National Ass'n of Regulatory Utility Com'rs v. F. C. C.

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Citation: 525 F.2d 630,173 U.S.App.D.C. 413
• Decision Date: 05 January 1976

Page 630

525 F.2d 630 173 U.S.App.D.C. 413, 1976-1 Trade Cases 60,865 NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents,
American Telephone and Telegraph Company, the National
Association of Business & Educational Radio, Inc., General
Electric Company, the Special Industrial Radio Service
Assn., Inc., the Central Committee on Telecommunications of
the American Petroleum Institute, Utilities
Telecommunications Council, North Carolina Utilities
Commission, South Carolina Public Service Comm., the People
of the State of California and the Public Utilities
Commission of State of California, Intervenors.
NATIONAL ASSOCIATION OF RADIOTELEPHONE SYSTEMS, Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents, The National Assn. of Business &
Educational Radio, Inc., A.T. & T. Inc., General Electric
Co., Special Industrial Radio Service Assn., Inc., Motorola,
Inc., and Airsignal International, Inc., Intervenors.
ILLINOIS ASSOCIATION OF RADIO-TELEPHONE SYSTEMS, INC., Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents, American Telephone and Telegraph
Company, National Association of Business & Educational
Radio, Inc., and General Electric Company, Intervenors.
RAM BROADCASTING COMPANY, Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents.
National Association of Business and Educational Radio,
Inc., and General Electric Company, Intervenors. Nos. 74-1555, 74-1585, 74-1659, 74-1696. United States Court of Appeals,
District of Columbia Circuit. Argued 12 Sept. 1975.
Decided 5 Jan. 1976.

Page 633

Kenneth E. Hardman, Washington, D.C., with whom Paul Rodgers, Washington, D.C., was on the brief for petitioner in No. 74--1555.

Abe Fortas, Washington, D.C., for petitioner in No. 74--1585.

John E. Ingle, Counsel, F.C.C., with whom Ashton R. Hardy, Gen. Counsel, Daniel M. Armstrong, Acting Associate Gen. Counsel, F.C.C. and Carl D. Lawson, Atty., Dept. of Justice, were on the brief for respondents. Joseph Marino, Associate Gen. Counsel, F.C.C., at the time the record was filed, also entered an appearance for respondent F.C.C. Howard E. Shapiro, and Roger B. Andewelt, Attys., Dept. of Justice, entered an appearance for respondent, United States of America in Nos. 74--1555 and 74--1585.

John P. Bankson, Jr., Washington, D.C., for intervenor National Ass'n of Business and Educational Radio, Inc.

Louis Schwartz, Robert A. Woods and Lawrence M. Miller, Washington, D.C., were on the brief for petitioner in No. 74--1659.

James A. Koerner, Washington, D.C., was on a statement filed in lieu of a brief, for petitioner in No. 74--1696.

Charles A. Horsky, Charles Lister, Washington, D.C., Alfred C. Partoll and F. Mark Garlinghouse, New York City, were on the brief for intervenor American Telephone and Telegraph Co. in Nos. 74--1555---74--1585 and 74--1659. Michael Boudin, Washington D.C., also entered an appearance for intervenor American Telephone and Telegraph Co.

Wayne V. Black and Larry S. Solomon, Washington, D.C., were on the brief for intervenor Special Industrial Radio Service Ass'n, Inc., in Nos. 74--1555 and 74--1585.

Joseph E. Keller, Wayne V. Black and Larry S. Solomon, Washington, D.C., were on the brief for intervenor The Central Committee on Telecommunications of the American Petroleum Institute in No. 74--1555.

Charles M. Meehan and Peter M. Nemkov, Washington, D.C., were on the brief for intervenor, Utilities Telecommunications Council.

Edward B. Hipp and Robert F. Page, Raleigh, N.C., were on the brief for intervenor North Carolina Utilities Commission.

Richard D. Gravelle, J. Calvin Simpson and Randolph W. Deutsch, San Francisco, Cal., were on the brief for intervenors State of California and the Public Utilities Commission of the State of California.

Frederick M. Rowe, John L. Bartlett and John B. Wyss, Washington, D.C., were on the brief for intervenor Motorola, Inc., in No. 74--1585.

Joseph M. Kittner and Edward P. Taptich, Washington, D.C., entered appearances for intervenor General Electric Co.

Robert E. Conn and Thomas J. McCabe, Washington, D.C., entered appearances for intervenor Airsignal International, Inc., in No. 74--1585.

M. John Bowen, Jr., Columbia, S.C., entered an appearance for intervenor South Carolina Public Service Commission in No. 74--1555.

Before TAMM, MacKINNON and WILKEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKEY.

WILKEY, Circuit Judge:

Petitioners seek review of a two-part 1975 F.C.C. Memorandum Opinion and Order ¹ (hereinafter 1975 Order), filed in a rulemaking proceeding of which notice was first given in 1968. ² The Order under review adopts the basic approach, with some modification, of a Second Report and Order, ³ (hereinafter 1974 Order),

Page 634

which issued after two rounds of comment had been received. This Court has jurisdiction to review the Orders under 47 U.S.C. § 402 (1970) and 28 U.S.C. § 2342 (1970).

The Orders under review deal with the allocation of frequency spectrum, in the 806--921 MHz band, to the land mobile radio service, and with the development of regulations pertaining to the future use of that spectrum. Land mobile radio services are radio communication services, based on land, where either the transmitting or receiving station is mobile. ⁴

Such services are of two general types. Public services are operated by common carrier licensees and made available to members of the public. The most common type of public services are radio telephone services which interconnect with existing telephone systems. Private services apparently include all other mobile radio operations, i.e., those not subject to common carrier regulation. They are predominantly dispatch services such as those operated by police departments, fire departments, and taxicab companies, for their own purposes. However, they are not limited to services which an operator provides only to itself, but also extend to services provided to a limited group of users by third party operators.

The 1974 Order, as modified by the 1975 Order, embodies three distinct actions. First, it allocates a total of 40 MHz on the 900 MHz band (825--845 MHz and 870--890 MHz) to the development of a nationwide, broad-band 'cellular' mobile radio communications system. (Initially, the Commission intends to authorize use of the minimum spectrum needed for developmental systems.) ⁵ Through the use of expensive and sophisticated new technologies, the cellular system will make possible more traffic intensity per unit of spectrum than do present mobile communication methods. When operative, which will not be before 1978, it is expected greatly to increase capacity for mobile communications in urban areas over what is now available. The cellular system is clearly a public, common carrier system, and will serve primarily to expand the capacity of radio telephone service.

The 1974 Order limited the group of eligible applicants for licenses to operate on these bands, to wireline (telephone) carriers. ⁶ The 1975 Order removed this limitation and extended eligibility to radio common carriers as well. ⁷ Any applicant for a license will nonetheless be required to demonstrate that it has the resources and technology for rapid development of a cellular system. ⁸ As well as providing radio telephone service, cellular systems are to be allowed to engage in didpatch operations. ⁹

Second, 30 MHz (806--821 MHz and 851--866 MHz) is allocated to private services, to be licensed to operators in the Public Safety, Industrial and Land Transportation areas, as authorized under 47 C.F.R. §§ 89, 91, 93. Thus, under existing regulations, this allocation makes available additional spectrum for eligible applicants who wish to obtain a license to operate a station, either for their own private purposes, or, with several other eligibles, on a non-profit, cost-sharing basis. ¹⁰ In addition, the Orders would create a new category of private mobile operators, eligible for licensing on the 30 MHz presently being allocated. This new category of operators, known as Specialized Mobile Radio Systems (SMRS), would operate on a commercial basis to provide service to third parties. Licensing is to be on a first-come, first-served basis, with SMRS applications

Page 635

treated no differently than those of other private applicants. ¹¹ Because it seeks to utilize a profit motive to speed development and refinement of mobile radio technologies, the Commission concludes that SMRS should not be subject to the common carrier regulations of Title II of the Communications Act, ¹² and that state certification of SMRS should be pre-empted. ¹³

Third and last, the 1975 Order designates the remaining 45 MHz of the total 115 MHz allocation for reserve and future growth. ¹⁴ This aspect of the Order is not challenged in this proceeding.

I. 40 MHz Allocation for the Creation of Cellular Systems

The power to make this allocation of spectrum for the development of sophisticated and band-efficient cellular systems arises, if at all, under 47 U.S.C. § 303(c) and (g) (1970). ¹⁵ Section 303 sets forth the Commission's power and duties in the regulation of radio, and states that the exercise of all powers should be guided by the requirements of 'public convenience, interest, or necessity.'

The authorizations of powers under subpart (c) to assign bands of frequencies to various classes of stations, and under subpart (g) to provide for experimental uses and encourage the more effective use of radio, appear on their face to justify the allocation at issue here. However, it has been challenged on a variety of grounds, as exceeding the discretion allowed the Commission under the public convenience, interest or necessity standard.

First, the argument is made that the allocation is excessive in light of both the technological...