Court Opinion

ID: 184917
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:25:40+00
Date Added: 2024-06-11T17:26:11.862731
License: Public Domain

182 F.3d 995 (D.C. Cir. 1999)
PLMRS Narrowband Corp.,Petitionerv.Federal Communications Commission and United States of America, Respondents
No. 92-1432 Consolidated with92-1440, 97-1329, 97-1330, 97-1339, 97-1340
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 19, 1999Decided July 16, 1999

[Copyrighted Material Omitted]
On Petitions for Review and Appeals of Orders of the Federal Communications Commission
A. Thomas Carroccio argued the causes for petitioners/ appellants and filed the briefs for petitioner/appellant Columbia Capital Corporation.
Richard S. Becker, James S. Finerfrock and Jeffrey E.  Rummel were on the briefs for petitioner/appellant PLMRS  Narrowband Corp.
K. Michele Walters, Counsel, Federal Communications  Commission, argued the cause for appellees.  With her on the  brief were Joel I. Klein, Assistant Attorney General, U.S.  Department of Justice, Robert B. Nicholson and Marion  Jetton, Attorneys, Christopher J. Wright, General Counsel,  Federal Communications Commission, John E. Ingle, Deputy  Associate General Counsel, and Laurel R. Bergold, Counsel.
Before:  Ginsburg, Randolph, and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge:

1
In 1991 the Federal Communications Commission proposed to grant by lottery four licenses,  each comprising several land mobile radio channels in the  220-222 MHz range, designated for nationwide, noncommercial use;  that is, the chosen licensee could use the  channels for its own internal communications needs but generally could not lease the channels to others.  See Amendment of Part 90 of the Commission's Rules to Provide for the  Use of the 220-222 MHz Band by the Private Land Mobile  Radio Services, 6 F.C.C.R. 2356 (1991) (Original Order);  7  F.C.C.R. 4484 (1992) (Reconsideration Order);  8 F.C.C.R.  4161 (1993) (Second Reconsideration Order).  Ultimately,  however, the Commission decided to assign the licenses by  auction rather than by lottery and to permit licensees to use  the channels for commercial as well as non-commercial purposes.  See Third Report and Order;  Fifth Notice of Proposed Rulemaking, 12 F.C.C.R. 10,943, p 6 (1997).

2
PLMRS Narrowband Corporation and Columbia Capital  Corporation, each of which filed applications under the Original Order, petition for review of the Reconsideration Orders  and of the Third Report and Order.  They ask the court to  vacate those orders and to require the Commission to process their applications under the Original Order.  We reject on its  merits the petitioners' challenge to the Third Report and  Order, and hence dismiss as moot their challenge to the  superseded Reconsideration Orders.

I. Background

3
Land mobile radio is used to send messages via radio  signals between a stationary transmission point and mobile  receiving units, in order to provide such services as cellular  telephony, paging, and the dispatch of taxicabs, delivery  vehicles, and police cars.  See Telocator Network of Am. v.  FCC, 691 F.2d 525, 527 (1982).  The four nationwide noncommercial licenses the Commission proposed to grant in  1991 were to be used primarily for the licensees' own internal  communications needs and, only insofar as a licensee had  excess capacity, to be leased to others.  See Original Order, 6  F.C.C.R. 2356, p 37 (predicting "non-commercial nationwide  licensees will require full usage of their systems for their own  communications needs in the major metropolitan areas, but  may have excess capacity in [smaller] urban areas and in  rural areas").  In order to "minimize the filing of speculative  applications," id. p 48, the Commission limited the transferability of licenses, provided for automatic license revocation if  two-and four-year construction benchmarks were not met,  and required licensees to install base stations in at least 70  markets within ten years.  Id. pp  49, 68, 83.  The Commission  received 34 applications, including those of the two present  petitioners, for the four non-commercial licenses.

4
The following year the Commission, upon reconsideration,  further restricted the transferability of licenses and the commercial leasing of excess capacity, shortened the construction  deadlines, and required that an applicant demonstrate either  its actual presence, or a long-term business plan requiring  internal communications capacity, in the 70 or more markets  identified in its application.  See Reconsideration Order, 7  F.C.C.R. 4484, pp 24-29.  In 1993, upon further reconsideration, the Commission repealed the regulation permitting an  applicant to submit a long-term business plan and simply required that it have an actual presence in 70 or more  markets.  See Second Reconsideration Order, 8 F.C.C.R.  4161, p 10.

5
Later that year the Congress authorized the Commission to  auction licenses for uses in which the licensee "receiv[es]  compensation from subscribers."  Omnibus Budget Reconciliation Act of 1993, Pub L. No. 103-66, § 6002(a), 107 Stat. 312,  388 (formerly codified at 47 U.S.C. § 309(j)(2)(A)).  In 1997  the Commission designated for such commercial use and  determined to assign by auction the four licenses it had  originally designated for non-commercial use and assignment  by lottery.  The agency returned pending applications filed  under the rules promulgated for non-commercial use of the  four licenses.  See Third Report and Order, 12 F.C.C.R.  10,943, pp 183-203.

II. Analysis

6
The petitioners challenge the Third Report and Order and  the Reconsideration Orders as arbitrary and capricious.  See  5 U.S.C. § 706(2)(A).  Under this deferential standard of  review we must affirm the Commission's decision if it examined the relevant information and gave a satisfactory explanation for its action, including a rational connection between the  facts found and the choice made.  See Motor Vehicle Mfrs.  Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43  (1983).

7
A.PLMRS's Challenge to the Third Report & Order

8
Although it "expressly supports" the Commission's designation of the licenses for commercial use in the Third Report  and Order, PLMRS claims the Commission acted arbitrarily  and capriciously both in deciding to auction those licenses and  in returning the application it filed under the previously  promulgated rules.  Its support for the Commission's designation of the licenses for commercial use in 1997 places in a  rather odd light its ultimate contention that the agency must  limit the applicant pool to entities that applied for the licenses  in 1991, when they were designated for non-commercial use.

9
In permitting additional applicants to compete for the  newly-designated commercial licenses, the Commission explained:

10
[B]ecause the nature of the 220 MHz service is undergo-ing such substantial change, it would be unfair to pre-clude new applicants from having the opportunity toapply for these 220 MHz licenses.  In 1991, when thepending applications were filed, parties interested inusing the 220 MHz spectrum may have decided not toapply for these licenses because the rules precluded alicensee from offering the type of service that theseparties desired to offer, such as primary fixed service,paging, or nationwide commercial service.

11
Third Report and Order, 12 F.C.C.R. 10,943, p 200.  PLMRS  claims there would be no such unfairness because the Commission had in the Original Order designated four other  licenses for nationwide commercial use.  Anyone seeking a  commercial license in 1991, PLMRS reasons, had an opportunity to apply for it, and "nothing in the record supports the  FCC's finding that such entities opted out of the 1991 filing  process because the rules precluded the type of service that  these parties desired to offer."

12
This is a non sequitur.  That one had an opportunity to  apply for other commercial licenses does not justify denying  one an opportunity to file for the formerly non-commercial  licenses once that restriction is lifted.  In any case, PLMRS  itself represents that in 1991 there were 140 applicants for  the four commercial licenses. The Commission reasonably  concluded that some of those applicants may have decided not  to apply for the four licenses now at issue because they were  not then designated for commercial use.  See id.  (PLMRS  acknowledges that a commercial license is more valuable than  a non-commercial license.)  When "an agency is obliged to  make policy judgments where no factual certainties exist or  where facts alone do not provide the answer, our role is ...  limited [to requiring] only that the agency so state and go on  to identify the considerations it found persuasive."  Melcher  v. FCC, 134 F.3d 1143, 1152 (D.C. Cir. 1998).  The Commission easily meets that standard here.

13
The Commission also gave an affirmative reason grounded  in public policy for expanding the existing pool of applicants:"Opening a filing window for all interested applicants ... will  increase the likelihood that competitive processes will trigger  the delivery of a broad array of services to customers at  reasonable prices."  Third Report and Order, 12 F.C.C.R.  10,943, p 200.  PLMRS does not even attempt to cast doubt  upon this justification for the Commission's change of course.

14
Instead PLMRS next argues that the Commission, by  returning all pending applications and electing to auction the  licenses, invited unreasonable delay because it was inevitable  that the original applicants would challenge those actions in  court.  As the Commission noted in the final rule, however,  had it not returned the applications of PLMRS and others it  would just as certainly have faced a court challenge from  parties interested in obtaining commercial licenses.  See id.  p 203.  We give such a predictive judgment our deference, of  course.  See Melcher, 134 F.3d at 1152;  FCC v. National  Citizens Comm. for Broad., 436 U.S. 775, 814 (1978) ("[A]  forecast of the direction in which future public interest lies  necessarily involves deductions based on the expert knowledge of the agency").  Deference aside, we do not endorse  PLMRS's suggestion that an agency must gauge the public  interest with reference to the litigation incentives facing  private parties.  To charge an agency with the delay imposed  upon it by others--in effect to encourage the agency to adopt  the course found least objectionable to interested parties-would hardly seem to further the public interest, and would  create a perverse incentive for parties to threaten the agency  with litigation.

15
PLMRS also contends that because the Commission in 1993  granted the four licenses it had designated for nationwide  commercial use under the Original Order, the agency acted  arbitrarily and capriciously by failing to process PLMRS's  application at the same time.  As the agency explains, however, it processed the commercial applications in 1993 because the rules promulgated in the Original Order to govern nationwide commercial licenses had become final and were not  subject to further agency reconsideration.  The Commission  did not process the applications for nationwide noncommercial licenses in 1993 because there were pending  before it three petitions for reconsideration of the rules  governing assignment of those licenses.  See Notice:  November 19, 1992, Date Established for Commercial Nationwide  220-222 MHz Band Applicants to File Application Amendments to Satisfy Entry Criteria, 57 Fed. Reg. 49,475, 49,475  (1992).  We see nothing arbitrary or capricious in the Commission's decision to defer issuing licenses until it has finally  settled upon the rules for doing so.  See Chadmoore Communications v. FCC, 113 F.3d 235, 242 (D.C. Cir. 1997) (holding  disparate treatment arbitrary only if parties are similarly  situated).

16
PLMRS's final two contentions, made only in passing, may  be rejected in kind;  neither raises a question open in this  circuit.  First, PLMRS did not, by virtue of filing its application, obtain the right to have it considered under the rules  then applicable.  See id. at 241.  Second, because PLMRS  obtained no such right, the Commission's subsequent change  in the regulations was not retroactive, let alone impermissibly  retroactive, rulemaking.  See DIRECTV, Inc. v. FCC, 110  F.3d 816, 825-26 (D.C. Cir. 1997) (holding that because  Commission's original order did not grant right to any particular broadcast channels, subsequent decision to auction those  channels not retroactive though it upset expectations based  upon prior law).

17
We therefore conclude that the Commission's decision to  auction the licenses and to return PLMRS's application was  neither arbitrary nor capricious.

18
B.Columbia's Challenge to the Third Report and Order

19
The Commission may not base a decision to designate a  band of frequencies for a particular use upon "the expectation  of Federal revenues from the use of a system of competitive  bidding."  47 U.S.C. § 309(j)(7)(A).  Columbia claims the  Commission did just that, however, when it designated for commercial use the channels covered by the four licenses at  issue in this case.  For this it relies exclusively upon the  videotape of a meeting at which the five-member Commission  voted unanimously to approve the notice of proposed rulemaking that led a year and one-half later to the Third Report  & Order.  See Second Memorandum Opinion and Order and  Third Notice of Proposed Rulemaking, 11 F.C.C.R. 188  (1995).

20
At that meeting two of the five Commissioners mentioned  the expectation of federal revenues.  Commissioner Susan  Ness elicited from the Commission staff the estimate that  proceeds of an auction would be "in the neighborhood of a  quarter-billion dollars."  She also commented that the 33  remaining original applicants "include some of the largest  U.S. Companies--AT&T, UPS, GE to name a few.  These  national companies can afford to return to the U.S. taxpayer a  little of the value of the spectrum."  Chairman Reed Hundt  stated, "I suppose we could hold an auction.  I suppose we  could hold a comparative hearing, too, ... on the following  basis.  The one who wants to give us the most money wins  the hearing."  Columbia argues that these statements show  the Commission violated § 309(j)(7)(A), that is, designated the  licenses to commercial use based "principally, if not exclusively, [upon] the FCC's commitment to convert the nationwide  220 MHz spectrum into federal revenues."

21
The Commission claims it did not base its decision upon the  expectation of revenues.  It points out that the Third Report  and Order makes no mention of such impermissible considerations, but rests solely upon legitimate justifications, such as  promoting efficient nationwide communication services at reasonable prices, promoting the development of new technologies, and ensuring that licenses go to those who value them  most.  See 12 F.C.C.R. 10,943, pp 47, 202.

22
It is fundamental that "[a]gency opinions, like judicial  opinions, speak for themselves."  Checkosky v. SEC, 23 F.3d  452, 489 (D.C. Cir. 1994).  Rendered at the conclusion of all  the agency's processes and deliberations, they represent the  agency's final considered judgment upon matters of policy the  Congress has entrusted to it.  Accordingly, "[w]here an agency has issued a formal opinion or a written statement of its  reasons for acting, transcripts of agency deliberations at  Sunshine Act meetings should not routinely be used to impeach that written opinion."  Kansas State Network v. FCC,  720 F.2d 185, 191 (D.C. Cir. 1983).

23
We do not think the evidence that two Commissioners  initially flirted with an impermissible rationale suffices to  demonstrate that the permissible rationale given a year and  one-half later in the Commission's published opinion was a  mere pretext.  Otherwise, it would seem, almost any slip of  the tongue during an agency's decision making process could  be fatal, contrary to the settled principle that "[u]p to the  point of announcement, agency decisions are freely changeable, as are the bases of those decisions."  Checkosky, 23 F.3d  at 489.

24
Columbia next claims that Chairman Hundt prejudged the  question whether to assign the licenses by auction.  In August 1995, before the Commission issued the Third Notice of  Proposed Rulemaking, the Chairman unveiled in a speech the  Commission's "lineup of upcoming auctions," including the  auction in the third quarter of 1996 of the licenses at issue  here.  The Washington Legal Foundation then petitioned the  Commission requesting that the Chairman recuse himself  from voting upon the auction issue on the ground that he  would be unable to give meaningful consideration to the  public comments opposing an auction and favoring a lottery.Chairman Hundt did not recuse himself, and indeed voted to  adopt the Third Report and Order, as did all the Commissioners.

25
The day after the public release of that order Chairman  Hundt responded to the WLF's petition.  He explained that  his 1995 statements indicated only his preliminary views, that  his announcement of tentative auction dates "included all  potential services to be licensed" by auction in 1996, and that  the Commission must begin to plan for an auction "well in  advance of any final Commission decision to authorize [one]."Letter from Chairman Hundt to Washington Legal Found.  (March 13, 1997).

26
Generally, we are unable to view the motivations of an  agency official except as through a glass, darkly, and the  glass may be tinted not by the official's unalterable prejudgment but by legitimate policy preconceptions;  in a particular  instance, the cause may be exceedingly difficult to discern.In order to avoid trenching upon the agency's policy prerogatives, therefore, we presume that policymakers approach  their quasi-legislative task of rulemaking with an open  mind--but not an empty one.  See Lead Indus. Ass'n v. EPA,  647 F.2d 1130, 1179 (D.C. Cir. 1980) ("Agency decisionmakers  are appointed precisely to implement statutory programs, and  so inevitably have some policy preconceptions");  United  Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1208 (D.C.  Cir. 1980) ("An administrative official is presumed to be  objective [and] mere proof that [he or] she has taken a public  position, or has expressed strong views, or holds an underlying philosophy with respect to an issue in dispute cannot  overcome that presumption").

27
Columbia's burden is to make a "clear and convincing  showing that [Chairman Hundt had] an unalterably closed  mind on matters critical to the disposition of the proceeding."Association of Nat'l Adver. v. FTC, 627 F.2d 1151, 1170 (D.C.  Cir. 1979).  That it has not done.  Even if we assume  Chairman Hundt was predisposed in favor of auctions as a  matter of policy, that alone would not imply that he was  unwilling to consider arguments to the contrary.

28
In sum, Columbia has not shown that the Commission  decided to auction the licenses based upon the impermissible  expectation of federal revenues.  Neither has it shown that  Chairman Hundt should have disqualified himself because he  had unalterably decided to vote for an auction even before the  period for public comment had opened.

III.  Conclusion

29
For the foregoing reasons, we reject the petitioners' challenge to the Third Report and Order.  Because the Third  Report and Order superseded the disputed portions of the  Reconsideration Orders, see 12 F.C.C.R. 10,943, p 6, their challenge to the Reconsideration Orders is moot.  Accordingly, the petitions for review are

30
Denied.