Court Opinion

ID: 186715
Source: CourtListenerOpinion
Date Created: 2011-02-05 03:01:13+00
Date Added: 2024-06-11T09:45:01.253695
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 12, 2005               Decided July 25, 2006

                        No. 04-1304

               ECHOSTAR SATELLITE L.L.C.,
                      PETITIONER

                             v.

       FEDERAL COMMUNICATIONS COMMISSION AND
              UNITED STATES OF AMERICA,
                    RESPONDENTS

    NATIONAL ASSOCIATION OF BROADCASTERS, ET AL.,
                   INTERVENORS

           On Petition for Review of Orders of the
           Federal Communications Commission

    Pantelis Michalopoulos argued the cause for petitioner.
With him on the briefs were Rhonda M. Bolton and John D.
Clopper.

     Joel Marcus, Counsel, Federal Communications
Commission, argued the cause for respondents. With him on the
brief were Thomas O. Barnett, Acting Assistant Attorney
General, U.S. Department of Justice, Robert B. Nicholson and
Robert J. Wiggers, Attorneys, Samuel L. Feder, General
Counsel, Federal Communications Commission, and Daniel M.
                                2

Armstrong, Associate General Counsel.         John A. Rogovin,
Attorney, entered an appearance.

     Thomas P. Olson argued the cause and filed the brief for
intervenors National Association of Broadcasters, et al.

    Before: GINSBURG, Chief Judge, and SENTELLE, Circuit
Judge, and WILLIAMS, Senior Circuit Judge.

     GINSBURG, Chief Judge: EchoStar Satellite L.L.C., a
provider of direct-to-the-home satellite television service,
petitions for review of two orders in which the Federal
Communications Commission adopted an improved version of
its Individual Location Longley-Rice (ILLR) model for
predicting the strength of broadcast television signals. In
response to congressional directives in § 1008 of the Satellite
Home Viewer Improvement Act of 1999 both to adopt a
“reliabl[e]” model and to “ensure” that the model “takes into
account” loss of signal strength due to “terrain, building
structures, and other land cover variations,” 47 U.S.C. §
339(c)(3), the Commission altered its ILLR model for UHF
stations but, as a practical matter, did not do so for VHF
stations. EchoStar argues, among other things, the decision with
respect to VHF stations violated § 339(c)(3). Six associations
of broadcasters and the Fox Broadcasting Company have
intervened in support of the Commission. For the reasons stated
below, we deny EchoStar’s petitions in all respects.

                         I. Background

     A network television broadcaster generally has “exclusive
rights,” pursuant to the Copyright Act, 17 U.S.C. § 106(5), to
authorize the public display of its copyrighted content, including
the retransmission of its broadcast signal. In the Satellite Home
Viewer Act of 1998 (SHVA), the Congress, in order to make
                                3

network programming available to households outside the
broadcast range of a local network affiliate, gave satellite
carriers a “statutory license,” that is, a compulsory license
subject to payment of a prescribed royalty, to retransmit to
“unserved households” the signals of no more than two distant
network television stations. 17 U.S.C. §§ 119(a)(2)(A)-(B). An
unserved household is, with respect to a particular television
network, one that is unable to receive by way of a conventional
rooftop antenna a Grade B signal, as defined by the
Commission, from one of that network’s affiliates. Id. §
119(d)(10)(A).

     In the wake of the SHVA, the Commission adopted the
ILLR computer model “to predict whether a household is likely
to be able to receive a signal of the required strength” and
thereby “minimiz[e] the need for on-site testing.” See Satellite
Delivery of Network Signals to Unserved Households for
Purposes of the Satellite Home Viewer Act, Report & Order, 14
F.C.C. Rcd. 2654, ¶ 7 (1999) (SHVA Order). When it was
adopted, EchoStar and others criticized the ILLR model because
it did not account for loss of signal strength due to variations in
land cover -- for example, buildings and vegetation -- also
known as “clutter loss.” See id. ¶ 82. The Commission
acknowledged that land cover affects signal intensity, but
declined to include a clutter loss factor in the model because it
was “not aware of a standard means of including such
information in the ILLR that has been accepted by the technical
and scientific community.” Id. ¶ 83.

    In response, the Congress enacted the Satellite Home
Viewer Improvement Act of 1999 (SHVIA), directing the
Commission to “take all actions necessary ... to develop and
prescribe by rule a point-to-point predictive model for reliably
and presumptively determining the ability of individual
locations to receive signals [of Grade B intensity].” 47 U.S.C.
                                4

§ 339(c)(3). Specifically, the Commission was to “rely on the
[ILLR] model set forth [in its SHVA Order] and ensure that such
model takes into account terrain, building structures, and other
land cover variations.” Id. The Congress further directed the
Commission to establish “procedures for the continued
refinement in the application of the model by the use of
additional data as it [sic] becomes available.” Id. Finally, the
SHVIA amended the Copyright Act to incorporate a statutory
presumption in favor of the Commission’s ILLR model. See 17
U.S.C. § 119(a)(2)(B)(ii)(I) (in copyright dispute between
broadcaster and satellite carrier, court must rely upon ILLR
model, as revised by the Commission over time, to establish
presumptively whether satellite subscriber is “unserved”).

      Pursuant to the SHVIA, the Commission conducted the
rulemaking here under review, proposing to adjust the ILLR
model to incorporate “the effects of both vegetation and
buildings.” See Establishment of an Improved Model for
Predicting the Broad. Television Field Strength Received at
Individual Locations, Notice of Proposed Rulemaking, 15
F.C.C. Rcd. 1843, ¶ 9 (2000) (ILLR Notice). In particular, the
Commission proposed to subtract from each predicted signal
strength a “clutter loss value” based upon one of ten different
categories of land cover, using data from the Land Use and Land
Cover (LULC) database published by the United States
Geological Survey. Id. ¶¶ 9-11. Loss of signal strength would
be calculated using the figures in “Clutter Losses and
Environmental Noise Characteristics Associated with Various
LULC Categories,” IEEE Transactions on Broadcasting, Vol.
44, No. 3 (Sept. 1988), by Professor Thomas N. Rubinstein. Id.
¶ 11. Recognizing certain limitations inherent in Professor
Rubinstein’s figures, see id. ¶¶ 11-12, the Commission solicited
“comment on whether other data are available that would allow
[it] to expand the application of clutter loss considerations, and
whether there are other approaches that are scientifically
                               5

supported and could be integrated into the ILLR model to take
into account losses due to vegetation and man-made structures.”
Id. ¶ 11.

     Various broadcasters, satellite carriers, and engineers
commented upon the proposed rule. Many criticized the
methodology underlying the Rubinstein data and one engineer,
Richard L. Biby, submitted an alternative set of clutter loss
figures. Most significant, an empirical study jointly submitted
by the National Association of Broadcasters and the Association
for Maximum Service Television, Inc. compared “approximately
1,000 intensity measurements,” taken during field testing in five
geographic regions, with the signal strength predicted by the
existing ILLR model and the model as adjusted for clutter loss
based upon the Rubinstein and the Biby data. The NAB/AMST
study reported for each measurement whether the various
models correctly predicted the presence of a Grade B signal,
predicted service at an unserved location (over-predicted), or
predicted no service at a served location (under-predicted). The
study concluded the proposed models were “less accurate” than
the ILLR model already in use because they produced a lower
percentage of correct predictions. Finally, the Associations
argued that the SHVIA required the Commission to leave its
“highly accurate” model in place “[a]bsent an empirically-
validated method of improving the accuracy of the ILLR.” The
NAB/AMST study was the only empirical study submitted by
any commenter, and no commenter, including EchoStar,
criticized the study prior to the Commission’s initial decision.

     Relying upon the NAB/AMST study, the Commission
concluded that for both VHF and UHF channels “the ILLR
model without clutter corrections prove[d] superior to [the
alternatives] by making the correct prediction more often.”
Establishment of an Improved Model for Predicting the Broad.
Television Field Strength Received at Individual Locations, First
                                 6

Report and Order, 15 F.C.C. Rcd. 12,118, ¶ 14 (2000) (ILLR
Report and Order). With respect to VHF channels, the
Commission concluded that reducing predicted signal strength
to take account of clutter loss would “make the ILLR model less
accurate because it already produces more under-predictions
than over-predictions.” Id. Accordingly, the Commission set
the “clutter loss values for VHF channels to zero,” id. ¶ 15,
thereby leaving the results generated by the model unchanged
for those channels. With respect to UHF channels, however, the
Commission concluded an adjustment for clutter loss was
appropriate because, by setting clutter loss figures at one third
the levels proposed in the ILLR Notice, it could “produce a
better balance between under-predictions and over-predictions
without adversely affecting the overall percentage of correct
predictions.” Id.

     EchoStar petitioned for reconsideration, arguing the
Commission had “abdicated its responsibility” under the SHVIA
to take into account clutter loss values in its predictive model for
VHF channels. EchoStar also objected that the Commission had
relied upon the NAB/AMST study without having made the
supporting data available for comment. (The two Associations
later filed those data with the Commission, approximately one
month before EchoStar’s reply was due.) Finally, EchoStar
argued the Commission had unlawfully refused to permit it to
conduct on-site signal strength tests at the premises of customers
who claim to have been erroneously identified as served, rather
than requiring those customers to pursue the waiver and testing
process outlined in 47 U.S.C. §§ 339(c)(2), (4), of which more
later.

    The Commission denied EchoStar’s petition, explaining it
had not “ignore[d]” clutter loss but rather had “made a
considered determination that the most accurate ILLR
predictions for VHF stations under certain groundcover
                                7

conditions, including buildings, are made by setting the
corresponding loss values to zero.” Establishment of an
Improved Model for Predicting the Broad. Television Field
Strength Received at Individual Locations, Memorandum
Opinion and Order, 19 F.C.C. Rcd. 9964, ¶ 13 (2004)
(Reconsideration Order). The Commission also noted that the
data underlying the NAB/AMST study “ha[d] been publicly
available since well before” it issued the ILLR Notice, that the
Associations had filed the data in the record since issuance of
the final rule, and that EchoStar had “reviewed and utilized the
raw data in its arguments.” Id. ¶ 10. Finally, the Commission
rejected EchoStar’s argument that the statute permits it, instead
of following the waiver and testing procedures in 47 U.S.C. §§
339(c)(2), (4), to conduct its own on-site testing for customers
claiming to be unserved by over-the-air signals from network
affiliates. EchoStar now seeks review of the ILLR Report and
Order and the Reconsideration Order.

                          II. Analysis

     EchoStar makes three arguments: The Commission (1) by
setting to zero the clutter loss term in the ILLR model for VHF
stations, violated 47 U.S.C. § 339(c)(3); (2) by relying upon data
not in the record, failed to comply with the notice and comment
requirements of the Administrative Procedure Act, 5 U.S.C. §§
553(b), (c); and (3) by refusing to permit EchoStar and its
customers to bypass the waiver and testing process outlined in
47 U.S.C. §§ 339(c)(2), (4), violated what it identifies as a
principle in the SHVA and the SHVIA that on-site testing is the
only way conclusively to determine whether a household is
served or unserved. We review an agency’s interpretation of a
statute it administers under the familiar two-step process
delineated in Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). First, we must
determine whether “the intent of Congress is clear.” Id. at 842.
                                8

If so, then “that is the end of the matter.” Id. If, on the other
hand, “the statute is silent or ambiguous with respect to the
specific issue, the question for the court is whether [the]
agency’s answer is based on a permissible construction of the
statute.” Id. at 843.

A. Land Cover

     EchoStar first argues the Commission failed to “ensure that
[its predictive] model takes into account terrain, building
structures, and other land cover variations.” 47 U.S.C. §
339(c)(3). According to EchoStar, the clear import of the statute
is that the Congress “intended the ILLR predictive model to give
dissimilar predictions based on dissimilarities in land cover”; the
Commission has discretion regarding “how to incorporate land
cover variations” but not regarding “whether to give them
effect.” Therefore, argues EchoStar, the Commission erred
when it set the clutter loss factor to zero for VHF channels rather
than incorporating in the model a term that would vary with land
cover.

     The Commission makes two counterarguments, of which
only the second is grounded in the decisions under review.
First, it argues the ILLR model already takes into account land
cover variation because the model “was itself derived from
empirical observations of signal intensity, and those
observations would themselves have reflected some degree of
clutter loss.” Because the statute directs the Commission only
to ensure the model “takes into account” variations in land cover
-- and not specifically to incorporate a variable for land cover --
the Commission argues it has complied with the statute by
determining that “the bias [toward under-prediction] present in
the existing ILLR model has the effect of accounting for land
[cover].” Though some broadcasters made this argument before
the Commission, the agency never adopted it. Because we must
                                  9

rely only upon the reasons given by the agency, not “counsel’s
post hoc rationalizations for agency action,” we disregard this
ground for upholding the orders.* Motor Vehicle Mfrs. Ass’n of
U.S. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 50 (1983)
(“It is well established that an agency’s action must be upheld,
if at all, on the basis articulated by the agency itself”); Chamber
of Commerce of U.S. v. SEC, 412 F.3d 133, 143 (D.C. Cir.
2005).

     Second, as it did in the rulemaking, the Commission takes
the position that any changes it makes to the model must comply
with the statutory “command that [it] craft a reliable predictive
model.” See 47 U.S.C. § 339(c)(3) (“[T]he Commission shall
take all actions necessary ... to develop ... [a] predictive model
for reliably and presumptively determining the ability of
individual locations to receive signals of [Grade B intensity]”).
According to the Commission, EchoStar’s interpretation would
“read[] reliability out of the statute” by requiring the
Commission to adopt one of the proposed adjustments even
though it would reduce the accuracy of the model. Instead, the
Commission says it conducted a “thorough analysis” of the
adjustments proposed and “made a considered determination
that the most accurate ILLR predictions for VHF stations under
certain groundcover conditions ... are made by setting the
corresponding loss values to zero.” Reconsideration Order, 19
F.C.C. Rcd. 9964, ¶ 13.

        *
          The passing reference in the background section of the
Reconsideration Order to the Commission’s determination that it
would “improve the accuracy of the ILLR model to assign certain
signal loss values, in addition to those already implicit in the model”
is not enough to preserve the present argument. 19 F.C.C. Rcd. 9964,
¶ 4. The Commission did not then, as it does now, argue that it
complied with the statutory directive to take land cover into account
by recognizing the ILLR model already does so.
                               10

     We think “the intent of Congress is clear,” Chevron, 467
U.S. at 842, and the Commission’s reading of the statute clearly
correct. The statutory directives in § 1008 of the SHVIA, 47
U.S.C. § 339(c)(3), to ensure land cover is taken into account
and to establish procedures for the “continued refinement” of the
model are subordinate to the anterior and more fundamental
mandate to design a model that “reliably” predicts signal
strength. Only in the context of “prescribing such [a] model” is
the Commission directed to ensure land cover is “take[n] into
account.” Id. Moreover, § 1008 of the SHVIA should be read
in tandem with § 1005(a)(2) of the same statute. See Motion
Picture Ass’n of Am., Inc. v. FCC, 309 F.3d 796, 801 (D.C. Cir.
2002) (“Statutory provisions in pari materia normally are
construed together to discern their meaning”). The latter
provision amended the Copyright Act, 17 U.S.C. §
119(a)(2)(B)(ii)(I), to require courts, in copyright disputes
between broadcasters and satellite carriers, to rely upon the
ILLR model “as that model may be amended by the
Commission over time under section [1008] ... to increase the
accuracy of that model.”           Section 1005(a)(2) plainly
contemplates any revision to the ILLR model adopted pursuant
to § 1008 will “increase,” not decrease, the accuracy of that
model. Therefore, when the Commission determined, with
respect to VHF stations, that the proposed adjustments would
“make the ILLR model less accurate,” it lawfully set the clutter
loss value to zero. ILLR Report and Order, 15 F.C.C. Rcd.
12,118, ¶ 14.

     Citing our decision in Colorado v. United States
Department of the Interior, 880 F.2d 481 (1989), EchoStar
nonetheless argues the “Congress, not the Commission,
determined that the time was right to incorporate land cover
variations into the ILLR model, and the Commission had no
power to second-guess that determination.” In Colorado we
held unlawful a model adopted by the Department of the Interior
                                11

(DOI) to assess damages to natural resources from the release of
oil or hazardous substances, as required by the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (CERCLA), 42 U.S.C. § 9601 et seq. Colorado, 880 F.2d
at 482. Although the statute expressly provided the DOI
regulations “shall take into consideration factors including, but
not limited to, replacement value, use value, and ability of the
ecosystem or resource to recover,” 42 U.S.C. § 9651(c)(2)(B),
the DOI had promulgated a rule based only upon lost use value
“because adequate data were not available to create a
standardized model based on average values for restoration
costs.” Colorado, 880 F.2d at 491 (quoting 52 Fed. Reg. 9051
(1987)). We rejected this justification for the Department’s
failure to regulate as instructed, reasoning that “data limitations
... cannot justify DOI’s decision to ignore the clear mandate of
Congress.” Id. Here, too, argues EchoStar, the agency simply
ignored an express direction of the Congress because the data (in
EchoStar’s words) “seemed inadequate.”

     Actually, this case is quite different from Colorado. As we
explained in the companion case of Ohio v. United States
Department of the Interior, 880 F.2d 432 (1989), our insistence
there that the model incorporate a term for restoration cost was
based not merely upon its inclusion in a list of factors the
regulations were to “take into consideration,” but also upon the
Congress having expressed in other provisions of the CERCLA
a “clear preference for restoration as the basic measure of
natural resources damages.” Id. at 444-46. We thought it
“would be odd indeed for a Congress so insistent that all
damages be spent on restoration to allow a ‘lesser’ measure of
damages than the cost of restoration in the majority of cases.”
Id. at 445. Absent these other provisions making clear the
Congress’s preference for restoration cost, we acknowledged,
the DOI’s argument -- that the phrase “take into consideration”
gave it discretion in applying the listed factors -- would have
                               12

been “a strong one.” Id. at 446. In the present case the clearly
expressed preference of the Congress is for a reliable model and,
as we have seen, acceptance of EchoStar’s proposed clutter loss
values would have derogated from that goal.

    This conclusion does not, as EchoStar hyperbolically
contends, render the mandate of § 339(c)(3) “meaningless.”
That mandate is forward-looking and continuing. If EchoStar,
another interested party, or the Commission itself in the future
identifies an adjustment to the model that both varies with land
cover and increases the accuracy of the model, then presumably
the Commission will be obligated to refine the model
accordingly.

B. NAB/AMST Data

      EchoStar next argues the Commission violated § 553 of the
Administrative Procedure Act, 5 U.S.C. §§ 553(b), (c), by
failing in a timely manner to make available for public comment
the raw data underlying the NAB/AMST study; indeed, the
Associations did not file those data with the Commission until
after the Commission had promulgated the final rule, and
EchoStar had filed its petition for reconsideration and its reply
was due in about one month. Although the Commission rejected
this challenge in its Reconsideration Order on the ground that
the underlying data were “publicly available” in federal court
and in other Commission records at the time of the rulemaking,
19 F.C.C. Rcd. 9964, ¶ 10, EchoStar claims its efforts to obtain
the data were unavailing and, in any event, it should not have
been required to discover them itself. According to EchoStar,
“there has never been any meaningful way for interested parties
to test the data and point out errors so as to prevent the
Commission from using unreliable information as the basis for
its final rule.”
                               13

     The Commission responds that EchoStar was not entitled to
the data because the Commission itself neither had nor relied
upon them when it issued its final rule. Rather, the Commission
based its analysis upon the description, methodology, and results
of the study contained in the public comments filed by the
Associations. See Air Transp. Ass’n of Am. v. FAA, 169 F.3d 1,
7 (D.C. Cir. 1999) (the “critical factual material that is used to
support the agency’s position on review” must be made
available for review).

     We need not decide whether EchoStar was entitled to these
data before the Commission issued its final order for the simple
reason that EchoStar, although on notice of the findings and
conclusions of the NAB/AMST study, did not ask for the data
before the Commission issued its final rule. The record reflects
the following sequence of events in 2000: (1) On February 22
the Associations submitted their comments on the ILLR Notice,
in which comments they summarized the findings of their
empirical study, the key finding being that the “ILLR model is
already a highly accurate predictor of whether households
receive -- or do not receive -- a Grade B signal.” (2) On March
14 EchoStar submitted its reply comments, in which it did not
even mention the NAB/AMST study, and the Associations
submitted their reply comments, including a chart comparing the
accuracy of the various models under consideration. (3) On
May 26 the Commission issued the final rule. (4) On July 10
EchoStar petitioned for reconsideration, objecting to the
agency’s reliance upon the NAB/AMST study without having
given other parties an opportunity to comment upon the
underlying data. (5) On July 24 the Associations filed the
underlying data. (6) On August 30 EchoStar filed its reply, in
which it did review and comment upon the data. Finally, in
2004 the Commission issued its Reconsideration Order rejecting
both EchoStar’s procedural objection and its arguments on the
merits of the NAB/AMST study.
                               14

     EchoStar asserts “the most critical discussion of the
NAB/AMSTV study ... appeared in the NAB/AMSTV’s reply
comments” filed on March 14, 2000, which included the chart
comparing the accuracy of the proposed modifications and of
the model then in use. Because the Associations’ March 14
filing merely provided further documentation of the study they
had described in their February comments, we are doubtful
about the greater significance of the later filing, but we will
assume as much for the sake of the argument. In any event, as
the Commission points out, EchoStar did not criticize the study
in any way or protest the lack of raw data in its response to the
Associations’ initial comments, in which they described and
relied heavily upon the study; in fact EchoStar did not even
mention the study, which suggests not that EchoStar was
blindsided in March but that its current objection to the
unavailability of the raw data then is an afterthought.

     Moreover, EchoStar could have criticized the study, or
requested more time in which to do so, during the two months
between the filing of the Associations’ reply comments and the
issuance of the Commission’s decision. Under the agency’s
liberal ex parte rules EchoStar could have submitted a written
presentation at any time during the rulemaking -- even, as
Commission counsel said at oral argument, at the “11th hour.”
See 47 C.F.R. § 1.1200, 1.1206 (in “permit-but-disclose”
proceedings, including informal rulemakings, “ex parte
presentations to Commission decision-making personnel are
permissible but subject to certain disclosure requirements” until
“the proceeding is no longer subject to administrative
reconsideration or review or to judicial review”); see also Home
Box Office, Inc. v. FCC, 567 F.2d 9, 57 (D.C. Cir. 1977) (“[W]e
recognize that informal contacts between agencies and the
public are the ‘bread and butter’ of the process of administration
and are completely appropriate so long as they do not frustrate
judicial review or raise serious questions of fairness. ... If ex
                                15

parte contacts ... occur, we think that any written document or
a summary of any oral communication must be placed in the
public file established for each rulemaking docket ... so that
interested parties may comment thereon.”). Indeed the parties
to this proceeding, including EchoStar itself, repeatedly availed
themselves of those rules by filing written presentations after the
expiration of the formal filing date.

     Arguing that disclosure of the raw data came too late
because the Commission already had issued its final rule,
EchoStar cites Advocates for Highway & Auto Safety v. FHA, 28
F.3d 1288 (D.C. Cir. 1994), where we noted that an “agency is
not likely to be receptive to suggested changes once the agency
puts its credibility on the line in the form of final rules.” Id. at
1292. But it is no doubt for precisely this reason that parties
avail themselves of the opportunities, ex parte or not, to object
to evidence in the record before the Commission adopts a final
rule. Cf. United States v. L.A. Tucker Truck Lines, Inc., 344
U.S. 33, 37 (1952) (“courts should not topple over
administrative decisions unless the administrative body ... has
erred against objection made at the time appropriate under its
practice”).

     We also reject EchoStar’s argument, based upon passing
references in the ILLR Report and Order to the Commission’s
“further analysis” and “verif[ication]” of aspects of the
NAB/AMST study, that the Commission developed its own
“data and analysis” upon which EchoStar should have had a
chance to comment. As the Commission explains in its brief --
and the record suggests nothing to the contrary -- these are
references merely to the agency staff’s own cogitations upon the
evidence in the record. Were parties entitled to comment upon
every observation an agency staff member draws from the
record as it accrues, rulemaking proceedings would be
interminable. The APA does not contemplate so exquisite a
                                16

process. Cf. Cmty. Nutrition Inst. v. Block, 749 F.2d 50, 58
(D.C. Cir. 1984) (“Rulemaking proceedings would never end if
an agency’s response to comments must always be made the
subject of additional comments”).

C. Waiver and Testing

     If the ILLR model predicts a certain household is served
and its satellite carrier accordingly denies it retransmission of a
distant network signal, then the satellite subscriber may ask the
network station (through the satellite carrier) for a waiver of that
denial. 47 U.S.C. § 339(c)(2). If the network station denies the
waiver, then the subscriber may request an independent field test
of signal intensity in order to show that the subscriber’s
household is in fact unserved. See id. § 339(c)(4)(A). The
satellite carrier and the network station or stations may jointly
select a qualified and independent tester or, if they are unable to
agree, then a tester will be designated by an independent and
neutral entity, id. § 339(c)(4)(B), for which role the Commission
has chosen the American Radio Relay League. ILLR Report and
Order, 15 F.C.C. Rcd. 12,118, ¶ 23. The cost of the test is
assigned to the satellite carrier or the broadcaster depending
upon the result of the test; the loser pays. 47 U.S.C. §
339(c)(4)(B).

      EchoStar contends that a satellite subscriber claiming to live
in an unserved household incorrectly identified by the predictive
model as being served may truncate the potentially time-
consuming waiver and testing procedure specified in 47 U.S.C.
§§ 339(c)(2), (4), and instead simply present to the network
station the result of an independent field test showing the house
is unserved. According to EchoStar, because the most reliable
determinant of whether a person is unserved is a signal strength
test, and because the “waiver/loser-pays system was adopted to
ease the burden on satellite operators, who might otherwise bear
                                 17

the full cost of the testing,” it follows that a subscriber should be
able to skip the waiver procedure by having his house tested,
provided the satellite carrier agrees to pay for the test.

     In support of this view, EchoStar points out that under the
SHVA, “actual measurement of signal strength at the household
premises [was] the only conclusive way to determine whether
the household [was] unserved.” See SHVA Order, 14 F.C.C.
Rcd. 2654, ¶ 45 (“Individual testing is the key mechanism under
the SHVA for proving that a specific household is unserved”);
17 U.S.C. § 119(d)(10)(A) (defining an “unserved household”
as a household that “cannot receive, through the use of a
conventional, stationary, outdoor rooftop receiving antenna, an
over-the-air signal of a primary network station affiliated with
that network of Grade B intensity”). Therefore, reasons
EchoStar, § 339 merely provides “an additional process” by
which a satellite provider may establish that a household is
unserved; it is more time consuming, but offers the satellite
provider the possibility of shifting the cost of testing to the
network affiliate pursuant to the “loser pays” requirement of §
339(c)(4). Still, says EchoStar, “[n]othing in the text of [§ 339]
explicitly made the waiver process exclusive” of the prior less
elaborate procedure. Moreover, we are told, nothing in 17
U.S.C. § 119, which gives a satellite provider a statutory license
to retransmit distant network signals to “unserved households,”
alters the principle that “[m]easurement is the fundamental
method for determining whether the ‘unserved household’
condition is met.”

     The Commission is not unsympathetic to the policy
argument underlying EchoStar’s position; it noted in its
Reconsideration Order that “EchoStar has raised a valid public
interest concern with the efficiency of the process used to
determine SHVIA eligibility.” 19 F.C.C. Rcd. 9964, ¶ 24. The
Commission further noted, however, that the “statute delineates
                               18

a specific sequence of events preceding testing: waiver request,
waiver denial, the subscriber’s request for an on-site test,
selection of a qualified tester by the satellite carrier and the
network station, and then the on-site test.” Id. ¶ 23. Inferring
the Congress intended that the sequence detailed in the statute
be exclusive, the Commission rejected EchoStar’s claim of right
to a streamlined process.

     We agree with the Commission. Pre-SHVIA, in the
absence of any express statutory guidance to the contrary, the
Commission reasonably may have concluded that individual
testing was “the key mechanism” for determining whether a
household was unserved, SHVA Order, 14 F.C.C. Rcd. 2654, ¶
45, but the statute is no longer so opaque. Instead, a prediction
of the ILLR model presumptively establishes whether a
household is unserved, 17 U.S.C. 119 § (a)(2)(B)(ii)(I), and §§
339 (c)(2) and (4) lay out an elaborate procedure for requesting
a waiver from a denial of service based upon, and for testing the
result of, that prediction. Moreover, we note that EchoStar’s
claim that it may circumvent the procedures in § 339 so long as
it pays for an on-site measurement by an independent tester,
because its right to do so pre-dates and survives the SHVIA,
does not square with § 1005(a)(2) of the SHVIA, 17 U.S.C. §
119(a)(2)(B)(ii)(II). That provision directs that for “purposes of
site measurements to determine whether a person resides in an
unserved household under [17 U.S.C. § 119(d)(10)(A)], a court
shall rely on [47 U.S.C. § 339(c)(4)],” which is the very
provision that prescribes what EchoStar calls the “unnecessarily
inefficient and burdensome” process for testing that it seeks to
avoid. EchoStar points to nothing in the statute to support its
conclusion that it may bypass the procedures in § 339 by
conducting its own on-site testing; nor do we see how one can
square the above-referenced instruction to courts with any
procedure other than that in § 339.
                                19

     In sum, the Commission’s reading of the SHVIA is the only
reasonable one; EchoStar’s contrary reading finds no support in,
and is actually inconsistent with, the statute. We therefore
uphold the Commission’s reading under Chevron step one and
end our inquiry here. See Chevron, 467 U.S. at 842 (if “the
intent of Congress is clear,” then “that is the end of the matter”).

                         III. Conclusion

    For the foregoing reasons, EchoStar’s petitions are

                                                           Denied.