86 F.3d 248 (D.C. Cir. 1996), 95-1179, McElroy Electronics Corp. v. F.C.C.

Docket Nº:95-1179, 95-1195, 95-1228, 95-1229 and 95-1307.
Citation:86 F.3d 248
Party Name:McELROY ELECTRONICS CORPORATION, et al., Appellants v. FEDERAL COMMUNICATIONS COMMISSION, Appellee Metro Mobile CTS of Phoenix, Inc., et al., Intervenors.
Case Date:June 21, 1996
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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86 F.3d 248 (D.C. Cir. 1996)




Metro Mobile CTS of Phoenix, Inc., et al., Intervenors.

Nos. 95-1179, 95-1195, 95-1228, 95-1229 and 95-1307.

United States Court of Appeals, District of Columbia Circuit

June 21, 1996

Argued May 16, 1996.

Rehearing Denied Aug. 19, 1996.

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[318 U.S.App.D.C. 175] Appeals of an Order of the Federal Communications Commission.

Louis Gurman argued the cause, for appellants, with whom William D. Silva, Theresa Fenelon, Anne P. Jones, David A. Gross and Lawrence Roberts, Washington, DC, were on the briefs.

Roberta L. Cook, Counsel, Federal Communications Commission, argued the cause, Washington, DC, for appellee, with whom William E. Kennard, General Counsel, and Daniel M. Armstrong, Associate General Counsel, were on the brief. John E. Ingle, Deputy Associate General Counsel, entered an appearance.

Eliot J. Greenwald, argued the cause and filed the brief, Washington, DC, for intervenors, with whom David J. Kaufman and Donald J. Evans, were on the brief. Douglas I. Brandon, Ray M. Senkowski, Anne P. Jones, David A. Gross, Theresa Fenelon, Richard B. Beckner, Stuart F. Feldstein, Lawrence Roberts, Frances J. Chetwynd and James F. Ireland, III, entered appearances.

Before: BUCKLEY, WILLIAMS and ROGERS, Circuit Judges.

Opinion for the Court filed bye Circuit Judge ROGERS.

ROGERS, Circuit Judge:

In McElroy Electronics Corp. v. FCC, 990 F.2d 1351 (D.C.Cir.1993) ("McElroy I"), the court ordered the Federal Communications Commission ("Commission") to reinstate nunc pro tunc appellants' applications for

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[318 U.S.App.D.C. 176] licenses to provide cellular telephone service in Los Angeles and Minneapolis. Two years later, the Commission decided that the reinstated applicants would have to enter a lottery with as many as 500 other applicants for the same licenses. Because the record demonstrates that other applicants had fair notice of a sixty-day deadline for filing competing applications, yet did not apply until more than four years after appellants did, we conclude that the Commission erred and we again remand the case to the Commission.


Appellants seek so-called "unserved-area" licenses. When the Commission first established rules for licensing cellular radiotelephone services, it divided the nation into separate geographic markets, known as metropolitan statistical areas (MSAs) and rural service areas (RSAs), and established two frequency blocks for each market (block A for wireline services and block B for non-wireline services). An applicant could designate a cellular geographic service area (CGSA), encompassing at least 75% of the geographic market, and was required to serve at least 75% of its designated CGSA. The Commission adopted a streamlined comparative-hearing process for the thirty largest MSAs and a lottery process for the other markets. Cellular Communications Systems, 86 F.C.C.2d 469 (1981), order on reconsideration, 89 F.C.C.2d 58, order on further reconsideration, 90 F.C.C.2d 571 (1982); Cellular Lottery Rulemaking, 98 F.C.C.2d 175 (1984), order on reconsideration, 101 F.C.C.2d 577, order on further reconsideration, 59 Rad. Reg.2d (P & F) 407 (1985), aff'd in part and rev'd in part sub nom. Maxcell Telecom Plus, Inc. v. FCC, 815 F.2d 1551 (D.C.Cir.1987). In 1987, the Commission adopted a rule providing that each initial licensee could "fill in" unserved areas within its CGSA without being subject to competing applications for five years from the date of the first authorization in that market (changed in 1989 to the date of the particular licensee's authorization). Rural Cellular Service, Second Report and Order, 2 F.C.C. Rcd. 2306 (1987), order on reconsideration, 4 F.C.C. Rcd. 5377 (1989); see 47 C.F.R. § 22.31(a)(1)(i) (1988). 1 Finally, in 1991, the Commission adopted rules for applications, from either existing licensees or competitors, to serve unserved areas after the initial five-year fill-in period. Amendment of Part 22 of the Commission's Rules, First Report and Order, 6 F.C.C. Rcd. 6185 (1991); Amendment of Part 22 of the Commission's Rules, Second Report and Order, 7 F.C.C. Rcd. 2449 (1992), order on reconsideration, 8 F.C.C. Rcd. 1363 (1993), aff'd sub nom. Committee for Effective Cellular Rules v. FCC, 53 F.3d 1309 (D.C.Cir.1995).

Shortly after the five-year fill-in period expired for the Los Angeles Block B license, and before the Commission had formulated its rules for unserved-areas applications, appellant McElroy Electronics Corporation applied to serve unserved areas within the Los Angeles MSA. On August 29, 1988, the Commission issued a public notice in which it noted, among other matters, the McElroy application. Public Notice, Report No. CL-88-154 (Aug. 29, 1988). The first page of the notice bore a preprinted letterhead entitled "Public Notice" and the Commission's address. The typewritten heading read: "COMMON CARRIER PUBLIC CELLULAR RADIO SERVICE INFORMATION." Below that were the date and a report number, followed by the underlined word "Informative." Then came a series of short announcements regarding various applications, each preceded by a file number. McElroy's notice appeared on the fourth page:

File No. 01758-CL-MP-88

McElroy Electronics Corporation

Station NEW

Market 2B--Los Angeles MSA

An application for a Construction Permit for a new Station for McElroy Electronics Corporation for the Los Angeles M.S.A. § has been filed with the Commission.

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[318 U.S.App.D.C. 177] The application, File No. 01758-CL-MP-88 proposes to serve unserved areas in the Los Angeles M.S.A. § on the block B frequencies under Section 22.31(a)(1)(i) of the rules.

(underlining in original). After the last listing, the notice stated: "Interested persons will have thirty (30) days from the date of this notice to submit Comments. Replies may be filed within fifteen (15) days. No further pleadings will be accepted."

Within sixty days of the notice of McElroy's Los Angeles application, appellants Los Angeles SMSA Limited Partnership ("L.A. Partnership") (the incumbent Block B licensee) and JAJ Cellular also applied to serve the unserved areas in Los Angeles. Public Notice, Report No. CL-89-14, at 2 (Oct. 27, 1988); Public Notice, Report No. CL-89-33, at 1 (Nov. 25, 1988). In a notice of December 23, 1988, the Commission listed a total of seven competing applications for Los Angeles Block B that it identified as possibly "mutually exclusive." Public Notice, Report No. CL-89-57, at 12 (Dec. 23, 1988). Appellant Price Communications Cellular filed another competing application more than sixty days after the public notice of McElroy's application.

McElroy filed a similar application following the expiration of the five-year fill-in period for the Minneapolis Block A license, and the Commission published a similar notice of McElroy's application on February 6, 1989. Public Notice, Report No. CL-89-80, at 2 (Feb. 6, 1989). In Minneapolis, the incumbent licensee filed for an unserved-area license just before McElroy's application. Public Notice, Report No.CL-89-75, at 3 (Jan. 31, 1989).

In a series of proceedings, the Commission dismissed all the applications, including the appellants', as premature. Cellular Applications for Unserved Areas in MSAs/NECMAs, 4 F.C.C. Rcd. 3636 (Common Carrier Bureau 1989), petitions for reconsideration denied, Amendment of Part 22 of the Commission's Rules, First Report and Order, 6 F.C.C. Rcd. 6185 (1991). The Commission ruled that, under the Second Report and Order in its 1987 rulemaking, once the five-year fill-in period expired, no one could apply for an unserved-area license until the Commission had published a notice of a date certain for filing such applications. First Report and Order, 6 F.C.C. Rcd. at 6189-92. Under the rules the Commission adopted for unserved-area applications, it established a one-day "filing window" for each market. Id. at 6196-97. For both the Los Angeles and Minneapolis MSAs, the filing window was March 10, 1993. Public Notice, Report No.CL-93-36, at 5 (Dec. 23, 1992). On that date, 517 applicants applied to serve the unserved Los Angeles areas and 494 applicants applied to serve the unserved Minneapolis areas ("the March 10 filers").

One month later, the court decided McElroy I. The court concluded that McElroy and the other early applicants had reasonably understood the Second Report and Order to mean that unserved area applications would be permitted after the five-year fill-in period had expired without any further action by the Commission. 990 F.2d at 1363. Such applications could be filed according to ordinary Commission practice, in which an applicant can file at any time and other parties may then file competing applications or petition the Commission to deny the first application. While the Commission contended that it had meant to require potential applicants to wait for the Commission to establish a different set of procedures and filing dates, the court held that the Second Report and Order had not given adequate notice of that requirement. Id. at 1363-64.

By operation of law and by the Commission's established notice and cut-off procedures, the date certain for filing an unserved area application in an M.S.A. § is the first day after the expiration of the protected fill-in period. Since the order did not prescribe specific procedures, such as filing windows, for these applications, petitioners appropriately filed pursuant to the Commission's regular notice and cut-off rules, under which there is no single date for the filing of the first mutually exclusive application. Under this regime, the "date certain" for filing is, therefore, merely an opening date, the date from which applications may be received, not a

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[318 U.S.App.D.C. 178] particular date on which they must be received.

Id. at...

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