NTCH, Inc. v. Fed. Commc'ns Comm'n

• Citation: 950 F.3d 871
• Decision Date: 21 February 2020
• Docket Number: No. 18-1241,No. 18-1243,C/w 18-1242,18-1241,18-1243
• Parties: NTCH, INC., Appellant v. FEDERAL COMMUNICATIONS COMMISSION, Appellee Dish Network Corporation, Intervenor NTCH, Inc., Petitioner v. Federal Communications Commission And United States of America, Respondents Dish Network Corporation, Intervenor
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

950 F.3d 871

NTCH, INC., Appellant

v.FEDERAL COMMUNICATIONS COMMISSION, Appellee

Dish Network Corporation, Intervenor

NTCH, Inc., Petitioner

v.Federal Communications Commission And United States of America, Respondents

Dish Network Corporation, Intervenor

No. 18-1241

C/w 18-1242

No. 18-1243

United States Court of Appeals, District of Columbia Circuit.

Argued October 8, 2019

Decided February 21, 2020

Donald J. Evans, Valparaiso, IN, argued the cause for appellant. With him on the briefs was Keenan Adamchak, McLean, VA.

Maureen K. Flood, Counsel, Federal Communications Commission, argued the cause for appellee. With her on the brief were Michael F. Murray, Deputy Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Frances E. Marshall, Attorneys, Washington, DC, Thomas M. Johnson Jr., General Counsel, Federal Communications Commission, Charleston, WV, David M. Gossett, Deputy General Counsel, and Richard K. Welch, Deputy Associate General Counsel, Washington, DC. Jacob M. Lewis, Associate General Counsel, Federal Communications Commission, Washington, DC, entered an appearance.

Bryan N. Tramont and J. Wade Lindsay, Washington, DC, were on the brief for intervenor. Jennifer B. Tatel, Washington, DC, entered an appearance.

Sarah E. Citrin, Counsel, Federal Communications Commission, argued the cause for respondents. With her on the brief were Michael F. Murray, Deputy Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Frances E. Marshall, Attorneys, Washington, DC, Thomas M. Johnson Jr., General Counsel, Federal Communications Commission, Charleston, WV, David M. Gossett, Deputy General Counsel, and Richard K. Welch, Deputy Associate General Counsel, Washington, DC. Jacob M. Lewis, Associate General Counsel, Washington, DC, and Maureen K. Flood and Thaila Sundaresan, Counsel, Federal Communications Commission, entered appearances.

Before: Tatel, Garland, and Griffith, Circuit Judges.

Per Curiam:

Title III of the Communications Act of 1934 charges the Federal Communications Commission with the regulation of the "channels of radio transmission." 47 U.S.C. § 301. These cases arise out of three Commission spectrum-management decisions. First, the Commission "modified" Dish Network Corporation’s licenses in the "Advanced Wireless Services-4 Band" (the "AWS-4 Band") to authorize the company to develop a stand-alone terrestrial network that could support wireless broadband services. Then, a year later, the Commission "waived" certain technical restrictions on these modified licenses, though it conditioned the waivers on Dish’s commitment to bid a certain sum of money in a public auction for adjacent spectrum in the so-called "H Block." And finally, the Commission designed and conducted "Auction 96," in which Dish bid as promised and won the H Block licenses.

NTCH, Inc., a competitor to Dish, challenges all three decisions. For the reasons set forth below, we deny its petitions for review of the orders modifying Dish’s AWS-4 licenses and establishing Auction 96’s procedures. But because the Commission wrongly dismissed NTCH’s challenges to the waiver orders for lack of administrative standing, we remand to the Commission to consider those claims on the merits.

I.

A.

The AWS-4 Band’s history begins, for present purposes, with the disappointing commercial deployment of "mobile satellite service" (MSS)— "a satellite-powered technology that provides email and cellular-like phone services," particularly in hard-to-reach areas and during natural disasters. Globalstar, Inc. v. FCC , 564 F.3d 476, 480 (D.C. Cir. 2009). Back in 1997, bullish on MSS, the Commission allocated spectrum for MSS and soon granted licenses to eight operators.

By 2003, however, satellite’s prospects seemed bleak compared to terrestrial technologies—i.e. , those that route radio communications through cell towers. To put MSS spectrum to better use, the Commission authorized MSS licensees to offer "ancillary" terrestrial services. See In re Service Rules for Advanced Wireless Services in the 2000-2020 MHz and 2180-2200 MHz Bands , 27 FCC Rcd. 3561, 3564–65, ¶¶ 5–6 (2012) (" AWS-4 NPRM "). The Commission thus allowed "MSS operators to augment their satellite services with terrestrial facilities" by "re-using frequencies assigned to MSS operations." Id. at 3564, ¶ 5. But the Commission imposed a condition on this new flexibility: before an MSS licensee could offer terrestrial services, it would first need to provide "substantial satellite service." Id.

This condition thwarted the development of terrestrial networks. Unable to make "substantial" satellite service commercially viable, licensees could not avail themselves of the terrestrial option. Id. at 3565, ¶ 8. By 2011, six of eight MSS licensees had surrendered their licenses. When the last two licensees filed for bankruptcy, Dish swooped in, acquiring the licenses from the bankrupt companies.

As the MSS spectrum fell into desuetude, the market for "wireless broadband" (which sends information to data-hungry devices like iPhones and iPads) was booming. Indeed, the Commission worried that, soon enough, "mobile data demand [would] exhaust spectrum resources." Id. at 3567, ¶ 10. In response, Congress enacted legislation instructing the Commission to develop a "national broadband plan" to "ensure that all people of the United States have access to broadband capability." American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, § 6001(k)(2)(D), 123 Stat. 115, 516. The Commission’s resulting National Broadband Plan acknowledged that its insistence on "substantial satellite service" in the AWS-4 Band made it "difficult for MSS providers to deploy ancillary terrestrial networks." See FEDERAL COMMUNICATIONS COMMISSION, CONNECTING AMERICA: THE NATIONAL BROADBAND PLAN 87-88 (2010). The plan thus recommended a subtle but critical shift in the AWS-4 Band: authorize "stand-alone terrestrial services" without the requirement that licensees first offer satellite service. Id. And in 2011, the Commission took a first step towards implementing this recommendation, setting aside "co-primary" terrestrial allocations in the satellite ranges. AWS-4 NPRM , 27 FCC Rcd. at 3568, ¶ 14.

NTCH’s first challenge—to the modification of Dish’s licenses, see infra Part II—arises out of the Commission’s efforts to further implement the National Broadband Plan ’s recommendation. In March 2012, the Commission sought comments on a proposal to "increase the Nation’s supply of spectrum for mobile broadband" by creating service rules and assigning licenses for "terrestrial services" in the AWS-4 Band. AWS-4 NPRM , 27 FCC Rcd. at 3563, ¶ 1. But the Commission also sought to preserve the possibility of satellite service. Noting that its 2011 decision allocated the AWS-4 Band "on a co-primary basis," the Commission insisted that its new policies should protect satellite systems from "harmful interference caused by [terrestrial] systems." Id. at 3569–70, ¶ 17 ; 3587, ¶ 80.

Given its continued commitment to satellite, the Commission proposed to use its authority under § 316 of the Communications Act to "modify" Dish’s licenses to allow it to offer terrestrial services. Id. at 3585–86, ¶¶ 74–78 ; see 47 U.S.C. § 316(a). The Commission reasoned that allowing "same-band, separate-operator" sharing of the spectrum—i.e. , dividing the terrestrial and satellite rights between two licensees—could hinder coordination between the two operators, and thus cause interference between the two services. Id. at 3586–87, ¶¶ 79–80. Back in 2003, when the Commission first opened the AWS-4 Band for ancillary terrestrial use, the Commission found that same-band, separate-operator sharing was unworkable, and the Commission expected that operators would face the same issues in 2012. Seeking more information, however, the Commission asked commenters whether "technological advances" since 2003 should "reinforce or alter" the Commission’s expectations. Id. at 3584, ¶ 72. If commenters established the feasibility of separate licensees, the Commission explained, it would consider changing course to "seek comment on other approaches," including "the assignment of new initial licenses" to the terrestrial rights through "competitive bidding." Id. at 3587, ¶ 80.

Nobody changed the Commission’s mind. And so, in December 2012, the Commission’s AWS-4 Order adopted the AWS-4 NPRM ’s proposed approach. See In re Service Rules for Advanced Wireless Services in the 2000-2020 MHz and 2180–2200 MHz Bands , 27 FCC Rcd. 16,102, 16,110–12 (2012) (" AWS-4 Order "). As the Commission explained, it "received numerous comments" confirming that "technical hurdles [to operator sharing] remain" and that granting a terrestrial license to "an entity other than the MSS incumbent remains impractical." Id. at 16,165, ¶ 166. Although one commenter suggested that "known technologies" would allow spectrum sharing, id. at 16,172, ¶ 182 ; see 18-1243 J.A. 142–54 (comments of MetroPCS), the Commission disagreed, claiming that these technologies were not "market-proven" and could only work if one operator controlled both uses of the spectrum. Id. at 16,172, ¶ 182. The Commission also noted that "no commenter," MetroPCS included, submitted technical evidence that disputed its 2003 finding. Id. at ¶ 183.

The Commission announced that it would use its § 316 modification authority to "allow [Dish] to operate terrestrial services, rather than make the band available ... under a sharing regime." Id. at 16,171, ¶ 181. Acknowledging that Dish’s licenses would "increase in value," the Commission reasoned that modifying these licenses was the "best and fastest method for bringing this spectrum to market." Id. at 16,170, ¶ 178.

The AWS-4 Order also imposed two relevant restrictions on Dish’s licenses. First, the Commission protected the remaining satellite services from interference by designating the AWS-4 Band’s lower portion (i.e. , 2000–2020 MHz) for "uplink" operations and...