Northpoint Technol v. FCC ( 2005 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 11, 2005 Decided July 15, 2005
No. 02-1194
NORTHPOINT TECHNOLOGY, LTD . ET AL.,
APPELLANTS
v.
FEDERAL COMMUNICATIONS COMMISSION,
APPELLEE
ECHOSTAR SATELLITE CORPORATION, ET AL.,
INTERVENORS
Consolidated with
02-1195, 02-1209, 03-1244, 03-1245,
03-1286, 03-1297, 03-1299, 03-1300
On Petitions for Review and Notices of Appeal
of Orders of the Federal Communications Commission
Richard P. Bress argued the cause for petitioners
DIRECTV, Inc., et al. With him on the briefs were James H.
Barker, III., Margaret L. Tobey, Pantelis Michalopoulos, Steven
G. Reed, Alice E. Loughran, Phillip L. Spector, and Jeffrey H.
Olson. Bart S. Epstein and Christa P. McAndrew entered
appearances.
2
Michael K. Kellogg argued the cause for petitioners
Northpoint Technology, Ltd., et al. With him on the briefs were
Antoinette C. Bush and J. C. Rozendaal.
Joel Marcus, Counsel, Federal Communications
Commission, argued the cause for appellee/respondents. With
him on the brief were Robert H. Pate, III, Assistant Attorney
General, Robert B. Nicholson and Steven J. Mintz, Attorneys,
John A. Rogovin, General Counsel, Austin C. Schlick, Deputy
General Counsel, and Daniel M. Armstrong, Associate General
Counsel. Jane E. Mago, Assistant General Counsel, entered an
appearance.
Before: SENTELLE, ROGERS and TATEL, Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
SENTELLE, Circuit Judge: This case concerns new
regulations issued by the Federal Communications Commission
(“FCC” or “the Commission”) allowing terrestrial multichannel
video distribution and data service (“MVDDS”), to share the
12.2-12.7 GHz bandwidth (“12 GHz bandwidth”) spectrum with
direct broadcast satellite (“DBS”) television services, as well as
a decision by the FCC to auction MVDDS use of that
bandwidth.
The regulations are challenged by two sets of petitioners:1
the incumbent providers, DIRECTV, Inc., Satellite Broadcasting
and Communications Association, EchoStar Satellite Corp., and
SES Americom, Inc. (“DBS providers”), and a would-be
1
Petitioner Northpoint is also appealing from the
Commission’s decision to allocate MVDDS licenses by auction, under
47 U.S.C. § 402. For simplicity’s sake, we will generally refer to
Northpoint as a Petitioner.
3
competitor, Northpoint Technology, Ltd. (“Northpoint”), which
claims credit for inventing MVDDS technology. For reasons
stated more fully below, we deny both petitions for review.
I. Background
A. Original Allocation of the 12 GHz Bandwidth
Twenty-five years ago, as satellite technology developed to
the point at which direct broadcast satellite service to individual
homes and businesses was feasible, the FCC began to
investigate setting aside specific portions of the spectrum for
DBS service. In the runup to an international radio conference
in 1979, the Commission “decided to seek international
agreement to shift the international allocation of DBS to the 12
GHz band in order to accommodate future U.S. DBS
requirements.” National Association of Broadcasters v. FCC,
740 F.2d 1190, 1195 (D.C. Cir. 1984). The next year, “the
Commission began to consider how to protect and advance U.S.
interests in DBS use of the 12 GHz band.” Id. In 1982, the
Commission issued a Report and Order authorizing the use of
the 12.2-12.7 GHz bandwidth to DBS use as in the public
interest. Report and Order, In the Matter of Inquiry into the
Development of Regulatory Policy in Regard to Direct
Broadcast Satellites for the Period Following the 1983 Regional
Administrative Radio Conference, 90 F.C.C. 2d 676, 679 (July
14, 1982). The Report and Order highlighted the Commission’s
conclusion “that DBS has the potential to provide extremely
valuable services to the American people[,]” including “the
provision of improved service to remote areas, additional
channels of service throughout the country, programming
offering more variety and that is better suited to viewers’ tastes,
technically innovative services, and expanded non-entertainment
service.” Id. at 680.
4
In the same Report and Order, in order to effectuate the
allocation of the 12 GHz bandwidth to DBS service, the FCC
announced a plan for any remaining terrestrial use of that
bandwidth: First, after a grace period of five years, already-
authorized terrestrial operations in the bandwidth would be
required to operate on a strict non-interference basis to DBS
services. Id. at 702. Second, terrestrial operations authorized
after the Report and Order would receive conditional licenses,
requiring that they not cause any harmful interference to DBS
systems. Id.
B. Decision to Propose Rulemaking for Sharing of 12
GHz Bandwidth
This policy began to shift when, in the late 1990s, the FCC
began to look at the possibility of allowing additional broadcast
technologies to share the 12 GHz bandwidth with DBS
providers. In 1997, Skybridge, L.L.C., a provider of non-
geostationary fixed satellite service (“NGSO-FSS”), filed a
Petition for Rulemaking with the FCC to allow it to operate in
various wavelengths between 10.7 and 14.5 GHz.
The next year, in 1998, Northpoint filed a Petition for
Rulemaking asking that it also be granted permission to use the
12.2-12.7 GHz bandwidth for its terrestrial MVDDS service,
which can allow DBS subscribers to receive additional channels.
As described by the FCC, the Northpoint technology “use[s]
northward pointing receivers at a DBS subscriber’s location to
receive signals transmitted from terrestrial towers whose
directional antennas point southward.” First Report and Order
and Further Notice of Proposed Rulemaking (“First Order”), 16
F.C.C. Rcd. 4096, 4160 ¶ 164 (2000).
The Commission responded to the NGSO-FSS and MVDDS
applications by issuing a Notice of Proposed Rulemaking, 14
5
F.C.C. Rcd. 1131 (1998), in which it proposed to allow NGSO-
FSS providers to use those bands for uplinks and downlinks, and
solicited comments on Northpoint’s proposal, including further
technical analyses of Northpoint’s ability to share spectrum with
DBS providers. The Commission also issued a Public Notice
soliciting competing applications from NGSO-FSS providers to
share, inter alia, the 12.2-12.7 GHz bandwidth, as a preliminary
step to adopting rules for NGSO-FSS systems in those
bandwidths. Public Notice, Report No. SPB-141, 1998 WL
758449 (Nov. 2, 1998). Northpoint, apparently seeing its
MVDDS technology as equivalent to satellite service, even
though it is terrestrial, submitted an application for usage of that
bandwidth pursuant to the November 1998 Public Notice.
C. New Congressional Mandate
Before the FCC could act further, Congress passed the
Rural Local Broadcast Signal Act of 1999, Pub L. No. 106-113
Div. B, App. I, Tit. II, 113 Stat. 1501, 1501A-544 (Nov. 29,
1999) (“RLBSA”), meant to give DBS
subscribers–predominantly found in small and rural television
markets–affordable access to local broadcast stations, whose
signals, at the time, typically were not carried by DBS service
providers. Specifically, the RLBSA directed the FCC to, within
one year, “make a determination regarding licenses or other
authorizations for facilities that will utilize, for delivering local
broadcast television station signals to satellite television
subscribers in unserved and under-served local television
markets, spectrum otherwise allocated to special use.” Id. §
2002(a). At the same time, the FCC was to “ensure that no
facility licensed or authorized under [the RLBSA] cause[]
harmful interference to the primary users of that spectrum or to
public safety spectrum use.” Id. § 2002(b)(2).
6
D. FCC Rulemaking
In its subsequent rulemaking, which it commenced by
issuing the First Report and Order and Further Notice of
Proposed Rulemaking in 2000, the FCC authorized both NGSO-
FSS and MVDDS providers to operate in the 12 GHz bandwidth
alongside DBS providers. See First Order, 16 F.C.C. Rcd. at
4109 ¶¶ 19, 21. The FCC reasoned that “[t]he use of innovative
spectrum sharing techniques will facilitate a high level of
frequency reuse in this band and provide a variety of broadband
services to a vast number of customers.” First Order, 16 F.C.C.
Rcd. at 4161 ¶ 168. The Commission further reasoned that
MVDDS in particular “w[ould] be capable of delivering local
broadcast signals to satellite television subscribers in unserved
and underserved local television markets” as required by the
RLBSA. Id. at 4108 ¶ 18.
As for the RLBSA’s bar on “harmful interference,” in the
First Order, the FCC adopted the definition in 47 C.F.R. §
2.1(c): “interference which endangers the functioning of a
radionavigation service or of other safety services or seriously
degrades, obstructs, or repeatedly interrupts a
radiocommunication service . . . ,” and found that “we can
develop operating requirements for MVDDS that will ensure
that DBS operations are not seriously degraded or subject to
repeated interruptions due to MVDDS operations . . . .” First
Order, 16 F.C.C. Rcd. at 4177 ¶ 213.
The First Order also served as a Further Notice of Proposed
Rulemaking, for rules developing those operating requirements.
The Commission specified that for those rules to comply with its
definition of “harmful interference,” “we will propose that the
maximum permissible increase in [DBS service] outage caused
by an MVDDS transmitter to any DBS subscriber be a value
such that the increase would generally be unnoticed by the DBS
7
subscriber.” Id.The DBS providers petitioned for reconsideration, arguing,
inter alia, that the decision to allow the MVDDS operators to
share the 12 GHz bandwidth harmed their reasonable reliance
interests in the bandwidth, and that at any rate, the Commission
had failed to justify its decision in light of the potential for
harmful interference.
Shortly thereafter, Congress enacted section 1012 of the
LOCAL TV Act, 47 U.S.C. § 1110, which required independent
testing of “any terrestrial service technology proposed by any
entity that has filed an application to provide terrestrial service”
in the 12 GHz band, to ensure that there would not be harmful
interference with DBS service in that bandwidth. An
independent corporation engaged by the FCC to test
Northpoint’s MVDDS technology concluded that although
MVDDS “poses a significant interference threat to DBS,”
spectrum sharing would still be feasible, given “a wide variety
of mitigation techniques . . . that . . . can greatly reduce, or
eliminate” the interference.
With this information in hand, the FCC denied the DBS
providers’ first petition for reconsideration, and issued the
promised technical parameters that enabled MVDDS to share
the 12 GHz bandwidth without causing harmful interference.
See Memorandum Opinion and Order and Second Report and
Order (“Second Order”), 17 F.C.C. Rcd. 9614 (2002), ¶ 67. In
the Second Order, the FCC laid out detailed technical
requirements for the operation of MVDDS service in the 12
GHz bandwidth. These parameters followed the dictate for non-
interference laid out in the First Order, which was restated in
the Second Order as a requirement “that the presence of an
MVDDS signal would not be perceptible to the DBS customer
in most cases.” Id. at 9641, ¶ 68. The parameters do not set a
8
specific threshold for percentage increase in DBS signal outage
that new MVDDS transmitters may tolerably introduce in a
given geographic area. According to the FCC, the parameters
do, however, ensure that the establishment of MVDDS service
will lead to a less than 10% increase in DBS signal outage in
almost all cases. Id. at 9642, ¶ 70.
Also in the Second Order, the FCC dismissed Northpoint’s
and other later-submitted applications for terrestrial (MVDDS)
licenses as premature, on the basis that the solicitation of
applications for satellite service licenses had not given adequate
notice to providers of terrestrial services that such licenses might
be available. Second Order, 17 F.C.C. Rcd. at 9697, ¶ 213. (In
particular, the FCC in effect rejected Northpoint’s
petition–which, as set forth above, had been submitted alongside
NGSO-FSS applications when those had been solicited–by
deciding not to grant Northpoint various waivers through which
the company sought to have its application considered alongside
the satellite applications. Id. at 9697-9702, ¶¶ 215-228. This
dismissal was, however, without prejudice; Northpoint was
explicitly given permission “to refile in a subsequent window
for terrestrial applications.” Id. at 9697 ¶ 214.) Instead, the
FCC announced that it would award MVDDS licenses by
auction pursuant to the authority granted to it by 47 U.S.C. §
309(j), which requires the Commission to allocate initial
licenses for mutually exclusive applications–e.g., for use of a
specific wavelength–via auction. Second Order, 17 F.C.C. Rcd.
at 9704-05, ¶¶ 237-238. The Commission rejected several
arguments made by Northpoint in the comment period preceding
the Second Order, including two reasserted in this petition for
review: (1) that the FCC could not auction that part of the
spectrum under Section 647 of the Open-market Reorganization
for the Betterment of International Telecommunications Act
(“ORBIT Act”), which bars auctions of spectrum “used for the
provision of international or global satellite communications
9
services,” 47 U.S.C. § 765f, Second Order, 17 F.C.C. Rcd. at
9706-07, ¶ 242;2 and (2) that the FCC could not invoke its
section 309(j) auction authority, as Northpoint was the only
qualified MVDDS applicant by operation of the LOCAL TV
Act’s testing requirement, and there was therefore no mutual
exclusivity. Id. at 9705, ¶ 239.
Both the DBS providers and Northpoint petitioned for
reconsideration of the Second Order. See Fourth Memorandum
Opinion and Order, 18 F.C.C. Rcd. 8428 (2003) (“Fourth
Order”). The DBS providers objected that the technical
parameters mandated by the Second Order were insufficient to
protect their service from “harmful interference,” because they
failed to guarantee a fixed upper bound on service outages. They
further objected to a provision in the Second Order that required
DBS providers to bear the burden of adjusting their transmitters
to prevent harmful interference when installed more than a
month after a MVDDS transmitter. Northpoint reiterated its
ORBIT Act and LOCAL TV Act challenges. The FCC rejected
both petitions.
Having lost its final administrative challenge, Northpoint
did not participate in the MVDDS auction, which took place in
January 2004, and awarded ten MVDDS licenses for the 12 GHz
2
In an unrelated proceeding a year later, but also one in which
Northpoint (through a subsidiary which sought a DBS license) had an
interest, the Commission sought public comment on its authority vel
non to hold an auction of DBS licenses themselves under the ORBIT
Act. See Public Notice, Auction of Direct Broadcast Satellite Service
Licenses Scheduled for August 6, 2003, 18 F.C.C. Rcd. 3478 (2003).
Northpoint asserted a similar theory on the import of Section 647 of
the Act, which the FCC also rejected. This is the subject of another
proceeding in this Court, Northpoint Technology, Ltd. v. FCC, Case
No. 04-1053 (D.C. Cir. June 21, 2005).
10
bandwidth.
E. Current Petitions/Appeals
Before this Court, the DBS providers seek review of the
provisions of the First Order that embody the decision to allow
MVDDS to share the 12 GHz bandwidth with DBS, as well as
the denials of reconsideration of that decision in the Second and
Fourth Orders. The DBS providers argue, principally, that the
Commission did not conform with the RLBSA’s requirement
that spectrum sharing cause no “harmful interference.” They
express a general concern that the regulations represent the loss
of two decades of “protection” from harmful terrestrial
interference with their services in the 12 GHz
bandwidth–protection they say the Commission provided
beginning in 1982, when it allocated the 12 GHz bandwidth for
DBS service to encourage competition with cable television
operators. Specifically, the DBS providers challenge the
regulations as violative of Section 106 of the Administrative
Procedure Act (“APA”) on the basis that (a) the Commission’s
definition of “harmful interference” is arbitrary and capricious,
and (b) the alleged lack of protections for new and existing
subscribers are contrary to law in violation of the RLBSA.
Northpoint, content with the FCC’s decision to force
sharing of the 12 GHz bandwidth, but not with its decision to
auction the MVDDS licenses for that bandwidth, petitions for
review of the Second and Fourth Orders, and appeals the
licensing decision contained therein. Northpoint argues that it
should have been granted exclusive access without having to go
through an auction process, as the first MVDDS provider to
apply to the FCC for use of that bandwidth. Specifically,
Northpoint argues that the auction (a) violates the ORBIT Act’s
prohibition against auctioning “spectrum used for the provision
of international or global satellite communications services”; (b)
11
was an arbitrary choice in violation of both Section 309(j) of the
Communications Act of 1934, and principles enunciated in
Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945), when
compared to the FCC’s decision to allow the NGSO-FSS
providers to go through a simple licensing process, and (c) is not
authorized by law, insofar as Northpoint claims it is the only
qualified MVDDS provider under the LOCAL TV Act, thus
negating the Commission’s authority to auction licenses under
Section 309(j) of the Communications Act.
We have jurisdiction over licensing decisions under 47
U.S.C. § 402(a), and rulemaking orders of the FCC under 28
U.S.C. § 2342. See AT&T Corp. v. FCC, 323 F.3d 1081, 1084
(D.C. Cir. 2003). Because we conclude that the Commission
had a rational basis for concluding that MVDDS providers could
share the 12 GHz bandwidth without causing “harmful
interference” to DBS service providers, as prohibited by the
RLBSA, and that the FCC’s decision was not arbitrary,
capricious, or contrary to law under the APA, we deny the DBS
providers’ petition for review. Further, because we conclude
that the MVDDS auction was neither prohibited by the ORBIT
Act, nor arbitrary under Ashbacker, nor in excess of the
Commission’s powers due to the operation of the LOCAL TV
Act, we deny Northpoint’s petition for review and its appeal of
the FCC’s licensing decision, as well. To the extent that
Northpoint alleges any violation of prior agreements or
understandings with the FCC as to the end result of the
development and testing of its technology, that is a Tucker Act
matter not reviewed in this APA proceeding.
II. Discussion
A. DBS Challenges
1. RLBSA “Harmful Interference” Standard
12
Under Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837,
842-43 (1984), we defer to the Commission’s interpretation of
statutes which it is charged with implementing, so long as the
Congress has not unambiguously forbidden it and it is otherwise
permissible. This means that, if Congress “has directly spoken
to the precise question at issue,” we “give effect to [its]
unambiguously expressed intent”; “if the statute is silent or
ambiguous,” we defer to the Commission’s interpretation so
long as it is “based on a permissible construction of the statute.”
Id.The RLBSA charges the FCC with “ensur[ing] that no
facility licensed or authorized under [the RLBSA] causes
harmful interference to the primary users of that spectrum . . .,”
113 Stat. 1501, 1501A-544 § 2002(b)(2), without specifying
what “harmful interference” might mean in this context. We
must therefore defer to the Commission’s interpretation of
“harmful interference” so long as it is “based on a permissible
construction of the statute.” Chevron, 467 U.S. at 842-43. This
does not require that the agency construction be the only
permissible construction, nor “the reading the court would have
reached if the question initially had arisen in a judicial
proceeding.” Id. at 843 n.11. Rather, all we need to conclude is
that the construction is not arbitrary, capricious, or manifestly
contrary to the statute. Id. at 844.
In this case, the FCC applied its existing definition of
“harmful interference,” listed in the “Terms and definitions”
section of its General Rules and Regulations for Frequency
Allocations and Radio Treaty Matters, see 47 C.F.R § 2.1, to the
context of potential interference with DBS service by MVDDS
users of the 12 GHz bandwidth. The DBS providers argue that
the Commission’s conclusion was impermissible, because it
departed from its own standard contained in 47 C.F.R. § 2.1, and
provided no firm upper limit on the level of outages that would
13
be tolerated. Reviewing the record, we cannot agree with this
assessment. In the First Order, the Commission closely
followed the 47 C.F.R. § 2.1 definition of “harmful interference”
(i.e., “interference which endangers or repeatedly interrupts a
radiocommunication service . . .”) when it said it would strive to
set the technical parameters such that “DBS operations are not
seriously degraded or subject to repeat interruptions due to
MVDDS operations[.]” First Order, 16 F.C.C. Rcd. at 4177, ¶
213. The Commission did not stray, arbitrarily or otherwise,
when it stated in the First Order it could do this by ensuring that
“the maximum increase in outage caused by an MVDDS
transmitter to any DBS subscriber be a value such that the
increase would be generally unnoticed by the DBS subscriber.”
Id. The Commission explained in the Second Order, that “DBS
is, on the whole, extremely reliable with typical service
availabilities on the order of 99.8 to 99.9 percent,” and that the
small number of interruptions to which DBS operations are
already subject “are well tolerated by DBS subscribers[.]”
Second Order, 17 F.C.C. Rcd. at 9640 ¶ 67. Thus, there is a
logical argument that if MVDDS increases that small number of
interruptions–which the DBS providers do not contest the
consumers do not notice now–to a level at which they still do
not notice the interruptions, the 47 C.F.R.§ 2.1 dictate that DBS
service not be seriously degraded will be satisfied. The FCC’s
decision to allow outages in DBS service that generally go
unnoticed is therefore based on a permissible construction of the
RLBSA.
We reject the DBS providers’ next argument, that the lack
of a numerical upper limit on the number of outages that will be
tolerated renders the FCC’s construction of “harmful
interference” impermissible, in light of the qualitative
requirement that interruptions stay at or below a level that are
“generally unnoticed by the DBS subscriber,” First Order, 16
F.C.C. Rcd. at 4177, ¶ 213. As the Commission explained,
14
although the “harmful interference” standard enunciated in the
First Order and for which it set technical parameters in the
Second Order does not set a strict limit on the percentage by
which MVDDS may increase outages in DBS service, “the
overly conservative assumptions used in [its] modeling, the
reality that DBS outage rates vary widely around the country
and from season to season, and the fact that outages occur at all
times of the day–i.e., not just when subscribers are watching
DBS, [it found] that the additional service outage that may result
. . . over and above the 10 percent starting point falls within the
permissible level.” Second Order, 17 F.C.C. Rcd. at 9643, ¶ 72.
In other words, the Commission consistently followed its
qualitative requirement that outage increases not be perceptible
to the DBS consumer: The relevant standard–that increased
interruptions be “generally unnoticed by the DBS
subscriber”–continues to be met even in those rare instances
where increases in the instance of signal outages may go above
10%. That standard, as we have just explained, passes APA
muster. The FCC’s decision not to impose a strict upper bound
on percentage increases in DBS outages, it follows, is also
permissible.
In the alternative, the DBS providers charge that even if the
FCC’s definition of harmful interference is permissible, the
technical parameters the Commission issued failed to ensure a
level of interference that would, in fact, be tolerable to the
average DBS consumer. The Commission responds that it was
reasonable to predict that DBS customers, who regardless “face
wide variations in their own service that are larger than the
increased outages that will be caused by MVDDS . . . would be
insensitive to relatively small increases in variability.” Govt.
Br. at 30. The plausibility of this prediction–that a relatively
small increase in variability would be less noticeable than
relatively large existing outages–is self-evident. Further, as the
Commission pointed out at oral argument, a 10% increase in a
15
0.1-0.2% unavailability is tiny indeed–at 0.01-0.02%. Thus,
neither the FCC’s definition of “harmful interference” nor its
anticipation that its technical parameters would prevent such
interference from occurring in practice, were unreasonable.
The decision to permit MVDDS operations under the
Second Order’s technical parameters appears particularly
reasonable in light of the “safety valve” referred to in that Order.
See Second Order, 17 F.C.C. Rcd. at 9651, ¶ 85. “[I]f due to an
anomalous situation,” the Order explains, “a DBS provider can
demonstrate a tangible detrimental impact on DBS caused by
MVDDS operations,” the FCC may adjust the relevant technical
parameters to eliminate the problem. Id. Through this safety
valve, the FCC can ensure that MVDDS causes no harmful
interference even if, contrary to the FCC’s predictions, operation
under existing parameters produces noticeable service
interruptions in some limited number of areas.
Finally, the DBS providers charge that the FCC failed to
adequately explain why MVDDS providers were not assigned to
alternative bandwidths where they would not cause harmful
interference. Because, for the reasons enunciated above, we
conclude that the Commission took adequate steps to prevent
harmful interference from occurring, such an explanation is not
necessary.
2. Other Alleged RLBSA Violations
The DBS providers also allege that the regulations at issue
violate the RLBSA insofar as they (a) fail to protect DBS
service to new subscriber locations, and (b) fail to protect DBS
service to all existing subscriber locations.
16
a. New Subscriber Locations
As part of its implementation of the plan to share the 12
GHz bandwidth, the Commission issued a rule that new DBS
receiver antennas installed more than 30 days after the relevant
DBS licensee is notified of a potential MVDDS transmitter site,
shall have no further rights of complaint. 47 C.F.R. §
101.1440(e). Instead, the DBS licensee is responsible for
mitigating any harmful interference to DBS reception that might
result. Id. The DBS producers argue that this violates the
“unambiguous obligation” that the RLBSA imposes on the
Commission “to ‘ensure’ that ‘no facility licensed or authorized
to deliver local broadcast television signals . . . causes harmful
interference [to DBS operations].’” DBS Br. at 19 (quoting
RLBSA § 2002(b)(2), 113 Stat. 1501).
By citing this aspect of the MVDDS regulations out of
context, the DBS providers obscure its practical nature. That
same section of the C.F.R. earlier provides that any MVDDS
provider “shall not begin operation unless it can ensure that the
[detectable signals] from its transmitting antenna at all DBS
customers of record locations” is below the applicable limit,
calibrated to ensure no harmful interference. 47 C.F.R. §
101.1440(a). “DBS customers of record,” in turn, is defined as
“those who had their DBS antennas installed prior to or within
the 30-day period after notification to the DBS operator by the
MVDDS licensee of the proposed MVDDS transmitting antenna
site.” Id. The subsequent rule to which the DBS providers
object–that DBS providers who install receivers nearby after that
30-day period are responsible for locating them “in such a way
as to avoid the MVDDS signal,” 47 C.F.R. § 101.1440(e)–is
simply a practicable solution for what to do next, after an
MVDDS transmitter is already in operation. This rule does not,
as the DBS providers suggest, deprive new DBS subscribers of
the right to receive their satellite service free of harmful
17
interference. Instead, it simply shifts the burden for avoiding
harmful interference in those instances from the MVDDS
providers to the DBS providers–something that is clearly not
barred by the RLBSA.
The RLBSA charges the Commission only with “ensur[ing]
that no facility licensed or authorized under [the RLBSA]
cause[] harmful interference to the primary users of that
spectrum . . . .” RLBSA at § 2002(b)(2). It does not speak to
how the Commission must ensure that harmful interference not
occur, or who the Commission must enlist to ensure that harmful
interference not occur. The use of the word “ensure” in the
statute is sufficiently ambiguous to allow a construction that
shifts the burden for some protective measures onto the DBS
providers from the MVDDS providers, to which we defer under
“Chevron Step Two.” We therefore find that 47 C.F.R. §
101.1440(e) does not violate the RLBSA as the DBS providers
argue.
b. Existing Subscribers
Another subsection of the implementing regulations, 47
C.F.R. § 101.1440(g), requires new MVDDS providers to
remedy complaints by existing DBS subscribers of record only
if the complaints are received within a year from when the
MVDDS providers start operations. The DBS providers
complain that this leaves many existing subscribers with no
protection from harmful interference. Specifically, they argue
that subscribers who experience seasonal outages due to weather
may not know until it is too late that MVDDS is the source of
extra interference they may have been experiencing. They
further argue that the rule fails to properly protect from harmful
interference existing DBS subscribers who may need to move
their satellite dishes to obtain better reception after the one-year
window has passed.
18
The record supports the conclusion that the one-year limit
on remediation imposed by 47 C.F.R. § 101.1440(g) is
reasonably calculated to fulfill RLBSA’s requirement that
existing DBS subscribers not encounter “harmful interference.”
It was reasonable for the Commission to predict that any
interference imposed by new MVDDS transmitters would
become apparent within a year. Even in areas subject to severe
weather patterns that could obscure harmful interference from
an existing DBS subscriber, the natural cycle of the seasons will
allow interference above and beyond that caused by seasonal
weather patterns to announce itself before a full year is out.
Finally, our conclusion that the one-year remediation limit is
reasonable is bolstered by the accompanying provision in 47
C.F.R. § 101.1440(f) that in the event of any major modification
to an MVDDS station, including the addition of a new antenna,
all the rights of complaint accorded to existing DBS subscribers
“begin anew.”
B. Northpoint Challenges
Northpoint raises several theories for why the FCC’s
decision to allocate MVDDS licenses in the 12 GHz bandwidth
by auction is arbitrary, capricious, or contrary to law in violation
of the APA. Specifically, it argues that the auctioning decision
(a) violates the ORBIT Act’s prohibition against auctioning
“spectrum used for the provision of international or global
satellite communications services”; (b) was arbitrary and
capricious in violation of both Section 309(j) of the
Communications Act of 1934 and principles enunciated in
Ashbacker Radio Corp. v. FCC; and (c) exceeds the FCC’s
auctioning authority, insofar as Northpoint claims it is the only
qualified MVDDS provider under the LOCAL TV Act. For the
reasons enunciated below, we conclude that none of these
theories unambiguously bar the Commission’s decision to
auction the MVDDS licenses.
19
1. ORBIT Act
The ORBIT Act, passed in 2000, compels the privatization
of the International Telecommunications Satellite Organization,
or INTELSAT, the U.S.-based, 143-nation, international satellite
consortium created by the Communications Satellite Act of
1962. It primarily protects and regulates INTELSAT and other
U.S.-based international or global satellite service providers.
Section 647 of the Act, codified at 47 U.S.C. § 765f, provides
that:
Notwithstanding any other provision of law, the
Commission shall not have the authority to assign by
competitive bidding orbital locations or spectrum used for
the provision of international or global satellite
communications services. The President shall oppose in the
International Telecommunication Union and in other
bilateral and multilateral fora any assignment by
competitive bidding of orbital locations or spectrum used
for the provision of such services.
Northpoint argues that Section 647 prohibits auctions of the
12 GHz bandwidth to MVDDS licensees, through its language
forbidding the FCC from “assign[ing] by competitive bidding
orbital locations or spectrum used for the provision of
international or global satellite communications services.” 47
U.S.C. § 765f. Northpoint argues that the 12 GHz bandwidth
cannot, therefore, be auctioned, as it is “spectrum used for the
provision of international or global satellite communications
services”–specifically, DBS and NGSO-FSS. It is irrelevant,
Northpoint argues, that what is being auctioned here–the use of
that spectrum by MVDDS providers–is not international or
global satellite service, because the statutory language was not
drafted to bar auctioning of spectrum to providers of
international or global satellite communications services.
20
Rather, Northpoint points out, the statute specifically bars
auctioning “spectrum used for the provision of international or
global satellite communications services.” 47 U.S.C. 765f
(emphasis added).
The Commission responds that it is owed deference under
Chevron Step Two for its interpretation of ambiguous language,
that, it argues, “does not directly address whether the ban on
auctions applies to terrestrial usage in spectrum sharing
situations.” Govt. Br. at 35.
We agree with the Commission that the ORBIT Act does
not unambiguously ban auctioning of MVDDS licenses for the
12 GHz bandwith. As the Commission noted in the Second
Order when it addressed Northpoint’s ORBIT Act argument, see
Second Order, 17 F.C.C. Rcd. at 9707 ¶ 244, and as we
explained just a few weeks ago in another case involving
Northpoint, see Northpoint Technology, Ltd., No. 04-1053 slip
op. at 11 (D.C. Cir. June 21, 2005) (rejecting the argument that
regardless of whether DBS is an international satellite service,
DBS licenses cannot be auctioned because DBS providers use
spectrum also available for NGSO-FSS, an international satellite
service), in the context of the ORBIT Act, the meaning of “used
for the provision of international or global satellite
communications services” is not entirely clear. Northpoint’s
construction of § 765f is plausible. But it is also possible to
construe the provision to forbid the FCC from auctioning
“orbital locations or spectrum” only when that spectrum is to be
“used for the provision of international or global satellite
communications services,” but not spectrum that is to be used
for provision of domestic, non-satellite-based communications
services. Because of this ambiguity, we defer to the
Commission’s reasonable interpretation. See Chevron, 467 U.S.
at 842-43.
21
2. Arbitrary and Capricious Claim
Northpoint’s next contention is that the FCC arbitrarily
discriminated against it by failing to include it in working out
sharing arrangements with all potential 12 GHz licensees,
including NGSO-FSS applicants. For this Northpoint constructs
two main arguments.
First, Northpoint argues that the FCC violated Section
309(j)(6)(E) of the Communications Act of 1934, codified at 47
U.S.C. § 309(j)(6)(E). Section 309 governs the Commission’s
treatment of applications for bandwidth licenses; Section 309(j)
governs the use of competitive bidding, in particular. Section
309(j)(6) provides:
Nothing in this subsection, or in the use of competitive
bidding, shall . . . be construed to relieve the Commission
of the obligation in the public interest to continue to use
engineering solutions, negotiation, threshold qualifications,
service regulations, and other means in order to avoid
mutual exclusivity in application and licensing
proceedings[.]
47 U.S.C. § 309(j)(6).
Northpoint argues that the Commission violated Section
309(j)(6) by not coming up with a way to avoid “mutual
exclusivity” among MVDDS applicants for the 12 GHz
bandwidth. In Northpoint’s opinion, once the “search[] for
consensus and engineering fixes” contemplated by section
309(j)(6)(E) was under way, the Commission had no discretion
remaining and had to negotiate to the point of avoiding mutual
exclusivity for all applicants. Northpoint Br. at 15.
22
We dismiss this contention out of hand. Section 309(j)(6)
merely provides “Rules of construction” for interpreting section
309(j). See 47 U.S.C. § 309(j)(6). We will not interpret a
hortatory provision exhorting, in Northpoint’s words, a “search
for consensus” to require that the Commission search and
negotiate until the bitter end.
Second, Northpoint argues that since both NGSO-FSS and
MVDDS licensees sought to use the same spectrum at the same
time, Ashbacker dictates that “the FCC [can] not grant one
[competing application] while setting the other for a
comparative hearing.” Northpoint Br. at 15. Instead,
Northpoint contends, “a single proceeding [involving both
NGSO-FSS and MVDDS applicants] was in fact launched
and–in all its key technical aspects–completed; then, after years
of negotiations, the proceeding was split in two, and one
participant in the original proceeding was told to start all over
again.” Northpoint Br. at 16. This argument is also off the mark.
As we have previously explained:
In Ashbacker Radio Corp. v. FCC, the Supreme Court held
that the FCC must conduct a comparative hearing whenever
there are before it mutually exclusive applications for a
broadcast license. The FCC has promulgated various
regulations governing the processing of such applications
and establishing certain filing deadlines. The purpose of
these rules is to attract all competitive applications for a
particular license within a fixed and reasonably short time
frame, allowing the Commission to satisfy its Ashbacker
obligations with a single, fairly prompt comparative
hearing.
Oregon v. FCC, 102 F.3d 583, 584 (D.C. Cir. 1996) (quotation
marks, brackets and citations omitted). Northpoint seems to be
23
arguing that the MVDDS license it seeks is mutually exclusive
with the eight licenses granted for NGSO-FSS use of the 12
GHz bandwidth. It follows, the company seems to be arguing,
that its application for an MVDDS license should have been
considered in a single comparative hearing with those of the
NGSO-FSS providers. But, Northpoint argues, because of
alleged preferential treatment by the FCC–i.e., “two years of
intense technical negotiation” resulting in the NGSO-FSS
licenses awarded “not [being] mutually exclusive,” Northpoint
Br. at 15 (emphasis in original)–the NGSO-FSS providers did
not have to be considered alongside Northpoint in a single,
comparative hearing.
Northpoint’s use of Ashbacker Radio here is creative, but
stretches a bit too far. The NGSO-FSS and MVDDS licenses
are two different kinds of licenses, for reasons to be explained
momentarily, and need not be considered together. Perhaps what
Northpoint was getting at was a more general principle–that an
agency must provide adequate explanation before treating
similarly situated parties differently, or else be in violation of
the APA. See, e.g., Burlington Northern & Santa Fe Ry. Co. v.
Surface Transp. Bd., 403 F.3d 771, 776-77 (D.C. Cir. 2005);
Chadmoore Communications v. FCC, 113 F.3d 235, 242 (D.C.
Cir. 1997). But Northpoint’s application for an MVDDS license
is differently situated from that of the NGSO-FSS applicants, as
the Commission adequately explained in the Orders under
review. NGSO-FSS service is satellite-based; MVDDS uses
terrestrial transmitters. More saliently, at the time the FCC first
announced it would allow NGSO-FSS and MVDDS providers
to share the 12 GHz bandwidth, how NGSO-FSS providers
could share that was well understood, having been discussed at
the 2000 World Radiocommunication Conference, but how
exactly MVDDS providers would share that spectrum was not.
See First Order, 16 F.C.C. Rcd. at 4109, ¶¶ 19-21. For that
reason, and in order to support its RLBSA burden of ensuring
24
that the terrestrial-based technology did not cause “harmful
interference” with DBS service, the FCC issued a Further Notice
of Proposed Rulemaking at that time. Id. at ¶ 21. Because
MVDDS is differently situated from NGSO-FSS technology, it
was not arbitrary or capricious for the FCC to conduct the
NGSO-FSS licensing process separately, and wait to license, via
auction, MVDDS licenses after further rulemaking.
3. LOCAL TV Act
Northpoint’s final formal argument is that by operation of
the LOCAL TV Act, it was the only “qualified applicant” for
terrestrial use of the 12 GHz bandwidth, and that therefore, the
FCC lacked the section 309(j)(1) authority to auction MVDDS
use of the 12 GHz bandwidth.
As noted above, the LOCAL TV Act required independent
testing within 60 days of the Act’s enactment of “any terrestrial
service technology proposed by any entity that has filed an
application to provide terrestrial service in the direct broadcast
frequency band,” to ensure that there would not be harmful
interference with DBS service in that bandwidth. See 47 U.S.C.
§ 1110. Northpoint argues that pursuant to this provision, only
entities which submitted technology for testing are eligible for
MVDDS licenses, and that as only it submitted technology for
testing, it is the sole entity eligible for an MVDDS license.
The Commission responds that “terrestrial service
technology” in that context arguably refers more generally to
MVDDS technology, and that it could therefore “reasonably
find that an MVDDS system operated within parameters
developed pursuant to [the independent tester’s] test of
Northpoint’s hardware and FCC-developed engineering models
constitutes a method of providing service–[i.e.,] a
technology–within the meaning of the statute, without regard to
25
the particular hardware used [by, e.g. Northpoint] to operate the
system.” Govt. Br. at 39.
The Commission has the better of the argument. The term
“terrestrial service technology” as used in 47 U.S.C. § 1110might refer to the exact system used by the authors of the
pending applications to which that section refers; the term might
also refer more generally to the scientific or technical methods
of which that (or those) authors’ pending application takes
advantage. Chevron tells us that when more than one reasonable
interpretation exists, the choice is not ours to make. See
Chevron, 467 U.S. at 842-43. Therefore, we again defer to the
Commission's interpretation.
As part of its LOCAL TV Act argument, Northpoint further
complains that “[t]he FCC could not properly rely on
Northpoint’s demonstration in order to qualify other applicants
for MVDDS licenses . . . also because Northpoint authorized the
Commission to carry out the demonstration solely for the
purpose of issuing licenses to Northpoint.” Northpoint Br. at 9
(emphasis added). If Northpoint is contending here that the
FCC violated an agreement with the company, that is a Tucker
Act matter, see 28 U.S.C. § 1491, and not for review in this
APA proceeding. Megapulse Inc. v. Lewis, 672 F.2d 959, 967-
70 (D.C. Cir. 1982).3
III. Conclusion
In sum, because we defer to the FCC’s definition of
3
The Commission advances an additional argument
challenging the standing of Northpoint to bring this petition. Because
we conclude that Northpoint has in fact advanced a justiciable claim
that it has suffered injury redressable in this action, we reject that
challenge to our jurisdiction.
26
“harmful interference” as used in the RLBSA, and further find
its solutions for ensuring that both new and existing DBS
subscribers do not experience such “harmful interference”
reasonable, we reject the DBS providers’ APA challenge.
Similarly, because we find that the ORBIT Act does not
unambiguously bar the Commission’s decision to auction
MVDDS licenses for the 12 GHz bandwidth, and the LOCAL
TV Act does not unambiguously operate to bar the Commission
from auctioning those licenses to MVDDS providers other than
Northpoint, and that the Commission did not arbitrarily treat
Northpoint differently than the NGSO-FSS applicants in
violation of the APA, we reject Northpoint’s petition, as well.
Both petitions for review are denied, and the Orders of the
Commission affirmed.