite that is not licensed by the Commission to serve the United States.

A. Modification of AMSC's License

17
In   316 of the Communications Act the Commission is  expressly authorized to modify a license as follows:

18
Any station license or construction permit may be modified by the Commission ... if in the judgment of  the Commission such action will promote the public interest, convenience, and necessity, or the provisions of this chapter or of any treaty ratified by the United States will be more fully complied with.

19
47 U.S.C.   316(a)(1).  AMSC claims that in the Order &  Authorization the Commission modified AMSC's license to  provide MSS throughout the Upper L-band without providing  the hearing required by   316.  The Commission does not  dispute that   316 requires a hearing if the Commission  modifies a license, but contends that it did not modify  AMSC's license and therefore did not have to hold a hearing.

20
Although the Commission did not, of course, literally  change the terms of AMSC's license, we regard "a license [as]  modified for purposes of section 316 when an unconditional  right conferred by the license is substantially affected."P&R Temmer v. FCC, 743 F.2d 918, 927-28 (D.C. Cir. 1984).AMSC claims the Commission substantially affected rights  conferred by its license in two respects.

21
First, AMSC argues that the Commission has "harm[ed]  AMSC's ... prospects" for coordinating sufficient spectrum  to meet its needs in future rounds of international negotiations.  By licensing METs in the United States to use the  TMI satellite, the Commission increased TMI's present and  future needs in the Upper L-band, thereby reducing AMSC's  need as a proportion of aggregate international demand for  that spectrum.  Because the crucial variables affecting coordination under the Mexico City MOU are present spectrum  usage and projections of short-term future spectrum need,  AMSC claims the Commission "dramatically improve[d]  TMI's negotiating position and correspondingly weaken[ed]  AMSC's negotiating position," thus ensuring that AMSC will  be unable to obtain through the international coordination  process the 20 MHz it says it needs.

22
The Commission responds that AMSC's license has always  been expressly conditioned upon the international coordination process.  AMSC's license does not guarantee success in  those negotiations;  it merely provides the opportunity to  participate, which is unaffected by the Order & Authorization.

23
We agree with the Commission.  We assume for the sake  of the argument that AMSC is correct in predicting that TMI  will obtain more L-band spectrum at AMSC's expense in  future rounds of international coordination.  That does not  work a modification of AMSC's license because the license  contains no "unconditional right" to any particular outcome in  the coordination process.  P&R Temmer, 743 F.2d at 927.On the contrary, the license is expressly conditioned upon and  thereby made subordinate to the outcome of international  coordination.  We further note that AMSC is not required to  accept any future coordination agreement;  it can simply veto  an agreement it believes offers it an unduly limited amount of  spectrum, whether as a result of TMI's greater traffic in the  United States or for any other reason.

24
Second, AMSC claims the Commission modified its license  by subjecting it to an increased risk of electrical interference. See FCC v. National Broadcasting Co. (KOA), 319 U.S. 239,  245 (1943);  Western Broadcasting Co. v. FCC, 674 F.2d 44, 50  (D.C. Cir. 1982).  The Commission acknowledged in the Order & Authorization that the AMSC and TMI satellites cover  the same geographic area and so would cause mutually destructive interference to the extent they operate on the same  frequencies.  14 F.C.C.R. at 20815 p 36.  Therefore, AMSC  argues, the Commission's licensing of new METs to use the  TMI satellite increases the likelihood that AMSC will face  interference in conducting its operations.

25
Because the new METs are limited to the spectrum coordinated for use by TMI, however, the Commission denies that  the Order & Authorization increases the likelihood that  AMSC will face interference.  The Commission's point is  plainly well-taken when an international coordination agreement is in effect:  With each system licensed to use only the Upper L-band frequencies that have been coordinated for its  use, AMSC and TMI will not interfere with each other.

26
AMSC claims, however, that when there is no coordination  agreement in effect SatCom and TMI are free to operate on  any frequency in the Upper L-band, including the frequencies  that had previously been coordinated for AMSC.  The Commission responds that even then the likelihood of interference  is not increased by the Order & Authorization because  SatCom's and TMI's licenses are expressly conditioned upon  their operating "on a non-interference basis."  Id. at 20826  p p 63-64.  If they violate that express condition, then the  Commission may revoke their licenses.  See 47 U.S.C.   312.(We note, without surprise, that AMSC does not claim to have  experienced any interference since December 31, 1999, when  the last coordination agreement expired.)

27
In sum, we agree with the Commission that in these  circumstances AMSC's claim of an increased likelihood of  interference is too speculative to constitute a modification of  its license cognizable under   316.  Therefore, no hearing  was required.

C. Reasoned Decision Making

28
AMSC claims the Commission failed adequately to explain  in the Order & Authorization the reversal of its long-held  position that the amount of spectrum needed for a viable MSS  system precludes the Commission from licensing more than  one such system in the Upper L-band.  AMSC is correct that  the Commission's policy had been to authorize only one MSS  system in the Upper L-band;  AMSC's claim fails, however,  because the Commission reversed that policy in DISCO II,  and replaced it with a public interest condition that the  Commission then applied--with an adequate explanation--in  the Order & Authorization here under review.

29
The Commission points out in the Order & Authorization  that it had established rules in DISCO II for licensing earth  stations to receive service from a satellite licensed by another  country if such service would be in the public interest.  14  F.C.C.R. at 20804 p 11.  AMSC had expressed its concern in

30
DISCO II that there was inadequate spectrum in the Upper  L-band to allow a non-U.S. satellite to serve MSS customers  in the United States.  See Reply Comments of AMSC Subsidiary Corp., IB Docket No. 96-111 (Sept. 5 1997). Although it  was aware of AMSC's concern, the Commission did not treat  the satellite market in the Upper L-band differently than any  other U.S. satellite market.  By its terms, therefore, the  public interest analysis in DISCO II appears to govern entry  by foreign-licensed satellites into the Upper L-band MSS  market in the United States.

31
AMSC argues, however, that the public interest analysis in  DISCO II did not alter the Commission's existing spectrum  management policy for the Upper L-band;  to the contrary,  AMSC claims DISCO II incorporated that policy as one  requirement that a non-U.S. licensed satellite must satisfy in  order to use the Upper L-band to serve customers in the  United States.  In other words, AMSC reads DISCO II as  merely contingent:  If at some future point AMSC were to  obtain 20 MHz of spectrum (or if the Commission were to  give a reasoned explanation why AMSC should make do with  less than 20 Mhz) then the Commission could authorize a  foreign MSS to serve the United States in the Upper L-band  pursuant to the DISCO II procedures.  Because AMSC has  less than 20 MHz of spectrum, however, and the Commission  has not explained why AMSC has enough spectrum to be  viable--indeed, it expressly reserved the issue how much  spectrum is required for an MSS to be viable, see Order &  Authorization, 14 F.C.C.R. at 20813 p 31 & n.85--AMSC  claims the Commission failed to provide a reasoned explanation for allowing a second MSS system to serve the United  States in the Upper L-band.

32
The Commission denies that the public interest analysis in  DISCO II carried forward the Commission's prior spectrum  management policy for the Upper L-band.  The policy prior  to DISCO II had been concerned with AMSC's eventual  spectrum needs;  the Commission's goal had been to secure  for AMSC use of at least 20 MHz in the Upper L-band.  The  factor of spectrum availability in the public interest analysis  of DISCO II, however, protects only AMSC's existing operations.  See DISCO II, 12 F.C.C.R. at 24158-59 p p 147, 150  (Commission "d[oes] not expect to require existing U.S. satellite systems to change their licensed operating parameters or  to decrease their capacity in order to accommodate additional  non-U.S. systems," and Commission will condition or decline  license applications "where grant would create debilitating  interference problems or where the only technical solution  would require U.S.-licensed systems to significantly alter  their operations").

33
We agree with the Commission that in the DISCO II  rulemaking proceeding it changed the spectrum management  policy for the Upper L-band;  we think the matter is clear  but, even were it opaque, we would accept the Commission's  reasonable interpretation of its own rules.  See Cassell v.  FCC, 154 F.3d 478, 484 (D.C. Cir. 1998).  The only open  question, therefore, is whether the Commission applied DISCO II in an arbitrary and capricious manner in the present  case.  The Commission explained at length in the Order &  Authorization why SatCom's and TMI's licenses satisfy the  tests for spectrum availability announced in DISCO II:  The  new METs will not require AMSC to change its licensed  operating parameters, see 14 F.C.C.R. at 20810 p 25, nor to  decrease its system capacity, see id. at 20811 p 26;  neither  will they cause interference problems for AMSC, see id.  p p 27, 33-34.  Because the Commission thus gave a thorough  and reasoned explanation of its decision, we deny AMSC's  petition for review.**

C. The Intervenors' Claim

34
Intervenors Global star L.P. and Space System License,  Inc. claim the Commission cannot license METs in the United States to use the TMI satellite without that satellite having  first been licensed to operate in the United States--a requirement that would have obliged the Commission to conduct a  space station processing round in which the intervenors could  also have competed for a license.  The Commission urges us  not to consider the intervenors' claim because the petitioner  did not raise it and there are no exceptional circumstances  warranting its consideration at the instance of an intervenor. The intervenors reply that they do not raise an issue different  from that raised by AMSC;  rather, as required by D.C. Cir.  Rule 28(e), they merely "focus upon points not made or  adequately elaborated upon in [AMSC's] brief, although relevant to the issues" raised by AMSC.  Specifically, the common issue as they state it is "whether the FCC unlawfully  granted [the TMI satellite] access to MSS spectrum in the  United States that was not otherwise available for licensing  except to AMSC."

35
Recall that AMSC claimed the Commission was required to  explain why AMSC could make do with less than 20 MHz  before it allowed another satellite to serve customers in the  United States using the Upper L-band;  it did not deny that  with such an explanation the Commission could allow the  second satellite to provide such service using the licensing  procedure for earth stations it announced in DISCO II. Ratcheting down the intervenors' issue to a comparable level  of abstraction, one can see that the intervenors are indeed  trying to raise a different issue than does the petitioner.  The  intervenors argue that even if the Commission fully explained  why there is sufficient spectrum in the Upper L-band for two  MSS systems to serve U.S. customers, it still could not allow  TMI to serve customers in the United States without conducting a space station processing round.

36
We have repeatedly held that only in "extraordinary cases,"  Lamprecht v. FCC, 958 F.2d 382, 389 (D.C. Cir. 1992), will we  address an issue raised solely by an intervenor.  We have  identified two factors, at least one (and perhaps both) of  which must be present to establish such circumstances:  The  intervenor had no incentive to file its own petition for review; and resolution of the issue raised by the intervenor is an "essential predicate" to the resolution of the issue raised by  the petitioner.  Synovus Fin. Corp. v. Board of Governors of the Fed. Reserve Sys., 952 F.2d 426, 433 (D.C. Cir. 1991);  see  also National Ass'n of Regulatory Utility Comm'rs v. ICC, 41 F.3d 721, 730 (D.C. Cir. 1994).

37
Neither factor is present in this case.  The intervenors  were aggrieved by the Commission having authorized the  TMI satellite to provide service to METs in the United States  without opening up a space station round;  therefore, they had  the incentive and the ability to file their own petition for  review.  And resolution of the intervenors' issue is neither a  necessary nor even a logical antecedent to the resolution of  the petitioners' issue;  if anything, the opposite is true.  We  therefore do not consider the intervenors' challenge.

III. Conclusion

38
For the foregoing reasons, AMSC's petition for review is

39
Denied.

Notes:

*
 Circuit Judge Garland did not participate in this matter.

**
 AMSC claims in its reply brief that the Commission failed to  address AMSC's objection to SatCom's and TMI's failure to provide  certain technical information required by Commission regulations. Although AMSC alluded to the factual basis for this claim in the  statement of facts in its opening brief, it did not actually make the  argument until its reply brief.  The argument is therefore waived. See Sitka Sound Seafoods, Inc. v. NLRB, 206 F.3d 1175, 1181 (D.C.  Cir. 2000).