Court Opinion

ID: 4222439
Source: CourtListenerOpinion
Date Created: 2017-11-21 16:00:50.964377+00
Date Added: 2024-06-11T14:42:09.110626
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 20, 2017          Decided November 21, 2017

                        No. 16-1290

               PRESS COMMUNICATIONS LLC,
                       APPELLANT

                              v.

         FEDERAL COMMUNICATIONS COMMISSION,
                     APPELLEE

           ATLANTIC CITY BOARD OF EDUCATION,
                      INTERVENOR

              On Appeal from an Order of the
            Federal Communications Commission

     Harry F. Cole argued the cause for appellant. With him on
the briefs were Anne Goodwin Crump and Ashley Ludlow.

     Thaila K. Sundaresan, Counsel, Federal Communications
Commission, argued the cause for appellee. With her on the
brief were Howard J. Symons, General Counsel at the time the
brief was filed, Jacob M. Lewis, Associate General Counsel,
and Richard K. Welch, Deputy Associate General Counsel.

    Matthew T. Murchison argued the cause for intervenor.
With him on the brief were James H. Barker, Matthew J.
Glover, and Alexander L. Stout.
                              2

    Before: PILLARD and WILKINS, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge PILLARD.

     PILLARD, Circuit Judge: Press Communications (Press)
runs a radio station broadcasting from a small town on the
Atlantic Coast in New Jersey. Press would like to move the
station to different premises further inland—a move that for
technological and regulatory reasons would require it also to
shift to a new channel on the radio dial. Press accordingly
submitted an application to the Federal Communications
Commission (FCC or Commission) for a license modification
to permit its channel transfer. Specifically, Press asked the
FCC to accommodate its move by authorizing Press to swap
stations with Equity Communications (Equity). The proposed
swap would assign Press’s WBHX (FM) the channel Equity’s
WZBZ (FM) now occupies, and move Equity’s station to
Press’s current channel.        The FCC dismissed Press’s
application because bumping Equity to Press’s channel would
violate FCC channel spacing rules, putting Equity’s station too
close to the Atlantic City Board of Education’s student run
station WAJM (FM) and to Delaware station WJBR (FM). The
Commission disagreed with Press’s view that, because Press
filed its application after the lapse and before the untimely
renewal of the Board of Education’s license, the short spacing
problem was irrelevant. Press now asks us to set aside as
arbitrary and capricious and inconsistent with the
Communications Act of 1934 (Act) the FCC’s Memorandum
Opinion & Order denying its application for review of the FCC
Media Bureau’s decision. Because we conclude that the FCC
acted reasonably and complied with the Act, we affirm the
FCC’s Order.
                                3
                        I. BACKGROUND

                    A. LEGAL FRAMEWORK

      Title III of the Act regulates American broadcast radio. 47
U.S.C. § 301 et seq. The Act confers on the United States
control “over all the channels of radio transmission,” id. § 301,
charges the FCC with implementing a licensing scheme
pursuant to the Act, id. § 303, and sets “public convenience,
interest, or necessity” as the Commission’s guiding principles,
id. Operation of a broadcast radio station requires a license
from the FCC, id. §§ 301, 307(a)-(d), and a station must apply
to the FCC for permission to modify its license, see 47 C.F.R.
§ 73.3573. The FCC may dismiss an application that does not
comply with FCC rules. Id. § 73.3566. The FCC’s rules cover
a lot of regulatory terrain, from the construction of radio towers
to the conditions of broadcast operation. See generally 47
C.F.R. subpts. B & H. Those rules spell out the conditions for
modifying a station’s operation, whether by “major change”
such as new ownership, or “minor change” such as change to
an adjacent channel. See id. § 73.3573. As FCC regulations
explain, an application that does not comply with FCC “rules,
regulations or other requirements,” “unless accompanied by an
appropriate request for waiver, will be considered defective
and will not be accepted for filing.” Id. § 73.3566.

    The rule at the heart of this case is Section 73.207 of the
Commission’s regulations, which establishes minimum
separation requirements for FM radio stations. Id. § 73.207.
Each radio station has a home on the ground (its transmitter),
and on the dial (its frequency). When two stations are not far
enough apart both on the ground and on the dial, their signals
are likely to interfere with one another, disrupting their
broadcasts. The spacing requirements laid out in Section
73.207 are designed to prevent that unwanted interference. The
                               4
distance the FCC requires between station transmitters on the
ground corresponds inversely to the distance between their
frequencies on the dial. For example, for our purposes, the
transmitters of “first-adjacent” channels, such as 99.3 and 99.5
or 100.7 and 100.9, must be at least 113 kilometers apart;
transmitters for “second-adjacent” channels, such as 99.3 and
99.7 or 100.7 and 101.1, must have at least 69 kilometers
between them. Id. § 73.207(b)(1) (Table A). As a general
matter, an application that fails to meet these spacing
requirements, both on the ground and between frequencies, is
said to create short spacing and is therefore defective. Id.
§ 73.207(a).

     Section 73.213 exempts the preexisting locations of
“grandfathered” short spaced stations from compliance with
the spacing rules of Section 73.207. See id. § 73.213. When
the FCC adopted its minimum spacing requirements, it excused
stations at already-authorized locations from complying with
the new spacing criteria; as Section 73.213 explains, stations
operating at locations authorized prior to 1964 or 1989 are
thereby “grandfathered.”        See id. § 73.213(a), (b).
Grandfathered short spaced stations “may be modified or
relocated” under Section 73.213, id., but any application for
minor modification such as a change in channel “must” satisfy
“the minimum spacing requirements of § 73.207” at the
proposed new site “without resort” to the grandfathering
provision, id. § 73.203 Note.

     The FCC’s regulations also spell out licensing procedures.
The Act provides that no station may broadcast without a
federal license. 47 U.S.C. § 301. Once granted, “no such
license shall be construed to create any right, beyond the terms,
conditions, and periods of the license.” Id. A license term is
“not to exceed 8 years,” id. § 307(c)(1), and may be renewed,
id. §§ 307(c)(1), 309(k)(1). According to Section 73.3539 of
                                5
the Commission’s regulations, applicants must submit
broadcast license renewal applications to the FCC at least four
months before the expiration of their current license terms. 47
C.F.R. § 73.3539. In addition to processing license renewals,
the FCC also handles license modifications. The FCC follows
a “first come/first serve” processing sequence for license
modification applications. Id. § 73.3573(f)(1). Under this cut-
off rule, “the first acceptable application cut[s] off the filing
rights of subsequent applicants” that would be mutually
exclusive because, for example, they would use the same
frequency or be so close as to create interference. Id.

                  B. FACTUAL BACKGROUND

     On August 27, 2010, Press submitted a minor modification
application to the FCC. At the time it applied, Press operated
radio station WBHX from a facility it leased on a monthly basis
in Beach Haven, Ocean County, New Jersey. Press sought to
move the transmitter for WBHX to a new location that would
be less prone to natural disaster and where it might find a longer
term lease. Because moving its transmitter to a new location
would make WBHX short spaced to nearby radio stations,
Press proposed that the FCC effectuate an involuntary channel
swap with the frequency now used by Equity’s station, WZBZ.
Under Press’s proposal, Equity would keep its transmitters in
their current location, but would switch frequencies with Press;
that is, Equity would move on the radio dial from 99.3 to 99.7,
while Press would move from 99.7 to 99.3. Broadcasting from
99.3, Press could move its physical transmitters inland without
short spacing itself to stations adjacent to 99.7.

     In response to Press’s application, the FCC’s Media
Bureau sent a deficiency letter notifying Press that its
application involved two impermissible short spacings. The
letter first explained that the proposed swap would leave
                               6
Equity’s station, WZBZ, short spaced to Atlantic City Board of
Education station WAJM, located at 88.9 on the dial. Press had
acknowledged in its application that, were the swap to take
place, Equity’s station would “theoretically” be short spaced to
the Board of Education’s station, but argued the concern was
“moot” because the Board of Education had failed to renew its
broadcast license. J.A. 57. The Board of Education’s license
had expired in June 2006, and it did not submit a renewal
application to the FCC until three weeks after Press submitted
its minor modification application. Even though the Board of
Education’s license had expired, the Media Bureau recognized
WAJM as an operational station (albeit broadcasting
unlawfully) and disagreed with Press’s contention that the
minimum distance requirement between WZBZ and WAJM
was “moot” or otherwise immaterial.

     Second, the new dial position Press proposed for Equity’s
WZBZ—i.e. the position Press now holds—would, if occupied
by Equity, make the station short spaced to Delaware station
WJBR 99.5. Equity’s current dial position is also short spaced
to WJBR, but enjoys grandfather status there. The move from
99.3 to 99.7 would not change the distance between Equity and
WJBR on the dial: At either location, Equity would be .2 MHz
away from Delaware station WJBR 99.5. Nor would the
physical distance between the two stations change: The tower
locations and hence ground distance between the two stations
would remain the same. The move, therefore, would not
exacerbate Equity’s existing short spacing. But the Media
Bureau wrote that the conventional spacing rules of Section
73.207 applied to Equity’s move, and Equity would not meet
those minimum spacing requirements with respect to WJBR at
its new location; that short spacing, the Commission ruled,
“constitute[d] an acceptance defect.” J.A. 261. The Bureau
noted that Press had “failed to cite any precedent for proposing
an involuntary channel substitution to a grandfathered short-
                                7
spaced station.” J.A. 261 n.3. It therefore deemed the WZBZ-
WJBR short spacing a defect in Press’s application.

     The Media Bureau gave Press thirty days to cure those two
defects, and warned Press that failure to do so would result in
a dismissal of its application. Press responded by insisting that
its initial application was not defective because it “would not
result in any unacceptable channel separations.” J.A. 276. It
neither cured the defect nor sought a waiver, but urged the
Bureau to accept its application as-is.

     In an Order also granting the Board of Education’s renewal
application, the FCC’s Media Bureau formally dismissed
Press’s minor modification application. In re Applications of
Atl. City Bd. of Educ. & Press Commc’ns, LLC, 30 FCC Rcd.
10,583 (Media Bureau 2015) (Bureau Order). The Bureau
determined that the two short spacings rendered the application
defective. Because Press declined to remedy the defects or to
seek a waiver of the spacing rules, the Bureau dismissed its
application. Id. at 10,585-87. Press then submitted to the full
Commission an application for review of the Media Bureau
decision. The Commission denied the application. In re Atl.
City Bd. of Educ. & Press Commc’ns, LLC, 31 FCC Rcd. 9380
(2016) (FCC Order). This appeal followed.

                         II. DISCUSSION

     Press advances two arguments for reversal of the FCC’s
decision to dismiss its modification application. It asserts first
that the transfer of a grandfathered short spaced station is
permitted under the FCC’s grandfathering rule, 47 C.F.R.
§ 73.213, making arbitrary and capricious the agency’s
enforcement of its conventional spacing rules against a short
spacing between Equity’s WZBZ and Delaware station WJBR.
Second, Press contends that the agency’s decision to accept the
Board of Education’s late-filed application to renew the license
                               8
for WAJM is contrary to the Communications Act and
constitutes an arbitrary and capricious waiver of the agency’s
deadline and cut-off rules.

      Press must prevail on both arguments in order for us to set
aside the FCC Order. If either of those arguments fails—that
is, if the FCC acted reasonably in rejecting the application on
the basis of either the WZBZ-WBJR short spacing or the
WZBZ-WAJM short spacing—we must uphold the agency’s
decision to dismiss Press’s application.

      A. GRANDFATHERED SHORT SPACING: WZBZ-WJBR

     We review the FCC’s decision only to determine whether
it was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).
Our review is “very deferential,” Rural Cellular Ass’n v. FCC,
588 F.3d 1095, 1105 (D.C. Cir. 2009). “Normally, an agency
[decision] would be arbitrary and capricious if the agency has
relied on factors which Congress has not intended it to
consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs
counter to the evidence before the agency, or is so implausible
that it could not be ascribed to a difference in view or the
product of agency expertise.” Motor Vehicle Mfrs. Ass’n of the
U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
As we consider the FCC’s explanation for its decision, we
recognize the FCC’s interpretation of its own regulations
“control[s] unless plainly erroneous or inconsistent with the
regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997)
(internal quotations omitted).

    We first consider whether the Commission permissibly
dismissed Press’s application to move Equity’s station without
Equity’s consent from its current location, where it is short
spaced but grandfathered under the Commission’s rules, to an
                                9
alternative short spaced location. The FCC contends that any
change in channel must meet the spacing requirements. Press
would therefore at least need to establish that its proposed
move yields adequate channel spacing or, alternatively, obtain
a waiver of the spacing rule. Press does not dispute that its
proposed move would leave Equity short spaced to Delaware
station WJBR, and it did not ask the Commission to waive its
spacing rules. It also failed to point to any precedent for an
involuntary transfer of a third party’s station to a short spaced
location in the absence of a waiver. Press instead rests on its
assertion that grandfathered stations simply are not subject to
the conventional spacing rules. We conclude otherwise.

     The FCC rationally applied its spacing rules, consistent
with its past practice, when it dismissed Press’s application.
Press focuses on Section 73.213(b) of the Commission’s rules,
which provides that “[s]tations at locations authorized prior to
May 17, 1989, that did not meet the . . . separation distances
required by § 73.207 and have remained short-spaced since that
time”—such as Equity’s station WZBZ—“may be modified or
relocated.” 47 C.F.R. § 73.213(b). But the regulation does not
require the Commission to grant a modification application that
imposes involuntary relocation on a third party, nor does it
grandfather that third party’s short spacing in the absence of a
request to waive the short spacing prohibition. Our inquiry,
then, cannot end with Section 73.213(b).

     A grandfathered station qualifies for a change in channel,
says the FCC, only if it meets standard spacing requirements at
its new location. Press’s argument to the contrary ignores a
crucial provision of the regulatory scheme: Applications for a
change in channel—like the one Press seeks for itself and
Equity’s station WZBZ—must satisfy “the minimum spacing
requirements of § 73.207 at the site specified in the application,
without resort to the provisions of the Commission’s rules
                                 10
permitting [grandfathered] short spaced stations as set forth in
[§] 73.213.” 47 C.F.R. § 73.203 Note (emphasis added). Even
without any deference to the Commission, we find it plain that
the Note to Section 73.203 means that a short spaced station
grandfathered under the rule is not necessarily permitted to rely
on its prior grandfathering when it transfers channels. In any
event, under Auer v. Robbins, the FCC’s interpretation of
Section 73.203 is “controlling” because it is neither “plainly
erroneous” nor “inconsistent with the regulation.” 519 U.S. at
461. Press’s application to swap Equity into a new short spaced
channel position was therefore “not in accordance with the
FCC rules,” and defective “unless accompanied by an
appropriate request for waiver.” 47 C.F.R. § 73.3566(a).

      At argument, counsel for Press suggested that we could not
rely on the Note to Section 73.203 without running afoul of the
Chenery principle that a reviewing court may only affirm an
agency’s action on the grounds the agency articulated. SEC v.
Chenery Corp., 318 U.S. 80, 94-95 (1943). We have explained
that “the contested decision need not be a model of clarity. As
long as ‘the agency’s path may reasonably be discerned,’ we
will uphold the decision even if it is ‘of less than ideal clarity.’”
Casino Airlines, Inc. v. Nat’l Transp. Safety Bd., 439 F.3d 715,
717 (D.C. Cir. 2006) (quoting Bowman Transp., Inc. v. Ark-
Best Freight Sys., Inc., 419 U.S. 281, 286 (1974)). The FCC’s
discussion of the WZBZ-WJBR short spacing is admittedly
sparse, but the Bureau Order invokes the principle that
involuntary channel changes for grandfathered stations must
meet the FCC’s minimum spacing requirements. The agency
need not have cited the Section 73.203 Note by name, so long
as it made clear that Equity was subject to the spacing rules of
Section 73.207. Bureau Order, 30 FCC Rcd. at 10,586. We
can reasonably discern the Bureau’s path in its decision
enforcing the spacing requirements. Our consideration of the
FCC’s citation of the Note in support of an already-familiar
                              11
argument is therefore consistent with Chenery. In Chiquita
Brands International, Inc. v. SEC, for example, we found “no
violation of the Chenery principle” where the SEC’s reasoning
was initially “articulated only briefly and in a somewhat
conclusory fashion” and the agency in this court invoked
reasoning “not specifically discussed in the order under
review.” 805 F.3d 289, 299 (D.C. Cir. 2015).

     The FCC’s enforcement of its spacing rules was also
consistent with its past practice. Press sought an unprecedented
license modification from the Commission. It asked to move
Equity involuntarily to a new short spaced location. As Press
conceded at oral argument, it could identify no prior case in
which the Commission granted an application to move a third
party’s grandfathered station to a different short spaced
location without its consent. The FCC emphasized in its Staff
Letter and the Bureau Order that there is no precedent for
“involuntarily changing one station’s short-spaced channel to
another short-spaced channel.” Bureau Order, 30 FCC Rcd. at
10,586; see also J.A. 261 n.3. Regardless of a station’s
grandfathered status, the FCC may force an involuntary
transfer only if, “in the judgment of the Commission,” doing so
would “promote the public interest, convenience, and
necessity.” 47 U.S.C. § 316(a)(1). The statute leaves to the
Commission’s discretion whether a transfer benefits the public,
and Press has failed to identify any way in which the
Commission exercised that discretion arbitrarily here.

    Press rests instead on precedent approving voluntary
moves by grandfathered stations. Even if Equity had joined
with Press to apply for a voluntary station swap, however, the
FCC’s precedent would not compel the agency to disregard its
spacing rules. Rather, the FCC would merely be authorized to
do so if, in its judgment, waiving the short spacing prohibition
were shown to be in the public interest. In In re Eatonton, the
                               12
Commission laid out the framework under which it is
“appropriate to consider waiving strict application of Section
73.207.” In re Eatonton and Sandy Springs, Ga., and Anniston
and Lineville, Ala., 6 FCC Rcd. 6580, 6583 (Media Bureau
1991) (Eatonton). Waiver may be proper if: (1) no new short
spacings are created; (2) no existing short spacings are
exacerbated by bringing the relevant stations closer together;
and (3) the potential for interference does not increase. See id.
The Commission has applied that waiver framework to
applications seeking voluntary transfers of grandfathered
stations to alternative short spaced locations. See In re Newnan
and Peachtree City, Ga., 7 FCC Rcd. 6307, 6308 (1992).
While a grandfathered station may change channels, then, it
may only do so pursuant to an FCC waiver of Section 73.207’s
requirements.

     Press responds that its application did not create “any
unacceptable channel separations,” J.A. 276, so Press “did not
propose a waiver [because] no waiver request was necessary,”
Appellant’s Br. 39—an assertion we have already rejected. To
the extent Press argues it did in fact seek a waiver by eventually
claiming that its request met the Eatonton framework, that
belated contention does not render the Commission’s decision
arbitrary and capricious. Eatonton creates no entitlement to a
waiver even where the specified circumstances are present, but
merely sets out factors under which the Commission will
“consider” waiver. The decision explains that “waivers of our
spacing rules will not be granted absent a showing of
compelling need,” Eatonton, 6 FCC Rcd. at 6584, and, indeed,
the Bureau declined to waive the spacing requirements in
Eatonton itself, where the proposed channel transfer would
have actually reduced existing short spacing. Id.

     Press has also argued that Eatonton does not impose an
affirmative burden on applicants to seek spacing waivers; in
                                13
other words, Press suggests the Commission should have
conducted an Eatonton-style waiver analysis as a matter of
course. Press cites rulemakings in which the Bureau applied
the three-factor test without specifying that it did so in response
to a party’s waiver request. Even where the Eatonton
requirements may be met, however, the agency still makes
case-by-case public-interest determinations, see id., and no
party is entitled to waiver of the minimum spacing criteria as a
matter of right.

     Waivers of the spacing requirements are but one avenue
by which the FCC may further the public’s “interest,
convenience and necessity”; the Eatonton factors are a subset
of the agency’s more general public interest consideration. See
id. at 6580, 6584. When the Bureau offered Press an
opportunity to supplement its initial application—which did
not so much as allude to waiver—Press eventually asserted that
“all” of the Eatonton “factors are present here” and claimed its
application would further the public interest. J.A. 275-78. The
Media Bureau, however, remained unpersuaded.                Press
discussed the anticipated spacing effects of its proposed swap,
but offered no support for its contention that the swap would
not increase interference. It also did not convince the FCC that
the order approving the swap, which Equity opposed, would
nonetheless be in the interests of the public. Equity,
meanwhile, told the Commission that “there was a good policy
reason” that Press’s proposed involuntary swap was
unprecedented: Not all short spaced allotments are created
equal. “Equity should not be forced to accept an alternate
short-spaced allotment that may prove to be operationally
deficient to that of its existing allotment merely to facilitate a
change by another station.” J.A. 104. With Press’s and
Equity’s arguments before it, the Commission determined
there was no “compelling need,” Eatonton, 6 FCC Rcd. at
6584, or public interest sufficient to merit departure from its
                               14
spacing rules. That decision, based on the objectives the
Communications Act sets for the agency and FCC precedent
seeking to serve those objectives, was not arbitrary or
capricious.

     In short, FCC regulations, decisions, and practice support
the Commission’s contention that applications for minor
modifications are subject to the spacing requirements
articulated in Section 73.207. Any nonconforming application
requires a waiver of that rule, and Press failed to justify such
waiver. The Commission reasonably rejected its application as
defective. We accordingly deny Press’s challenge to the FCC’s
Order.

              B. LICENSE RENEWAL: WZBZ-WAJM

     The Bureau Order also relied on a separate ground: The
channel swap Press proposed in its application would create a
conflict with WAJM, a station run by the Atlantic City Board
of Education. Press argues that because WAJM had not filed
for renewal of its expired license at the time of Press’s mutually
exclusive application, the FCC was required to give Press the
benefit of the cut-off rule and deny WAJM’s subsequent, late-
filed renewal application.

     Because the short spacing defect between WZBZ and
WJBR is independently sufficient to support the FCC’s Order,
we do not reach Press’s alternative argument. Press’s assertion
of cut-off rights vis-à-vis the Board of Education’s station also
is of limited prospective importance because the Media Bureau
has adopted a new policy for processing license renewal
applications that makes lapses like the Board of Education’s
less likely to recur. FCC Order, 31 FCC Rcd. at 9384 n.30.
Under its new policy, the Bureau monitors licenses due to
expire and issues “a notice of apparent liability if the renewal
has not been filed within 30 days of the original due date.” Id.
                               15
A licensee in receipt of such a notice faces apparent liability
that presumably will prompt it to file a renewal application
before its license expires.

                              ***

     We uphold the FCC’s Order as valid based on the failure
of Press’s proposed channel swap with Equity to comply with
the applicable short spacing bar or establish its entitlement to a
waiver of that bar. Because that defect suffices to support the
Order, we do not reach Press’s challenge to the FCC’s license-
renewal practices, which have in any event been superseded by
the new policy.

                                                     So ordered.