Council Tree Communications, Inc. v. F.C.C.

• Decision Date: 28 September 2007
• Docket Number: No. 06-2943.,06-2943.
• Citation: 503 F.3d 284
• Parties: COUNCIL TREE COMMUNICATIONS, INC.; Bethel Native Corporation; The Minority Media and Telecommunications Council, Petitioners v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Respondents CTIA-Wireless Association and T-Mobile USA, Inc., Intervenor.
• Court: U.S. Court of Appeals — Third Circuit

503 F.3d 284

COUNCIL TREE COMMUNICATIONS, INC.; Bethel Native Corporation; The Minority Media and Telecommunications Council, Petitioners v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Respondents CTIA-Wireless Association and T-Mobile USA, Inc., Intervenor.

No. 06-2943.

United States Court of Appeals, Third Circuit.

Argued May 23, 2007.

Filed: September 28, 2007.

Dennis P. Corbett, Esq. (Argued), S. Jenell Trigg, Esq., Leventhal, Senter & Lerman, Washington, DC, Attorneys for Petitioners.

Joseph R. Palmore, Esq. (Argued), Samuel L. Feder, Esq., Laurence N. Bourne, Esq., Federal Communications Commission, Office of General Counsel, Washington, DC, Robert B. Nicholson, Esq., Robert J. Wiggers, Esq., United States Department of Justice, Appellate Section, Washington DC, Attorneys for Respondents.

William T. Lake, Esq. (Argued), Wilmer Cutler Pickering Hale & Dorr, Washington, DC, Ian H. Gershengorn, Esq., Jenner & Block, Washington DC, Attorneys for Intervenors.

Before: CHAGARES, HARDIMAN and TASHIMA,^* Circuit Judges.

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

This case involves a challenge to two orders of the Federal Communications Commission (FCC) enacting new rules regarding competitive bidding for wireless communications spectrum licenses. Petitioners assert that the new rules are invalid and that an auction conducted pursuant to those rules must be nullified. For the reasons that follow, the petition for review must be dismissed because it is incurably premature.

I.

The Communications Act of 1934 directs the FCC to design a system to allocate spectrum licenses by "establish[ing] a competitive bidding methodology" via regulation. 47 U.S.C. § 309(j)(3). In doing so, the FCC shall seek to "promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women." Id. § 309(j)(3)(B). Such businesses are known as "designated entities" or "DEs." See 47 C.F.R. § 1.2110(a). The FCC must ensure that DEs "are given the opportunity to participate in the provision of spectrum-based services, and, for such purposes, consider the use of tax certificates, bidding preferences, and other procedures," 47 U.S.C. § 309(j)(4)(D), and "require such transfer disclosures and antitrafficking restrictions and payment schedules as may be necessary to prevent unjust enrichment as a result of the methods employed to issue licenses and permits." Id. § 309(j)(4)(E).

On June 13, 2005, Petitioner Council Tree Communications, Inc. (Council Tree), a company organized to identify and develop investment opportunities for minority and women-owned businesses in the communications industry, wrote an ex parte letter to the FCC proposing changes to the then-existing competitive bidding regulations. In particular, Council Tree sought to prevent abuse of DE benefits by prohibiting those DEs affiliated with large incumbent wireless companies from receiving "bidding credits" at spectrum license auctions. These credits are discounts of 25% or 15% from a DE's winning bid.

On February 3, 2006, the FCC released a Further Notice of Proposed Rulemaking in the Matter of Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's Competitive Bidding Rules and Procedures, 71 Fed.Reg. 6992 (Feb. 10, 2006), which proposed and sought comment on modifications similar to those suggested in Council Tree's letter to the FCC.

After receiving over fifty comments and reply comments, the FCC released on April 25, 2006 and published in the Federal Register on May 4, 2006 a Second Report and Order and Second Further Notice of Proposed Rulemaking (Second Order), 71 Fed.Reg. 26,245 (May 4, 2006) (codified at 47 C.F.R. pt. 1). That Second Order adopted new rules that: (1) take bidding credit eligibility away from DEs that have certain material relationships with other entities; and (2) extend the repayment period to prevent the unjust enrichment of DEs that lose their eligibility after winning a license. Dissatisfied with these rules, on May 5, 2006, Petitioners filed a petition with the FCC to reconsider the Second Order.

On June 2, 2006, the FCC released an Order on Reconsideration of the Second Report and Order (Reconsideration Order), 71 Fed.Reg. 34,272 (June 14, 2006) (codified at 47 C.F.R. pt. 1), to "clarif[y] certain aspects [and] address[] certain procedural issues" raised in Petitioners' petition for reconsideration. The Reconsideration Order did not expressly grant or deny the petition, but essentially rejected all of the arguments contained therein.

Instead of waiting for the FCC to publish its Reconsideration Order in the Federal Register, Petitioners filed a petition for review with this Court on June 7, 2006, along with an emergency motion to stay the effectiveness of the new rules and the auction of Advanced Wireless Services licenses (Auction 66), which would be conducted pursuant to the FCC's new rules.¹ Petitioners challenge those rules as: (1) not in accordance with the notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. § 553(b)(3); (2) arbitrary and capricious under the relevant provisions of the Communications Act of 1934, 47 U.S.C. § 309(j), and the Telecommunications Act of 1996, 47 U.S.C. § 257; and (3) not in compliance with the Regulatory Flexibility Act, 5 U.S.C. §§ 601 et seq. They also seek to nullify the results of Auction 66. In addition to opposing each of these challenges, the FCC argues that we lack jurisdiction over the petition, which was filed seven days before the FCC published its Reconsideration Order in the Federal Register on June 14, 2006. On June 29, 2006, a motions panel of this Court issued a per curiam Order denying Petitioners' emergency motion for stay.

II.

We begin, as we must, with questions of jurisdiction: (1) whether Petitioners' petition for review is incurably premature; and, if so, (2) whether the motions panel's earlier per curiam Order vitiates that prematurity.²

A. Incurable Prematurity

We have no jurisdiction to consider an incurably premature petition for review. Tenn. Gas Pipeline Co. v. FERC, 9 F.3d 980, 981 (D.C.Cir.1993) (per curiam). A petition to review a non-final agency order is incurably premature. See Clifton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C.Cir.2002). An agency order is non-final as to an aggrieved party whose petition for reconsideration remains pending before the agency. West Penn Power Co. v. EPA, 860 F.2d 581, 583 (3d Cir. 1988).

In the case at bar, it is undisputed that at the time Petitioners filed their June 7, 2006 petition for review, their petition for reconsideration of the Second Order was still pending before the FCC and remains pending to this day, see Reply Br. at 5, so the petition for review is incurably premature as to the non-final Second Order. See TeleSTAR, Inc. v. FCC, 888 F.2d 132, 133 (D.C.Cir.1989) (per curiam) (court lacks jurisdiction to consider prematurely filed petition even after the agency rules on a rehearing request; a new petition must be filed).

The petition for review is also incurably premature with respect to the Reconsideration Order because it does not comply with the Hobbs Act. Title 47 U.S.C. § 402(a) refers to chapter 158 of Title 28, commonly called the Hobbs Act, see Stone v. INS, 514 U.S. 386, 392, 115 S.Ct. 1537, 131 L.Ed.2d 465 (1995), to determine when a petition for review of an FCC order must be filed with a federal court of appeals. The Hobbs Act's timing provision states in relevant part:

On the entry of a final order reviewable under this chapter, the agency shall promptly give notice thereof by service or publication in accordance with its rules. Any party aggrieved by the final order may, within 60 days after its entry, file a petition to review the order in the court of appeals wherein venue lies.

28 U.S.C. § 2344. "[T]he 60 day period for seeking judicial review set forth in the Hobbs Act is jurisdictional in nature, and may not be enlarged or altered by the courts." N.J. Dep't of Envtl. Prot. & Energy v. Long Island Power Auth., 30 F.3d 403, 414 (3d Cir.1994) (quoting Natural Res. Def. Council v. NRC, 666 F.2d 595, 602 (D.C.Cir.1981)); see also Fed. R.App. P. 26(b)(2).

In Western Union Telegraph Co. v. FCC, 773 F.2d 375 (D.C.Cir.1985), the Court of Appeals for the D.C. Circuit defined "entry" of FCC orders for purposes of § 2344 as "the date upon which the [FCC] gives public notice of the order." Id. at 376 (relying on 47 U.S.C. § 405). An FCC regulation in turn defines "public notice" as "publication in the Federal Register" with respect to orders released in rulemaking proceedings. 47 C.F.R. § 1.4(b)(1). In Western Union, the FCC adopted an order on March 1, 1985, released it to the public on March 8, 1985, and published it in the Federal Register on March 21, 1985. Meanwhile, on March 15, 1985, after the order's public release but before its publication in the Federal Register, AT & T filed a petition to review the order in the Court of Appeals for the D.C. Circuit. Based on the court's definition of "entry" and the FCC's definition of "public notice," the D.C. Circuit held that AT & T's petition was premature, 773 F.2d at 378, and dismissed it for lack of jurisdiction. Id. at 380. In doing so, the court reasoned:

It is not a principle of law that all agency action need be reviewable as soon as it is effective and ripe — or indeed that all agency action need be reviewable at all. Here the governing statutes, 28 U.S.C. § 2344 and 47 U.S.C. § 405, provide that review is unavailable until the date the [FCC] gives public notice, whether or not the order becomes effective and otherwise ripe before then.

Id. at 377; see also ...