Court Opinion

ID: 769662
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:04:13+00
Date Added: 2024-06-11T08:06:20.766502
License: Public Domain

220 F.3d 601 (D.C. Cir. 2000)
Benkelman Telephone Company, et al.,Petitionersv.Federal Communications Commission and United States of America, RespondentsNationwide Paging, Inc., et al.,IntervenorsMetamora Telephone Company, Petitionerv.Federal Communications Commission and United States of America, Respondents.Advanced Paging, Inc, et al.,Petitionersv.Federal Communications Commission and United States of America, RespondentsRobert L. Wagner, et al.,Petitionersv.Federal Communications Commission and United States of America, RespondentsPersonal Communications Industry Association, Petitionerv.Federal Communications Commission and United States of America, Respondents
No. 97-1245, No. 97-1294, No. 99-1247, No. 99-1251, No. 99-1331, No. 99-1337
United States Court of Appeals, FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 16, 2000Decided July 28, 2000

On Petitions for Review of Orders of the Federal Communications Commission
Carl W. Northrop argued the cause for the petitioners and  intervenors.  Timothy E. Welch, Kenneth E. Hardman, John  D. Pellegrin, Frederick M. Joyce, Kenneth D. Patrich and  Robert L. Hoggarth were on brief. Ray M. Senkowski, Christine M.Crowe and David A. Gross entered appearances.
Roberta L. Cook, Counsel, Federal Communications Commission, argued the cause for the respondents. Christopher J.  Wright, General Counsel, John E. Ingle, Deputy Associate  General Counsel, Federal Communications Commission, Joel I. Klein, Assistant Attorney General, United States Department of Justice, and Robert B. Nicholson and Andrea Limmer, Attorneys, United States Department of Justice, were  on brief.  Daniel M. Armstrong, Associate General Counsel,  and Gregory M. Christopher, Counsel, Federal Communications Commission, entered appearances.
Before:  Williams, Sentelle and Henderson, Circuit  Judges.
Opinion for the court filed by Circuit Judge Henderson.
Karen LeCraft Henderson, Circuit Judge:

1
The petitioners  challenge a Federal Communications Commission (FCC) rule making that established a geographic area licensing regime  for common carrier paging and 929 MHz private carrier  paging licenses1 and a competitive bidding procedure for  mutually exclusive2 applications filed thereunder.  See In re  Revision of Part 22 and Part 90 of the Comm'n's Rules to  Facilitate Future Dev. of Paging Sys., Second Report and  Order and Further Notice of Proposed Rule making, 12  F.C.C.R. 2732 (1997) (Second R&O);  In re Revision of Part  22 and Part 90 of the Comm'n's Rules to Facilitate Future  Dev. of Paging Sys., Memorandum Opinion and Order on  Reconsideration and Third Report and Order, 14 F.C.C.R.  10,030 (1999) (Third R&O).  The petitioners and intervenors  contend the FCC lacked statutory authority under 47 U.S.C.  § 309(j) to auction the new geographic paging licenses, that  the FCC arbitrarily failed to require that geographic licensees provide notice of construction to neighboring incumbent licensees and that the algorithm the FCC used to identify  pending mutually exclusive applications violates the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. §§ 3501 et seq.  For the reasons set out below we reject each of these  arguments and deny the petitions for review.

I.

2
Before 1996 the FCC allocated licenses for common carrier  paging and exclusive private carrier paging service spectrum  under the traditional site-specific licensing scheme which  required a separate license for each paging transmitter site. Each license application proposed a transmission frequency  and set out technical information on the proposed station,  including its potential for electrical interference with adjacent  stations.  See 47 C.F.R. § 22.529 (1996);  id. § 22.559.  Once  an applicant filed, the FCC reviewed each site-specific application preliminarily for formal compliance and issued public  notice of acceptance of filing.  See id. § 22.120.  Generally, if  an applicant's proposed service would overlap and interfere  with an incumbent licensee's transmission, the application was  denied.  See id. § 22.537(a).  When mutually exclusive site specific applications were filed, a single applicant was selected  by lottery.  See id. § 22.131(c)(1).

3
In the challenged rule making the FCC replaced the sites pecific licensing process with a scheme of geographic licenses.  The new scheme authorizes a licensee to operate a  transmitter anywhere within the licensed geographic area  without notice to the FCC of the transmitter's operation or of  its precise location.  The geographic licensee must, however,  protect incumbent operators in the geographic area and  adjacent areas from harmful electrical interference.  In order  to bid at a geographic license auction, an applicant must file  an FCC Form 175 (Short Form) either identifying individual  channels and markets it seeks or checking the "All" box,  which allows it to bid on any or all of the channels and  markets being auctioned.  After filing the Short Form, but  before the auction, an applicant must submit an "up front"  payment which "bear[s] a relation to the value of the licenses to be awarded."  Second R&O, 12 F.C.C.R. at 2794.  A  successful bidder faces "automatic cancellation" of the license  if it does not either (1) "provide coverage to one-third of the  population within three years of the license grant, and to two thirds of the population within five years of the license grant"  or (2) "provide substantial service to the geographic license  area within five years of license grant."  Id. at 2765.

4
In contemplation of the new geographic system, the FCC  imposed a filing freeze as of February 8, 1996. On February  19, 1997 the Commission released its Second Report and  Order outlining the auction procedures for the new geographic licenses and authorizing the Wireless Telecommunications  Bureau to dismiss all pending exclusive paging applications  and to either grant or dismiss all pending non-mutually  exclusive paging applications.  On June 24, 1999 the FCC  issued its Third Report and Order affirming the geographic  licensing scheme but somewhat modifying its procedures.  On  August 12, 1999 the FCC issued a public notice announcing  the relevant auction procedures for the geographic paging  licenses.  See Auction of 929 MHz Paging Serv. Spectrum,  Public Notice (1999).  Applicants for the licenses filed their  Short Forms on January 20, 2000 and deposited their up front  payments on February 7, 2000.  On February 24, 2000 the  FCC conducted the auction.

5
Six petitions for review of the FCC's rule making have been  filed at various points in the proceedings and have been  consolidated for consideration here.

II.

6
The petitioners, consisting of incumbent paging licensees  and a paging industry trade association (licensee petitioners)3 and dismissed license applicants (applicant petitioners),4 challenge the FCC's new geographic licensing scheme on three  grounds.  We address--and reject--each ground in turn.

A. Statutory Authority for License Auctions

7
The petitioning trade association and incumbent licensees,  joined by the intervenors,5 challenge the FCC's authority  under 47 U.S.C. § 309(j)(1) to require that existing licensees  bid at auction when they seek to "modify" their present  licenses.  Section 309(j)(1) requires:If, consistent with the obligations described in paragraph(6)(E), mutually exclusive applications are accepted forany initial license or construction permit, then, except asprovided in paragraph (2), the Commission shall grantthe license or permit to a qualified applicant through asystem of competitive bidding that meets the require-ments of this subsection.

8
47 U.S.C. § 309(j)(1).  Section 309(j)(6)(E), in turn, provides:"Nothing in this subsection, or in the use of competitive  bidding, shall ... (E) be construed to relieve the Commission  of the obligation in the public interest to continue to use  engineering solutions, negotiation, threshold qualifications,  service regulations, and other means in order to avoid mutual  exclusivity in application and licensing proceedings;...."  Id.  § 309(j)(6)(E).  In determining the Commission's authority  under this statute, "the court reviews the FCC's interpretation of the Communications Act under the now-familiar standard set forth in Chevron U.S.A. Inc. v. Natural Resources  Defense Council, Inc., 467 U.S. 837, 842-843, 104 S.Ct. 2778,  81 L.Ed.2d 694 (1984), by which the court considers 'whether  Congress has directly spoken to the precise question at issue,'  id. at 842, and if it has not, 'whether the agency's answer is  based on a permissible construction of the statute.' Id. at  843."  Community Television, Inc. v. FCC, 216 F.3d 1133, 1137 (D.C. Cir. 2000).  We conclude that, while the  cited statutory language is ambiguous, the Commission has  reasonably construed it to authorize the challenged auctions.

9
The petitioners first argue modified licenses are not "initial" licenses for which section 309(j)(1) authorizes competitive  bidding.  In order for a license to be considered initial under  section 309(j)(1), "a newly issued license must differ in some  significant way from the license it displaces." Fresno Mobile  Radio, Inc. v. FCC, 165 F.3d 965, 970 (D.C. Cir. 1999).  In  Fresno we noted that "nothing in the text of [section 309(j)]  forecloses [the FCC] from considering a license 'initial' if it is  the first awarded for a particular frequency under a new  licensing scheme, that is, one involving a different set of  rights and obligations for the licensee."  Id.  The FCC  reasonably treated the incumbent licensees' applications for  modification under the new geographic system as applications  for "initial" licenses under such a "new licensing scheme."Despite some general similarities--the two licensing schemes  provide the same paging service on the same frequencies,  provide fill-in sites and maintain the same licensee buildout  requirements--the FCC pointed out significant fundamental  differences.  "[G]eographic licensees will gain use of a large,  geographic area and the freedom to locate base stations  anywhere within that larger geographic region" as opposed to  "the existing paging service licenses that are essentially  confined to the smaller region."  In re Revision of Part 22  and Part 90 of the Comm'n's Rules to Facilitate Future Dev.  of Paging Sys., Notice of Proposed Rulemaking, 11 F.C.C.R.  3108, 3128 (1996).  The former site-specific licenses were  "heavily licensed," "confined largely to the addition of fill-in  sites and minor expansion" and had "relatively little desirable  spectrum ... available for licensing," while the new geographic licenses provide greater freedom for construction and  thus more desirable spectrum.  Id. at 3112.  The petitioners  themselves acknowledge that the geographic license scheme  has wrought "fundamental alterations to the paging industry's market structure and licensing schemes."  Petitioners'  Br. 30.  Given these alterations, we hold the FCC reasonably  treated modification applications by incumbents as "initial"  applications within the meaning of section 309(j)(1).

10
The petitioners also assert the FCC shirked its duty under  section 309(j)(6)(E) to affirmatively avoid mutual exclusivity  by adopting the new licensing scheme, which necessarily  causes a high rate of mutual exclusivity at certain frequencies, and by creating "phantom" or "artificial" mutual exclusivity through the "All" box option and the "substantial  service" alternative.  We reject this argument for substantially the same reason we rejected a similar argument raised in  DIRECTV v. FCC, 110 F.3d 816, 827-28 (D.C. Cir. 1997).  In  DIRECTV the petitioners contended that "the Commission  lacked authority to adopt an auction rule under § 309(j)  because it did not first make sufficient efforts, while still  using the [previous] approach to the assignment of licenses, to  avoid mutual exclusivity among their applications."  DIRECTV, 110 F.3d at 828.  We concluded, however:

11
Once the Commission had abandoned [its previous] meth-odology--for sufficient reasons, as we have seen--it wasfaced with mutually exclusive applications.  Nothing ins 309(j)(6)(E) requires the FCC to adhere to a policy itdeems outmoded "in order to avoid mutual exclusivity in... licensing proceedings";  rather, that provision in-structs the agency, in order to avoid mutual exclusivity,to take certain steps, such as the use of an engineeringsolution, within the framework of existing policies.

12
Id. (quoting 47 U.S.C. § 309(j)(6)(E)).  Similarly here, the  FCC reasonably abandoned the site-specific system in favor  of a geographic one, finding that "the public interest is better  served by licensing all remaining paging spectrum through a  geographic licensing scheme than by processing additional  site-specific licenses," Third R&O, 14 F.C.C.R. at 10,043, while "it would not be in the public interest to implement  other licensing schemes or other processes that avoid mutual  exclusivity," id at 10,042.  The Commission further reasonably found that both the "All" box option and the substantial  service alternative were necessary to effectively implement  the new scheme--the former to "give[ ] bidders the flexibility  to pursue back-up strategies in the event they are unable to  obtain their first choice of licenses" and the latter to encourage service to rural areas as required under section 309(j)(3).Third R&O, 14 F.C.C.R. at 10,081-82.  Having found the  policy changes in the public interest, the Commission was  authorized to implement them without regard to section  309(j)(6)(E) which imposes an obligation only to minimize  mutual exclusivity "in the public interest," 47 U.S.C.  § 309(j)(6)(E), and "within the framework of existing policies," DIRECTV, 110 F.3d at 828.  Thus, the FCC's authority  to adopt the new licensing scheme was not foreclosed by its  section 309(j)(6)(E) obligation.6

B. Notice to Incumbent Licensees

13
Next, the licensee petitioners and two of the intervenors  contend that geographic licensees should be required under  the new system to provide advance notice of new construction  to adjacent site-specific licensees, in order to warn them of  potential interference, as they are required to do for adjacent  geographic licensees.  See Second R&O, 12 F.C.C.R. at 2765  App. A, § 22.503(h).  Site-specific incumbent licensees, however, do not share geographic licensees' need for such warning because the existing rules furnish interference protection  through requirements "that govern transmitter height and  power, distance between transmission stations, the licensee's  protected service area, and/or the field strength of the licensee's service and interfering signals."  Second R&O, 12 F.C.C.R. at 2767.7 Geographic licensees, by contrast, enjoy no  similar protection from interference.  Because of this distinction, we conclude the FCC reasonably accorded the two  groups different treatment.

C. PRA

14
Finally, the applicant petitioners and two intervenors claim  that the algorithm the FCC used to determine their applications should be dismissed for mutually exclusivity is a "collection of information" for which OMB approval was not obtained as required by the PRA.8  We disagree and hold that  the algorithm is not a "collection of information" under the  PRA.9  The PRA defines "collection of information" as "obtaining, causing to be obtained, soliciting, or requiring the  disclosure to third parties or the public, of facts or opinions  by or for an agency."  44 U.S.C. § 3502(3)(A).  To come  within this definition the algorithm must impose a "reporting  requirement" on applicants.  See Saco River Cellular, Inc. v.  FCC, 133 F.3d 25, 33 (D.C. Cir. 1998).  It does not.  The  algorithm simply blocks applications that meet specific criteria for mutual exclusivity.  It is true, as the petitioners  assert, that "if an applicant is to ensure its basic acceptability," it must research in advance whether or not the license it  seeks meets the algorithm's criteria, Reply Brief at 24, but  the FCC does not require such research or that its results be  reported.10

15
For the foregoing reasons, the petitions for review are

16
Denied.

Notes:

1
 Common carrier paging licensees "gain[ ] the exclusive use of  the licensed frequency within their protected service area."  PSWF  Corp. v. FCC, 108 F.3d 354, 355 (D.C. Cir. 1997).  Private carrier  paging licensees, on the other hand, "ha[ve] to share their allotted  frequency with other such licensees operating in the same geographic area."  Id.

2
 Applications are considered "mutually exclusive" if only one can  be granted because they seek the same license or different licenses  that would interfere with each other.  See Lakeshore Broadcasting,  Inc. v. FCC, 199 F.3d 468, 470 (D.C. Cir. 1999) (citing Ashbacker  Radio Corp. v. FCC, 326 U.S. 327, 333 (1945)).

3
 The incumbent licensees are Benkelman Telephone Co., Frederick W. Hiort dba B&B Beepers, Wauneta Telephone Co., Metamora  Telephone Co., Advanced Paging, Inc., Mark A. Apsley dba Progressive Paging, Capitol Radiotelephone Co., Inc. dba Capitol Paging, Express Message Corp., A. V. Lauttamus Communications, Inc.  and NEP, LLC dba Northeast Paging.  The trade association is  Personal Communications Industry Association.  For convenience, these petitioners or any subgroup of them will be identified as  "licensee petitioners."

4
 These petitioners, whose applications, filed between November  15, 1995 and February 8, 1996, were dismissed without action  because the FCC considered them mutually exclusive, are Robert  L. Wagner, Melvia M. Woods, Robert Horn, John Piskor, Mohammed Siddiqui and Lenard Travis.

5
 The intervenors include AirTouch Paging, Arch Communications  Group, Inc., Metrocall, Inc., Nationwide Paging, Inc. and PowerPage, Inc.

6
 The petitioners also challenge the "substantial service" standard  as too vague to permit the FCC to provide notice to licensees of  license termination, as required under 5 U.S.C. § 558(c).  We find  adequate notice is provided, however, in the review procedure the  FCC requires before automatic termination can occur.  See Brief of  Respondents at 28.

7
 In addition, geographic licensees are required to provide construction information upon request.  See 47 C.F.R. § 22.529(c).

8
 PRA section 3507(a) provides that "[a]n agency shall not conduct or sponsor the collection of information unless in advance of  the adoption or revision of the collection of information ... the  agency has" submitted the proposed collection of information to the  OMB Director, "the [OMB] Director has approved the proposed  collection of information ...;  and ... the agency has obtained from  the [OMB] Director a control number to be displayed upon the  collection of information."  44 U.S.C. § 3507(a).

9
 The FCC contests our jurisdiction over the claims of those  applicant petitioners who did not file a petition for reconsideration  of the FCC's dismissal of their applications.  See 47 U.S.C.  § 155(c)(7).  The FCC concedes, however, that the court has jurisdiction over at least one of the petitions.  See Brief of Respondents  at 32.  The PRA issue is therefore squarely before the court.

10
 The petitioners' alternative argument that the algorithm violates the Administrative Procedure Act, 5 U.S.C. § 553, because  promulgated without public notice and comment is waived because  the argument was raised for the first time in the petitioners' reply  brief.  See Grant v. United States Air Force, 197 F.3d 539, 543  (D.C. Cir. 1999) ("[A]n argument first made in a reply brief comes  too late.") (citing Fraternal Order of Police v. United States, 173  F.3d 898, 902-03 (D.C. Cir. 1999)).