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.