815 F.2d 1551 (D.C. Cir. 1987), 85-1322, Maxcell Telecom Plus, Inc. v. F.C.C.

Docket Nº:85-1322, 85-1331, 85-1332, 85-1335 and 85-1346.
Citation:815 F.2d 1551
Party Name:MAXCELL TELECOM PLUS, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and the United States of America, Respondents, Yankee Celltell Co., Southwestern Bell Mobile Systems, Inc., BellSouth Mobility Inc., Bell Atlantic Mobile Systems, NYNEX Mobile Communications Co., Radiofone, Inc., Centel Corporation, MCI Cellular Telephone Company, et al.,
Case Date:April 07, 1987
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 1551

815 F.2d 1551 (D.C. Cir. 1987)

MAXCELL TELECOM PLUS, INC., Petitioner,

v.

FEDERAL COMMUNICATIONS COMMISSION and the United States of

America, Respondents,

Yankee Celltell Co., Southwestern Bell Mobile Systems, Inc.,

BellSouth Mobility Inc., Bell Atlantic Mobile Systems, NYNEX

Mobile Communications Co., Radiofone, Inc., Centel

Corporation, MCI Cellular Telephone Company, et al., New

Vector Communications, Inc., Telephone and Data Systems,

Inc., Ameritech Mobile Communications, Inc., Baldwin

Telecom, Inc., Contel Cellular Inc., Intervenors.

NORTHWESTERN INDIANA TELEPHONE COMPANY, INC., Petitioner,

v.

FEDERAL COMMUNICATIONS COMMISSION and the United States of

America, Respondents,

Yankee Celltell Co., BellSouth Mobility Inc., Southwestern

Bell Mobile Systems, Inc., Bell Atlantic Mobile Systems,

NYNEX Mobile Communications Co., Radiofone, Inc., Centel

Corporation, MCI Cellular Telephone Company, et al.,

Telephone and Data Systems, Inc., Ameritech Mobile

Communications, Inc., Continental Telecom, Inc., Baldwin

Telecom, Inc., Intervenors.

MAXCELL TELECOM PLUS, INC., et al., Appellants,

v.

FEDERAL COMMUNICATIONS COMMISSION, Appellee,

St. Louis Cellular System, Inc., New Orleans CGSA, Inc.,

Centel Corporation, Yankee Celltell, Co.,

NewVector Communications, Inc.,

Continental Telecom, Inc.,

Intervenors.

LA STAR CELLULAR TELEPHONE COMPANY, Appellant,

v.

FEDERAL COMMUNICATIONS COMMISSION, Appellee,

New Orleans CGSA, Inc., Contel Cellular, Inc., Intervenors.

NORTHWESTERN INDIANA TELEPHONE COMPANY, INC., Appellant,

v.

FEDERAL COMMUNICATIONS COMMISSION, Appellee,

New Orleans CGSA, Inc., Ameritech Mobile Communications,

Inc., Contel Cellular Inc., Intervenors.

Harry J. PAPPAS d/b/a California Portaphone, Petitioner,

v.

FEDERAL COMMUNICATIONS COMMISSION and the United States of

America, Respondents,

NYNEX Mobile Communications Co., BellSouth Mobility Inc.,

MCI Cellular Telephone Company, et al., Telephone and Data

Systems, Inc., Ameritech Mobile Communications, Inc.,

Continental Telecom, Inc., Bell Atlantic Mobile Systems,

Southwestern Bell Mobile Systems, Inc., Intervenors.

Nos. 85-1322, 85-1331, 85-1332, 85-1335 and 85-1346.

United States Court of Appeals, District of Columbia Circuit

April 7, 1987

Argued Sept. 22, 1986.

As Amended .

Page 1552

Petitions for Review and Notices of Appeals of Orders of the Federal Communications Commission.

Page 1553

George Petrutsas, with whom Richard Hildreth and Frank R. Jazzo, Washington, D.C., were on brief, for petitioner, Harry J. Pappas d/b/a California Portaphone, in No. 85-1346.

Arthur V. Belendiuk, Washington, D.C., for petitioner/appellant, La Star Cellular Telephone, et al., in Nos. 85-1322, 85-1331 and 85-1332.

David L. Nace, with whom Russell D. Lukas and Pamela L. Gist, Washington, D.C., was on brief, for petitioner/appellant, Northwestern Indiana Telephone Company, Inc., in Nos. 85-1324 and 85-1335.

Roberta L. Cook, Counsel, Federal Communications Commission, with whom Jack D. Smith, General Counsel, Daniel M. Armstrong, Associate General Counsel and John E. Ingle, Deputy Associate General Counsel, Federal Communications Comm., Washington, D.C., were on brief, for respondents/appellees. Robert B. Nicholson and Margaret G. Halpern, Attys., Dept. of Justice, Washington, D.C., also entered appearances for respondents/appellees in Nos. 85-1322, 85-1324, 85-1331, 85-1332, 85-1335 and 85-1346.

Alan B. Sternstein, with whom Raymond F. Scully, Katherine I. Hall, Washington, D.C., and Martin C. Ruegsegger were on joint brief, for intervenors, Bell Atlantic Mobile Systems, Inc., et al., in Nos. 85-1322, 85-1324, 85-1331, 85-1332, 85-1335 and 85-1346.

John W. Berresford, Philadelphia, Pa., entered an appearance for Bell Atlantic Mobile Systems, Inc.

Edward R. Wholl, Washington, D.C., entered an appearance for NYNEX Mobile Communications Co.

Richard B. Severy, Washington, D.C., was on brief, for intervenor, MCI Cellular Telephone Company, et al., in Nos. 85-1322, 85-1324 and 85-1346.

Charles A. Zielinski and A. Richard Metzger, Jr., Washington, D.C., were on brief, for intervenor, Ameritech Mobile Communications, Inc., in Nos. 85-1322, 85-1324, 85-1335, 85-1346. Joseph J. Simons also entered an appearance for Ameritech Mobile Communications, Inc.

Arthur Blooston, Harold Mordkofsky, Robert M. Jackson and Edward P. Taptich, Washington, D.C., entered appearances for intervenors, Yankee Celltell Co., et al., in Nos. 85-1322, 85-1324 and 85-1331.

Theodore D. Frank and Marilyn D. Sonn, Washington, D.C., entered an appearance for intervenor, Centel Corp., in Nos. 85-1322, 85-1324 and 85-1331.

Leon T. Knauer and L. Andrew Tollin, Washington, D.C., entered appearances for intervenor, NewVector Communications, Inc., in Nos. 85-1322 and 85-1331.

Alan Y. Naftalin and Peter Connolly, Washington, D.C., entered appearances for intervenor, Telephone and Data Systems, Inc., in Nos. 85-1322, 85-1324 and 85-1346.

Dean George Hill, Washington, D.C., entered an appearance for intervenor, Baldwin Telecom, Inc., in Nos. 85-1322 and 85-1324.

John A. Borsari, Washington, D.C., and Joseph P. Benkert, entered appearances for intervenor, Centel Cellular Inc., in Nos. 85-1322, 85-1324, 85-1331, 85-1332, 85-1335 and 85-1346.

Before BORK and BUCKLEY, Circuit Judges, and HAROLD H. GREENE, [*] District Judge.

Opinion for the Court filed by Circuit Judge BORK.

BORK, Circuit Judge:

These consolidated cases present challenges to two features of the procedures established by the Federal Communications Commission to award cellular radiotelephone licenses. Petitioner California Portaphone ("Portaphone") claims that the use of a lottery procedure to select licensees for the Fresno, California market was an invalid retroactive application of the procedure, since comparative applications for the Fresno market had been filed before the

Page 1554

Commission adopted a lottery procedure. The remaining challengers (hereinafter collectively the "fill-in appellants") object to the Commission's treatment of their applications to provide "fill-in" service in various markets. The Commission returned the applications, finding that they were filed out of time.

We affirm the Commission's retroactive application of the lottery procedure to the Fresno market; we reverse the Commission's order rejecting application of appellant La Star Cellular Telephone Company ("La Star") in the New Orleans market as untimely and affirm the Commission's orders rejecting as untimely the remaining appellants' applications.

I.

Confronted with a heavy demand for cellular telephone service and a large group of firms eager to provide it, the Federal Communications Commission has sought to streamline the procedures for awarding cellular licenses. The Commission has eliminated the standard comparative hearing used to select licensees and replaced it with a simplified comparative "paper hearing" for the thirty largest cellular markets and with a lottery procedure for smaller markets. The Commission also has introduced special filing procedures and cut-off dates based on the market at issue in each proceeding. Cellular Communications Systems, 86 F.C.C.2d 469, 498-503 (1981) (Cellular Order ); Cellular Communications Systems, 89 F.C.C.2d 58, 85-94 (1982) (Reconsideration Order ); Cellular Communications Systems, 90 F.C.C.2d 571, 572-75 (1982) (Further Reconsideration Order ); Cellular Lottery Rulemaking, Report and Order, 98 F.C.C.2d 175, 202-09 (1983) (Cellular Lottery Order ). Further details of the Commission's decisions on these procedures are discussed separately as they relate to each of the issues before us.

II.

We begin with Portaphone's challenge to the validity of the Commission's decision to extend its lottery procedures to Portaphone's previously pending comparative application. Review of retroactive agency action "is in each case a question of law, resolvable by reviewing courts with no overriding obligation to the agency['s] decision." Retail, Wholesale & Dep't Store Union v. NLRB, 466 F.2d 380, 390 (D.C.Cir.1972).

A.

The Commission receives authority to use a lottery to award licenses for certain communications systems from section 309(i) of the Communications Act. 47 U.S.C. Sec. 309(i) (1982). 1 Although this statute was in place prior to the March, 1983 cut-off date for Portaphone's Fresno application, the Commission specifically proposed to employ a lottery in markets including Fresno after the date of Portaphone's filing. Cellular Lottery Proceeding, Notice of Proposed Rulemaking, 48 Fed.Reg. 51,493 (proposed Oct. 23, 1983). Portaphone argues that the Commission's adoption of this lottery proposal for the Fresno market, a lottery Portaphone ultimately lost, is an invalid retroactive application of the rule. The Commission carefully and fully considered this objection in its Cellular Lottery Order, 98 F.C.C.2d at 182-84, 188-89. The Commission's analysis is correct.

B.

As the Supreme Court has explained, retroactive enforcement of a rule is improper only if "the ill effect of the retroactive application" of the rule outweighs the "mischief" of frustrating the interests the rule promotes. SEC v. Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575,

Page 1555

1580, 91 L.Ed. 1995 (1947); see Retail, Wholesale & Dep't Store Union, 466 F.2d at 389-90. Since we believe that the "ill effect" on Portaphone of the lottery's retroactive effect is little or none, and that the "mischief" caused by prohibiting retroactive effect would be significant, we...

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