PMCM TV, LLC v. Federal Communications Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 18, 2012 Decided December 14, 2012
No. 11-1330
PMCM TV, LLC,
APPELLANT
v.
FEDERAL COMMUNICATIONS COMMISSION,
APPELLEE
On Appeal from an Order of the
Federal Communications Commission
Donald J. Evans argued the cause for appellant. With
him on briefs were Harry F. Cole and Anne Goodwin Crump.
Joel Marcus, Counsel, Federal Communications
Commission, argued the cause for appellee. On the brief were
Austin C. Schlick, General Counsel, Peter Karanjia, Deputy
General Counsel, Richard K. Welch, Deputy Associate General
Counsel, and Laurence N. Bourne, Counsel. C. Grey Pash
Jr., Counsel, entered an appearance.
Before: TATEL, GARLAND, and KAVANAUGH, Circuit
Judges.
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Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: Section 331(a) of the
Communications Act directs the Federal Communications
Commission to approve “reallocations” of very high frequency
(VHF) television channels to States currently lacking such a
channel. Relying on this provision, appellant filed an
application to reallocate VHF channels from Nevada and
Wyoming to New Jersey and Delaware. The Commission
denied the application, interpreting section 331(a) to require
reallocations of channels only between neighboring locations.
Because the Commission’s decision conflicts with the statute’s
text and purpose and because appellant can move its channels
without creating signal interference, we reverse.
I.
For most of broadcast television’s history, VHF
channels have enjoyed substantial technical advantages over
other broadcasting methods. Reallocation of Channel 2 from
Jackson, Wyoming to Wilmington, Delaware & Reallocation of
Channel 3 from Ely, Nevada to Middletown Township, New
Jersey, 26 F.C.C. Rcd. 13,696, 13,697 (2011) (“FCC Order”).
Indeed, by the 1950s, most metropolitan areas across the
eastern seaboard had VHF stations. But the Commission had
allocated no VHF channels to Delaware and only a single VHF
channel, which was operating non-commercially, to New
Jersey. Id. at 13,697. The reason for this was that interference
from VHF stations broadcasting in New York City,
Philadelphia, and Baltimore prevented placing additional
channels in New Jersey and Delaware. Id. at 13,697–98.
People living in these two States could thus receive VHF
programming only by tuning in to New York, Pennsylvania, or
Maryland stations. New Jersey Coalition for Fair
Broadcasting v. FCC, 574 F.2d 1119, 1121–22 (3d Cir. 1978).
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The dispute before us today is the latest in a
decades-long effort to correct this problem. In 1980, New
Jersey Senators Bill Bradley and Pete Williams petitioned the
Commission to “reallocate” a New York VHF channel to New
Jersey. Petition to Reallocate VHF-TV Channel 9 from New
York, New York, to a City Within the City Grade Contour of
Station WOR-TV, 84 F.C.C. 2d 280–83 (1981). Moving a
channel from neighboring New York could be accomplished
without creating interference because the newly-established
New Jersey channel would simply fill the void left by the
vacated New York channel.
Without waiting for the Commission to act, Senator
Bradley introduced the statute at issue here. Enacted by
Congress as part of the Tax Equity and Fiscal Responsibility
Act of 1982, Pub L. No. 97-248, 96 Stat. 324, 641, the
provision, now codified as section 331(a) of the
Communications Act, 47 U.S.C. § 331(a), states:
It shall be the policy of the Federal
Communications Commission to allocate
channels for very high frequency commercial
television broadcasting in a manner which
ensures that not less than one such channel shall
be allocated to each State, if technically
feasible. In any case in which [sic] licensee of a
very high frequency commercial television
broadcast station notifies the Commission to the
effect that such licensee will agree to the
reallocation of its channel to a community
within a State in which there is allocated no
very high frequency commercial television
broadcast channel at the time [sic] such
notification, the Commission shall,
notwithstanding any other provision of law,
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order such reallocation and issue a license to
such licensee for that purpose pursuant to such
notification for a term of not to exceed 5 years
as provided in section 307(d) of this title.
Prompted by section 331(a)’s second sentence, the
Commission granted a petition by a New York channel to
move to New Jersey. FCC Order, 26 F.C.C. Rcd. at 13,698–99.
An unsuccessful competitor for the license appealed the
Commission’s decision to this Court, contending that New
Jersey was not “a State in which there is allocated no [VHF]
commercial television broadcast channel” because the
non-commercial VHF station operating there had actually been
allocated as a commercial channel. In Multi-State
Communications, Inc. v. FCC, 728 F.2d 1519, 1522–24 (D.C.
Cir. 1984), we relied on Senator Bradley’s extensive
involvement in the bill’s passage to reject this textual argument
and hold that the statute did apply to New Jersey. “Construing
a statutory term,” we explained, “requires more than a
superficial and isolated examination of the statute’s plain
words.” Id. at 1522. We also rejected the competitor’s
argument that other provisions of the Communications Act
required a comparative hearing, finding that interpretation
inconsistent with the statutory text that “the Commission shall,
notwithstanding any other provision of law, order such
reallocation and issue a license.” Id. at 1524–25 (emphasis
omitted). We concluded that section 331(a) “displaced the
normal procedures for channel reallocation as well as the
normal procedures for issuing licenses, including the
requirement of a comparative hearing.” Id. at 1525.
Flash forward to 2009 when the United States
transitioned from analog to digital television broadcasting.
Because VHF is poorly suited for digital broadcasting, the
Commission allowed several stations to substitute other
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channels for their VHF allotments. PMCM TV, LLC c/o Harry
F. Cole, Esq., 24 F.C.C. Rcd. 14,588, 14,595 & n.38 (2009)
(“Bureau Decision”). As a result, New Jersey and Delaware
once again had no VHF stations. But unlike when section
331(a) was enacted, the digital transition made it technically
feasible to allocate new VHF channels to New Jersey and
Delaware on vacated airwaves without creating signal
interference. FCC Order, 26 F.C.C. Rcd. at 13,707–08.
Within days of the digital transition and setting the stage
for the case before us, PMCM, a television station operator,
proposed to reallocate its Nevada and Wyoming VHF channels
to New Jersey and Delaware, respectively. Id. at 13,699. The
Commission’s Media Bureau denied the request. Although
acknowledging that both moves could be accomplished
without creating signal interference, the Bureau found that the
proposed moves were not “reallocations” within the meaning
of section 331(a)’s second sentence. Bureau Decision, 24
F.C.C. Rcd. at 14,594 n.33, 14,595. In doing so, the Bureau
conceded that the term “reallocation” was susceptible to two
different meanings. Id. at 14,590–91. Under the broader
interpretation, advocated by PMCM, the Commission would
“consider any allocation of a channel to a state without a VHF
channel as a ‘reallocation’ if the proponent currently operates a
station on the same channel somewhere in the United States
and agrees to terminate service on that channel and move to the
unserved state to operate on the same channel there.” Id. at
14,590. The Bureau observed that “although PMCM asserts
that its proposals are technically feasible, [PMCM] contends
that the Commission must order such ‘reallocation’ even if it is
not technically feasible because the second sentence of Section
331 has no explicit technical feasibility condition.” Id.
Rejecting PMCM’s interpretation of “reallocation,” the Bureau
concluded that the word meant “the shifting of a channel
allocation from one community to another community under
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circumstances where the channel cannot be used
simultaneously at both locations due to interference concerns.”
Id. at 14,593. Under this narrower reading, the second sentence
would apply to moves between neighboring locations, such as
from New York City to New Jersey, but not to moves between
distant locations, such as those proposed by PMCM.
The Commission denied PMCM’s application for
review. FCC Order, 26 F.C.C. Rcd. at 13,708. Conceding that
PMCM’s proposed moves would cause no interference, the
Commission confirmed the Bureau’s interpretation of
“reallocation,” explaining that “it is more reasonable to
interpret the term to mean the moving of a VHF channel to a
new state under circumstances where the channel cannot be
used simultaneously at the authorized and proposed new
location because such dual operations would cause
interference.” Id. at 13,702.
PMCM now appeals.
II.
Congress enacted section 331(a) to solve a specific
problem existing at the time of its passage—the lack of a
commercial VHF station in New Jersey. Our task is to
determine how section 331(a) applies to a situation not
contemplated by Congress. Although this is hardly an unusual
undertaking for this Court, it is unusually challenging here
because Congress held no hearings on section 331(a), passed it
as a rider to an unrelated tax bill, and used language we have
found cannot be interpreted literally. See Multi-State
Communications, 728 F.2d at 1522–24.
The parties believe that this case turns on the word
“reallocation” in section 331(a)’s second sentence, although
they disagree about what the word means. PMCM contends
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that section 331(a) uses the term without “limiting condition,”
Appellant’s Br. 19, and that its proposed moves fall under the
statute’s literal language because New Jersey and Delaware are
“State[s] in which there is allocated no very high frequency
commercial television broadcast channel at the time [of] such
notification,” 47 U.S.C. § 331(a). Although conceding that its
interpretation would require the Commission to approve
reallocations that cause signal interference, PMCM maintains
that the omission of the words “technical feasibility” from
section 331(a)’s second sentence “invites any commercial
VHF licensee to fill an allocation gap created by the
Commission’s failure to comply with the first sentence.”
Appellant’s Br. 25. For its part, the Commission believes that
“reallocation” refers only to moves between adjacent locations
“because technical feasibility is assured in situations involving
reallocations of channels to nearby communities where the two
allocations are mutually exclusive.” FCC Order, 26 F.C.C.
Rcd. at 13,702. Although conceding that PMCM’s proposed
reallocations would themselves cause no interference, the
Commission warns that under PMCM’s broader reading of
section 331(a), it “would be required to grant any move request
even if it would cause harmful interference to existing
stations.” Appellee’s Br. 34.
In our view, the parties’ differing interpretations suffer
from insurmountable problems. PMCM’s interpretation
creates the potential for signal interference, which would leave
viewers watching static. Given the basic purpose of the
Communications Act—to ensure interference-free
broadcasting—PMCM’s interpretation makes little sense. See,
e.g., National Broadcasting Co. v. FCC, 516 F.2d 1101, 1110
(D.C. Cir. 1974) (“Congress created the Federal
Communications Commission and its predecessor, the Federal
Radio Commission, because the available space on the
electromagnetic spectrum was far exceeded by the number of
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those who would use it.”). Had Congress intended to alter this
fundamental element of telecommunications policy, we doubt
it would have done so without hearings and in a two-sentence
rider to an entirely unrelated tax bill.
The Commission’s interpretation is equally unsatisfying.
For one thing, nothing in section 331(a)’s text limits the second
sentence to “situations involving reallocations of channels to
nearby communities where the two allocations are mutually
exclusive.” FCC Order, 26 F.C.C. Rcd. at 13,702. At oral
argument, Commission counsel conceded that reallocation is
neither a defined term under the Communications Act nor a
term commonly used by the Commission. See Oral Arg. Rec.
23:43–24:39. The Commission also concedes that it has used
the word “allocation” to refer to any channel allotment without
regard to geography. See, e.g., Oversight of the Radio and TV
Broadcast Rules, 1 FCC Rcd. 849, 849 (1986) (“After
allocating frequencies for broadcasting purposes, the
supervising Mass Media Bureau allots frequencies to
geographical areas in the U.S.A. and its territories and
possessions for specific services therein.”). Moreover, the
Commission’s interpretation conflicts with Congress’s plainly
stated goal to “ensure[] that not less than one [VHF] channel
shall be allocated to each State, if technically feasible.” 47
U.S.C. § 331(a).
Setting aside the parties’ unilluminating dispute over the
meaning of “reallocation,” and focusing on the two things we
do know about Congressional intent—that Congress passed the
Communications Act to ensure interference-free
broadcasting and section 331(a) to ensure that every State has
at least one VHF station if technically feasible—we think
section 331(a)’s meaning becomes clear despite the statute’s
linguistic defects. The first sentence directs the FCC to allocate
VHF channels to each State where technically feasible, and the
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second sentence directs the Commission to grant any proposed
technically feasible reallocation to unserved States. Interpreted
this way, section 331(a) fulfills congressional intent: it ensures
that every State will have a VHF station so long as that goal can
be accomplished without causing signal interference. This is
the best interpretation of section 331(a) because it reads the
two sentences as a coherent whole and is consistent with the
basic purpose of the Communications Act.
In reaching this conclusion, we realize, as PMCM
repeatedly reminds us, that unlike section 331(a)’s first
sentence, its second sentence does not mention technical
feasibility. But if, as we think, the second sentence functions as
a subpart of the first, then Congress had no need to mention
technical feasibility in the second sentence. Nor is it significant
that the second sentence contains the phrase “notwithstanding
any other provision of law.” As we explained in Multi-State
Communications, this language simply serves to “displace[]
the normal procedures for channel reallocation as well as the
normal procedures for issuing licenses.” 728 F.2d at 1525.
III.
Given the foregoing and given the Commission’s
concession that PMCM’s proposal is technically feasible, we
reverse and remand to the Commission with instructions to
approve the reallocations.
So ordered.