When Is A Spectrum Auction Illegal?

I’ve been litigating this and a prior case against the FCC seeking to halt its ongoing “incentive spectrum auction” on behalf of low-power television (LPTV) clients like religious broadcasters. It’s a bit arcane with the terminology, but you’ll get the gist:

Summary of Argument

The twin orders challenged in this case represent a cruel and arbitrary FCC game of spectral musical chairs. Despite the settled renew­al expectancy and explicit statutory protection of their spectrum usage rights, “many” LPTV licensees will be forced to shut down be­cause the Commission has neither included LPTV in its phase two tele­vision band spectrum reorganization nor assured that “displaced” LPTV stations have an alternative channel on which to continue broadcasting. The Com­mission’s steps to “mitigate” that virtually certain harm do nothing at all to alleviate the loss of licensed spectrum on which to televise.

These decisions are unlawful for several different reasons. First,  the FCC ignored the plain command of 47 U.S.C. § 1452(b)(5) not to “alter” LPTV’s “spectrum usage rights” in its television band reorgan­ization, and indeed offered no interpretation of this provision. That LPTV service has always been treated as “second­ary” for interference purpose to full-power stations means under § 1452(b)(5) that this LPTV right to broadcast absent such harmful inter­ference must remain intact following the auction’s reorg­anization phase.

Second, the Com­mission violated the APA standard for rational rulemaking because the record is uncontroverted that channel sharing will not avoid disruptions in service, and the agency’s finding that sharing may “possibly” help “some” LPTV stations was based on no record data, analysis or sub­stantiated projection.

Third, the FCC acted arbitrarily and capriciously in reversing its long-stand­ing rule authorizing LPTV licensees to broadcast “sec­ond­­arily”—requiring LPTV to cease operations nationwide in the reorg­anized 600 MHz Band when a wireless carrier “commences oper­ations,” regardless of actual interference, and even if that spectrum is never used—without either acknow­ledging or explaining this untoward change.

Fourth, the orders violate the Regulatory Flex­ibility Act by (a) failing to quantify the significant adverse economic impact of the new rules on LPTV owners as small business entities, and (b) taking no steps to “min­i­­mize” that impact other than falsely assert­ing, in flat contradiction to the FCC’s rationale, that channel sharing “will greatly minimize” the impact of so-called “displacement” on LPTV licensees.

The agency is at best simply gues­sing and at worst con­sciously avoiding reality. Neither is consistent its APA rulemaking respons­ibilities, the RFA, or Chevron’s settled test for agency statutory con­struction. The Commission’s actions, in addition, raise serious, un­settled and complex constitutional issues as an arguable Fifth Amend­ment taking of private property, an impermissible delegation of reg­ulatory power to private parties in violation of due process, and an agency-imposed Bill of Attainder that singles out and punishes LPTV owners with the unprecedented sanction of losing all their assets and invest­ment. This Court may and should avoid decid­ing them—thus sparing the federal courts from a host of future LPTV cases as­serting constitutional challenges—by applying § 1452(b)(5) consistent with its plain meaning.

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