Council Tree Comm v. FCC

CourtCourt of Appeals for the Third Circuit
DecidedSeptember 28, 2007
Docket06-2943
StatusPublished

This text of Council Tree Comm v. FCC (Council Tree Comm v. FCC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Council Tree Comm v. FCC, (3d Cir. 2007).

Opinion

Opinions of the United 2007 Decisions States Court of Appeals for the Third Circuit

9-28-2007

Council Tree Comm v. FCC Precedential or Non-Precedential: Precedential

Docket No. 06-2943

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Recommended Citation "Council Tree Comm v. FCC" (2007). 2007 Decisions. Paper 318. http://digitalcommons.law.villanova.edu/thirdcircuit_2007/318

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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 06-2943

COUNCIL TREE COMMUNICATIONS, INC.; BETHEL NATIVE CORPORATION; THE MINORITY MEDIA AND TELECOMMUNICATIONS COUNCIL,

Petitioners

v.

FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA,

Respondents

CTIA-WIRELESS Association and T-Mobile USA, Inc.,

Intervenor

On Petition for Review of Orders of the Federal Communications Commission (FCC Nos. 06-52, 06-71 and 06-78) Argued May 23, 2007 Before: CHAGARES, HARDIMAN and TASHIMA,* Circuit Judges.

(Filed: September 28, 2007)

Dennis P. Corbett, Esq. (Argued) S. Jenell Trigg, Esq. Leventhal, Senter & Lerman 2000 K Street, N.W. Washington, DC 20006

Attorneys for Petitioners

Joseph R. Palmore, Esq. (Argued) Samuel L. Feder, Esq. Laurence N. Bourne, Esq. Federal Communications Commission Office of General Counsel 445 12 th Street, S.W. Washington, DC 20554

Robert B. Nicholson, Esq. Robert J. Wiggers, Esq. United States Department of Justice

* The Honorable A. Wallace Tashima, Senior Circuit Judge for the United States Court of Appeals for the Ninth Circuit, sitting by designation.

2 Appellate Section Room 3224 950 Pennsylvania Avenue, N.W. Washington DC 20530

Attorneys for Respondents

William T. Lake, Esq. (Argued) Wilmer Cutler Pickering Hale & Dorr 1875 Pennsylvania Avenue, N.W. Washington, DC 20006

Ian H. Gershengorn, Esq. Jenner & Block 601 13 th Street N.W. Suite 1200 Washington DC 20005

Attorneys for Intervenors

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

This case involves a challenge to two orders of the Federal Communications Commission (FCC) enacting new rules

3 regarding competitive bidding for wireless communications spectrum licenses. Petitioners assert that the new rules are invalid and that an auction conducted pursuant to those rules must be nullified. For the reasons that follow, the petition for review must be dismissed because it is incurably premature.

I.

The Communications Act of 1934 directs the FCC to design a system to allocate spectrum licenses by “establish[ing] a competitive bidding methodology” via regulation. 47 U.S.C. § 309(j)(3). In doing so, the FCC shall seek to “promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women.” Id. § 309(j)(3)(B). Such businesses are known as “designated entities” or “DEs.” See 47 C.F.R. § 1.2110(a). The FCC must ensure that DEs “are given the opportunity to participate in the provision of spectrum-based services, and, for such purposes, consider the use of tax certificates, bidding preferences, and other procedures,” 47 U.S.C. § 309(j)(4)(D), and “require such transfer disclosures and antitrafficking restrictions and payment schedules as may be necessary to prevent unjust enrichment as a result of the methods employed to issue licenses and permits.” Id. § 309(j)(4)(E).

4 On June 13, 2005, Petitioner Council Tree Communications, Inc. (Council Tree), a company organized to identify and develop investment opportunities for minority and women-owned businesses in the communications industry, wrote an ex parte letter to the FCC proposing changes to the then-existing competitive bidding regulations. In particular, Council Tree sought to prevent abuse of DE benefits by prohibiting those DEs affiliated with large incumbent wireless companies from receiving “bidding credits” at spectrum license auctions. These credits are discounts of 25% or 15% from a DE’s winning bid.

On February 3, 2006, the FCC released a Further Notice of Proposed Rulemaking in the Matter of Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, 71 Fed. Reg. 6992 (Feb. 10, 2006), which proposed and sought comment on modifications similar to those suggested in Council Tree’s letter to the FCC.

After receiving over fifty comments and reply comments, the FCC released on April 25, 2006 and published in the Federal Register on May 4, 2006 a Second Report and Order and Second Further Notice of Proposed Rulemaking (Second Order), 71 Fed. Reg. 26,245 (May 4, 2006) (codified at 47 C.F.R. pt. 1). That Second Order adopted new rules that: (1) take bidding credit eligibility away from DEs that have certain material relationships with other entities; and (2) extend the repayment period to prevent the unjust enrichment of DEs that lose their eligibility after winning a license. Dissatisfied with these rules,

5 on May 5, 2006, Petitioners filed a petition with the FCC to reconsider the Second Order.

On June 2, 2006, the FCC released an Order on Reconsideration of the Second Report and Order (Reconsideration Order), 71 Fed. Reg. 34,272 (June 14, 2006) (codified at 47 C.F.R. pt. 1), to “clarif[y] certain aspects [and] address[] certain procedural issues” raised in Petitioners’ petition for reconsideration. The Reconsideration Order did not expressly grant or deny the petition, but essentially rejected all of the arguments contained therein.

Instead of waiting for the FCC to publish its Reconsideration Order in the Federal Register, Petitioners filed a petition for review with this Court on June 7, 2006, along with an emergency motion to stay the effectiveness of the new rules and the auction of Advanced Wireless Services licenses (Auction 66), which would be conducted pursuant to the FCC’s new rules.1 Petitioners challenge those rules as: (1) not in accordance with the notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. § 553(b)(3); (2) arbitrary and capricious under the relevant provisions of the Communications Act of 1934, 47 U.S.C. § 309(j), and the Telecommunications Act of 1996, 47 U.S.C. § 257; and (3) not in compliance with the Regulatory Flexibility Act, 5 U.S.C. §§ 601 et seq. They also seek to nullify the results of Auction 66. In addition to opposing each of these challenges, the FCC

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