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


ORION COMM LTD

v.

FCC


98-1424a

D.C. Cir. 2000


*	*	*


Opinion for the Court filed Per Curiam.


Per Curiam: In the Balanced Budget Act of 1997, Congress  amended
section 309(j) of the Communications Act of 1934 to  require
competitive bidding for commercial broadcast ser- vices, replacing the
Commission's historic practice of award- ing such licenses through
comparative hearings. See Bal- anced Budget Act of 1997 s 3002(a)(1),
Pub. L. No. 105-33,  111 Stat. 251, codified at 47 U.S.C. s 309(j).
Following a  notice of proposed rulemaking, the FCC issued two orders 
implementing section 309(j). First Report and Order, 13  FCC Rcd.
15920 (1998); Memorandum Opinion and Order,  14 FCC Rcd. 8724 (1999).
Various parties filed petitions for  review of these orders. In this
opinion, we consider the  petition for review in No. 99-1188. We
resolved all of the  issues raised by the other petitions in a


In the First Report and Order, the FCC determined that  applicants for
broadcast service auctions would be subject to  its anti-collusion
rule, 47 C.F.R. s 1.2105(c)(1), which it had  previously applied in
sixteen spectrum auctions. First Report  and Order, 13 FCC Rcd. at
15980-81 p 155. This rule  provides that, following the filing of
short-form applications,


applicants are prohibited from cooperating, collaborating,  discussing
or disclosing in any manner the substance of  their bids or bidding
strategies, or discussing or negotiat- ing settlement agreements, with
other applicants until  after the high bidder makes the required down
payment,  unless such applicants are members of a bidding consor- tium
or other joint bidding arrangement identified on the  bidder's
short-form application....


47 C.F.R. s 1.2105(c)(1). In other words, applicants may not  negotiate
settlement agreements after their short-form appli- cations have been
filed.


Petitioners contest the FCC's application of its anti- collusion rule,
urging instead that the Commission permit  applicants to negotiate
settlement agreements within a rea- sonable interval--they suggest
ninety days--of the date of  filing. They first contend that the
anti-collusion rule violates  section 309(j)(6)(E), which provides:


Nothing in this subsection, or in the use of competitive  bidding,
shall be construed to relieve the Commission of  the obligation in the
public interest to continue to use  engineering solutions,
negotiation, threshold qualifica- tions, service regulations, and
other means in order to  avoid mutual exclusivity in application and
licensing pro- ceedings.


47 U.S.C. s 309(j)(6)(E) (emphasis added). Making a Chev- ron step one
argument, petitioners claim that "Congress both  intended and
expressly provided that the Commission is  obliged in the public
interest to use settlements (i.e., 'other  means') to avoid mutual
exclusivity in broadcast auction pro- ceedings."


The question we ask at Chevron step one is whether  Congress has
"directly spoken to the precise question at  issue." Chevron, U.S.A.,
Inc. v. Natural Resources Defense  Council, Inc., 467 U.S. 837, 842
(1984). We cannot see how  section 309(j)(6)(E) speaks to the precise
question of whether  the FCC must permit a reasonable interval for
settlement  negotiations when the statute does not even mention
settle- ments, let alone a specific time interval for negotiations. To
 be sure, settlements are "other means" of avoiding mutual 
exclusivity, but the statute cannot be read to direct the FCC  to
adopt all other means available.


Petitioners next claim that the Commission's application of  the
anti-collusion rule is arbitrary and capricious, arguing  that "the
Commission never explains why, in its view, the  provision for a
reasonable interval for settlement is irreconcil- able with its policy
to deter collusion." We disagree. The  Commission more than adequately
explained its reasons for  applying the anti-collusion rule.
"Permitting competing ap- plicants for new facilities in all broadcast
services to engage  in discussions concerning settlements or other
resolution of  their mutual exclusivities following submission of
their short- form applications," the Commission said, "would, we
believe,  reduce the effectiveness of the anti-collusion rule." Memo-
randum Opinion and Order, 14 FCC Rcd. at 8755 p 61. The  Commission


For example, if competing broadcast auction applicants  were permitted
to engage in discussions concerning set- tlement or other resolution
of mutual exclusivities, these  competing applicants would almost
inevitably transfer  information at least indirectly affecting bids or
bidding  strategies, thereby adversely impacting the competitive- ness
of the auction. Moreover, given our statutory obli- gation to utilize
auctions as a primary licensing tool, the  protection of the integrity
of the auction process is of  paramount importance, and we are
consequently con- cerned about actions that compromise the integrity
of the  process, particularly behavior that violates the anti-
collusion rule. The Commission's experience in conduct-


ing numerous previous auctions has demonstrated the  importance of the
anti-collusion rule in preventing and  facilitating the detection of
collusive conduct.


Id. (internal quotation marks omitted). Finding this explana- tion
entirely reasonable, we deny the petition for review.


So ordered.