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


COMMTY TV INC

v.

FCC


98-1106a

D.C. Cir. 2000


*	*	*


United States Court of Appeals


FOR THE DISTRICT OF COLUMBIA CIRCUIT


Argued March 27, 2000 Decided July 7, 2000 


No. 98-1106


Community Television, Inc., et al.,  Appellant/Petitioners


v.


Federal Communications Commission,  Appellee/Respondent


Paxson Communications Corporation, et al.,  Intervenors


Association for Maximum Service Television, Inc., et al.,  Intervenor


Consolidated with  Nos. 98-1212, 98-1259, 99-1082


Appeals and Petitions for Review of Orders of the  Federal
Communications Commission


---------


John Griffith Johnson, Jr. argued the cause for petitioners.  With him
on the briefs were Gene A. Bechtel, Christopher D.  Imlay, Stephen T.
Yelverton, Arthur H. Harding, R. Bruce  Beckner, Jill Kleppe
McClelland, and Daniel R. Ball. Rich- ard F. Swift entered an


Scott D. Dailard argued the cause for intervenors Paxson 
Communications Corporation, et al. With him on the briefs  were John
R. Feore, Jr., Barry A. Friedman and David M.  Silverman.


C. Grey Pash, Jr., Counsel, Federal Communications Com- mission, argued
the cause for appellee. With him on the brief  were Christopher J.
Wright, General Counsel, Daniel M.  Armstrong, Associate General
Counsel, Joel Marcus and K.  Michele Walters, Counsel, Joel I. Klein,
Assistant Attorney  General, U.S. Department of Justice, Robert B.
Nicholson  and Adam D. Hirsh, Attorneys. Catherine G. O'Sullivan, and 
Christopher J. Sprigman, Attorneys, U.S. Department of  Justice,
entered appearances.


Jonathan D. Blake was on the brief for intervenor Associa- tion for
Maximum Service Television, Inc.


Before: Edwards, Chief Judge, Henderson and Rogers,  Circuit Judges.


Opinion for the Court filed by Circuit Judge Rogers.


Rogers, Circuit Judge: Petitioners and intervenors1 seek  review of the
Federal Communications Commission's final 




__________

n 1 Petitioners in these consolidated cases are Community Televi- sion,
Inc., Pappas Telecasting of Southern California, LLC, Penn- sylvania
Telecasters Association, and Minority Television Project,  Inc.
Intervenors in support of petitioners are Paxson Communica- tions
Corporation, Corridor Television, LLP, and Entravision Com-
munications Company, LLC. For ease of reference we refer to  these
parties as "petitioners" except as indicated. Certain other 
broadcasters withdrew their petitions or the court dismissed their 
challenges, see, e.g., Lindsay Television, Inc. v. Association of 
America's Pub. Television Stations, 1998 WL 633809 (D.C. Cir.  Aug.
11, 1998), including Mountain Broadcasting Corporation, which 
voluntarily withdrew its petition for review after filing its opening


rules establishing the procedures and timetable under which  television
broadcasting will migrate from the now-prevalent  analog technology to
digital technology. Digital technology  holds the promise of either
greatly enhancing the audiovisual  quality of television broadcasts or
of replicating current quali- ty while liberating substantial portions
of the broadcast spec- trum for other uses. Because of the massive
investment  required by broadcasters and consumers, who must purchase 
digital televisions or converter devices, to accomplish the 
analog-to-digital transition, the rules under review provide for  a
ten-year transition period during which licensed broadcast- ers and
those with permits to construct broadcast facilities as  of August 3,
1997, have received an additional channel to  commence digital
broadcasting while continuing analog broad- casts during the
transition. At the end of the transition  period, analog transmissions
will cease; broadcasters will  retain their new digital channels and
give back to the FCC  their analog channels. Thus by statute,
essentially all televi- sion broadcasting in the United States will be
exclusively by  digital technology as of December 31, 2006. See 47


To plan for the transition, the FCC indisputably faced  myriad policy
choices and a daunting engineering task. Giv- en the complexity and
interdependence of the decisions the  FCC had to make, the trade-offs
among competing interests  would be unlikely to satisfy all
broadcasters and consumers.  Remarkably then, only a few broadcasters,
four petitioners  supported by three intervenors, challenge the final
rules now.  They contend that the FCC acted unlawfully by: (1)
granting  a second channel to broadcasters whose construction permit 
applications had been approved by April 3, 1997, while deny- ing a
second channel to those whose applications had not been  so approved;
(2) allotting that second channel to replicate the  area served as of
April 3, 1997, even if the broadcaster had 




__________

n brief in light of the FCC's decision to allow it to trade DTV 
channels with another station. See Public Notice, Broadcast Ac- tions,
Report No. 44600, 1999 WL 979570 (Oct. 27, 1999). Separate- ly, the
Association for Maximum Service Television, Inc. intervened  in
support of the FCC.


applied to expand the service area as of that date; (3)  adopting and
applying its "service replication" principle in a  way that unfairly
favored VHF broadcasters over UHF  broadcasters; and (4) deleting
Channel 29 in State College,  Pennsylvania and redistributing that
spectrum where a  would-be broadcaster had sought to apply to operate
Channel  29. While petitioners' challenges may be sympathetic, we 
conclude that the FCC's decisions were neither arbitrary,  capricious,
nor contrary to law, and accordingly, we deny the  petitions for


I.


From its inception, the television broadcasting industry has  relied on
a common set of technical standards to maximize the  availability of
television. When the FCC made its first  allotment of spectrum for
broadcast television in 1941, it also  adopted the basic engineering
standards devised by the Na- tional Television System Committee for
monochromatic  (black-and-white) television service.2 See Notice of
Inquiry,  In the Matter of Advanced Television Systems and Their 
Impact on the Existing Television Broadcast Service, 2  F.C.C.R. 5125,
5126 (1987). That standard, commonly re- ferred to as NTSC, was
revised in 1953 to allow for color  television broadcasting, and again
in 1984 to allow for broad- casts using stereophonic sound. Id.
Relying on the NTSC  standard, the FCC maintains the Television Table
of Allot- ments, 47 C.F.R. s 73.606, which is the master plan for 
allocating NTSC television broadcast channels to communities 
throughout the country. See WITN-TV v. FCC, 849 F.2d  1521, 1522-23
(D.C. Cir. 1988). The Table of Allotments  designates how many full
service, low power, and television  translator channels are assigned
to each community, see 47  C.F.R. ss 73.601, 73.606, and these




__________

n 2 These standards include the width of the television broadcast 
channel, the precise frequencies for the visual and aural carriers, 
the number of lines per frame, the scanning rate and method, the 
aspect ratio or width-to-height ratio of the picture, and the audio 


between VHF ("very high frequency") Channels 2-13 and  UHF ("ultra high
frequency") Channels 14-69.


Although the NTSC standard proved to be workable for  more than fifty
years, in light of the development of new  broadcasting technologies,
the emergence of competing stan- dards, and the growing popularity of
cable television, mem- bers of the television broadcasting industry
petitioned for a  rulemaking in 1987 for the adoption of a new and
improved  standard for provision of "advanced" television, or "ATV".3 
The FCC obliged. See Notice of Inquiry, 2 F.C.C.R. 5125.  The
development of the rules under review illustrates the  difficult
policy issues and complex engineering challenges  faced by the FCC. At
the outset of the rulemaking proceed- ing, the FCC ordered a freeze on
any amendments to the  Television Table of Allotments and on all
applications for  construction permits for vacant television channels
in the  thirty busiest television markets in order to preserve its 
options for reallocating spectrum should that become neces- sary. See
Advanced Television Systems, 776 Rad. Reg.2d  (P&F) 843 (1987)
("Freeze Order"). By 1991, the FCC tenta- tively opined, and
ultimately decided that: migration to a new  standard would be in the
public interest; the transition to a  digital standard would not
involve rededication of broadcast  spectrum; incumbent broadcasters
would be the parties best  suited to implement the transition to a
digital standard; a  transition period during which NTSC broadcasts
would con- tinue would be necessary; and the width of a digital
channel  would not exceed the NTSC-standard width of 6 MHz. No- tice
of Proposed Rulemaking, 6 F.C.C.R. at 7024 ("NPRM").  To carry out
these policies, the FCC proposed to pair DTV  channels with analog
licenses, providing incumbent broadcast- ers with a second 6 MHz
channel for digital broadcasts (a  "DTV channel") without charge for
use during the transition  period to allow for both digital and NTSC




__________

n 3 The FCC adopted the term "ATV" to describe a variety of  competing
technologies, each of which would improve upon NTSC  service. See
Notice of Proposed Rulemaking, 6 F.C.C.R. 7024, 7024  n.1 (1991).


7025-26. In the period between the initial NPRM in 1991  and 1996,
following a series of reports and orders and further  notices of
proposed rulemaking, the FCC's transition plan  had been substantially
developed.


Then, in 1996, Congress enacted the Telecommunications  Act of 1996,
Pub. L. No. 101-104, 110 Stat. 56 (1996) ("1996  Act"), preempting to
a limited degree some FCC decisions  related to the analog-to-digital
transition. Thereafter the  relevant decisions by the FCC occurred as
follows: On July  25, 1996, the FCC adopted its Sixth Further Notice
of  Proposed Rulemaking, 11 F.C.C.R. 10968 (1996), in which it  set
forth the proposed DTV Table of Allotments showing  which broadcasters
would receive which DTV channels.4  Then, on April 3, 1997, the FCC
adopted two reports and  orders that are directly at issue. In the
Fifth Report and  Order, 12 F.C.C.R. 12809 (1997), the FCC issued
initial DTV  licenses to incumbent broadcasters and set forth the
timeta- ble and terms under which the transition to DTV would take 
place. In the Sixth Report and Order, 12 F.C.C.R. 14588  (1997), the
FCC promulgated the final DTV Table and set  forth its rationale for
the decisions reflected therein. In  response to petitions for
reconsideration, the FCC reaffirmed,  clarified, and, in some measure,
revised its decisions in two  rounds. See Memorandum Opinion and Order
on Reconsid- eration of the Fifth Report and Order ("Service
Reconsidera- tion"), 13 F.C.C.R. 6860 (1998); Memorandum Opinion and 
Order on Reconsideration of the Sixth Report and Order  ("Allotment
Reconsideration"), 13 F.C.C.R. 7418 (1998); Sec- ond Memorandum
Opinion and Order on Reconsideration of  the Fifth and Sixth Report
and Orders ("SMOOR"), 14  F.C.C.R. 1348 (1998).




__________

n 4 On December 27, 1996, the FCC released its Fourth Report  and
Order, 11 F.C.C.R. 17771 (1996), which adopted a technical  DTV
standard. Petitioners do not challenge the decisions reflected 


In Part II of this opinion we address whether the FCC was  statutorily
barred from issuing DTV licenses in the Fifth  Report and Order, and
if not, whether the FCC arbitrarily  failed to grant a second DTV
channel to Pappas Telecasting  of Southern California, Entravision
Communications Compa- ny, Corridor Television, and Paxson
Communications Corpo- ration. In Part III we address whether the FCC
arbitrarily  decided not to upgrade the service area covered by the
DTV  allotments for Community Television, Inc. and Paxson Com-
munications Corporation. In Part IV we address whether the  FCC
arbitrarily deviated from its service-replication policy  when
assigning Minority Television Project, Inc.'s digital  allotment. And,
in Part V we address whether the FCC  abused its discretion in
eliminating Channel 29 and reassign- ing its spectrum when the
Pennsylvania Telecasters Associa- tion sought to apply for a
construction permit for the channel  and its petition to waive the


II.


Pappas Telecasting of Southern California, Corridor Televi- sion,
Paxson Communications Corporation, and Entravision  Communications
Company (collectively "the pending appli- cants") contend that the FCC
unlawfully deprived them of a  second channel for digital broadcasting
during the transition  period. The FCC's licensing scheme for NTSC
channels has  two stages. See Service Reconsideration, 13 F.C.C.R. at
6862  & n.7. A potential broadcaster first applies for a permit to 
construct a television station, and, if the permit is granted,  the
permittee then applies for a broadcast license. Id. The  FCC proposed
to provide a DTV channel to all parties that  held a broadcast
license, a construction permit, or had applied  for a construction
permit as of the October 24, 1991, adoption  of the NPRM. See Second
Report/Further Notice, 7  F.C.C.R. 3340, 3342-44 (1992). In the event
of a "spectrum  shortfall" in some communities, licensees and
permittees  would receive preference. Id.; see also Third Report/ 
Further Notice, 7 F.C.C.R. 6924, 6928 (1992). Pappas and  Corridor had
both applied for construction permits by Octo-


ber 24, 1991, and were thus, at the time, in the pool of  broadcasters
eligible for a second channel.


However, during the rulemaking, Congress passed the 1996  Act, which
addressed the issue of eligibility for additional  television
broadcast spectrum in the following terms:


If the Commission determines to issue additional licenses  for advanced
television services, the Commission--(1)  should limit the initial
eligibility for such licenses to  persons that, as of the date of such
issuance, are licensed  to operate a television broadcast station or
hold a permit  to construct such a station (or both); and (2) shall
adopt  regulations that allow the holders of such licenses to  offer
such ancillary or supplementary services on desig- nated frequencies
as may be consistent with the public  interest, convenience, and


47 U.S.C. s 336(a).


In the Fifth Report and Order, the FCC announced that,  pursuant to s
336(a)(1), it had limited initial eligibility for a  DTV channel to
existing licensees and permittees as of April  3, 1997. 12 F.C.C.R. at
12814-15. The Fifth Report and  Order also "modified" the licenses or
permits of eligible  broadcasters to grant them an "additional"
license for use of a  DTV channel, subject to the conditions set forth
therein. Id.  at 12838. The FCC embodied its grant of these DTV
licenses  in its final DTV Table of Allotments. See Sixth Report and 
Order, 12 F.C.C.R. at 14693, app. B. Recognizing that the  final
allocation excluded some broadcasters who had been  considered
eligible for a DTV channel prior to the 1996 Act,  the FCC stated that
it would "give particular consideration  for assigning temporary DTV
channels to new licensees who  applied on or before October 24, 1991,
given the reliance that  these parties may have placed on rules we
adopted before  passage of the 1996 Act." Fifth Report and Order, 12 


In its second opinion on reconsideration of the Fifth and  Sixth
Reports (SMOOR), the FCC denied requests for paired  channels by those
permittees and licensees whose applications 


had been pending as of October 24, 1991, but were not  granted until
after April 3, 1997. While noting its stated  intent in the Fifth
Report and Order to give "particular  consideration" to such
applicants, the FCC pointed out that it  had also notified them of
their low priority should there be  insufficient spectrum available
for DTV channels. SMOOR,  14 F.C.C.R. at 1358-60 & n.36. The FCC also
noted that, in  reconsidering the Fifth Report (Service
Reconsideration), it  had granted such applicants authority either to
construct  DTV stations on their NTSC channels immediately, or to 
convert to DTV service later, and had streamlined the appli- cation
process for such analog-to-digital modification. Id. at  1359-60
(citing Service Reconsideration, 13 F.C.C.R. at 6864- 66).


A. s 308(a)'s Written-Application Requirement. Hav- ing been deprived
of "initial eligibility" for a DTV allotment  by the 1996 Act, the
pending applicants first raise a statutory  challenge that, if
successful, would invalidate the FCC's en- tire DTV licensing scheme.
In the Fifth Report and Order,  the FCC set forth a three-stage
process by which it first  determined that all existing broadcasters
and permittees as of  April 3, 1997, were granted a digital license to
broadcast on  an additional channel. 12 F.C.C.R. at 12838-40.5 The FCC
 then established a procedure by which licensees and permit- tees
would apply to construct facilities for digital transmission  and then
apply to test and use those facilities. Id. at 12840- 48. Although the
FCC stated in the Fifth Report and Order  that it was "issu[ing]" DTV
licenses, it at the same time  clarified that the licenses "issued" in
fact were modifications  of existing analog television permits or
licenses. Id. at 12838.


The pending applicants contend that the FCC's "issuance"  of these DTV
licenses contravened s 308(a), which provides in  part that the FCC
"may grant construction permits and  station licenses, or
modifications or renewals thereof, only 




__________

n 5 The three stages are (1) the initial modified license for DTV,  (2)
certification or application for a construction permit, and (3) 
application for a license to cover a construction permit for a DTV 
facility. Id.


upon written application therefor received by it," subject to 
exceptions in times of emergency. 47 U.S.C. s 308(a). They  maintain
that the Communications Act required each incum- bent broadcaster to
file a written application for an initial  DTV license with the FCC.
The second and third stages of  the process outlined in the Fifth
Report and Order each  require a written application. In the pending
applicants'  view, the FCC did not comply with s 308(a) until it
issued  DTV licenses pursuant to the third stage of the process set 
forth in the Fifth Report and Order. Thus, they continue,  the first
such license was issued on February 5, 1999, and  that date should be
used for determining "initial eligibility"  under s 336(a)(1). Using
this calculus, the pending appli- cants deem themselves initially
eligible for a DTV channel  because all of their respective NTSC
construction permits  had been granted prior to February 1999.


As an initial matter, the FCC contends that this challenge  was not
raised below and thus is not subject to review.  Although it appears
that no petitioner directed the FCC's  attention specifically to s
308(a) during the rulemaking, com- ments by another party to that
proceeding provided the FCC  with a sufficient opportunity to consider
the issue such that  judicial review is proper. See 47 U.S.C. s
405(a). Specifical- ly, the pending applicants rely on the comments of
the Media  Access Project ("MAP"), that because DTV licenses would be 
new licenses, the FCC was statutorily required by 47 U.S.C.  s 308(b)
to determine that each broadcaster receiving such a  license was
financially qualified. MAP's comments logically  implicated s 308(a)'s
written application requirement because  they were directed to the
contents of such applications.


On the merits, the court reviews the FCC's interpretation  of the
Communications Act under the now-familiar standard  set forth in
Chevron U.S.A. Inc. v. Natural Resources De- fense Council, Inc., 467
U.S. 837, 842-843 (1984), by which the  court considers "whether
Congress has directly spoken to the  precise question at issue," id.
at 842, and if it has not,  "whether the agency's answer is based on a
permissible  construction of the statute." Id. at 843. We do not agree
 that the plain language of s 308(a) compels the crimped 


reading advocated by the pending applicants. Because the  recipients of
the initial DTV licenses were broadcasters with  written applications
already on file, s 308(a) must be read in  conjunction with 47 U.S.C.
s 316, which allows the FCC to  modify existing licenses,6 and new s
336, added by the 1996  Act, which directed the FCC to limit initial
eligibility for DTV  licenses to incumbent broadcasters (or those
holding con- struction permits for a television broadcast facility).
Because  Congress did not answer the question of how these provisions 
apply to the issuance of DTV licenses, we will uphold the  FCC's
harmonization of the relevant provisions so long as it is 


In concluding that the FCC's interpretation of its modifica- tion
authority was reasonable, we are instructed by the  court's previous
reconciliation of the apparent conflict be- tween s 308(a) and s
316(a)(1), in holding that "[t]he Com- mission has power under Section
316(a) ... to modify a  license without an application for the
modification having  been made by the licensee." Peoples Broadcasting
Co. v.  United States, 209 F.2d 286, 287 (D.C. Cir. 1953). While in 
Peoples Broadcasting, the court affirmed the FCC's power to  modify a
broadcaster's license by requiring it to shift from  Channel 4 to
Channel 8, nothing in the statute or that opinion  suggests that the
FCC's modification power is limited to  individual licenses. Rather,
the FCC may modify entire 




__________

n 6 Section 316(a)(1) provides:


Any station license or construction permit may be modified by  the
Commission either for a limited time or for the duration of  the term
thereof, if in the judgment of the Commission such  action will
promote the public interest, convenience, and neces- sity, or the
provisions of this chapter or of any treaty ratified  by the United
States will be more fully complied with. No  such order of
modification shall become final until the holder of  the license or
permit shall have been notified in writing of the  proposed action and
the grounds and reasons therefor, and  shall be given reasonable
opportunity, of at least thirty days, to  protest such proposed order
of modification; except that,  where safety of life or property is
involved, the Commission  may by order provide, for a shorter period


classes of licenses. Further, the issuance of transitory DTV  licenses
in the Fifth Report and Order was part of a process  that modifies
broadcasters' underlying permits and licenses in  a way analogous to
the modification upheld in Peoples Broad- casting: at the end of the
transition period, broadcasters will  have migrated from one channel
to another. While there  admittedly is a difference in kind from the
circumstances in  People's Broadcasting, the analog-to-digital
transition is limit- ed to a one-time change.


Hence, what the FCC did in the Fifth Report and Order is  unlike the
situation in MCI Telecommunications Corp. v.  AT&T, 512 U.S. 218
(1994), on which the pending applicants  rely. There the Supreme Court
held that the FCC's power  to "modify" the requirements of 47 U.S.C. s
203, under which  telecommunications carriers file their rates in a
tariff with the  FCC, did not authorize the FCC to do away with
tariffs  altogether, and that no deference was due to an interpreta-
tion that went beyond the meaning that the statute could  bear. Id. at
229.7 While the pending applicants contend that  the same reasoning
applies here because the FCC's issuance  of an initial DTV license
cannot reasonably be said to modify  a broadcaster's existing license,
the FCC has not wrought a  fundamental change to the terms of those
permits and licens- es. Broadcasters will begin and end the transition
period  broadcasting television programming to the public under very 
similar terms. Although the FCC chose not to require 100% 
simulcasting on the NTSC and DTV channels throughout the  transition,
and Congress disfavored such an approach, see 47  U.S.C. s 336(a)(2),
broadcasters will provide essentially the  same services, with some
flexibility to provide ancillary ser- vices as well, under their
licenses during the transition. See  Service Reconsideration, 13
F.C.C.R. at 6873-74. Because  the issuance of initial DTV licenses to
existing broadcasters  was not clearly the issuance of new "station
licenses" under  s 308(a) and because the terms of the DTV licenses
can  reasonably be considered modifications of existing licenses, 




__________

n 7 Subsequently, Congress authorized detariffing. See MCI  Worldcom
Inc. v. FCC, 209 F.3d 760 (D.C. Cir. 2000).


the FCC could reasonably deem s 308(a) inapplicable and  issue DTV
licenses pursuant to s 316.


Finally, the FCC reasonably construed s 336 to allow for  the
three-stage process set forth in the Fifth Report and  Order. In the
1996 Act, Congress preempted the ongoing  DTV proceeding only to a
limited degree. Section 336 over- ruled the FCC's decision to include
applicants for construc- tion permits in the pool of broadcasters
eligible for a second  channel during the transition period. In most
other respects,  Congress left the details of managing the
analog-to-digital  transition to the FCC. Nothing in s 336 foreclosed
the FCC  from issuing initial DTV licenses on a date certain. More-
over, because Congress limited initial eligibility for DTV  licenses
to incumbent broadcasters, the FCC could reason- ably construe s
336(a)(1)'s reference to "additional licenses  for advanced television
services" to encompass a modification  of existing licenses and
permits to allow for advanced televi- sion services in addition to
then-existing analog broadcasting  services. Having adopted a paired
channel approach, giving  a DTV license to the eligible broadcasters,
the FCC's inter- pretation of its modification power reasonably
followed. For  as the FCC explained at oral argument, the two reasons
for  requiring the filing of an application for a new license--to 
determine who is eligible and how to award licenses in a  competitive
proceeding--are inapplicable here: Congress has  defined who is


For these reasons we conclude that in the Fifth Report and  Order the
FCC reasonably construed the Communications  Act to allow it to modify
existing broadcast licenses and  construction permits to render
incumbent broadcasters ini- tially eligible to provide DTV services
consistent with  s 336(a) and pursuant to s 316(a)(1) without having
received  written applications for "station licenses" covered by s


B. The April 3, 1997, Cut-Off for DTV Eligibility. In  the alternative,
the pending applicants contend that even if  the FCC had authority to
issue initial DTV licenses in the  Fifth Report and Order without
having received written  applications, the FCC unreasonably
interpreted s 336 as 


requiring it to issue DTV licenses to those eligible under  s 336(a)(1)
as of a single date rather than account for those  with equities on
their side, such as Pappas Telecasting of  Southern California and
Corridor Television who had been  eligible for a second channel prior
to the 1996 Act. Further,  they contend that the FCC failed to
adequately explain why it  chose not to grant them a second channel.


Our review is limited to whether the FCC acted reasonably  and
adequately explained its decision not to grant the pending  applicants
a second channel for the transition period. It  clearly did. The FCC
left no mystery as to its rationale.  Notwithstanding the pending
applicants' equitable arguments  arising out of their disappointment
resulting from the 1996  Act, the FCC decided that the spectrum that
they sought  would be put to better use by providing it to new full
power  broadcasters as well as new and displaced low power televi-
sion (LPTV) and TV translator stations. See SMOOR, 14  F.C.C.R. at
1359-60. The pending applicants have not  shown, in light of s 336,
that the date-certain approach was  "patently unreasonable, having no
relationship to the underly- ing regulatory problem." Home Box Office,
Inc. v. FCC, 567  F.2d 9, 60 (D.C. Cir. 1977); see also Cassell v.
FCC, 154 F.3d  478, 485 (D.C. Cir. 1998). Moreover, the FCC adequately
 addressed the equitable concerns of those applicants who  were
granted construction permits after April 3, 1997, by  allowing them to
convert to DTV on the channel they are  granted and to apply to
maximize their service area. See  Service Reconsideration, 13 F.C.C.R.
at 6863-66.8 As to the  substance of the FCC's rationale, it is hardly
arbitrary and  capricious. The agency reasonably balanced competing
de- mands for spectrum and allowed the pending applicants con-
siderable flexibility in making the transition to DTV.9




__________

n 8 The FCC's reference in the Fifth Report and Order to  "particular
consideration" for those in the pending applicants' posi- tion did not
guarantee any particular result, and certainly did not  obligate the
FCC to take steps beyond the careful balancing of  interests reflected
in its decision to deny paired channels while  increasing flexibility
for analog-to-digital conversions for those in  the pending
applicants' position.


III.


Community Television, Inc. ("Community") and Paxson  Communications
Corporation ("Paxson"), each received a sec- ond channel but contend
that their allotment was inadequate  because it does not serve the
upgraded service area for which  each had applied. As a matter of
policy, the FCC decided  that it would allot DTV channels in a manner
to replicate a  broadcaster's existing NTSC service area. See Sixth
Further  Notice, 11 F.C.C.R. at 10974-75. In the Sixth Further 
Notice, the FCC indicated that "we are proposing to allow  stations to
maximize or increase their service area where such  an increase would
not create additional interference," id. at  10975; however, the FCC
cautioned that allowing such modi- fications would affect the DTV
Table, causing both technical  difficulties and affecting the ability
of broadcasters to com- ment meaningfully on the draft DTV Table. Id.


To balance broadcasters' individual interests in increasing  their
service areas against the broader interests in establish- ing a
workable DTV Table, the FCC announced in the Sixth  Further Notice
that it would "henceforth condition the grant  of applications for
modifications of technical facilities, includ- ing those for
applications on file before the date of the  adoption of this Further
Notice but granted after that date, 




__________

n 9 Pappas contends further that the FCC arbitrarily failed to 
consider its unique circumstances in that it had applied for a 
construction permit prior to October 24, 1991 and had presented the 
FCC with a motion for leave to supplement its reconsideration 
petition to show that a DTV channel was available in its community  of
Avalon, California. The FCC did not grant Pappas' motion for  leave
and was therefore not obliged to consider its supplement. See  47
C.F.R. s 1.429(d). To the extent that the FCC was obliged to 
articulate its reasons for not granting leave, its failure to do so
was  harmless. See 5 U.S.C. s 706. In rejecting a very similar conten-
tion raised by another party, the FCC made clear that the availabil-
ity of another channel was immaterial to its discretionary decision 
not to award a DTV channel to petitioners. See SMOOR 14  F.C.C.R. at


on the outcome of our final decision on the DTV Table of  Allotments."
Id. Commenters complained that those broad- casters who had applied to
upgrade their service prior to July  25, 1996, the date of issuance of
the Sixth Further Notice, did  so with the expectation that they would
receive corresponding  digital upgrades and that it would be
economically infeasible  to invest in an upgrade of analog service
only for the transi- tion period.


The FCC partially accommodated such broadcasters. The  final DTV Table,
issued in the Sixth Report and Order,  reflected NTSC upgrades that
had been granted in the  interim between the Sixth Further Notice and
the Sixth  Report and Order, that is, between July 25, 1996 and April
3,  1997. Applications that had not been acted upon as of April  3,
1997, remained subject to the condition of non-interference  with the
DTV Table, and, if granted, would not include a  corresponding digital
upgrade. See SMOOR, 14 F.C.C.R. at  1362-63. Community is licensed to
operate Channel 57 in  Atlanta, Georgia and had applied to upgrade its
NTSC ser- vice area prior to the adoption of the Sixth Further Notice
on  July 25, 1996. Because the FCC did not grant Community's 
application until May 1999, Community's DTV channel, Chan- nel 41,
does not replicate its upgraded NTSC service area.  Similarly, Paxson
had filed eleven upgrade applications prior  to July 25, 1996, each of
which was granted after April 3,  1997, and therefore did not include
a corresponding digital  upgrade. Each party may, however, apply for
such a digital  upgrade. See 47 C.F.R. s 73.622, 73.623.


Community and Paxson first contend that the FCC's ac- tions were
impermissibly retroactive by subjecting pending  upgrade applications
to the compatibility principle. However,  the mere filing of upgrade
applications did not vest petition- ers with a legally cognizable
expectation interest. See  Chadmoore Comm., Inc. v. FCC, 113 F.3d 235,
240-41 (D.C.  Cir. 1997). Thus the FCC was free to alter its criteria
for  considering those applications. Next, Community and Pax- son
contend, in essence, that the FCC did not try hard  enough to
accommodate pending applications during the  course of assembling the
DTV Table of Allotments. Neither 


party has demonstrated that the FCC's failure to fashion the  DTV Table
in a manner that would have granted all upgrade  applications pending
on July 25, 1996, was a product of  administrative whim or sloth. On
the contrary, the FCC  found that it was not feasible to grant all of
the NTSC  modification applications. SMOOR, 14 F.C.C.R. at 1362.


Paxson contends, however, that it is unable to demonstrate  that the
FCC acted arbitrarily because the FCC failed to  explain why some
upgrade applications were granted while  others were not. It
continues, the FCC cannot reasonably  defend its decision to treat
those broadcasters whose upgrade  applications were granted after
April 3, 1997, differently than  those whose applications were granted
before that date with- out explaining how it decided which
applications to grant on  which dates. But the FCC explained that it
granted those  applications that were consistent with the DTV Table
and  deferred action on those that were not. We presume that the  FCC
processed the pending applications with administrative  regularity,
for neither Community nor Paxson has identified  any evidence that
rebuts that presumption. See, e.g., Louisi- ana Ass'n of Indep.
Producers and Royalty Owners v. FERC,  958 F.2d 1101, 1119 (D.C. Cir.
1992); see also Wilson v.  Hodel, 758 F.2d 1369, 1372-73 (10th Cir.
1985). Further- more, while both Paxson and Community assert that some
 later-filed applications were granted prior to some earlier- filed
applications, there is no indication that administrative 
irregularities occurred. Paxson's real complaint is that the  FCC
fashioned the DTV Table in such a way that its upgrade  applications
were processed more slowly than others. How- ever, Paxson has not
demonstrated why this processing, or  the compromises made in the DTV


IV.


Minority Television Project ("MTP"), licensee of Channel  32 in San
Francisco, California, contends that the FCC's  "service replication"
policy unlawfully puts it at a competitive  disadvantage because the
policy unnecessarily entrenches the  disparity between VHF and UHF
channels. Most analog 


UHF stations have smaller service areas than analog VHF  stations, for
historical and technical reasons. See Electronic  Indus. Ass'n
Consumer Elec. Group v. FCC, 636 F.2d 689,  691-92 (D.C. Cir. 1980).
UHF stations are more susceptible  to interference. See id. at 698
n.17. Digital technology  mitigates interference problems on the UHF
band. See Sixth  Report and Order, 12 F.C.C.R. at 14603-04.
Nonetheless,  under either an analog or digital transmission system,
broad- casting on UHF channels to reach a given audience requires 
higher power than broadcasting on VHF channels. The FCC  set power
parameters of 50 kW to 1000kW for digital UHF  channels. Id. at 14605.
This meant that some UHF channels  would see their service area
increased by the minimum power  requirement while other broadcasters,
who had an analog  VHF channel but received a digital UHF channel,
would see  their service area decreased because of the ceiling on
power  that could be used for digital broadcasting on the UHF band. 
MTP's analog and digital channels are both in the UHF band.


MTP's contention that the FCC's service-replication policy  arbitrarily
entrenches the historical VHF/UHF disparity is in  essence a dispute
about a policy decision properly within the  province of the FCC.
Initially the FCC had adopted an  approach that would have maximized
the service area of each  DTV allotment, an approach favored by MTP,
and the FCC  sought comment on this allocation policy. See Sixth
Further  Notice, 11 F.C.C.R. at 10974-75. However, the FCC ulti-
mately sided with the numerous broadcasters that preferred  to
replicate the status quo to the greatest extent possible.  See Sixth
Report and Order, 12 F.C.C.R. at 14605-07. While  MTP is disappointed
by the FCC's choice of its service- replication policy, MTP fails to
demonstrate how that choice  was unlawful.


In the alternative, MTP contends that the overall DTV  allotment for
San Francisco, and the allotment MTP received  at the minimum UHF
power level of 50 kW, are arbitrary  because MTP's DTV channel will
not reach the audience  currently served. MTP does not seriously
dispute that its  DTV signal will propagate along the same contours as
does  its NTSC signal. Rather MTP maintains that its DTV allot-


ment lacks sufficient power to penetrate physical obstacles,  such as
buildings and hills, and therefore its DTV channel will  not reach
viewers who currently receive its NTSC service.  MTP is further
concerned that neighboring allotments will  not allow it to increase
its power if necessary. However,  MTP presents no data to demonstrate
that the power level of  its allotment is so inadequate as to amount
to an arbitrary  departure from the service-replication policy.10


V.


Finally, Pennsylvania Telecasters Association ("PTA") chal- lenges the
FCC's decision to reallocate the spectrum that had  been set aside for
Channel 29 in State College, Pennsylvania  without first considering
PTA's application to broadcast on  Channel 29. Channel 29 was one of
many vacant NTSC  allotments that were deleted in the course of
compiling the  DTV Table.


To implement its policy to reconfigure spectrum allotments  to enable
broadcasters using one channel to use two, the FCC  needed to identify
more than 1900 channels available for  assignment to incumbent
broadcasters. See Sixth Further  Notice, 11 F.C.C.R. at 10972. The FCC
had issued its Freeze  Order in 1987, recognizing that any transition
plan would  require considerable spectrum. Among the vacant channels 
covered by the Freeze Order was Channel 29. The FCC had  assigned the
channel to State College in 1972 and it had  remained vacant until
imposition of the Freeze Order in 1987.  In 1996, the FCC issued its
proposed DTV Table in the Sixth  Further Notice and announced that to
facilitate finalization of  the DTV Table, it would stop accepting
applications for new  NTSC stations as of September 20, 1996. See




__________

n 10 Moreover, should subsequent events bear out MTP's con- cerns, the
FCC states in its brief on appeal that it retains authority  to make
adjustments to mitigate interference problems that may  arise during
the analog-to-digital transition. The FCC points out  that it has
already demonstrated such flexibility in allowing Moun- tain
Broadcasting Corporation to trade DTV channels with another  station.
See supra note 1.


Notice, 11 F.C.C.R. at 10993. The FCC noted further that  "[t]he DTV
Table proposed herein was developed on the  assumption that the
existing vacant NTSC allotments for  which no construction permit
application is pending will be  deleted." Id.


On September 20, 1996, PTA and another would-be broad- caster
petitioned the FCC to waive the application of the  Freeze Order to
Channel 29 and to accept their applications  for a construction permit
for that channel. When the FCC  issued its final DTV Table in the
Sixth Report and Order, the  FCC had reassigned the spectrum allotted
for Channel 29 in  State College to DTV channels serving Johnstown,
Pennsyl- vania and Williamsport, Pennsylvania. PTA petitioned for 
reconsideration, arguing that the elimination of Channel 29  was
contrary to the FCC's commitment to "maintain and  protect those
vacant NTSC allotments that are the subject of  pending applications."
See Sixth Report and Order, 12  F.C.C.R. at 14639. The FCC denied
reconsideration on the  ground that PTA's "application has not been
accepted, and we  have not acted on its waiver request. The allotment
at issue  was needed and was used for DTV." Allotment Reconsidera-


PTA's petition for review must be denied because it mis- construes the
FCC's policy. PTA filed its waiver petition and  application for
Channel 29 in response to that portion of the  Sixth Further Notice in
which the FCC stated that it would  stop accepting applications for
vacant analog channels in 30  days and that "we will continue our
current policy of consid- ering requests for waiver of our 1987 freeze
Order on a case- by-case basis." 11 F.C.C.R. at 10992. PTA misread
this  statement as a promise to consider new applications for  unused
channels in freeze areas. To the contrary, the FCC  promised only that
it would consider requests to lift the  freeze on a case-by-case
basis, not that it would consider  unused channel applications prior
to lifting the freeze. In- deed, the FCC indicated that applications
requiring a lifting  of the freeze would not be accepted for filing
unless there was  a public notice to that effect. Id. The FCC
ultimately  explained that neither PTA's waiver request nor the


tion had been accepted pursuant to the Freeze Order, and  that
elimination of Channel 29 and reallocation of its spec- trum were
necessary to accommodate the DTV Table. Allot- ment Reconsideration,
13 F.C.C.R. at 7601-02.


The FCC reasonably interpreted its commitment in the  Sixth Report and
Order to maintain and protect vacant  NTSC allotments for which
applications were pending, 12  F.C.C.R. at 14639, to be limited to
applications for vacant  allotments not subject to the Freeze Order or
for which a  waiver of the Freeze Order had been granted. Because
under  the terms of the Sixth Report and Order PTA's waiver  petition
did not constrain the FCC's authority to eliminate  Channel 29, the
FCC acted consistently with its stated expec- tation that "the
existing vacant NTSC allotments for which no  construction permit
application is pending will be deleted."  Sixth Further Notice, 11


* * * * *


We conclude as we began. The FCC faced a host of  difficult decisions
in designing rules for the transition from  analog to digital
television broadcasting. After years of work,  a small number of the
parties to the proceeding have sought  relief in the court from
unfavorable FCC interpretations and  decisions. Even if the
compromises reflected in the chal- lenged FCC decisions were not
always Solomonic in their  wisdom, they were not required to be. Given
the relevant  statutory directives and regulations, and the competing
inter- ests of the various broadcasters and viewers concerning use  of
limited spectrum, the FCC reasonably and permissibly  interpreted its
obligations in allocating the valuable public 




__________

n 11 For this reason, PTA's contention based on the Due Process 
Clause, U.S. Const. amend V, is without merit; the FCC did not 
deprive PTA of a property or liberty interest by deleting Channel  29.
Similarly, the FCC did not violate 47 U.S.C. s 307(b), which  directs
the FCC to ensure equitable distribution of radio service  among
communities, because that section applies to the FCC's  consideration
of "applications for licenses," which PTA's waiver  petition was


resource that is broadcast spectrum. Accordingly, we deny  the
petitions for review.