Council Tree Communications, Inc. v. Federal Communications Commission

503 F.3d 284, 42 Communications Reg. (P&F) 1137, 2007 U.S. App. LEXIS 22892
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 28, 2007
Docket06-2943
StatusPublished
Cited by44 cases

This text of 503 F.3d 284 (Council Tree Communications, Inc. v. Federal Communications Commission) 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 Communications, Inc. v. Federal Communications Commission, 503 F.3d 284, 42 Communications Reg. (P&F) 1137, 2007 U.S. App. LEXIS 22892 (3d Cir. 2007).

Opinion

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

This case involves a challenge to two orders of the Federal Communications Commission (FCC) enacting new rules 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 “establishing] 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, includ *286 ing 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).

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, 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 “clariffy] 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 *287 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 argues that we lack jurisdiction over the petition, which was filed seven days before the FCC published its Reconsideration Order in the Federal Register on June 14, 2006. On June 29, 2006, a motions panel of this Court issued a per curiam Order denying Petitioners’ emergency motion for stay.

II.

We begin, as we must, with questions of jurisdiction: (1) whether Petitioners’ petition for review is incurably premature; and, if so, (2) whether the motions panel’s earlier per curiam Order vitiates that prematurity. 2

A. Incurable Prematurity

We have no jurisdiction to consider an incurably premature petition for review. Tenn. Gas Pipeline Co. v. FERC, 9 F.3d 980, 981 (D.C.Cir.1993) (per curiam). A petition to review a non-final agency order is incurably premature. See Clifton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C.Cir.2002). An agency order is non-final as to an aggrieved party whose petition for reconsideration remains pending before the agency. West Penn Power Co. v. EPA, 860 F.2d 581, 583 (3d Cir.1988).

In the case at bar, it is undisputed that at the time Petitioners filed their June 7, 2006 petition for review, their petition for reconsideration of the Second Order was still pending before the FCC and remains pending to this day, see Reply Br. at 5, so the petition for review is incurably premature as to the non-final Second Order... See TeleSTAR, Inc. v. FCC,

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503 F.3d 284, 42 Communications Reg. (P&F) 1137, 2007 U.S. App. LEXIS 22892, Counsel Stack Legal Research, https://law.counselstack.com/opinion/council-tree-communications-inc-v-federal-communications-commission-ca3-2007.