McElroy Electronics Corp. v. F.C.C., Nos. 91-1545

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtBefore MIKVA, Chief Judge, WALD and BUCKLEY; WALD
Citation990 F.2d 1351
PartiesMcELROY ELECTRONICS CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Los Angeles SMSA Limited Partnership; Ameritech Mobile Communications, Inc.; McCaw Cellular Communications, Inc., Intervenors. JAJ CELLULAR, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Los Angeles SMSA Limited Partnership; Ameritech Mobile Communications, Inc.; United States Telephone Association; Rochester Telephone Mobile Communications; National Telephone Cooperative Association; Metro Mobile CTS, Inc.; McCaw Cellular Communications, Inc., Intervenors. LOS ANGELES SMSA LIMITED PARTNERSHIP, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, McCaw Cellular Communications, Inc., Intervenor. PRICE COMMUNICATIONS CELLULAR, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, National Telephone Cooperative Association; Ameritech Mobile Communications, Inc.; ALLTEL Mobile Communications, Inc.; US WEST NewVector Group, Inc.; BellSouth Corporation; McCaw Cellular Communications, Inc.; New Par; Cellular Communications of Puerto Rico, Inc., Intervenors.
Docket NumberNos. 91-1545,91-1552 and 91-1606
Decision Date23 April 1993

Page 1351

990 F.2d 1351
301 U.S.App.D.C. 81
McELROY ELECTRONICS CORPORATION, Appellant,
v.
FEDERAL COMMUNICATIONS COMMISSION, Appellee,
Los Angeles SMSA Limited Partnership; Ameritech Mobile
Communications, Inc.; McCaw Cellular
Communications, Inc., Intervenors.
JAJ CELLULAR, Appellant,
v.
FEDERAL COMMUNICATIONS COMMISSION, Appellee,
Los Angeles SMSA Limited Partnership; Ameritech Mobile
Communications, Inc.; United States Telephone Association;
Rochester Telephone Mobile Communications; National
Telephone Cooperative Association; Metro Mobile CTS, Inc.;
McCaw Cellular Communications, Inc., Intervenors.
LOS ANGELES SMSA LIMITED PARTNERSHIP, Appellant,
v.
FEDERAL COMMUNICATIONS COMMISSION, Appellee,
McCaw Cellular Communications, Inc., Intervenor.
PRICE COMMUNICATIONS CELLULAR, INC., Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents,
National Telephone Cooperative Association; Ameritech
Mobile Communications, Inc.; ALLTEL Mobile Communications,
Inc.; US WEST NewVector Group, Inc.; BellSouth
Corporation; McCaw Cellular Communications, Inc.; New Par;
Cellular Communications of Puerto Rico, Inc., Intervenors.
Nos. 91-1545, 91-1552 and 91-1606.
United States Court of Appeals,
District of Columbia Circuit.
Argued March 4, 1993.
Decided April 23, 1993.

Louis Gurman, with whom William D. Silva, Shaun A. Maher, Jerome K. Blask and Coleen M. Egan, Washington, DC, were on the joint brief, for appellants McElroy Electronics Corp. and JAJ Cellular.

Anne P. Jones, with whom David A. Gross, Washington, DC, was on the brief, for appellant Los Angeles SMSA Ltd. Partnership.

Lawrence Roberts, Washington, DC, for appellant Price Communications Cellular, Inc.

Roberta L. Cook, Counsel, F.C.C., with whom Renee Licht, Acting Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, and John E. Ingle, Deputy Associate Gen. Counsel, F.C.C., Catherine G. O'Sullivan and Andrea Limmer, Attorneys, Dept. of Justice, Washington, DC, were on the brief, for appellee.

Alfred W. Whittaker and Mitchell F. Hertz, Washington, DC, entered appearances for intervenor Ameritech Mobile Communications, Inc.

Anne P. Jones, Washington, DC, entered an appearance for intervenor Los Angeles SMSA Ltd. Partnership.

R. Michael Senkowski, Washington, DC, entered an appearance for intervenor McCaw Cellular Communications, Inc.

Martin T. McCue, Washington, DC, entered an appearance for intervenor U.S. Telephone Ass'n.

Page 1353

[301 U.S.App.D.C. 83] Michael J. Shortley, III, Washington, DC, entered an appearance for intervenor Rochester Telephone Mobile Communications.

David Cosson and L. Marie Guillory, Washington, DC, entered appearances for intervenor Natl. Telephone Co-op. Ass'n.

Stuart F. Feldstein, Washington, DC, entered an appearance for intervenor Metro Mobile CTS, Inc.

Carolyn C. Hill, Washington, DC, entered an appearance for intervenor ALLTEL Mobile Communications, Inc.

Leon T. Knauer, Washington, DC, entered an appearance for intervenor US WEST NewVector Group, Inc.

William B. Barfield and M. Robert Sutherland, Atlanta, GA, entered appearances for intervenor BellSouth Corp.

Thomas J. Casey and Jay L. Birnbaum, Washington, DC, entered appearances for intervenors New Par and Cellular Communications of Puerto Rico, Inc.

Before MIKVA, Chief Judge, WALD and BUCKLEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

These consolidated cases involve what could be considered the "second wave" of cellular licenses in metropolitan areas. Over a decade ago, the Federal Communications Commission ("FCC" or "Commission") launched its "initial" cellular licensing period, during which it granted licenses and permits primarily to companies committed to serving the larger part of a standard metropolitan statistical area ("MSA"), and permitted those companies to expand within their service areas, largely free from competition, for a period of five years. According to the Commission's scheme, after this five-year expansion period, which ran from the grant of the first construction license in each MSA, competitors would be permitted to file applications to serve areas within the MSA that were not being served by the incumbent.

The petitioners in this action, McElroy Electronics Corporation ("McElroy"), JAJ Cellular ("JAJ"), Price Communications Cellular Inc. ("Price"), and Los Angeles SMSA Limited Partnership ("L.A. Partnership"), are companies that filed applications to serve unserved areas in targeted MSAs a little more than five years after the grant of the first construction license in that MSA. The Commission returned those applications as "premature." While not disputing that the requisite five years had passed, the Commission found the applications untimely because it had neither given the notice of the date certain for filing in each MSA that it had announced that it would give, nor established procedures for accepting, processing and selecting the applications. At the heart of this dispute is whether a 1987 Commission order can reasonably be construed to give adequate notice that applications for unserved areas could not be filed after five years had lapsed but before the Commission had announced that it would receive applications. Because we conclude that even a careful reader of the order in question could not have been expected to understand that a further announcement by the Commission was a condition precedent to any applicant's filing of an unserved area application, we remand with instructions to reinstate the applications of at least three of the petitioners nunc pro tunc. An agency cannot ignore its primary obligation to state its directives in plain and comprehensible English. When it does not live up to this obligation, we will not bind a party by what the agency intended, but failed to communicate. We do not reach petitioners' other challenges, which are briefly described below.

I. BACKGROUND

A. General Background

When the FCC started granting licenses for cellular communications, it undertook to do so in two (somewhat overlapping) steps. Its first priority was to receive and process applications for the initial licenses, primarily from firms wanting to serve all or a core part of an MSA. Each such applicant had to define as its service area [301 U.S.App.D.C. 84]

Page 1354

(or Cellular Geographic Service Area ("CGSA")) a substantial part of that MSA. 1 These first licensees were selected through a streamlined comparative "paper hearing" for the thirty largest MSAs, and by lottery for the rest. For the ninety largest MSAs, the Commission adopted special filing and cut-off procedures, including specified dates for filing, which were designed to reduce administrative burdens, permit orderly processing of applications, and discourage applicants from reading and copying competitors' proposals. Cellular Reconsideration Order, 89 F.C.C.2d 58, 87-88 (1982).

The Commission's second focus has been to accept and process applications for areas within an MSA that are not being served by the initial licensee; these applications have been termed "fill-in" applications, as they generally fill in around the initial CGSA, serving fringe areas or pockets. 2 For the top 90 MSAs, the Commission received these "fill-in" applications on the due date for the initial MSA applications. Once the FCC expanded beyond these 90 MSAs, however, it postponed an opening date for the filing of such supplementary applications by nonincumbents. Amendment of the Commission's Rules to Allow Random Selection or Lotteries, 98 F.C.C.2d 175, 205 (1984) ("Cellular Lottery Rulemaking "). In 1986, the Commission initiated a notice and comment rulemaking to determine when it should allow nonincumbents to compete with incumbents seeking to expand their CGSAs. Amendment of the Commission's Rules for Rural Cellular Service (Further Notice of Proposed Rulemaking), 1 F.C.C.Rcd. 499 (1986). In 1987, it declared that the "fill-in period" during which existing licensees or permittees could expand service within their CGSAs or expand their CGSAs within their MSAs, without competing applications, would last five years. See Second Report and Order, 2 F.C.C.Rcd. 2306, 2309 (April 1987) ("Second Report and Order "). The expansion period for each MSA was set at five years from the grant date of the first construction permit in that MSA. Id. This "fill-in" or "expansion" period for existing licensees was promoted by the FCC as the most efficient and expeditious means to get cellular service to the public and to permit the incumbents "to adjust their systems to meet unpredicted and unforeseen technical changes and market forces," id. at 2308. This court upheld virtually all of this application scheme. Maxcell Telecom Plus, Inc. v. FCC, 815 F.2d 1551, 1560-61 (D.C.Cir.1987).

The order announcing this rule, the so-called Second Report and Order, is at the heart of this dispute, so it bears quoting at some length. First, it announced the modification of the Commission "fill-in" rule to state:

Notwithstanding any other provision of this rule section and rule provision of this Part, applications by other than licensees or permittees for a Metropolitan Statistical Area (MSA) to serve unserved

Page 1355

[301 U.S.App.D.C. 85] areas outside the presently authorized CGSA but within the MSA are prohibited from being filed and will not be considered as mutually exclusive with a licensee's or permittee's application filed under § 22.903(d) herein until five years from the date of the first construction permit granted in that MSA.

47 C.F.R. § 22.31(a)(1)(i) (1987). The text of the order further provided the following:

We are establishing a period of five years from the date the first construction permit is granted in each MSA for licensees/permittees to expand their CGSAs within the MSAs. A date certain filing date will thus be established for each MSA market.

Second Report and Order, 2 F.C.C.Rcd. at 2307.

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20 practice notes
  • Part II
    • United States
    • Federal Register May 07, 2008
    • May 7, 2008
    ...that was internally inconsistent); East Texas Electric Co-op v. FERC, 218 F.3d 750, 754 (D.C. Cir. 2000); McElroy Elecs. Corp. v. FCC, 990 F.2d 1351, 1358 (D.C. Cir. 1993); Vehicle Mfrs. Ass'n, 463 U.S. at 43 (finding that agency rule would be arbitrary and capricious if the explanation run......
  • E.E.O.C. v. United Parcel Services, Inc., No. C 97-00961 WHA.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • December 12, 2000
    ...preamble in 1988 and the resulting 1988 regulation. Within the 1988 regulation, there was no ambiguity. See McElroy Electronics v. FCC, 990 F.2d 1351, 1366 (D.C.Cir.1993) ("regulations cannot be construed to mean what an agency intended but did not adequately express"); Wyoming Ou......
  • Beach TV Props., Inc. v. Solomon, Civil Action No.: 15–1823 (RC)
    • United States
    • U.S. District Court — District of Columbia
    • March 29, 2018
    ...345 F.2d 730 (DC Cir. 1965). I haven't re-read the 306 F.Supp.3d 81 McElroy Electronics [Corp. v. F.C.C.] case, but I think MM was cited. 990 F.2d 1351 (DC Cir. 1993). In any event, MM has been cited in a number of subsequent cases that you can easily find. Jud's Declaration excellent.Ex. K......
  • Committee for Effective Cellular Rules v. F.C.C., Nos. 93-1220
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • May 9, 1995
    ...in areas that the existing licensees were not serving, i.e., the "unserved areas." See McElroy Electronics Corp. v. FCC, 990 F.2d 1351 (D.C.Cir.1993). The Commission had dismissed those applications because it had not yet established standards and procedures for awarding licenses ......
  • Request a trial to view additional results
19 cases
  • E.E.O.C. v. United Parcel Services, Inc., No. C 97-00961 WHA.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • December 12, 2000
    ...preamble in 1988 and the resulting 1988 regulation. Within the 1988 regulation, there was no ambiguity. See McElroy Electronics v. FCC, 990 F.2d 1351, 1366 (D.C.Cir.1993) ("regulations cannot be construed to mean what an agency intended but did not adequately express"); Wyoming Ou......
  • Beach TV Props., Inc. v. Solomon, Civil Action No.: 15–1823 (RC)
    • United States
    • U.S. District Court — District of Columbia
    • March 29, 2018
    ...345 F.2d 730 (DC Cir. 1965). I haven't re-read the 306 F.Supp.3d 81 McElroy Electronics [Corp. v. F.C.C.] case, but I think MM was cited. 990 F.2d 1351 (DC Cir. 1993). In any event, MM has been cited in a number of subsequent cases that you can easily find. Jud's Declaration excellent.Ex. K......
  • Committee for Effective Cellular Rules v. F.C.C., Nos. 93-1220
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • May 9, 1995
    ...in areas that the existing licensees were not serving, i.e., the "unserved areas." See McElroy Electronics Corp. v. FCC, 990 F.2d 1351 (D.C.Cir.1993). The Commission had dismissed those applications because it had not yet established standards and procedures for awarding licenses ......
  • Qwest Corp. v. Fed. Commun Comm'n, No. 00-1376 and 00-1377
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • June 15, 2001
    ...See Order, 15 F.C.C.R. at 11,172-73 n.42, 11,189-90 p p 41-42. Petitioners' footnoted claim that under McElroy Electronics Corp. v. FCC, 990 F.2d 1351 (D.C. Cir. 1993), a footnote will not suffice, is incorrect. There we held that an ambiguous footnote in a Commission order failed to provid......
  • Request a trial to view additional results
1 provisions
  • Part II
    • United States
    • Federal Register May 07, 2008
    • May 7, 2008
    ...that was internally inconsistent); East Texas Electric Co-op v. FERC, 218 F.3d 750, 754 (D.C. Cir. 2000); McElroy Elecs. Corp. v. FCC, 990 F.2d 1351, 1358 (D.C. Cir. 1993); Vehicle Mfrs. Ass'n, 463 U.S. at 43 (finding that agency rule would be arbitrary and capricious if the explanation run......

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