UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


PLMRS NARROWBAND

v.

FCC


92-1432a

D.C. Cir. 1999


*	*	*


Ginsburg, Circuit Judge: In 1991 the Federal Communica- tions
Commission proposed to grant by lottery four licenses,  each
comprising several land mobile radio channels in the  220-222 MHz
range, designated for nationwide, non- commercial use; that is, the
chosen licensee could use the  channels for its own internal
communications needs but gen- erally could not lease the channels to
others. See Amend- ment of Part 90 of the Commission's Rules to
Provide for the  Use of the 220-222 MHz Band by the Private Land
Mobile  Radio Services, 6 F.C.C.R. 2356 (1991) (Original Order); 7 
F.C.C.R. 4484 (1992) (Reconsideration Order); 8 F.C.C.R.  4161 (1993)
(Second Reconsideration Order). Ultimately,  however, the Commission
decided to assign the licenses by  auction rather than by lottery and
to permit licensees to use  the channels for commercial as well as
non-commercial pur- poses. See Third Report and Order; Fifth Notice of
Pro- posed Rulemaking, 12 F.C.C.R. 10,943, p 6 (1997).


PLMRS Narrowband Corporation and Columbia Capital  Corporation, each of
which filed applications under the Origi- nal Order, petition for
review of the Reconsideration Orders  and of the Third Report and
Order. They ask the court to  vacate those orders and to require the
Commission to process 


their applications under the Original Order. We reject on its  merits
the petitioners' challenge to the Third Report and  Order, and hence
dismiss as moot their challenge to the  superseded Reconsideration
Orders.


I. Background


Land mobile radio is used to send messages via radio  signals between a
stationary transmission point and mobile  receiving units, in order to
provide such services as cellular  telephony, paging, and the dispatch
of taxicabs, delivery  vehicles, and police cars. See Telocator
Network of Am. v.  FCC, 691 F.2d 525, 527 (1982). The four nationwide
non- commercial licenses the Commission proposed to grant in  1991
were to be used primarily for the licensees' own internal 
communications needs and, only insofar as a licensee had  excess
capacity, to be leased to others. See Original Order, 6  F.C.C.R.
2356, p 37 (predicting "non-commercial nationwide  licensees will
require full usage of their systems for their own  communications
needs in the major metropolitan areas, but  may have excess capacity
in [smaller] urban areas and in  rural areas"). In order to "minimize
the filing of speculative  applications," id. p 48, the Commission
limited the transfer- ability of licenses, provided for automatic
license revocation if  two-and four-year construction benchmarks were
not met,  and required licensees to install base stations in at least
70  markets within ten years. Id. pp 49, 68, 83. The Commission 
received 34 applications, including those of the two present 


The following year the Commission, upon reconsideration,  further
restricted the transferability of licenses and the com- mercial
leasing of excess capacity, shortened the construction  deadlines, and
required that an applicant demonstrate either  its actual presence, or
a long-term business plan requiring  internal communications capacity,
in the 70 or more markets  identified in its application. See
Reconsideration Order, 7  F.C.C.R. 4484, pp 24-29. In 1993, upon
further reconsidera- tion, the Commission repealed the regulation
permitting an  applicant to submit a long-term business plan and


required that it have an actual presence in 70 or more  markets. See
Second Reconsideration Order, 8 F.C.C.R.  4161, p 10.


Later that year the Congress authorized the Commission to  auction
licenses for uses in which the licensee "receiv[es]  compensation from
subscribers." Omnibus Budget Reconcili- ation Act of 1993, Pub L. No.
103-66, s 6002(a), 107 Stat. 312,  388 (formerly codified at 47 U.S.C.
s 309(j)(2)(A)). In 1997  the Commission designated for such
commercial use and  determined to assign by auction the four licenses
it had  originally designated for non-commercial use and assignment 
by lottery. The agency returned pending applications filed  under the
rules promulgated for non-commercial use of the  four licenses. See
Third Report and Order, 12 F.C.C.R.  10,943, pp 183-203.


II. Analysis


The petitioners challenge the Third Report and Order and  the
Reconsideration Orders as arbitrary and capricious. See  5 U.S.C. s
706(2)(A). Under this deferential standard of  review we must affirm
the Commission's decision if it exam- ined the relevant information
and gave a satisfactory explana- tion for its action, including a
rational connection between the  facts found and the choice made. See
Motor Vehicle Mfrs.  Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S.


A. PLMRS's Challenge to the Third Report & Order


Although it "expressly supports" the Commission's designa- tion of the
licenses for commercial use in the Third Report  and Order, PLMRS
claims the Commission acted arbitrarily  and capriciously both in
deciding to auction those licenses and  in returning the application
it filed under the previously  promulgated rules. Its support for the
Commission's desig- nation of the licenses for commercial use in 1997
places in a  rather odd light its ultimate contention that the agency
must  limit the applicant pool to entities that applied for the
licenses  in 1991, when they were designated for non-commercial use.


In permitting additional applicants to compete for the 
newly-designated commercial licenses, the Commission ex- plained:


[B]ecause the nature of the 220 MHz service is undergo- ing such
substantial change, it would be unfair to pre- clude new applicants
from having the opportunity to  apply for these 220 MHz licenses. In
1991, when the  pending applications were filed, parties interested in
 using the 220 MHz spectrum may have decided not to  apply for these
licenses because the rules precluded a  licensee from offering the
type of service that these  parties desired to offer, such as primary
fixed service,  paging, or nationwide commercial service.


Third Report and Order, 12 F.C.C.R. 10,943, p 200. PLMRS  claims there
would be no such unfairness because the Com- mission had in the
Original Order designated four other  licenses for nationwide
commercial use. Anyone seeking a  commercial license in 1991, PLMRS
reasons, had an opportu- nity to apply for it, and "nothing in the
record supports the  FCC's finding that such entities opted out of the
1991 filing  process because the rules precluded the type of service
that  these parties desired to offer."


This is a non sequitur. That one had an opportunity to  apply for other
commercial licenses does not justify denying  one an opportunity to
file for the formerly non-commercial  licenses once that restriction
is lifted. In any case, PLMRS  itself represents that in 1991 there
were 140 applicants for  the four commercial licenses. The Commission
reasonably  concluded that some of those applicants may have decided
not  to apply for the four licenses now at issue because they were 
not then designated for commercial use. See id. (PLMRS  acknowledges
that a commercial license is more valuable than  a non-commercial
license.) When "an agency is obliged to  make policy judgments where
no factual certainties exist or  where facts alone do not provide the
answer, our role is ...  limited [to requiring] only that the agency
so state and go on  to identify the considerations it found


v. FCC, 134 F.3d 1143, 1152 (D.C. Cir. 1998). The Commis- sion easily
meets that standard here.


The Commission also gave an affirmative reason grounded  in public
policy for expanding the existing pool of applicants:  "Opening a
filing window for all interested applicants ... will  increase the
likelihood that competitive processes will trigger  the delivery of a
broad array of services to customers at  reasonable prices." Third
Report and Order, 12 F.C.C.R.  10,943, p 200. PLMRS does not even
attempt to cast doubt  upon this justification for the Commission's


Instead PLMRS next argues that the Commission, by  returning all
pending applications and electing to auction the  licenses, invited
unreasonable delay because it was inevitable  that the original
applicants would challenge those actions in  court. As the Commission
noted in the final rule, however,  had it not returned the
applications of PLMRS and others it  would just as certainly have
faced a court challenge from  parties interested in obtaining
commercial licenses. See id.  p 203. We give such a predictive
judgment our deference, of  course. See Melcher, 134 F.3d at 1152; FCC
v. National  Citizens Comm. for Broad., 436 U.S. 775, 814 (1978) ("[A]
 forecast of the direction in which future public interest lies 
necessarily involves deductions based on the expert knowl- edge of the
agency"). Deference aside, we do not endorse  PLMRS's suggestion that
an agency must gauge the public  interest with reference to the
litigation incentives facing  private parties. To charge an agency
with the delay imposed  upon it by others--in effect to encourage the
agency to adopt  the course found least objectionable to interested
parties-- would hardly seem to further the public interest, and would 
create a perverse incentive for parties to threaten the agency  with


PLMRS also contends that because the Commission in 1993  granted the
four licenses it had designated for nationwide  commercial use under
the Original Order, the agency acted  arbitrarily and capriciously by
failing to process PLMRS's  application at the same time. As the
agency explains, howev- er, it processed the commercial applications
in 1993 because 


the rules promulgated in the Original Order to govern na- tionwide
commercial licenses had become final and were not  subject to further
agency reconsideration. The Commission  did not process the
applications for nationwide non- commercial licenses in 1993 because
there were pending  before it three petitions for reconsideration of
the rules  governing assignment of those licenses. See Notice: Novem-
ber 19, 1992, Date Established for Commercial Nationwide  220-222 MHz
Band Applicants to File Application Amend- ments to Satisfy Entry
Criteria, 57 Fed. Reg. 49,475, 49,475  (1992). We see nothing
arbitrary or capricious in the Com- mission's decision to defer
issuing licenses until it has finally  settled upon the rules for
doing so. See Chadmoore Commu- nications v. FCC, 113 F.3d 235, 242
(D.C. Cir. 1997) (holding  disparate treatment arbitrary only if


PLMRS's final two contentions, made only in passing, may  be rejected
in kind; neither raises a question open in this  circuit. First, PLMRS
did not, by virtue of filing its applica- tion, obtain the right to
have it considered under the rules  then applicable. See id. at 241.
Second, because PLMRS  obtained no such right, the Commission's
subsequent change  in the regulations was not retroactive, let alone
impermissibly  retroactive, rulemaking. See DIRECTV, Inc. v. FCC, 110 
F.3d 816, 825-26 (D.C. Cir. 1997) (holding that because  Commission's
original order did not grant right to any partic- ular broadcast
channels, subsequent decision to auction those  channels not
retroactive though it upset expectations based  upon prior law).


We therefore conclude that the Commission's decision to  auction the
licenses and to return PLMRS's application was  neither arbitrary nor
capricious.


B. Columbia's Challenge to the Third Report and Order


The Commission may not base a decision to designate a  band of
frequencies for a particular use upon "the expectation  of Federal
revenues from the use of a system of competitive  bidding." 47 U.S.C.
s 309(j)(7)(A). Columbia claims the  Commission did just that,
however, when it designated for 


commercial use the channels covered by the four licenses at  issue in
this case. For this it relies exclusively upon the  videotape of a
meeting at which the five-member Commission  voted unanimously to
approve the notice of proposed rule- making that led a year and
one-half later to the Third Report  & Order. See Second Memorandum
Opinion and Order and  Third Notice of Proposed Rulemaking, 11


At that meeting two of the five Commissioners mentioned  the
expectation of federal revenues. Commissioner Susan  Ness elicited
from the Commission staff the estimate that  proceeds of an auction
would be "in the neighborhood of a  quarter-billion dollars." She also
commented that the 33  remaining original applicants "include some of
the largest  U.S. Companies--AT&T, UPS, GE to name a few. These 
national companies can afford to return to the U.S. taxpayer a  little
of the value of the spectrum." Chairman Reed Hundt  stated, "I suppose
we could hold an auction. I suppose we  could hold a comparative
hearing, too, ... on the following  basis. The one who wants to give
us the most money wins  the hearing." Columbia argues that these
statements show  the Commission violated s 309(j)(7)(A), that is,
designated the  licenses to commercial use based "principally, if not
exclusive- ly, [upon] the FCC's commitment to convert the nationwide 
220 MHz spectrum into federal revenues."


The Commission claims it did not base its decision upon the 
expectation of revenues. It points out that the Third Report  and
Order makes no mention of such impermissible consider- ations, but
rests solely upon legitimate justifications, such as  promoting
efficient nationwide communication services at rea- sonable prices,
promoting the development of new technolo- gies, and ensuring that
licenses go to those who value them  most. See 12 F.C.C.R. 10,943, pp


It is fundamental that "[a]gency opinions, like judicial  opinions,
speak for themselves." Checkosky v. SEC, 23 F.3d  452, 489 (D.C. Cir.
1994). Rendered at the conclusion of all  the agency's processes and
deliberations, they represent the  agency's final considered judgment
upon matters of policy the  Congress has entrusted to it. Accordingly,
"[w]here an agen-


cy has issued a formal opinion or a written statement of its  reasons
for acting, transcripts of agency deliberations at  Sunshine Act
meetings should not routinely be used to im- peach that written
opinion." Kansas State Network v. FCC,  720 F.2d 185, 191 (D.C. Cir.


We do not think the evidence that two Commissioners  initially flirted
with an impermissible rationale suffices to  demonstrate that the
permissible rationale given a year and  one-half later in the
Commission's published opinion was a  mere pretext. Otherwise, it
would seem, almost any slip of  the tongue during an agency's
decisionmaking process could  be fatal, contrary to the settled
principle that "[u]p to the  point of announcement, agency decisions
are freely changea- ble, as are the bases of those decisions."


Columbia next claims that Chairman Hundt prejudged the  question
whether to assign the licenses by auction. In Au- gust 1995, before
the Commission issued the Third Notice of  Proposed Rulemaking, the
Chairman unveiled in a speech the  Commission's "lineup of upcoming
auctions," including the  auction in the third quarter of 1996 of the
licenses at issue  here. The Washington Legal Foundation then
petitioned the  Commission requesting that the Chairman recuse himself
 from voting upon the auction issue on the ground that he  would be
unable to give meaningful consideration to the  public comments
opposing an auction and favoring a lottery.  Chairman Hundt did not
recuse himself, and indeed voted to  adopt the Third Report and Order,
as did all the Commission- ers.


The day after the public release of that order Chairman  Hundt
responded to the WLF's petition. He explained that  his 1995
statements indicated only his preliminary views, that  his
announcement of tentative auction dates "included all  potential
services to be licensed" by auction in 1996, and that  the Commission
must begin to plan for an auction "well in  advance of any final
Commission decision to authorize [one]."  Letter from Chairman Hundt
to Washington Legal Found.  (March 13, 1997).


Generally, we are unable to view the motivations of an  agency official
except as through a glass, darkly, and the  glass may be tinted not by
the official's unalterable prejudg- ment but by legitimate policy
preconceptions; in a particular  instance, the cause may be
exceedingly difficult to discern.  In order to avoid trenching upon
the agency's policy preroga- tives, therefore, we presume that
policymakers approach  their quasi-legislative task of rulemaking with
an open  mind--but not an empty one. See Lead Indus. Ass'n v. EPA, 
647 F.2d 1130, 1179 (D.C. Cir. 1980) ("Agency decisionmakers  are
appointed precisely to implement statutory programs, and  so
inevitably have some policy preconceptions"); United  Steelworkers of
Am. v. Marshall, 647 F.2d 1189, 1208 (D.C.  Cir. 1980) ("An
administrative official is presumed to be  objective [and] mere proof
that [he or] she has taken a public  position, or has expressed strong
views, or holds an underly- ing philosophy with respect to an issue in
dispute cannot  overcome that presumption").


Columbia's burden is to make a "clear and convincing  showing that
[Chairman Hundt had] an unalterably closed  mind on matters critical
to the disposition of the proceeding."  Association of Nat'l Adver. v.
FTC, 627 F.2d 1151, 1170 (D.C.  Cir. 1979). That it has not done. Even
if we assume  Chairman Hundt was predisposed in favor of auctions as a
 matter of policy, that alone would not imply that he was  unwilling
to consider arguments to the contrary.


In sum, Columbia has not shown that the Commission  decided to auction
the licenses based upon the impermissible  expectation of federal
revenues. Neither has it shown that  Chairman Hundt should have
disqualified himself because he  had unalterably decided to vote for
an auction even before the  period for public comment had opened.


III. Conclusion


For the foregoing reasons, we reject the petitioners' chal- lenge to
the Third Report and Order. Because the Third  Report and Order
superseded the disputed portions of the  Reconsideration Orders, see
12 F.C.C.R. 10,943, p 6, their 


challenge to the Reconsideration Orders is moot. According- ly, the
petitions for review are


Denied.