Council Tree Investors, Inc. v. Federal Communications Commission , 739 F.3d 544 ( 2014 )

FILED
United States Court of Appeals
Tenth Circuit
PUBLISH January 3, 2014
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
COUNCIL TREE INVESTORS, INC.
and BETHEL NATIVE
CORPORATION,
Petitioners,
v. No. 12-9543
FEDERAL COMMUNICATIONS
COMMISSION and THE UNITED
STATES OF AMERICA,
Respondents.
CELLCO PARTNERSHIP, d/b/a
Verizon Wireless,
Intervenor.
ASIAN AMERICAN JUSTICE
CENTER, a member of the Asian
American Center for Advancing
Justice; STEVEN R. BRADLEY;
MEDIA ALLIANCE; NATIONAL
ASSOCIATION OF
MULTICULTURAL DIGITAL
ENTREPRENEURS; NATIONAL
HISPANIC MEDIA COALITION;
PUBLIC KNOWLEDGE; RAINBOW
PUSH COALITION; GILBERT H.
SCOTT, SR.; WOMEN'S INSTITUTE
FOR FREEDOM OF THE PRESS;
ARIZONA HISPANIC NEWSWIRE
LLC; BUSINESS INTELLIGENCE
SOLUTIONS, LLC; BRIAN
O'REILLY; DEMPSTER GROUP,
LLC; KINEX NETWORKING
SOLUTIONS, INC.; NATIONAL
ASSOCIATION FOR THE
ADVANCEMENT OF COLORED
PEOPLE; NATIONAL INDIAN
TELECOMMUNICATIONS
INSTITUTE; NATIONAL
ORGANIZATION FOR WOMEN
FOUNDATION; OFFICE OF
COMMUNICATION OF THE
UNITED CHURCH OF CHRIST,
INC.; CTIA - THE WIRELESS
ASSOCIATION; THE
TELECOMMUNICATIONS
INDUSTRY ASSOCIATION;
MOBILE FUTURE,
Amici Curiae.
Appeal from the Federal Communications Commission
(FCC 07-197, FCC 12-12)
Dennis P. Corbett (S. Jenell Trigg with him on the briefs), Lerman Senter PLLC,
Washington, D.C., for Petitioners.
Richard Welch (Sean A. Lev, Peter Karanjia, Jacob M. Lewis, and Laurence N.
Bourne, Federal Communications Commission, Office of General Counsel; and
Joseph F. Wayland, Robert B. Nicholson, and Robert J. Wiggers, United States
Department of Justice, Antitrust Division, Appellate Section, with him on the
brief), Federal Communications Commission, Office of General Counsel, for
Respondents.
Thomas R. McCarthy (Andrew G. McBride, Brett A. Shumate, Wiley Rein LLP,
Washington, D.C.; Michael E. Glover, Verizon Communications, Inc., Arlington,
VA; and John T. Scott, III, and Catherine M. Hilke, Verizon Communications,
Inc., Washington, D.C., with him on the brief), Wiley Rein LLP, Washington,
2
D.C., for Intervenor.
Jeneba Jalloh Ghatt, The Ghatt Law Group LLC, College Park, Maryland, filed an
amicus curiae brief for Arizona Hispanic Newswire LLC, Business Intelligence
Solutions, LLC, Brian O’Reilly, Dempster Group, LLC, Gilbert H. Scott, Sr.,
Kinex Networking Solutions, Inc., Steven R. Bradley, Asian American Justice
Center, Media Alliance, National Association for the Advancement of Colored
People, National Association of Multicultural Digital Entrepreneurs, National
Hispanic Media Coalition, National Indian Telecommunications Institute,
National Organization for Women Foundation, Office of Communication of the
United Church of Christ, Inc., Public Knowledge, Rainbow PUSH Coalition, and
Women’s Institute for Freedom of the Press, in support of Petitioners.
Michael Altschul, Senior Vice President and General Counsel, CTIA - The
Wireless Association, Washington, D.C., David H. Solomon, Bryan N. Tramont,
and Russell P. Hanser, Wilkinson Barker Knauer, LLP, Washington, D.C., and
Danielle Coffey, Vice President Government Affairs, Telecommunications
Industry Association, Washington, D.C., filed an amicus brief for CTIA - The
Wireless Association, The Telecommunications Industry Association, and Mobile
Future, in support of Respondents.
Before KELLY, McKAY, and HOLMES, Circuit Judges.
HOLMES, Circuit Judge.
Petitioners Council Tree Investors, Inc., a communications investment firm,
and Bethel Native Corporation, a small wireless carrier based in Alaska
(collectively, “Council Tree”), seek our review of two orders issued by the
Federal Communications Commission (“FCC” or “the Commission”)—the D
Block Waiver Order (the “Waiver Order”) issued in 2007 and the Waiver
Reconsideration Order issued in 2012. In so doing, Council Tree specifically
requests nullification of Auction 73, the FCC’s auction of the 700-MHz wireless
3
spectrum conducted in early 2008 pursuant to the Waiver Order. Council Tree
filed a Petition for Reconsideration of the Waiver Order (the “Waiver
Reconsideration Petition”) with the FCC in 2007, as well as a Supplement to the
Waiver Reconsideration Petition (the “Supplement”) in 2011. In its Waiver
Reconsideration Order, the FCC dismissed the Waiver Reconsideration Petition as
moot and dismissed the Supplement as untimely. For the reasons set forth below,
we dismiss Council Tree’s petition, as it pertains to the Waiver Order, and deny
its petition, as it relates to the Waiver Reconsideration Order.
I
The Communications Act of 1934 authorizes the FCC to award licenses to
use the electromagnetic spectrum in order to provide communications services.
See 47 U.S.C. §§ 307, 309. In 1993, Congress enacted section 309(j), which
directs the Commission to award spectrum licenses “through a system of
competitive bidding,” e.g., by auction. Id. § 309(j)(1). Pursuant to section
309(j), the Commission must design systems of competitive bidding that, among
other objectives, “promot[e] economic opportunity and competition . . . 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.”
4
Id. § 309(j)(3)(B). These statutorily-prescribed groups are commonly referred to
as “designated entities,” or “DEs.” 1
To promote the participation of DEs in spectrum-license auctions, the
Commission awards “bidding credits” that reduce by a specified percentage the
amounts that DEs would otherwise pay for licenses won at auction. 47 C.F.R.
§ 1.2110(f). To prevent abuse of the bidding-credits system, the Commission is
required to seek the “avoidance of unjust enrichment through the methods
employed to award” spectrum licenses, 47 U.S.C. § 309(j)(3)(C), and to establish
“such . . . 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).
Accordingly, the Commission took steps to ensure that “only legitimate
small businesses reap the benefits of the Commission’s designated entity
program.” Implementation of the Commercial Spectrum Enhancement Act &
Modernization of the Comm’n’s Competitive Bidding Rules & Procedures,
1
Although FCC rules define “designated entities” to include
“businesses owned by members of minority groups and/or women,” 47 C.F.R.
§ 1.2110(a), the FCC has eliminated DE benefits based on the race or gender of
an applicant’s owners after the Supreme Court ruled in Adarand Constructors,
Inc. v. Pena, 515 U.S. 200 (1995), that certain federal affirmative-action
programs were unconstitutional. See Omnipoint Corp. v. FCC, 78 F.3d 620, 633
(D.C. Cir. 1996) (upholding an FCC rule change that eliminated race- and gender-
based provisions in its competitive-bidding rules). Since Adarand, bidding
credits have been available only to eligible small businesses, based on specific
size standards. See, e.g., Sioux Valley Rural Television, Inc. v. FCC, 349 F.3d
667, 669–73 (D.C. Cir. 2003).
5
Further Notice of Proposed Rule Making, 21 FCC Rcd. 1753, 1757 ¶ 6 (2006).
Under the Commission’s unjust-enrichment rules, a DE that has used bidding
credits to acquire a license must return some or all of those credits if, during the
first five years of the license term, it loses its eligibility for bidding credits or
subsequently transfers its license to an entity that is not eligible for DE status.
See id. at 1763 ¶ 20; see also 47 C.F.R. § 1.2111(d).
In April 2006, the Commission issued the Implementation of the
Commercial Spectrum Enhancement Act and Modernization of the Commission’s
Competitive Bidding Rules and Procedures, Second Report and Order, 21 FCC
Rcd. 4753 (2006) (“DE Second Report & Order”). That document made two
primary revisions to the auction rules for DEs (collectively, the “2006 Rules”).
First, it increased the repayment period for the unjust-enrichment rules from five
years to ten years, such that if a DE transferred its license to a non-DE or
otherwise lost eligibility for DE benefits during the first ten years of its license, it
would have to repay some or all of its bidding credits (the “Ten-Year Rule”). 47
C.F.R. § 1.2111(d)(2)(i) (2006) (vacated 2010). And, second, it disqualified
license applicants or licensees from eligibility for DE benefits if they leased or
resold (including at wholesale) more than 50% of their aggregate spectrum
capacity (the “Fifty-Percent Rule”). Id. § 1.2110(b)(3)(iv)(A) (2006) (vacated
2010).
6
In May 2006, three petitioners—Council Tree Communications, Inc.,
Bethel Native Corporation, and the Minority Media and Telecommunications
Council—jointly filed a petition for expedited reconsideration of the DE Second
Report & Order. See Implementation of the Commercial Spectrum Enhancement
Act & Modernization of the Comm’n’s Competitive Bidding Rules & Procedures,
Order on Recons. of Second Report & Order, 21 FCC Rcd. 6703, 6703–04,
6721 n.2 (2006) (“Order on Reconsideration”). Before the FCC published its
order addressing that petition, in June 2006, the three petitioners filed for review
in the Third Circuit of the DE Second Report & Order. The Third Circuit
dismissed the petition as premature. 2 See Council Tree Commc’ns, Inc. v. FCC
(Council Tree I), 503 F.3d 284, 287 (3d Cir. 2007) (“We have no jurisdiction to
consider an incurably premature petition for review. A petition to review a non-
final agency order is incurably premature.” (citation omitted)).
Several months before the Third Circuit issued this decision, the
Commission had stated on April 27, 2007 that it would apply the 2006 Rules
promulgated in the DE Second Report & Order to Auction 73, in which the FCC
would auction several 700-MHz blocks of the spectrum. See Serv. Rules for the
698–746, 747–762 & 777–792 MHz Bands, Report & Order, 22 FCC Rcd. 8064,
8067 ¶ 6 (2007) (“700 MHz First Report & Order”) (“With regard to auctions-
2
Although the Minority Media and Telecommunications Council
participated in the Third Circuit litigation regarding the DE Second Report &
Order, it is not a petitioner before us in this case.
7
related issues, we find that our existing competitive bidding rules do not require
modification for purposes of an auction of commercial 700 MHz Band licenses.”).
Council Tree did not seek judicial review of this order.
However, in August 2007, the Commission issued another order in the same
proceeding. See Serv. Rules for the 698–746, 747–762 & 777–792 MHz Bands,
Second Report & Order, 22 FCC Rcd. 15289 (2007) (“700 MHz Second Report &
Order”). There, the focus was not on DEs and the application of the 2006 Rules
to Auction 73; rather, the Commission (among other things) addressed a topic, as
to which it had previously sought comment, relating to “establishing a
public/private partnership between a commercial licensee and a single public
safety licensee with respect to developing a nationwide, shared interoperable
broadband network for use by public safety users.” Id. at 15292 ¶ 2; see Council
Tree Commc’ns, Inc. v. FCC (Council Tree II), 324 F. App’x 3, 5 (D.C. Cir.
2009) (per curiam).
Nonetheless, using this order as the predicate, proceeding alone, Council
Tree (without Bethel Native Corporation) sought review in the D.C. Circuit of its
“claims that the decision of the Federal Communications Commission (‘FCC’) to
use its existing bidding rules [i.e., the 2006 Rules, which related to DEs] for a
particular auction was arbitrary and capricious or otherwise not in accordance
with law.” Council Tree II, 324 F. App’x at 4. The D.C. Circuit rejected—based
on a lack of jurisdiction—Council Tree’s effort to obtain review of such claims,
8
concluding that the FCC’s 700 MHz Second Report & Order did not conclusively
reopen the subject matter of its 700 MHz First Report & Order, from which
Council Tree’s claims (in substance) actually stemmed. See id. at 5.
In November 2007, the Commission issued the Waiver Order on its own
motion, waiving the application of the Fifty-Percent Rule—also referred to as the
“impermissible material relationship rule”—“for purposes of determining
designated entity eligibility solely with respect to arrangements for lease or resale
(including wholesale) of the spectrum capacity of the Upper 700 MHz Band D
Block (‘D Block’) license.” J.A. at 6 (FCC Order, released Nov. 15, 2007). In
other words, the Waiver Order excepted D Block licenses from the Fifty-Percent
Rule. The Commission found that “the unique regulations governing the D Block
license . . . together with the application of the Commission’s other designated
entity eligibility requirements—eliminate[d] for the D Block license the risks that
led the Commission to adopt the impermissible material relationship rule.” Id.
(footnote omitted). The Waiver Order “stress[ed] that this waiver applie[d] only
to arrangements for spectrum capacity on the D Block,” and that it was “not
waiving operation of the [Fifty-Percent Rule] as applied to arrangements that a D
Block applicant or licensee may have for use of licenses other than the D Block
license.” Id. at 9.
Council Tree filed a Waiver Reconsideration Petition with the Commission
on December 7, 2007. In the petition, Council Tree requested rescission of the
9
Waiver Order. Id. at 46 (Pet. for Recons., filed Dec. 7, 2007) (concluding that
“the [Waiver Order] should be reconsidered and rescinded”). At a few points in
its petition, Council Tree argued that the rationale underlying the waiver of the
Fifty-Percent Rule for the D Block actually could justify granting a waiver across
the entire spectrum—that is, relieving all of the spectrum from application of the
Fifty-Percent Rule. See, e.g., id. at 43 (“[T]here is no rational basis for limiting
the scope of the relief granted by the [Waiver Order] exclusively to the D Block.
The relief must logically extend to all DE bidding on all spectrum available in the
auction.”). By advancing this seemingly discordant argument, however, Council
Tree was actually trying to achieve the same objective articulated throughout the
rest of its petition—rescission of the Waiver Order. Specifically, Council Tree
reasoned that the justification for waiving application of the Fifty-Percent Rule to
the D Block could just as well be applied to all of the spectrum; therefore, the fact
that the Commission only extended the waiver to the D Block (and not the other
blocks of the spectrum) demonstrated that the Commission was acting arbitrarily
and capriciously and that the Waiver Order—a product of such deficient decision-
making—should be rescinded. See id. (“The [Waiver Order] is . . . arbitrary and
capricious and it must be overturned.”); cf. id. at 32 (“The [Waiver Order] was
adopted in violation of statute and precedent, and is arbitrary and capricious. It
cannot survive.”).
10
In early 2008, while the Waiver Reconsideration Petition was pending, the
Commission proceeded to conduct Auction 73 pursuant to the 2006 Rules and the
Waiver Order. Around the time this auction concluded, in March 2008, see
Auction of the D Block License in the 758–763 & 788–793 MHz Bands, 23 FCC
Rcd. 5421, 5422 (2008), the FCC issued an order formally denying the May 2006
petition filed by the three petitioners (including Council Tree). See
Implementation of the Commercial Spectrum Enhancement Act & Modernization
of the Comm’n’s Competitive Bidding Rules & Procedures, Second Order on
Recons. of Second Report & Order, 23 FCC Rcd. 5425, 5426 ¶ 4 (2008) (“Second
Order on Reconsideration”). 3 The three petitioners then filed a timely petition for
review before the Third Circuit. Council Tree Commc’ns, Inc. v. FCC (Council
Tree III), 619 F.3d 235, 248 (3d Cir. 2010). Among other things, the Third
Circuit held that the Fifty-Percent Rule and the Ten-Year Rule were invalid for
failure to comply with notice-and-comment requirements. See id. at 258.
Nevertheless, on May 18, 2011, Council Tree filed a supplement to the
still-pending Waiver Reconsideration Petition, J.A. at 100–09 (Supp. to Pet. for
Recons., filed May 18, 2011), along with a Motion for Leave to File the
3
Although the FCC had issued an earlier (first) Order on
Reconsideration to clarify certain aspects of the new DE rules, it did not formally
deny the petition for expedited reconsideration until its second reconsideration
order. Cf. Council Tree I, 503 F.3d at 286 (“The Reconsideration Order did not
expressly grant or deny the petition, but essentially rejected all of the arguments
contained therein.”).
11
Supplement, id. at 180–83 (Mot. for Leave to File Supp., filed May 18, 2011).
The Commission released its Waiver Reconsideration Order on February 1, 2012,
which was published in the Federal Register on March 21, 2012. Id. at 12–15
(FCC Order, released Feb. 1, 2012); see Implementation of the Commercial
Spectrum Enhancement Act & Modernization of the Comm’n’s Competitive
Bidding Rules & Procedures, 77 Fed. Reg. 16470-01 (Mar. 21, 2012) (to be
codified at 47 C.F.R. pt. 1). The Waiver Reconsideration Order formally
rescinded the 2006 Rules in light of the Third Circuit’s decision in Council Tree
III, dismissed the Waiver Reconsideration Petition as moot, denied the Motion for
Leave to File the Supplement, and dismissed the accompanying Supplement as
untimely. J.A. at 12–13.
Council Tree filed a petition for review of the Waiver Order and the Waiver
Reconsideration Order in our court on March 29, 2012.
II
We begin by considering whether Council Tree’s petition for review of the
Waiver Order—that is, the order that waived the application of the Fifty-Percent
Rule to D Block spectrum licenses—gives us jurisdiction over Council Tree’s
argument regarding the application of the 2006 Rules to Auction 73. We
conclude that it does not. We then assess the propriety of the FCC’s dismissals of
Council Tree’s Waiver Reconsideration Petition and its Supplement, and
determine that the FCC’s dismissals should be upheld.
12
A
Council Tree seeks invalidation of Auction 73 based on the fact that “the
FCC conducted Auction 73 pursuant to . . . the [2006] Rules.” Pet’rs’ Opening
Br. at 44. Before we may reach the merits of Council Tree’s claim that Auction
73 was itself an unlawful agency action, we must first determine whether we have
jurisdiction over this challenge.
Courts of appeals have exclusive jurisdiction over final orders issued by the
FCC. 28 U.S.C. § 2342(1); see, e.g., Minority Television Project, Inc. v. FCC,
736 F.3d 1192, 1211 (9th Cir. 2013) (en banc) (“Jurisdiction over challenges to
FCC orders lies exclusively in the court of appeals; as such, federal district courts
lack jurisdiction over appeals of FCC orders.”). Our “[j]urisdiction is invoked by
filing a petition as provided by section 2344.” 28 U.S.C. § 2342. That section, in
turn, requires that petitions for review be filed within sixty days of entry of a
final order. Id. § 2344. Thus, our jurisdiction over an FCC order is contingent
upon the timely filing of a petition for review. Cf. Cellular Telecomms. &
Internet Ass’n v. FCC, 330 F.3d 502, 508 (D.C. Cir. 2003) (“The 60-day statutory
deadline is jurisdictional.”); NRDC v. Nuclear Regulatory Comm’n, 666 F.2d 595,
602 (D.C. Cir. 1981) (“The 60 day period for seeking judicial review set forth in
the Hobbs Act[, 28 U.S.C. § 2344,] is jurisdictional in nature, and may not be
enlarged or altered by the courts.”).
13
The FCC announced on April 27, 2007, by way of the 700 MHz First
Report & Order, that it would apply the then-existing DE auction
rules—including the 2006 Rules—to Auction 73. See 22 FCC Rcd. at 8067.
Council Tree acknowledges that the FCC’s decision to apply the 2006 Rules to
Auction 73 was announced on April 27, 2007 in the 700 MHz First Report &
Order. Pet’rs’ Opening Br. at 28 (“On April 27, 2007 . . . the FCC made clear
that it was applying to Auction 73, without exception, [the Fifty-Percent Rule and
Ten-Year Rule] it had adopted in 2006 . . . .”). But Council Tree did not file a
petition for review of the 700 MHz First Report & Order within sixty days of that
date. Instead, in December 2007, Council Tree petitioned for reconsideration of
the November 2007 Waiver Order, which excepted D Block licenses from the
Fifty-Percent Rule. Council Tree’s failure to challenge the 700 MHz First Report
& Order on the grounds that it inappropriately applied the 2006 Rules to Auction
73 constitutes a high jurisdictional hurdle—and ultimately an insurmountable
one—to our consideration of essentially the same challenge which Council Tree
presents in the context of its petition for review of the Waiver Order. 4
4
Of course, Council Tree had seemingly tried a similar approach in
2007: in the context of a purported challenge to the 700 MHz Second Report &
Order, Council Tree attempted to eviscerate the FCC’s “decision . . . to use its
existing bidding rules for a particular auction” on the grounds that it was
“arbitrary and capricious or otherwise not in accordance with law.” Council Tree
II, 324 F. App’x at 4. As we do here, the D.C. Circuit concluded that it did not
have jurisdiction over such an attempt. Id.14
Council Tree attempts to circumvent this jurisdictional deficiency by
casting the Waiver Order as having effectively reopened the Commission’s April
2007 700 MHz First Report & Order. In other words, Council Tree urges that we
have jurisdiction to review the FCC’s execution of Auction 73 pursuant to the
2006 Rules because the FCC “voluntarily elect[ed] in the [Waiver Order] to
revisit the issue of how it would apply [those rules] to Auction 73.” Id. at 29.
The Supreme Court, in the context of considering the reviewability of the
Interstate Commerce Commission’s decision not to reopen a proceeding under its
reconsideration authority pursuant to 49 U.S.C. § 10327(g), held that “[w]hen [an
agency] reopens a proceeding for any reason and, after reconsideration, issues a
new and final order setting forth the rights and obligations of the parties, that
order—even if it merely reaffirms the rights and obligations set forth in the
original order—is reviewable on its merits.” ICC v. Bhd. of Locomotive Eng’rs,
482 U.S. 270, 278 (1987) (emphasis added). On the other hand, when an agency
decision is formally characterized as one denying reconsideration, reviewing
courts should not look beyond that formal characterization to determine whether
reconsideration in fact occurred. See id. at 280 (concluding that “an order which
merely denies rehearing of . . . [the prior] order is not itself reviewable”
(alteration in original) (quoting Microwave Commc’ns, Inc. v. FCC, 515 F.2d 385,
387 n.7 (D.C. Cir. 1974)) (internal quotation marks omitted)).
However, not all agency decisions have a formal characterization; the
15
Waiver Order does not regarding the topic of the general applicability of the 2006
Rules to Auction 73. Where agency decisions “lack[] such a formal
designation—reconsideration or denial of reconsideration—we must look to the
substance of [the agency’s] action to determine whether it represents a new
decision or merely a reaffirmance of previous action.” HRI, Inc. v. EPA (HRI I),
198 F.3d 1224, 1238 (10th Cir. 2000). If an agency “simply reassert[s] its
original position,” the agency has not reopened its decision—viz., the agency’s
decision must “reflect a sufficient degree of separateness, novelty, and finality, to
trigger the limitations period for judicial review.” Id.Council Tree asserts that the Waiver Order “fits easily within the contours
of HRI I’s ‘separateness, novelty, and finality’ test.” Pet’rs’ Opening Br. at 31.
The Waiver Order is separate, Council Tree argues, because it was issued outside
of the context of an existing FCC proceeding; it is novel because it extended
limited relief from the Fifty-Percent Rule to the D Block licenses on the basis of
an “entirely new” rationale regarding the uniqueness of the D Block; 5 and it is a
5
At oral argument, Council Tree pointed to paragraph nine of the
Waiver Order as demonstrating the FCC’s allegedly new rationale regarding the D
Block. In that paragraph, the FCC explained that “the D Block license is
conditioned upon its commercial licensee constructing and operating a
nationwide, interoperable broadband network across both the D Block and the 700
MHz public safety broadband spectrum”; it “must be used to provide both a
commercial service and a broadband network service to public safety entities.”
J.A. at 10 (internal quotation marks omitted). Because a D Block licensee would
necessarily “be required to participate in the provision of facilities-based services
for the benefit of the public,” the FCC concluded that a waiver of the Fifty-
(continued...)
16
final agency action because Auction 73 was conducted pursuant to the Waiver
Order’s “renewed adherence” to the 2006 Rules. Id. at 31–32.
However, none of Council Tree’s arguments demonstrate that the FCC, by
means of its Waiver Order, made a “new and final” decision, as defined by the
Supreme Court, relating to the general applicability of the 2006 Rules to all
blocks of spectrum covered by Auction 73. See Bhd. of Locomotive Eng’rs, 482
U.S. at 278. More specifically, Council Tree has not demonstrated that the
Waiver Order decided anything new beyond waiving the Fifty-Percent Rule for D
Block licenses. See HRI I, 198 F.3d at 1238. As set forth above, the FCC
stressed, “[T]his [Waiver Order] applies only to arrangements for spectrum
capacity on the D Block. We are not waiving operation of the [Fifty-Percent
Rule] as applied to arrangements that a D Block applicant or licensee may have
for use of licenses other than the D Block license.” J.A. at 9. This language
relates only to the Fifty-Percent Rule—not the 2006 Rules as a whole—and only
to the scope of the waiver for a D Block license. 6
5
(...continued)
Percent Rule would be in the public interest. Id.6
The quoted language is from paragraph 7 of the order. We
underscore the limited and targeted concerns of the Commission—namely, the
Fifty-Percent Rule and the D Block—by setting forth its text in full:
We find that the unique circumstances and obligations of the D
Block license justify a waiver of the impermissible material
relationship rule under both prongs of the waiver standard.
(continued...)
17
Indeed, the whole of the Waiver Order does not examine the merits of the
general application of the 2006 Rules to the portion of the spectrum covered by
Auction 73, much less offer something novel about this subject. It states only
that D Block licensees would continue to be governed by the then-existing
rules—with the exception of the Fifty-Percent Rule—and that even then, a D
Block licensee’s purchases of other licenses would continue to be governed by the
Fifty-Percent Rule. The Waiver Order does not indicate that the FCC
6
(...continued)
Specifically, we conclude that a D Block applicant or licensee
with lease or resale (including wholesale) arrangements with
other entities involving more than 50 percent of the spectrum
capacity of the D Block license will not be ineligible for
designated entity benefits solely on the basis of such
arrangements given the unique circumstances and obligations
relating to the license. We stress that this waiver applies only to
arrangements for spectrum capacity on the D Block. We are not
waiving operation of the rule as applied to arrangements that a D
Block applicant or licensee may have for use of licenses other
than the D Block license. Thus, under the terms of this waiver,
the existence of arrangements regarding the spectrum capacity of
the D Block license that would constitute an impermissible
material relationship absent the waiver will not alone make the
D Block licensee ineligible for the award of designated entity
benefits with respect to other spectrum licenses. Also, because
we are not waiving the rule with respect to arrangements for use
of the spectrum capacity of licenses other than the D Block
license, if an applicant or licensee has an impermissible material
relationship with respect to the spectrum capacity of any other
license(s), the normal operation of the current rules will continue
to render it ineligible for designated entity benefits for the D
Block license. The waiver we grant herein does not change that.
J.A. ¶ 7, at 9 (footnote omitted).
18
reconsidered the general applicability of the 2006 Rules to all the spectrum
covered by Auction 73—as opposed to the applicability of the Fifty-Percent Rule
to the discrete area of the spectrum covered by the D block. Accordingly, we are
hard-pressed to conclude that, through the vehicle of the Waiver Order, the FCC
reconsidered the general applicability of the 2006 Rules regarding the blocks of
spectrum covered by Auction 73. 7
At oral argument, Council Tree made much of footnote thirteen of the
Waiver Order, which cites pleadings filed with the Commission by Frontline
Wireless, LLC (“Frontline”), a company advocating for relief from the Fifty-
Percent Rule for the D Block. See id. at 8 n.13 (citing Frontline’s petition for
reconsideration and oppositions to petitions for reconsideration). Council Tree
pointed to footnote thirteen as evidence that the Commission, in the Waiver
Order, reconsidered the Fifty-Percent Rule as applied to all blocks of spectrum
covered by Auction 73, as opposed to solely the D Block. The Waiver Order cites
Frontline’s pleadings, however, only in the context of addressing Frontline’s
7
The parties raise the issue of the D.C. Circuit’s “reopener doctrine,”
which renews the statutory time limit for judicial review in cases “where an
agency has—either explicitly or implicitly—undertaken to ‘reexamine its former
choice.’” Nat’l Mining Ass’n v. U.S. Dep’t of Interior, 70 F.3d 1345, 1351 (D.C.
Cir. 1995) (quoting Pub. Citizen v. Nuclear Regulatory Comm’n, 901 F.2d 147,
151 (D.C. Cir. 1990)). As in HRI I, we decline here to address the application of
the reopener doctrine. See 198 F.3d at 1239 n.8. Because HRI I gives us grounds
to conclude that the FCC’s Waiver Order does not represent a new decision
involving reconsideration of the application of the 2006 Rules to all blocks of
spectrum covered by Auction 73, we need not decide in this case whether or not
to adopt the reopener doctrine.
19
suggestion that “wholesaling one hundred percent of the D Block spectrum is
consistent with the purpose of the Commission’s designated entity rules.” Id. at 8
(internal quotation marks omitted).
Furthermore, even if Frontline had argued for reconsideration of the 2006
Rules, as a whole, as applied to all blocks of spectrum covered by Auction 73, a
party cannot reopen an issue simply by arguing it. Contrary to Council Tree’s
assertion, the unadorned citations in footnote thirteen of the Waiver Order do not,
without more, indicate that the FCC itself—subsequent to its 700 MHz First
Report & Order—reconsidered how the 2006 Rules would be applied to Auction
73.
In sum, the Waiver Order did not reopen the issue of how the 2006 Rules
would apply, as a general matter, to Auction 73. Because Council Tree did not
file a petition for review of the 700 MHz First Report & Order—in which the
FCC did decide to apply the 2006 Rules to Auction 73—within sixty days of entry
of that order, see 28 U.S.C. § 2344, we do not have jurisdiction to review the
lawfulness of the FCC’s execution of Auction 73 under the 2006 Rules.
Accordingly, we dismiss this portion of Council Tree’s petition for review. 8
8
The Commission argues in the alternative that even if Council Tree’s
challenge to the conduct of Auction 73 pursuant to the 2006 Rules was timely, it
nonetheless would be barred by principles of claim preclusion. The Commission
asserts that Council Tree is barred from re-litigating its challenge to the
application of the 2006 Rules to Auction 73 because the Third Circuit, in Council
Tree III, considered and rejected on the merits that same claim brought by the
(continued...)
20
B
Council Tree next argues that the FCC’s dismissals of its Waiver
Reconsideration Petition and its Supplement to that petition were arbitrary and
capricious and should be set aside. Council Tree undisputedly timely filed its
petition for review of the FCC’s action. We address the Waiver Reconsideration
Petition and the Supplement in turn and uphold the FCC’s dismissals of them.
1
The Administrative Procedure Act (“APA”) provides that on a petition for
review of an agency action,
the reviewing court shall decide all relevant questions of law,
interpret constitutional and statutory provisions, and determine
the meaning or applicability of the terms of an agency action.
The reviewing court shall . . . hold unlawful and set aside agency
action, findings, and conclusions found to be . . . arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance
with law.
5 U.S.C. § 706(2)(A).
The APA “sets forth the full extent of judicial authority to review executive
agency action for procedural correctness.” FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 513 (2009). Under the APA, “we review the underlying agency
decision to determine whether it was ‘arbitrary, capricious, an abuse of discretion,
8
(...continued)
same parties. Because we conclude that we lack jurisdiction over Council Tree’s
challenge to Auction 73, we do not reach the merits of the Commission’s claim-
preclusion argument.
21
or otherwise not in accordance with law.’” Hillsdale Envtl. Loss Prevention, Inc.
v. U.S. Army Corps of Eng’rs, 702 F.3d 1156, 1164–65 (10th Cir. 2012) (quoting
5 U.S.C. § 706(2)(A)); see also Fox Television, 556 U.S. at 513; Qwest Corp. v.
FCC, 689 F.3d 1214, 1224 (10th Cir. 2012). Although we review matters of law
de novo, see, e.g., Wyo. Farm Bureau Fed’n v. Babbitt, 199 F.3d 1224, 1231
(10th Cir. 2000); Trimmer v. U.S. Dep’t of Labor, 174 F.3d 1098, 1102 (10th Cir.
1999), ultimately, the scope of our review under section 706(2)(A) “is ‘narrow’;
as [the Supreme Court] ha[s] often recognized, ‘a court is not to substitute its
judgment for that of the agency.’” Judulang v. Holder, --- U.S. ----, 132 S. Ct.
476, 483 (2011) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983)).
An agency’s action is thus arbitrary and capricious if
the agency has relied on factors which Congress has not intended
it to consider, entirely failed to consider an important aspect of
the problem, offered an explanation for its decision that runs
counter to the evidence before the agency, or is so implausible
that it could not be ascribed to a difference in view or the product
of agency expertise.
State Farm, 463 U.S. at 43; accord Hillsdale, 702 F.3d at 1165.
“Our inquiry under the APA must be thorough, but the standard of review
is very deferential to the agency. . . . A presumption of validity attaches to the
agency action and the burden of proof rests with the parties who challenge such
action.” Hillsdale, 702 F.3d at 1165 (citations omitted) (internal quotation marks
22
omitted); accord Sorenson Commc’ns, Inc. v. FCC (Sorenson II), 659 F.3d 1035,
1046 (10th Cir. 2011); Sorenson Commc’ns, Inc. v. FCC (Sorenson I), 567 F.3d
1215, 1221 (10th Cir. 2009).
2
The FCC dismissed Council Tree’s Waiver Reconsideration Petition as
moot in light of the Third Circuit’s vacatur of the 2006 Rules. J.A. at 13; see
Council Tree III, 619 F.3d at 258. Council Tree objects that the Third Circuit’s
vacatur of the 2006 Rules “in no way mooted [its] timely claim in 2007 [by means
of its Waiver Reconsideration Petition] that Auction 73 could not lawfully be
conducted with the [2006] Rules in place.” Pet’rs’ Opening Br. at 45. We
disagree.
The goal that Council Tree clearly sought to accomplish through that
petition was the rescission of the Waiver Order—which would have resulted in
the Fifty-Percent Rule applying with full force to D Block licenses, but only to
the D Block. To be sure, in seemingly discordant fashion in a few sentences,
Council Tree argued that, under the FCC’s rationale, there was no logical basis
for not extending the Waiver Order to all of the spectrum—that is, lifting the
restriction of the Fifty-Percent Rule from the entire spectrum. But, by this
argument, Council Tree sought to demonstrate that the FCC’s reasoning in
adopting the Waiver Order was arbitrary and capricious. And the consequence
that ineluctably followed, as Council Tree envisioned it, was not the extension of
23
the Waiver Order to all spectrum, but rather, the rescission of the Waiver Order as
to the D Block. In sum, Council Tree argued that the Waiver Order arbitrarily
and capriciously distinguished between licensees and therefore “must be
overturned.” J.A. at 43 (emphasis added).
Given that Council Tree sought, in its Waiver Reconsideration Petition, the
rescission of the Waiver Order and the re-application of the Fifty-Percent Rule to
the D Block, we conclude that the FCC’s dismissal of that petition as moot, in
light of Council Tree III, was not arbitrary and capricious. Once the Third Circuit
vacated the Fifty-Percent Rule in Council Tree III, the FCC was powerless to
grant Council Tree the relief it sought—viz., it could not un-waive and reapply the
vacated rule. This is the very situation encompassed by the doctrine of mootness.
Cf. Jordan v. Sosa, 654 F.3d 1012, 1023 (10th Cir. 2011) (“The mootness doctrine
provides that although there may be an actual and justiciable controversy at the
time the litigation is commenced, once that controversy ceases to exist, the
[action] must [be] dismiss[ed] . . . for want of jurisdiction.” (internal quotation
marks omitted)); Rio Grande Silvery Minnow v. Bureau of Reclamation, 601 F.3d
1096, 1110 (10th Cir. 2010) (“The crucial question is whether granting a present
determination of the issues offered will have some effect in the real world.”
(quoting Wyoming v. U.S. Dep’t of Agric., 414 F.3d 1207, 1212 (10th Cir. 2005))
(internal quotation marks omitted)); 13C Charles A. Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice and Procedure § 3533.3.1, at 56, 59–60 (3d
24
ed. 2008) (“Mootness is found when events outside the litigation make relief
impossible . . . . Events may supersede the occasion for relief, particularly when
the requested relief is limited.” (footnotes omitted)). Because the FCC was
unable to grant the relief that Council Tree sought in its Waiver Reconsideration
Petition, its dismissal of the petition as moot was not arbitrary, capricious, or an
abuse of discretion.
3
The FCC dismissed Council Tree’s Supplement to its Waiver
Reconsideration Petition as untimely. J.A. at 13. Council Tree argues that the
FCC’s dismissal was arbitrary and capricious, given that Council Tree
demonstrated “adequate grounds for the Supplement’s filing.” Pet’rs’ Opening
Br. at 46. It maintains that “[t]here was nothing untimely about the Supplement.”
Id. at 47.
FCC regulations provide that a “petition for reconsideration and any
supplement thereto shall be filed within 30 days from the date of public notice of
the final Commission action.” 47 C.F.R. § 1.106(f). When the Commission has
not acted on a pending petition for reconsideration, supplements to it that are filed
after the expiration of the thirty-day period are not considered “except upon leave
granted” by the Commission. Id. In other words, there is in fact a thirty-day
deadline for filing supplements to petitions, but the FCC has discretion to waive
that deadline. Here, notwithstanding Council Tree’s protestations to the contrary,
25
its Supplement was clearly untimely. Council Tree filed the Supplement in May
2011, forty-two months after entry of the Waiver Order in November 2007. And
we conclude that the Commission’s decision not to entertain the Supplement was
not arbitrary or capricious.
In resisting such an outcome, Council Tree explains that it could not have
asked the Commission to overturn the results of Auction 73 within thirty days of
the Waiver Order because the auction had not yet occurred. 9 Pet’rs’ Opening Br.
at 47 n.100. Citing other instances in which the Commission allowed
supplemental filings, id. at 46 n.99, 47–48, Council Tree asserts that it “must be
allowed the ‘breathing room’ to supplement reconsideration petitions with facts
and developments which could not have been cited or raised during the initial 30-
day window for the filing of such petitions,” id. at 47. The Commission
“reject[ed] Council Tree[’s] argument that [its] untimely supplement seeking to
challenge the Commission’s application of [the 2006 Rules] to Auction 73 . . .
could not have been raised earlier. The Commission decided to apply [the 2006
Rules] to Auction 73 in an earlier order [(the 700 MHz First Report & Order)].”
J.A. at 14 n.12. The Commission’s reasoning is patently reasonable.
Furthermore, contrary to Council Tree’s characterization of it, the
Supplement does more than expand the facts raised in the Waiver Reconsideration
9
Council Tree nonetheless waited three years after Auction 73 was
conducted, and nine months after the Third Circuit’s vacatur of the 2006 Rules, to
challenge Auction 73 and the 2006 Rules under which it was conducted.
26
Petition. Rather, Council Tree used the Supplement to seek entirely different
relief than what it sought in the Waiver Reconsideration Petition. Specifically,
Council Tree’s request for relief changed from a request to rescind the Waiver
Order—a step that would effectively apply the Fifty-Percent Rule with full force
to the D Block—to a request to rescind Auction 73’s results because the Fifty-
Percent Rule, among other rules, should not have been applied at all. 10 Compare
id. at 45–46 (alleging in the Waiver Reconsideration Petition that the FCC
promulgated the Waiver Order without requisite notice and comment, and
concluding that “the [Waiver Order] should be reconsidered and rescinded”), with
id. at 102 (attempting in the Supplement to frame the Waiver Reconsideration
Petition as having “made clear that, rather than suspend just the [Fifty-Percent]
Rule for just one block of spectrum, the FCC needed to suspend all of the harmful
and unlawful DE rules adopted in 2006 for all spectrum offered in Auction 73”),
and id. at 107–08 (alleging in the Supplement that “even setting aside [Council
Tree’s] objections to the special treatment afforded some DEs in the [Waiver
10
As Council Tree emphasized in the Waiver Reconsideration Petition,
it “ha[d] been challenging the [Ten-Year] Rule and [the Fifty-Percent Rule] since
their . . . adoption by the Commission.” J.A. at 45. The Waiver Reconsideration
Petition also mentions Council Tree’s position that these rules, like the Waiver
Order, could not survive notice-and-comment violations. Id. However, the fact
remains that Council Tree challenged the 2006 Rules in a separate petition for
review of the Commission’s DE Second Report & Order, which ultimately
resulted in invalidation of those rules by the Third Circuit. The Waiver
Reconsideration Petition at issue in this case only sought rescission of the Waiver
Order. Id. at 46.
27
Order, it is] independently entitled to relief based on [its] claim that the [Waiver
Order] unlawfully refused to exempt all DEs from the [2006] Rules” and that
therefore, “the FCC must vacate the results of Auction 73”).
As the Commission explained, while it does sometimes exercise its
discretion to consider untimely-filed supplements to timely-filed reconsideration
petitions, it disfavors those that seek to substantially expand the scope of relief
sought in the reconsideration petition. Id. at 14 n.12; see, e.g., In re Alpine PCS,
Inc., 25 FCC Rcd. 469, 479–80 ¶ 16 (2010) (dismissing untimely-filed
supplements that sought to raise new questions of law not previously presented);
cf. 21st Century Telesis Joint Venture v. FCC, 318 F.3d 192, 199–200 (D.C. Cir.
2003) (“Th[is] court has discouraged the [FCC] from accepting late petitions in
the absence of extremely unusual circumstances.”). The Commission’s action
here in dismissing the Supplement, in our view, is a reasonable application of this
regulatory preference.
In sum, we have considered the Commission’s stated reasons for rejecting
Council Tree’s contentions that it could not have filed the Supplement earlier and
that the Supplement was merely an extension of the original Waiver
Reconsideration Petition. We conclude that the Commission did not abuse its
discretion by dismissing the Supplement and that its dismissal was not arbitrary
or capricious.
28
III
For the foregoing reasons, we DISMISS Council Tree’s petition for review,
as it pertains to the Waiver Order, and DENY its petition, as it relates to the
Waiver Reconsideration Order.
29