Small Bus. in Telecommun v. Fed. Commun. Comm'n, 99-1543
| Decision Date | 08 June 2001 |
| Docket Number | No. 99-1543,99-1543 |
| Parties | (D.C. Cir. 2001) Small Business in Telecommunications, Petitioner v. Federal Communications Commission and United States of America, Respondents |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
On Petition for Review of Orders of the Federal Communications Commission
Robert H. Schwaninger, Jr. argued the cause for the petitioner.
Roberta L. Cook, Counsel, Federal Communications Commission, argued the cause for the respondents. Christopher J. Wright, General Counsel, and Daniel M. Armstrong, Associate General Counsel, Federal Communications Commission, A. Douglas Melamed, Acting Assistant Attorney General, and Catherine G. O'Sullivan and Andrea Limmer, Attorneys, United States Department of Justice, were on brief.
Before Henderson, Rogers and Tatel, Circuit Judges.
Opinion for the court filed by Circuit Judge Henderson.
The petitioner, Small Business in Telecommunications (SBT), seeks to challenge rulemaking orders of the Federal Communications Commission (FCC or Commission) that, inter alia, devised service and competitive bidding rules as well as technical and operational rules for 800 MHz Specialized Mobile Radio (SMR) service.1 For the reasons set forth below, we dismiss the petition for review with respect to the Upper Channel First Reconsideration Order and deny the petition with respect to the Lower Channel Report and Order and the Lower Channel Reconsideration Order.
In 1974 the FCC created the SMR service. SMR licensees use bandwidth2 in the 800 MHz and 900 MHz ranges to provide "land mobile communications services" on a commercial basis. 47 C.F.R. 90.7. In order to accommodate new uses of the bandwidth, including cellular telephone and data transmission services, and to respond to changes in statutory law, see Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 967 (D.C. Cir. 1999), in 1995 the Commission adopted a regime for the upper 200 channels of the SMR bandwidth which planned to auction licenses for each of 175 newly-designated Economic Areas (EA). Each EA license includes a large block of spectrum3 for an entire geographic area, thereby making transmitter-by-transmitter and channel-by-channel licensing unnecessary. To help EA licensees obtain the contiguous spectrum needed to provide competitive wide-area services, the Commission determined that any EA licensee can require any incumbent SMR licensee to relocate to the lower 230 channels of the SMR spectrum, provided the EA licensee gives the displaced licensee comparable facilities and spectrum, pays its relocation expenses and ensures a "seamless" transition between the old and new frequencies. See In the Matter of Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, First Report and Order, 11 F.C.C.R. 1463 (1995). Although the Commission adhered to the new regulatory scheme for the upper 200 channels of SMR bandwidth, it ultimately changed its procedure to give small businesses an advantage in the auction process by allowing bidding credits for which only small businesses could qualify.4 It maintained its two-tiered definitions of small business but adjusted for the deletion of the installment payment plan. See Upper Channel First Reconsideration Order, 12 F.C.C.R. 9972, pp 125-34.
In June 1997 the Commission adopted a similar set of rules for the lower 230 channels. Again, the FCC decided to auction the new EA licenses, each of which was intended to cover a wide geographic area and a large block of spectrum. As before, the Commission decided to aid small businesses with bidding credits but deferred deciding whether to eliminate installment payments. It again used the two-tiered definitions of small business based on average gross revenue. The FCC also required an EA licensee displacing an incumbent licensee to reimburse the incumbent for relocation expenses. See Lower Channel Report and Order, 12 F.C.C.R. 19,079, pp 123-25, 272-87.
On September 2, 1997 the petitioner filed two petitions for reconsideration. One requested the FCC to reconsider portions of the Lower Channel Report and Order while the other sought reconsideration of the Upper Channel First Reconsideration Order. On October 24, 1997 the petitioner filed a "Consolidated Supplement to Petitions for Reconsideration," contending that the FCC failed to obtain the requisite approval of its "small business" definitions from the Small Business Administration (SBA). JA 563. The last paragraph of the Consolidated Supplement requested "that the Commission reconsider its Orders in accord with the foregoing, obtain necessary prior approval from the Small Business Administration, provide necessary time prior to the scheduling of its auction in accord with 47 U.S.C. 309(j)(3(E) [sic], and take such other action that is necessary to cause its decisions and Orders to be rendered in accord with applicable statutory law." JA 566.
On October 8, 1999 the FCC issued its Lower Channel Reconsideration Order, in which it addressed the issues raised both in SBT's petition for reconsideration of the Lower Channel Report and Order and in SBT's Consolidated Supplement. The Commission rejected the petitioner's contention that the failure to obtain SBA approval of the "small business" definitions suspended the operation of the Lower Channel Report and Order until the SBA's approval was secured, explaining that the SBA had by then approved the definitions. Lower Channel Reconsideration Order, 14 F.C.C.R. 17,566, p 87 n.251. The Commission also "reiterated that payment of relocation costs" by an EA licensee to an incumbent licensee "will not be due until the incumbent has been fully relocated and the frequencies are free and clear." Id. at p 58. On October 19, 1999 the petitioner filed a petition for review of both the Lower Channel Reconsideration Order and the Lower Channel Report and Order as well as the Upper Channel First Reconsideration Order. See Small Business in Telecommunications v. FCC, No. 99-1419 (D.C. Cir. filed Oct. 19, 1999). The respondents moved to dismiss on the ground that the petition was premature because the Lower Channel Reconsideration Order had not yet been published in the Federal Register. The petitioner then moved for voluntary dismissal, which the court granted. The Lower Channel Reconsideration Order was subsequently published in the Federal Register on December 20, 1999. 64 Fed. Reg. 71,042.
On December 2, 1999 the FCC issued its Upper Channel Second Reconsideration Order, denying the petitioner's petition for reconsideration of the Upper Channel First Reconsideration Order. The Commission stayed with its decision to eliminate installment payments, rejecting the contention that installment payments were necessary to ensure "a meaningful opportunity" for small businesses to participate in the 800 MHz SMR auction. See In the Matter of Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, Second Memorandum Opinion and Order on Reconsideration, 14 F.C.C.R. 21,068, p 3 (1999) [Upper Channel Second Reconsideration Order]. The Upper Channel Second Reconsideration Order was published in the Federal Register on July 14, 2000.
On December 29, 1999 the petitioner filed a petition "for review of the Federal Communications Commission's Memorandum Opinion and Order on Reconsideration In the Matter of Amendment of Part 90 of the Commission's Rules; Implementation of Sections 3(n) and 332 of the Communications Act; and Implementation of Section 309(j) of the Communications Act adopted on September 30, 1999 [Lower Channel Reconsideration Order]." Petition for Review, No. 99-1543 (filed Dec. 29, 1999). On January 6, 2000 the petitioner filed a "Certificate as to Parties, Rulings and Related Cases," noting the above cited Lower Channel Reconsideration Order as well as the Lower Channel Report and Order. Certificate as to Parties, Rulings and Related Cases, No. 99-1543 (filed Jan. 6, 2000). On April 24, 2000 the petitioner moved to amend the Certificate to "include Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93-144, Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd 9972 (1997) [Upper Channel First Reconsideration Order], as a ruling under review." Motion to Amend Certificate as to Parties, Rulings and Related Cases, No. 99-1543 (filed Apr. 24, 2000). The petitioner's motion declared that the Upper Channel First Reconsideration Order "is an underlying Order to the [Lower Channel Reconsideration Order] released on October 8, 1999 in the same matter, which order is the primary order on review in the above-captioned case." Id. The motion was granted on April 28, 2000.
The petitioner argues that in issuing the Lower Channel Report and Order, Lower Channel Reconsideration Order and Upper Channel First Reconsideration Order, the FCC violated (1) 15 U.S.C. 632(a)(2)(C)(iii) and 5 U.S.C. 553(d) by failing to obtain prior SBA approval of its "small business" definitions, (2) 47 U.S.C. 309(j) by failing to allow interested parties sufficient time to participate in the 800 MHz SMR auction and (3) 5 U.S.C. 604(a)(5) by failing to address the economic impact of relocation on "small business" incumbent licensees. Because we dispose of the petitioner's challenges to the upper and lower channel orders in different ways, we address the orders separately.
The Federal Rules of Appellate Procedure "govern procedure in the United States courts of appeal," Fed. R. App. P. 1, as do the Circuit Rules of our Circuit. See Circuit Rule 1. Rule 15(a) of the Federal Rules of Civil Procedure requires that a petition for review "specify the order or part...
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