Mountain Solutions, Ltd. v. Federal Communications Commission

197 F.3d 512, 339 U.S. App. D.C. 42, 18 Communications Reg. (P&F) 1346, 1999 U.S. App. LEXIS 31601
CourtCourt of Appeals for the D.C. Circuit
DecidedDecember 3, 1999
DocketNo. 98-1503
StatusPublished
Cited by29 cases

This text of 197 F.3d 512 (Mountain Solutions, Ltd. v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mountain Solutions, Ltd. v. Federal Communications Commission, 197 F.3d 512, 339 U.S. App. D.C. 42, 18 Communications Reg. (P&F) 1346, 1999 U.S. App. LEXIS 31601 (D.C. Cir. 1999).

Opinion

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

Mountain Solutions Ltd., Inc. was the winning bidder for ten licenses in the broadband personal communications service C block auction. Under the rules of the Federal Communications Commission, Mountain Solutions was required to make a 10% down payment for the licenses, payable in two installments. See 47 C.F.R. §§ 24.711(a)(2), 24.809(b). Mountain Solutions paid the first installment but was unable to make timely payment of the second down payment. On the due date, Mountain Solutions petitioned the Commission for a thirty-day waiver of its rules in order to allow completion of financing [514]*514discussions. Although Mountain Solutions supplemented its waiver request within twenty-three days to state that financing discussions had been successfully concluded and then, following the Commission’s grant of other waivers, tendered an irrevocable letter of credit, the Commission denied the waiver request for lack of financing on the due date. On appeal Mountain Solutions contends that the Commission was arbitrary and capricious in denying a waiver when it granted waivers to similarly situated entities, and that changed regulatory procedures make recission an appropriate remedy for such arbitrary and capricious action. Alternatively, Mountain Solutions asks the court to enjoin the Commission’s enforcement of any default penalties against it. Because the Commission did not abuse its broad discretion in denying a waiver and because the claim for injunctive relief is not ripe, we deny the petition in part and dismiss the petition in part.

I.

In 1993, Congress authorized the Federal Communications Commission (“Commission”) to allocate radio spectrum by auction. See Omnibus Budget Reconciliation Act of 1993, Pub.L. No. 103-66, tit. VI, § 6002(a), 107 Stat. 312, 387-392 (1993) codified in principal part at 47 U.S.C. § 309(J). Congress directed the Commission to design its implementing rules to “ensure that smaller businesses ... and businesses owned by members of minority groups and women are given the opportunity to participate in the provision of spectrum-based services,” and thus “to consider the use of ... [such procedures as] bidding preferences.... ” 47 U.S.C. § 309(j)(4)(D). Accordingly, the Commission set aside two blocks of personal communications service (“PCS”) spectrum, the 30 MHz C block and the 10 MHz F block, for bidding by “designated entities,” defined as “small businesses, businesses owned by members of minority groups and/or women, and rural telephone companies.” 47 C.F.R. § 1.2110(a) (1999); see also Implementation of Section S09(j) of the Communications Act — Competitive Bidding, Fifth Report and Order, 9 F.C.C.R. 5532 ¶¶ 93-95, 113 (1994). In recognition of the challenges faced by designated entities in obtaining financing, the Commission adopted a special payment program for C block licenses, reducing both the upfront bid amount and the percentage down payment at the close of the auction. Thus, the licensees were required to submit a 5% down payment within five days of the close of the auction and a second 5% down payment within five days of the conditional grant of their licenses, with the remaining 90% and interest payable in quarterly installments over ten years. See 47 C.F.R. § 24.711(a)(1), (2), (b) (1996).

Mountain Solutions was the successful bidder for ten licenses in the Commission’s original C block auction held from December 1995 through May 1996. It timely paid approximately $1.2 million as its initial 5% down payment. Its license applications were conditionally granted on September 17, 1996, and thus its second down payment was due on September 24th. On the due date, Mountain Solutions filed an emergency petition for a waiver, seeking a thirty-day extension of the second down payment deadline. Asserting that an agreement providing the necessary financing was imminent and was expected within the following thirty days, Mountain Solutions stated that it was negotiating an agreement with a major United States financier to obtain the financing required to meet its obligations but was not yet in possession of the funds. On October 17, 1996, Mountain Solutions supplemented its waiver petition to advise that it had secured the necessary financing from its current investors, while noting that a public notice released August 28, 1996, which gave guidance to D, E, and F Block bidders on the Commission’s anti-collusion rule, had contributed to “Mountain Solutions’ inability to remit its second down [515]*515payment within the prescribed time period.”1

Mountain Solutions was one of seventeen applicants for various spectrum licenses seeking a waiver of the down payment deadlines, including seven other C block applicants. The Wireless Telecommunications Bureau (“the Bureau”) and the Mass Media Bureau issued a Public Notice seeking comment on how it should evaluate these waiver requests. On February 4, 1997, the Bureau granted other waiver requests, subject to a 5% late penalty, of the other C block applicants as well as other waiver petitions. In each order granting a partial waiver, the Bureau noted that the failure to pay timely was inadvertent. In a number of cases, the inadvertence occurred because the first down payment was sufficient to cover both the first and second down payments, and the bidder had assumed that the Commission retained sufficient funds to cover the latter.2 Two other bidders had miscalculated the amount of their down payments.3 The remaining partial waivers were granted in circumstances where the bidder was either unaware of the payment deadline4 or, due to payment submission complications, made payment one day late.5 In each order, the Bureau made note of two circumstances: first, the importance the Commission attached to the first and second down payment obligations for “discouraging insincere or financially unqualified bidders from ‘shopping’ a winning bid in order to obtain financing for a down payment,”6 and second, that the inadvertent nature of the missed second payment deadline, combined with the fact that payment was’ submitted promptly upon discovery of the mistake in each case, demonstrated “that, but for the [inadvertent error, each bidder] would have been able to meet its payment obligations on [516]*516time.”7

On February 12, 1997, Mountain Solutions filed a second supplement to its waiver request, asserting that the Bureau had indicated for the first time in its February 4th waiver orders that it places positive weight on an applicant’s late tendered second down payment in determining whether to grant a waiver request, and negative weight on an applicant’s apparent inability to pay its second down payment on the due date. In light of the former, Mountain Solutions tendered an irrevocable letter of credit demonstrating that it could meet its second down payment obligation.

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Bluebook (online)
197 F.3d 512, 339 U.S. App. D.C. 42, 18 Communications Reg. (P&F) 1346, 1999 U.S. App. LEXIS 31601, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mountain-solutions-ltd-v-federal-communications-commission-cadc-1999.