ORAL ARGUMENT NOT YET SCHEDULED BRIEF FOR APPELLEE IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT NO. 11-1330 PMCM TV, LLC, APPELLANT, V. FEDERAL COMMUNICATIONS COMMISSION, APPELLEE. ON APPEAL FROM AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION AUSTIN C. SCHLICK GENERAL COUNSEL PETER KARANJIA DEPUTY GENERAL COUNSEL RICHARD K. WELCH DEPUTY ASSOCIATE GENERAL COUNSEL LAURENCE N. BOURNE COUNSEL FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 (202) 418-1740 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 1 of 89 CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES 1. Parties. All parties, intervenors, and amici appearing in this Court and before the Commission are listed in the appellant’s brief. 2. Ruling under review. Reallocation of Channel 2 from Jackson, Wyoming to Wilmington, Delaware and Reallocation of Channel 3 from Ely, Nevada to Middletown Township, New Jersey, Memorandum Opinion and Order, 26 FCC Rcd 13696 (2011) (J.A. 196). 3. Related cases. This case has not previously been before this Court. We are not aware of any related case pending before this Court or any other Court. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 2 of 89 i TABLE OF CONTENTS Table of Contents .............................................................................................. i Table of Authorities.......................................................................................... ii Glossary.............................................................................................................v JURISDICTION................................................................................................1 STATEMENT OF ISSUE.................................................................................2 COUNTERSTATEMENT ................................................................................4 I. REGULATORY BACKGROUND ...........................................................4 II. PMCM’S PROPOSAL TO MOVE ITS VHF STATIONS TO NEW JERSEY AND DELAWARE....................................................9 A. PMCM’s “Reallocation” Requests........................................................9 B. This Court’s Dismissal of PMCM’s Petition For A Writ of Mandamus.......................................................................................14 C. The Order On Review.........................................................................15 D. Other Developments............................................................................18 SUMMARY OF ARGUMENT ......................................................................18 ARGUMENT ..................................................................................................20 I. THE ORDER IS REVIEWED UNDER DEFERENTIAL STANDARDS..........................................................................................20 II. THE COMMISSION’S READING OF SECTION 331(a) COMPORTS WITH THE TEXT, STRUCTURE, PURPOSES, AND LEGISLATIVE HISTORY OF THAT PROVISION. ...........................................................................................22 CONCLUSION ...............................................................................................42 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 3 of 89 ii TABLE OF AUTHORITIES CASES * Alarm Indus. Commc’ns Comm. v. FCC, 131 F.3d 1066 (D.C. Cir. 1997)........................................................................... 24, 37 American Family Ass’n v. FCC, 365 F.3d 1156 (D.C. Cir. 2004)...........................................................................................40 AT&T Corp. v. FCC, 317 F.3d 227 (D.C. Cir. 2003) .....................................40 * Bell Atlantic Tel. Cos. v. FCC, 131 F.3d 1044 (D.C. Cir. 1997)............................................................................ 22, 24, 35, 36, 37 California Metro Mobile Commc’ns, Inc. v. FCC, 365 F.3d 38 (D.C. Cir. 2004) ......................................................................24 Cassel v. FCC, 154 F.3d 478 (D.C. Cir. 1998)...............................................24 Chevron USA v. Natural Resources Defense Council, 467 U.S. 837 (1984) ........................................................ 21, 23, 24 In re PMCM TV, LLC, Order, D.C. Circuit No. 10- 1001 (filed May 12, 2010)...........................................................................16 * Multi-State Commc’ns, Inc. v. FCC, 728 F.2d 1519 (D.C. Cir. 1984)...................................................................... 8, 9, 43, 44, 45 * Public Citizen v. U.S. Dept. of Justice, 491 U.S. 440 (1989) ............................................................................................. 22, 29, 46 Red Lion Broad. Co. v. FCC, 395 U.S. 367 (1969) ........................................39 Worldcom Network Servs., Inc. v. FCC, 274 F.3d 542 (D.C. Cir. 2001)....................................................................................25 ADMINISTRATIVE DECISIONS Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, 23 FCC Rcd 4220 (2008) ............................................................................28 Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, Sixth Report and Order, 12 FCC Rcd 14588 (1997) ..........................................................................................................10 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 4 of 89 iii Amendment of Section 3.606 of the Commission’s Rules and Regulations, Sixth Report and Order, 41 F.C.C. 148 (1952).....................................................................................5 Amendment of Section 73.606(b), Table of Allotments, Television Broadcast Stations (Montrose and Scranton, Pennsylvania), 3 FCC Rcd 1061 (Media Bur. 1988).......................................................................28 Amendment of Section 73.606(b), Table of Allotments, TV Broadcast Stations (Snyder, Texas), 6 FCC Rcd 5791 (1991)..................................................................28 Amendment of Section 73.606(b), Table of Assignments, Television Broadcast Stations (Riverside and Santa Anna, California), 65 FCC 2d 920 (1977) ................................................................................................6 Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Atlantic City, New Jersey), Notice of Proposed Rulemaking, 24 FCC Rcd 14601 (Media Bur. 2009) .......................................................................................13 Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Atlantic City, New Jersey), Report and Order, 25 FCC Rcd 2606 (Video Div., Media Bur. 2010)....................................................................................................18 Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Seaford, Delaware), Notice of Proposed Rulemaking, 24 FCC Rcd 14596 (Media Bur. 2009)............................................................................................................13 Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Seaford, Delaware), Report and Order 25 FCC Rcd 4466 (Video Div., Media Bur. 2010) .....................................18 Modification of FM and TV Authorizations to Specify a New Community of License, 4 FCC Rcd 4870 (1989) .................................................................................................38 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 5 of 89 iv Oversight of the Radio and TV Broadcast Rules, 1 FCC Rcd 849 (Media Bur. 1986)................................................................28 Petition for Inquiry into the Need for Adequate Television Service for the State of New Jersey, 58 FCC 2d 790 (1976)......................................................................................27 Petition to Reallocate VHF Television Channel 9 from New York, New York, to a City Within the City Grade Contour of Station WOR-TV, Report and Order, 53 Rad.Reg. 2d (P&F) 469 (1983)................................... 8, 9, 39 Petition to Reallocate VHF-TV Channel 9 from New York, New York, to a City Within the City Grade Contour of WOR-TV, 84 FCC 2d 280 (1981) .............................................30 SRC, Inc., San Angelo, TX, 21 FCC 2d 901 (1970) ........................................27 STATUTES AND REGULATIONS 47 C.F.R. § 73.610(b)(1).................................................................................28 47 C.F.R. § 74.702(b)......................................................................................12 47 U.S.C. § 272 ...............................................................................................31 47 U.S.C. § 307(b)...................................................................................... 4, 16 47 U.S.C. § 309(a).............................................................................................5 47 U.S.C. § 309(j) .............................................................................................6 * 47 U.S.C. § 331(a)................................... 2, 7, 8, 10, 11, 12, 13, 14, 16, 18, 22, ........................................... 23, 24, 25, 26, 30, 31, 32, 33, 34, 38, 39, 40, 41 47 U.S.C. § 402(b).............................................................................................1 47 U.S.C. § 405(a).................................................................................... 20, 35 OTHERS 128 Cong. Rec., S10946 (Aug. 19, 1982) .......................................................29 H.R. Rep. No. 760, 97th Cong., 2d Sess. 690 (1982), reprinted in 1982 U.S.C.C.A.N. 1453............................................29 * Cases and other authorities principally relied upon are marked with asterisks. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 6 of 89 v GLOSSARY BOC Bell Operating Company Br. Brief Commission or FCC Federal Communications Commission DTV Digital Television J.A. Joint Appendix LPTV Low Power Television Nave Nave Broadcasting, LLC PMCM PMCM TV, LLC UHF Ultra High Frequency (TV Channels 14-69) VHF Very High Frequency (TV Channels 2-13) USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 7 of 89 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT NO. 11-1330 PMCM TV, LLC, APPELLANT, V. FEDERAL COMMUNICATIONS COMMISSION, APPELLEE. ON APPEAL FROM AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION BRIEF FOR APPELLEE JURISDICTION The Order on appeal was released on September 15, 2011. Reallocation of Channel 2 from Jackson, Wyoming to Wilmington, Delaware and Reallocation of Channel 3 from Ely, Nevada to Middletown Township, New Jersey, Memorandum Opinion and Order, 26 FCC Rcd 13696 (2011) (J.A. 196) (“Order”). Appellant PMCM TV, LLC (“PMCM”) filed its notice of appeal on September 21, 2011. This Court’s jurisdiction rests on 47 U.S.C. § 402(b). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 8 of 89 2 STATEMENT OF ISSUE In this case, appellant PMCM, a licensee of two very high frequency (“VHF”) television channels in Nevada and Wyoming, asked the Federal Communications Commission (“Commission” or “FCC”) to grant the cross- country “reallocation” of those two channels to New Jersey and Delaware. Invoking a statute that had been applied only once before in its nearly 30-year history – when the FCC in 1983 approved a request by a New York City station to change its community of license to suburban New Jersey without moving its transmission facilities – PMCM argued that the Commission was required to move the VHF channels pursuant to section 331(a) of the Communications Act, 47 U.S.C. § 331(a). The first sentence of that provision directs the Commission to “allocate” commercial VHF channels (i.e., channels licensed for commercial use, as opposed to noncommercial educational use) so that each state has at least one such channel “if technically feasible.” Id. The next sentence provides, without any mention of technical feasibility, that “the Commission shall, notwithstanding any other provision of law,” order the “reallocation” of a licensee’s VHF channel to an unserved state if that licensee “notifies” the Commission that it agrees to such reallocation. Id. PMCM argued that the statute stripped the Commission of all discretion to consider its two relocation USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 9 of 89 3 requests, confining the agency to the purely ministerial role of approving PMCM’s requested move of the VHF channels. According to PMCM, the statute requires such a result, even though it would permit PMCM to abandon service to viewers of the existing Nevada and Wyoming stations and to move its operations thousands of miles – without any FCC inquiry into whether the move is in the public interest and without any consideration of whether the moved stations’ operation in their new locations would interfere with the signals of existing stations. The Commission denied PMCM’s requests. Based on the text, structure, purposes, and legislative history of section 331(a), the Commission concluded that the second sentence of that provision (on which PMCM relied) applies only where an existing channel allocation precludes a new allocation of the same channel to an unserved state due to concerns about signal interference. Here, it is undisputed that PMCM’s existing channel allocations (for locations thousands of miles from New Jersey and Delaware) do not have that preclusive effect. Thus, the licensee’s requested moves were not required by section 331(a). The case presents a single question for the Court’s review: Whether the Commission reasonably construed section 331(a) of the Communications USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 10 of 89 4 Act when it denied PMCM’s requests to move its Nevada and Wyoming stations to New Jersey and Delaware. COUNTERSTATEMENT I. REGULATORY BACKGROUND Section 307(b) of the Communications Act, 47 U.S.C. § 307(b), provides, in general, that when the Commission exercises its authority to grant, renew, or modify station licenses in the public interest, it “shall make such distribution of licenses, frequencies, hours of operation, and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same.” To fulfill that mandate, the Commission long ago established the following criteria (in descending order of priority) for allotting television broadcast licenses: (1) “[t]o provide at least one television service to all parts of the United States;” (2) “[t]o provide each community with at least one television broadcast station;” (3) “[t]o provide a choice of at least two television services to all parts of the United States;” (4) “[t]o provide each community with at least two television stations;” and (5) to assign any remaining channels to communities based on population, geographic location, and the number of television services available to the community from stations located in other communities. Amendment of Section 3.606 of the USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 11 of 89 5 Commission’s Rules and Regulations, Sixth Report and Order, 41 F.C.C. 148, 167 (¶ 63) (1952) (“Television Assignments Sixth R&O”). New channel allotments applying these settled priorities customarily are made after notice-and-comment rulemaking proceedings and a public interest finding by the Commission that the allotment to the community would further the policy goals of section 307(b). 1 These goals reflect Congress’s intent “to create a nationwide, locally oriented system of broadcasting in which broadcasters are expected to serve the needs and interests of their communities.” Order ¶ 19 (J.A. 204). The Commission’s rules implementing section 307(b) likewise are designed to ensure broadcasters will not create radio interference for other stations, “as interference would deprive stations and their viewers of the full benefit of the allocated spectrum.” Id. (J.A. 204-05). Established Commission policy further provides that “when a frequency becomes available to a community for the first time, ‘the proper procedure to follow in such cases is to allow applications to be filed under’” 47 U.S.C. § 309(a), which provides for the grant of license applications when “the public interest, convenience and necessity will be served” thereby. 1 Letter from William T. Lake, Chief, Media Bureau, to PMCM TV, LLC, 24 FCC Rcd 14588, at page 3 (Media Bur. 2009) (“Bureau Order”) (J.A. 122) (citing Television Assignments Sixth R&O, 41 F.C.C. at 167). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 12 of 89 6 Bureau Order at 3 (J.A. 122) (quoting Amendment of Section 73.606(b), Table of Assignments, Television Broadcast Stations (Riverside and Santa Anna, California), 65 FCC 2d 920, 921, 924 (1977)). That is because “the resulting ‘opportunity for competing filings . . . allows [the Commission] to select the applicant which will best serve the public interest.’” Ibid. Under current law, when more than one party files an application for a channel, that selection is made through competitive bidding pursuant to 47 U.S.C. § 309(j). Order ¶ 19 (J.A. 204-05). Once a station is in operation, subsequent proposals that would result in withdrawal of service from a community “have long been considered to be prima facie inconsistent with the public interest. Order ¶ 20 & n.62 (J.A. 206); Bureau Order at 6 & n.30 (J.A. 125-26) (cataloguing precedent). Accordingly, such proposals generally “must be supported by a strong showing of countervailing public interest benefits.” Order ¶ 20 n.62 (J.A. 206). By the 1950s, all available commercial VHF channels (TV channels 2 through 13) had been allotted to East Coast metropolitan areas, including New York City, Philadelphia, and Baltimore. Order ¶ 3 (J.A. 197). VHF signals cover large areas, and the Commission’s rules therefore establish minimum distance separation requirements to ensure that the VHF channels USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 13 of 89 7 are technically feasible – i.e., do not cause harmful interference with other allotted stations. Order ¶ 3 & nn.5 & 6 (J.A. 197). As a consequence, given the VHF allotments already made to other East Coast communities, it was not technically feasible to allocate any commercial VHF channels to either New Jersey or Delaware. Id. In 1982, Congress enacted section 331(a) of the Communications Act, 47 U.S.C. § 331(a). That two-sentence provision, introduced by Senator Bradley to help remedy the absence at that time of any VHF commercial television stations in his home state of New Jersey, 2 provides, in the first sentence, that the Commission’s policy shall be “to allocate channels” for VHF commercial television broadcasting to ensure that at least one such channel is “allocated to each State, if technically feasible.” 47 U.S.C. § 331(a). The second sentence states, without express reference to technical feasibility, that “[i]n any case” in which a commercial VHF station licensee “notifies the Commission” that it will “agree to the reallocation of its channel” to a community in an unserved state, the Commission “shall, notwithstanding any other provision of law, order such reallocation. . . .” Ibid. 2 Multi-State Commc’ns, Inc. v. FCC, 728 F.2d 1519, 1521, 1523-24 (D.C. Cir. 1984). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 14 of 89 8 Prior to the events leading to this case, section 331(a) had been invoked only once in 30 years – immediately after it was enacted. RKO General, Inc. (“RKO”), the licensee of WOR-TV, Channel 9, New York, N.Y., was in the midst of a comparative license renewal proceeding at the time section 331(a) was enacted in 1982.3 Because the “reallocation” procedure set forth in the second sentence of section 331(a) enabled RKO to avoid the risk of losing its license for WOR-TV to a competing applicant, RKO “notified the Commission . . . that it agree[d] to the requirements of Section 331” and that it would “relocate its main studio to Secaucus, New Jersey,” while “its transmitter w[ould] remain atop the World Trade Center in New York City,” thereby allowing RKO to continue broadcasting within its existing coverage area. Petition to Reallocate VHF Television Channel 9 from New York, New York, to a City Within the City Grade Contour of Station WOR-TV, Report and Order, 53 Rad.Reg. 2d (P&F) 469, 470 (¶ 2) (1983) (“WOR-TV Reallocation Order”), aff’d, Multi-State Commc’ns, 728 F.2d 1519. The Commission granted the reallocation request in those circumstances, giving New Jersey “a first commercial VHF station,” and “moot[ing] the competing 3 Under the procedures in existence at the time, the filing of mutually exclusive applications for a license at the end of its term required comparative hearings to determine which applicant was better qualified. Among other things, such hearings could consider financial and character qualification issues. Multi-State Commc’ns, 728 F.2d at 1521. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 15 of 89 9 application” that was pending in the comparative proceeding. Id. at 470, 471 (¶¶ 2, 6). II. PMCM’S PROPOSAL TO MOVE ITS VHF STATIONS TO NEW JERSEY AND DELAWARE A. PMCM’s “Reallocation” Requests Pursuant to the DTV Delay Act, Pub. L. No. 111-4, 123 Stat. 112 (2009), full-power television stations were required to cease providing analog television service by June 13, 2009, and the Commission was directed to terminate all full-power analog television licenses. To accomplish this directive, the Commission established a multi-step process by which stations elected channels for post-transition digital television (“DTV”) operations. See Order ¶ 6 n. 21 (J.A. 199). On June 13, 2009, when WWOR-TV (formerly, WOR-TV) ceased operations on its analog Channel 9 as part of the DTV transition, New Jersey once again was left without a VHF commercial station. Order ¶ 6 (J.A. 199). The state of Delaware also lacked a VHF commercial station. At the same time, because WWOR-TV and other stations in the region had vacated their analog VHF channels in favor of digital Ultra-High Frequency (“UHF”) USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 16 of 89 10 channels, 4 it became technically possible to allocate new VHF channels to both New Jersey and Delaware under the first sentence of section 331(a), without causing harmful interference to existing stations. Order ¶ 24 (J.A. 208). On June 15, 2009, PMCM filed with the FCC “notifications” pursuant to section 331(a) asking the Commission to move to the East Coast two stations in the western United States that PMCM had recently acquired. Specifically, PMCM sought to move VHF Station KVNV(TV), Channel 3, in Ely, Nevada, to Middletown Township, New Jersey, and VHF Station KJWY, Channel 2, in Jackson, Wyoming, to Wilmington, Delaware. 5 PMCM claimed entitlement to these cross-country moves because neither New Jersey nor Delaware had any operational VHF commercial broadcast 4 Since June 12, 2009, a number of television stations in urbanized areas have requested the substitution of UHF channels for their assigned post- transition VHF channels because the “technical advantages of analog VHF channels . . . no longer exist in the current digital environment.” Bureau Order at 8 (J.A. 127) (citing Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, Sixth Report and Order, 12 FCC Rcd 14588, 14627 (1997)). For example, some VHF channels are subject to “higher ambient noise levels due to leaky power lines, vehicle ignition systems, and other impulse noise sources.” 12 FCC Rcd at 14627. 5 Letter from Donald J. Evans and Harry F. Cole to FCC Secretary (June 15, 2009) (“KVNV Application”) (J.A. 9); Letter from Donald J. Evans and Harry F. Cole to FCC Secretary (June 15, 2009) (“KJWY Application”) (J.A. 17). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 17 of 89 11 stations as of that date. KVNV Application at 2 (J.A. 10); KJWY Application at 1 (J.A. 17). Nave Broadcasting, LLC (“Nave”), the licensee of Station WKOB-LP in New York City, objected to the notifications. 6 Nave asserted that moving PMCM’s channels to New Jersey and Delaware would cause “massive interference” with stations in New York and Philadelphia, including its own station WKOB. Nave Objection at 4 (J.A. 43). Nave also argued that PMCM’s recent acquisitions of the Nevada and Wyoming stations evinced an attempt “intentionally [to] subvert[] a section of the Communications Act [section 331(a)] to its own financial advantage.” Id. at 2 (J.A. 41). Specifically, Nave pointed out that PMCM had finalized its acquisition of Station KJWY just three days before filing its application to move that station to Delaware. Id. Nave also asserted that PMCM’s application to acquire that station did not provide the FCC or interested persons any notice that PMCM intended only to provide “very short-term service to [the Jackson, Wyoming] community.” Id. Nave similarly asserted that PMCM had purchased Nevada Station KVNV only seven months before submitting its move request. Id. at 2-3 (J.A. 41-42). According to Nave, “[t]he object of Section 331 was to 6 Consolidated Informal Objection to Notifications (Dec. 4, 2009) (J.A. 34) (“Nave Objection”). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 18 of 89 12 make it easier for a New York VHF station to relocate to New Jersey without relocating its transmitter site,” not to move broadcasting facilities thousands of miles, leaving the existing community of license without service and causing harmful interference in the new community. Id. at 9 (J.A. 48); see generally id. at 4-9, 16-18 (J.A. 43-48, 55-57). In this regard, Nave asserted that PMCM’s proposed moves would “result in the complete loss of television service to residents of Ely, Nevada and Jackson, Wyoming.” Id. at 17 (J.A. 56). PMCM, in response, “acknowledge[d] that its operations in Delaware and New Jersey will negatively impact LPTV [low power television] stations in the vicinity,” but asserted that such stations, “by operation of law, must accept any such interference from a full service station.” 7 PMCM argued that section 331(a) left the Commission no discretion but to approve PMCM’s requests and grant it new licenses to operate stations in New Jersey and Delaware. Id. at 2-3 (J.A. 97-98). On December 18, 2009, the Commission’s Media Bureau denied PMCM’s requests. Bureau Order (J.A. 120). Addressing the text, purpose, structure, and legislative history of section 331(a), the Bureau concluded that 7 Letter from Donald J. Evans and Harry F. Cole to FCC Secretary, at 5 (Dec.12, 2009) (J.A. 100) (citing 47 C.F.R. § 74.702(b)) (“PMCM Response”). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 19 of 89 13 the direction to “reallocat[e]” channels in the second sentence of that provision was most reasonably interpreted “to mean the shifting of a channel allocation from one community to another community under circumstances where the channel cannot be used simultaneously at both locations due to interference concerns.” Bureau Order at 6 (J.A. 125). By contrast, PMCM’s operation of stations in Nevada and Wyoming did not preclude the FCC from allocating the same channels (3 and 2, respectively) in New Jersey or Delaware, and thus its requested moves were not governed by the reallocation procedure set forth in the second sentence of section 331(a). Bureau Order at 8 (J.A. 127). While denying PMCM’s requests, the Bureau simultaneously initiated rulemaking proceedings – consistent with normal allotment processes – to allot Channel 4 to Atlantic City, New Jersey and Channel 5 to Seaford, Delaware. Id. 8 The Bureau found that such action – which had become possible because stations in the region recently had vacated their VHF channels in favor of UHF channels as part of the DTV transition (see Order 8 See Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Atlantic City, New Jersey), Notice of Proposed Rulemaking, 24 FCC Rcd 14601 (Media Bur. 2009); Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Seaford, Delaware), Notice of Proposed Rulemaking, 24 FCC Rcd 14596 (Media Bur. 2009). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 20 of 89 14 ¶ 24 (J.A. 208)) – would fulfill the Congressional policy, expressed in the first sentence of section 331(a), of “allot[ting] at least one VHF channel to each State, if technically feasible.” Bureau Order at 8 (J.A. 127). B. This Court’s Dismissal of PMCM’s Petition For A Writ of Mandamus After the Bureau denied its requests, PMCM filed a petition for a writ of mandamus in this Court, seeking an order directing the Commission “to comply immediately with Section 331(a) by reallocating PMCM’s channels as indicated in PMCM’s notifications and issuing PMCM appropriate licenses.” In re PMCM TV, LLC, D.C. Circuit No. 10-1001, Petition for Writ of Mandamus at 21-22 (filed January 5, 2010). PMCM argued that the statute confined the FCC to a purely ministerial role and required the Commission to grant its requests. Id. at 11, 21. On May 12, 2010, the Court denied the mandamus petition without requesting a response from the Commission. The Court found, among other things, that “Petitioner has not demonstrated that the Federal Communications Commission has violated a clear duty to act.” Id., Order, D.C. Circuit No. 10-1001 (filed May 12, 2010). By separate orders filed August 6, 2010, the Court similarly denied PMCM’s requests for panel rehearing and rehearing en banc of the mandamus denial, with no member of the Court requesting a vote. Id., Orders, D.C. Circuit No. 10-1001 (filed Aug. 6, 2010). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 21 of 89 15 C. The Order On Review Shortly after PMCM filed its mandamus petition with this Court, on January 19, 2010, PMCM also filed an application for administrative review of the Bureau Order by the full Commission. 9 Nave again filed in opposition, 10 arguing that the Commission should affirm the Bureau’s reasonable interpretation of the term “reallocation” in section 331(a). Nave Opposition at 7 (J.A. 161). Nave contended that, unlike PMCM’s reading, the Bureau’s interpretation harmonized Congress’s goal of ensuring that every state had at least one VHF station with practical considerations, such as the avoidance of harmful interference. Id. at 3 (J.A. 157). Indeed, Nave pointed to an ex parte communication that PMCM filed with the FCC in which PMCM readily conceded that its interpretation of the statute “would preclude Commission discretion even in . . . extreme situations” that would “lead to unacceptable interference.” Id. at 3 n.5, Attachment A (PMCM 9/15/09 ex parte) at 3 (J.A. 157, 166) (emphasis added). 9 Contingent/Protective Application for Review of PMCM TV, LLC and Request for Prompt Related Relief (Jan. 19, 2010) (J.A. 130) (“Application for Review”). 10 Opposition to Contingent/Protective Application for Review of PMCM TV, LLC and Request for Prompt Related Relief (Feb. 3, 2010) (J.A. 155) (“Nave Opposition”). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 22 of 89 16 On September 15, 2011, the Commission issued the Order on appeal, denying PMCM’s application for administrative review and affirming the Bureau’s interpretation of section 331(a). Order ¶ 1 (J.A. 196). The Commission determined that the language and structure of section 331(a) reveal “a narrowly drawn statutory scheme.” Order ¶ 14 (J.A. 202). The Commission explained that the first sentence of section 331(a) directs it “to ‘allocate’ at least one commercial VHF channel to each state ‘if technically feasible.’” Id. (quoting section 331(a)). By contrast, the second sentence provides, without express reference to technical feasibility, that if a licensee notifies the Commission that it will agree to the “reallocation of its channel” to an unserved state, the Commission shall order such reallocation and issue a corresponding license “notwithstanding any other provision of law.” Id. (quoting section 331(a)). Reading these two provisions together, and in light of its traditional mechanisms for allocating channels in the public interest under 47 U.S.C. § 307(b), the Commission determined that Congress did not intend “for Section 331(a) to operate as a substitute for normal allocation procedures where, as here, the Commission can fulfill the statutory mandate of [the first sentence to] allocate[e] at least one commercial VHF channel to each state using those procedures.” Order ¶ 23 (J.A. 208). Those procedures protect USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 23 of 89 17 against unnecessary loss of service by other communities – such as Ely, Nevada and Jackson, Wyoming in this case – and ensure that all relevant policies are considered and that all interested parties are afforded an opportunity to seek a license when a newly allotted channel is available. Order ¶¶ 19, 20 & n.62 (J.A. 205, 206). The Commission found that, in contrast to the prior application of the section 331(a) reallocation procedure to WOR-TV in 1983 – when there was no technically feasible way to allocate a new VHF channel to New Jersey because existing channel allocations precluded new allocations to that state – normal allocation procedures are possible for New Jersey and Delaware today. Order ¶¶ 22-23 (J.A. 206-08). Indeed, the Commission noted, those allocation procedures have now been implemented to provide VHF channels to both New Jersey and Delaware. Id. ¶ 22 (J.A. 207). The Commission reasoned further that “the absence of a technical feasibility proviso in the second sentence does not mean that Congress meant to require the Commission to order reallocations that would cause interference to other channels.” Order ¶ 14 (J.A. 202). Rather, the Commission stated, it reflects an appreciation that the narrow circumstance to which the second sentence applies would never pose a risk of technical infeasibility. Id. That circumstance, the Commission concluded, was limited USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 24 of 89 18 to cases – like the earlier WOR-TV reallocation from New York City to Secaucus, New Jersey – that did not add a new broadcast signal to a geographic area, but rather changed an existing station’s official community of license by reallocating its channel to the new community. Id. ¶¶ 14-15 (J.A. 202-03); see also id. ¶¶ 4-5, 8-9 (J.A. 198-99, 200). D. Other Developments In March and April of 2010, respectively, the Commission allotted VHF Channel 4 to Atlantic City, New Jersey and VHF Channel 5 to Seaford, Delaware. 11 Both states, therefore, now have “not less than one [commercial VHF] channel.” 47 U.S.C. § 331(a). SUMMARY OF ARGUMENT Taking account of the statutory text, structure, purposes, and legislative history of section 331(a), the Commission reasonably construed the second sentence of that provision to apply solely in circumstances, not present here, in which interference concerns arising from an existing channel allocation preclude a new allocation of the same channel to an unserved state. That was the case with the WOR-TV reallocation in 1983, which was a major focus of 11 Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Atlantic City, New Jersey), Report and Order, 25 FCC Rcd 2606 (Video Div., Media Bur. 2010); Amendment of Section 73.622(i), Post-Transition Table of DTV Allotments, Television Broadcast Stations (Seaford, Delaware), Report and Order, 25 FCC Rcd 4466 (Video Div., Media Bur. 2010). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 25 of 89 19 the statute’s legislative history. See Order ¶¶ 3-5, 16 (J.A. 197-99, 203). In those circumstances, a broadcaster’s voluntary reallocation of its channel to the unserved state may be the only technically feasible way to provide VHF service to that state. The FCC’s reasonable construction of the statute is entitled to deference under Chevron USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). As PMCM conceded below, 12 its reading of the reallocation provision would compel the grant of reallocation requests in “any case” (Br. 20 (quoting section 331(a)), even if such reallocations would result in harmful interference with other stations. Such a reading “confuses ‘plain meaning’ with literalism.” Bell Atlantic Tel. Cos. v. FCC, 131 F.3d 1044, 1045 (D.C. Cir. 1997). The Commission reasonably rejected that reading because it ignores Congress’s clearly expressed intent, in the first sentence of section 331(a), that commercial VHF channels be allocated to unserved states “if technically feasible,” and would yield the absurd result of compelling technically infeasible moves to the detriment of the public. Order ¶¶ 14-15, 20 (J.A. 202-03, 205). Indeed, such a result would undermine the overriding statutory goal of having an expert agency (the FCC) allocate spectrum licenses in the public interest so as to avoid signal interference. See 12 PMCM 9/15/09 ex parte at 3 (J.A. 166). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 26 of 89 20 Public Citizen v. U.S. Dept. of Justice, 491 U.S. 440, 454 (1989) (statutory words “of general meaning” should be construed to avoid “absurd results”) (internal quotation marks omitted). PMCM claims that the Commission’s own interpretation of the statute is inconsistent with precedent and would permit harmful interference. Br. 35- 45. But PMCM demonstrates no such inconsistency, and its contention that the Commission’s interpretation would allow reallocations that could cause harmful interference is not properly before the Court because it was not first presented to the agency as required by 47 U.S.C. § 405(a). In any event, the Commission reasonably explained that the reallocation procedure specified in the second sentence of section 331(a) applies to a defined universe of cases – such as the WOR-TV reallocation in 1983 – in which “technical feasibility is assured.” Order ¶ 14 (J.A. 202). ARGUMENT I. THE ORDER IS REVIEWED UNDER DEFERENTIAL STANDARDS. PMCM’s challenge to the FCC’s interpretation of section 331(a) of the Communications Act is governed by Chevron USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837. Under Chevron, if “Congress has directly spoken to the precise question at issue,” the Court “must give effect to the unambiguously expressed intent of Congress.” Id. at 842-43. In determining USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 27 of 89 21 whether Congress has spoken unambiguously, the Court uses “the customary statutory interpretation tools of text, structure, purpose, and legislative history.” California Metro Mobile Commc’ns, Inc. v. FCC, 365 F.3d 38, 44- 45 (D.C. Cir. 2004) (internal quotation marks omitted); accord Bell Atlantic Tel. Cos. v. FCC, 131 F.3d at 1047. If “the purported ‘plain meaning’ of a statute’s word or phrase happens to render the statute senseless,” that is evidence of “ambiguity rather than clarity.” Alarm Indus. Commc’ns Comm. v. FCC, 131 F.3d 1066, 1068 (D.C. Cir. 1997). And “if the statute is silent or ambiguous with respect to the specific issue, the question for the [Court] is whether the agency’s answer is based on a permissible construction of the statute.” Chevron, 467 U.S. at 843. The Commission likewise is entitled to substantial deference in construing its own precedent. Cassel v. FCC, 154 F.3d 478, 483 (D.C. Cir. 1998). The Commission’s “interpretation of the intended effect of its own orders is controlling unless clearly erroneous.” MCI Worldcom Network Servs., Inc. v. FCC, 274 F.3d 542, 547 (D.C. Cir. 2001). PMCM cannot overcome the high burden imposed on parties challenging agency action. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 28 of 89 22 II. THE COMMISSION’S READING OF SECTION 331(a) COMPORTS WITH THE TEXT, STRUCTURE, PURPOSES, AND LEGISLATIVE HISTORY OF THAT PROVISION. The Commission acted well within its discretion in rejecting PMCM’s argument that the agency had a non-discretionary duty under the second sentence of 47 U.S.C. § 331(a) to relicense Nevada Station KVNV(TV), Channel 3, in New Jersey and Wyoming Station KJWY, Channel 2, in Delaware. Specifically, PMCM argues that its “reallocation” notifications qualified for non-discretionary treatment, because both New Jersey and Delaware were without VHF channels at the time of the notifications and the language of the second sentence applies to “any case” in which a VHF licensee notifies the Commission that it agrees to the “reallocation” of its channel to an unserved state. Br. 16, 20 (quoting section 331(a)). As the Commission explained, the term “reallocation” in the second sentence of section 331(a) is properly construed as referring to the “shifting of a channel from one community to another community under circumstances where the channel cannot be used simultaneously at both locations because such dual operations would cause interference.” Order ¶ 1 (J.A. 196). Here, there is no dispute that the operation of PMCM’s stations in Nevada and Wyoming has no preclusive effect on use of the same channels in New Jersey or Delaware. Accordingly, the Commission correctly determined that section USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 29 of 89 23 331(a) does not “allow[] PMCM to obtain licenses to move its operations from Nevada and Wyoming to New Jersey and Delaware.” Order ¶ 24 (J.A. 208). Section 331(a) provides: It shall be the policy of the Federal Communications Commission to allocate channels for very high frequency commercial television broadcasting in a manner which ensures that not less than one such channel shall be allocated to each State, if technically feasible. In any case in which [a] licensee of a very high frequency commercial television broadcast station notifies the Commission to the effect that such licensee will agree to the reallocation of its channel to a community within a State in which there is allocated no very high frequency commercial television broadcast channel at the time [of] such notification, the Commission shall, notwithstanding any other provision of law, order such reallocation and issue a license to such licensee for that purpose pursuant to such notification for a term of not to exceed 5 years as provided in section 307(d) of the Communications Act of 1934. 47 U.S.C. § 331(a). The FCC explained that “[a]n examination of the wording and structure of Section 331(a) reveals a narrowly drawn statutory scheme.” Order ¶ 14 (J.A. 202). Specifically, “[t]he first sentence of Section 331(a) directs the Commission to ‘allocate’ at least one commercial VHF channel to each state ‘if technically feasible.’” Ibid. The second sentence directs the Commission, “upon a licensee’s notification to the Commission that it is willing to agree to the ‘reallocation of its channel’ to an unserved state, to order such USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 30 of 89 24 reallocation and issue a license for the reallocated channel, ‘notwithstanding any other provision of law.’” Ibid. Thus, the agency explained, “Congress directed the Commission to allocate at least one commercial VHF channel to each state, using normal allocation procedures, where it is technically feasible to do so.” Ibid. (emphasis added). By contrast, where it is “not technically feasible to establish [that] objective using normal procedures, Congress provided an alternative mechanism” – the mechanism that PMCM invokes here – “that was intended to facilitate reallocations to unserved states by removing the comparative hearing requirements that otherwise would put a licensee’s existing operations at risk and inhibit voluntary reallocations.” Ibid. 13 Accordingly, the Commission reasonably determined that where, as here, normal allocation procedures with normal public-interest protections can be employed to implement the first sentence of section 331(a) by “allocating” a new VHF channel in an unserved state, Congress did not intend the second sentence to apply. Order ¶ 14 (J.A. 202); see also id. ¶ 23 (J.A. 13 See Bureau Order at 5 (J.A. 124) (noting that, at the time section 331 was enacted, “the Commission regarded a petition to amend the TV Table of Allotments to change an allotment’s community of license as an event triggering an opportunity for all interested parties to file applications for the new allotment, even when the channel was already occupied by a station and no new service would result from the change in community of license because the station already served that area”). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 31 of 89 25 208) (“We do not think Congress intended for Section 331(a) to operate as a substitute for normal allocation procedures where, as here, the Commission can fulfill the statutory mandate of allocating at least one commercial VHF channel to each state using those procedures.”). Instead, the FCC concluded that the second sentence of section 331(a) applies only when existing VHF stations in other states make it infeasible to allocate a new VHF channel to the unserved state. In that situation, as in the case of WOR-TV in the early 1980s, the statute permits the licensee of a VHF station with an existing broadcast footprint that covers communities in the unserved state to reallocate its channel to the unserved state. That interpretation of the second sentence of section 331(a) – which the Commission described as “involving reallocations of channels to nearby communities where the two allocations are mutually exclusive” – would reach only that subset of cases in which “technical feasibility is assured” and harmful interference would never be a problem. Order ¶ 14 (J.A. 202). As the Commission noted, that common-sense interpretation explained why “Congress did not believe it was necessary to require technical feasibility explicitly” in the second sentence of section 331(a). Ibid. PMCM’s expansive reading of the second sentence, by contrast, would render the first and second sentences of section 331(a) internally inconsistent USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 32 of 89 26 and yield absurd results. If the second sentence were read to reach “any case” in which a VHF licensee seeks to move its station to a state with no VHF station, as PMCM asserts (Br. 16, 20 (quoting section 331(a)), it not only would undermine Congress’s express concern, reflected in the first sentence, that technical feasibility be assured, but also would risk the absurd result of mandating that the Commission approve new broadcast service that provides a poor quality signal while impairing the signal of other area stations, as well. See, e.g., Public Citizen, 491 U.S. at 454 (despite use of “broad” statutory language, “consideration of the whole legislation, or of the circumstances surrounding its enactment, or of the absurd results which follow from giving such broad meaning to the words, makes it unreasonable to believe the legislator intended to include the particular act”) (internal quotation marks omitted). The Commission reasonably concluded that Congress intended to avoid this result through its use of the term “reallocation” in the second sentence. It noted that, prior to the enactment of section 331(a), the Commission had used that term to address circumstances, such as the eventual WOR-TV channel reallocation, in which the prior channel allotment and the reallocated channel were mutually exclusive and reallocation, therefore, would avoid the risk of harmful interference. See Order ¶ 21 (J.A. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 33 of 89 27 206) (noting that in its pre-section 331 “New Jersey Inquiry, . . . the Commission clearly distinguished between an allotment, i.e., the drop-in of a . . . channel 8 to New Jersey, and the ‘reallocation’ of existing channels in New York to New Jersey”) (citing Petition for Inquiry into the Need for Adequate Television Service for the State of New Jersey, 58 FCC 2d 790, 802-04 (1976)); id. ¶ 14 (J.A. 202) (noting that “technical feasibility is assured” in such circumstances). PMCM contends (Br. 39-42) that the Commission misread its precedent in attributing that narrow meaning to the term “reallocation.” However, the only pre-enactment decision that PMCM cites in support of its argument is SRC, Inc., San Angelo, TX, 21 FCC 2d 901, 907 (1970). That case is consistent with the Commission’s description of its precedent because it involved the “reallocation” of a previously deleted Texas channel back to the same community. Thus, it did not involve “the deletion of a channel from one community and the addition of the same channel in another community where simultaneous operation on that channel in both communities would be feasible.” Order ¶ 21 (J.A. 206). Nor are the post-enactment decisions PMCM cites (Br. 39-40) inconsistent with the Commission’s view of its USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 34 of 89 28 earlier precedent: each involved proposed “reallocations” between mutually exclusive communities. 14 According to PMCM, the Commission’s conclusion that “reallocation” has had a narrow consistently-defined meaning also is undermined “by the Commission’s own acknowledgement” that it has used the term “allocate” in a “‘colloquial, i.e., erroneous’ manner.” Br. 40 (quoting Oversight of the Radio and TV Broadcast Rules, 1 FCC Rcd 849, 849 (Media Bur. 1986)). Not so. The cited order addressed the Commission’s prior misuse of the “terms ‘allotment’ and ‘assignment’” and did not identify any misuse of the terms “allocations” or “reallocations.” Oversight of the Radio and TV Broadcast Rules, 1 FCC Rcd at 849 (¶4). PMCM provides no basis upon which to overcome the deference to which the Commission is entitled in 14 See Amendment of Section 73.606(b), Table of Allotments, Television Broadcast Stations (Montrose and Scranton, Pennsylvania), 3 FCC Rcd 1061 (Media Bur. 1988); Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, 23 FCC Rcd 4220, 4283 (¶ 162) (2008) (reciting Johnstown to Jeannette, Pennsylvania reallocation); Amendment of Section 73.606(b), Table of Allotments, TV Broadcast Stations (Snyder, Texas), 6 FCC Rcd 5791 (1991). Each of the cited cases involved UHF stations. Rule 73.610(b)(1), 47 C.F.R. § 73.610(b)(1), which governed analog channel allotments, delineated the minimum UHF station separation distances for Zone 1 (which includes Pennsylvania) and Zone 2 (which includes Texas). Because those minimum separation requirements were not met in the cited cases, the proposed reallocations involved mutually exclusive communities. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 35 of 89 29 interpreting its own prior orders. MCI WorldCom Network Servs., Inc. v. FCC, 274 F.3d at 547. The legislative history of section 331(a) also strongly supports the Commission’s reading of “reallocation.” Although PMCM argues that the statute’s Conference Report reflects a Congressional intent that the reallocation provision apply to “‘any licensee’ in ‘a’ state, without limitation as to the location of that licensee’s station,” Br. 23 (quoting H.R. Rep. No. 760, 97th Cong., 2d Sess. 690 (1982), reprinted in 1982 U.S.C.C.A.N. 1453 (“Conference Report”)), that report also expressed an intent that a licensee seeking to invoke the reallocation procedure under section 331 “will move its studio and offices to and operate for the public benefit of the unserved State.” 1982 U.S.C.C.A.N. 1453 (emphasis added). The quoted language makes no reference to any movement of the licensee’s transmission facilities. Similarly, as the Commission noted, Senator Bradley explained that under the legislation he authored “‘the reallocation of a license to New Jersey will mean that the licenseholder will move its studios and offices to New Jersey.’” Order ¶ 5 (J.A. 198) (quoting 128 Cong. Rec., S10946 (Aug. 19, 1982)). The notable absence of any reference to the relocation of transmission facilities supports the Commission’s construction of section 331(a). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 36 of 89 30 Indeed, in FCC administrative proceedings a year before section 331 was enacted, Senators Bradley and Williams of New Jersey had filed a petition on behalf of their state “‘proposing that [WOR-TV’s channel 9] be reallocated [from New York City] to any of several communities in New Jersey over which the current operation [of WOR-TV] places a city grade signal,’” while noting that their proposal would not require the physical relocation of the channel 9 transmission facilities. Order ¶ 4 (J.A. 198) (quoting Petition to Reallocate VHF-TV Channel 9 from New York, New York, to a City Within the City Grade Contour of WOR-TV, 84 FCC 2d 280, 282 (1981)). The enactment of section 331 the following year effectively provided WOR-TV the same limited relief the New Jersey Senators had sought unsuccessfully through administrative action. There is every indication in the surrounding circumstances that section 331(a) was intended specifically to address WOR-TV’s station. See Order ¶¶ 3-5, 16 (J.A. 197- 99, 203) (detailing legislative history). There is no indication in the statute’s legislative history that Congress contemplated any possible application of section 331 that could cause harmful interference, as could occur if the statute were read to require non-discretionary relocation of broadcast transmission facilities from anywhere in the county to an unserved state. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 37 of 89 31 Even if PMCM were correct that “reallocation,” in other contexts, would be construed more broadly, the Commission’s reading was entirely reasonable in the specific context of section 331(a), because it reconciles the first and second sentences of that provision. This Court’s Bell Atlantic decision is instructive. That case examined two subsections of 47 U.S.C. § 272. The first subsection, section 272(a), provides that, “normally, a Bell Operating Company (‘BOC’) may not provide origination of most communications services between Local Access and Transport Areas (‘interLATA [or long-distance] services’) except through a separate affiliate.” Bell Atlantic, 131 F.3d at 1045. The second subsection, section 272(e)(4), states that a BOC “‘may provide . . . interLATA … facilities or services to its interLATA affiliate if such services or facilities are made available to all carriers at the same rates.’” Id. (quoting section 272(e)(4)). The Court noted that, “[a]t first blush, the second provision appears to give back what the first section takes away, i.e., a BOC’s ability to provide interLATA origination services in a physically integrated network with its local exchange services.” Id. To avoid that “anomalous result,” however, the FCC interpreted section 272(e)(4) to include an additional caveat (reflected in the highlighted language that follows) – i.e., that a BOC “may provide any interLATA services ‘it is otherwise authorized to provide,’ so long as it USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 38 of 89 32 provides them on a non-discriminatory basis.” Id. (quoting FCC order). Rejecting the BOC petitioners’ claim that “the plain meaning of § 272(e)(4) precludes the Commission’s interpretation because the literal meaning of the words ‘may provide any’ operates as an unrestricted affirmative grant of authority for them to deliver integrated interLATA services,” the Court found that petitioners’ argument “confuses ‘plain meaning’ with literalism.” Id. The Court concluded that the statute was ambiguous and upheld the Commission’s reasonable construction. Id. at 1047-50. A similar result should obtain here. Like the petitioners’ argument in Bell Atlantic, PMCM’s contention (Br. 20) that the second sentence of section 331(a) applies to “any case” in which a licensee agrees to the reallocation of its VHF channel to an unserved state “confuses ‘plain meaning’ with literalism.” 131 F.3d at 1045. It would negate Congress’s expressed concern about technical feasibility, i.e., preventing harmful interference. Indeed, because that “purported ‘plain meaning’ of [section 331(a)] happens to render the statute senseless, we are encountering ambiguity rather than clarity,” permitting the Commission to interpret the provision in a manner that is reasonable in light of its overall language, structure, purpose and legislative history. Alarm Indus. Commc’ns v. FCC, 131 F.3d at 1068. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 39 of 89 33 PMCM attempts to explain Congress’s express concern with technical feasibility in the first sentence of section 331(a) – and the absence of any such stated concern in the second sentence – by contending that the second sentence only applies where the Commission first has failed to implement Congress’s command in the initial sentence to ensure that, if technically feasible, each state has a VHF channel. Br. 28; see also Br. 45 (describing the second sentence of section 331(a) as a “back-up mechanism”). But section 331(a), by its terms, does not provide for sequential attempts to implement the first sentence and then the second. Any eligible licensee (such as the licensee in the Multi-State case) could have invoked the reallocation procedure on the first day after section 331 was enacted in 1982, without waiting for the Commission to “fail[]” (Br. 28) to implement the first sentence. Thus, under PMCM’s reading, “Congress’ directive in the first sentence . . . to consider technical feasibility . . . would be rendered superfluous if the second sentence of the statute were interpreted to require the Commission to reallocate a channel despite technical infeasibility.” Bureau Order at 6 n.27 (J.A. 125); see also Order ¶ 14 (J.A. 202) (noting that PMCM “has suggested no reason why Congress would be concerned about technical feasibility in the first sentence of section 331(a) . . . but completely unconcerned about technical feasibility in the second sentence”). Indeed, USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 40 of 89 34 PMCM’s own actions in this case undermine the interpretive theory advanced in its appellate brief: PMCM did not wait for the FCC to “fail” to allocate a channel under the first sentence; instead, it attempted to foreclose the normal notice-and-comment process by rushing to submit a “reallocation” request two days after New Jersey lost its analog VHF channel. 15 PMCM argues that its “proposed reallocations would not in any event cause any interference to existing stations entitled to protection.” Br. 20. That argument misses the point. Whether or not PMCM’s requested moves would have caused harmful interference, PMCM concedes that, under its reading of the statute, the Commission would be required to grant any move request even if it would cause harmful interference to existing stations. PMCM 9/15/09 ex parte at 3 (J.A. 166). The FCC reasonably took account of the ramifications of PMCM’s reading of the statute (see Bureau Order at 7 n.33 (J.A. 126)) – particularly where that reading would undermine the core purpose of FCC spectrum allocations. See Red Lion Broad. Co. v. FCC, 395 15 Relatedly, PMCM asserts that, notwithstanding implementation issues associated with the DTV transition, the Commission could have invoked the first sentence of section 331(a) to allocate new VHF channels to New Jersey and Delaware earlier than it did. Br. 32-34. That claim is baseless for the reasons the Commission outlined. See Order ¶ 22 (J.A. 206-07). And it has no bearing on the interpretive question in this case – whether PMCM’s request to move its Nevada and Wyoming channels to New Jersey and Delaware is governed by the second sentence of section 331(a). USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 41 of 89 35 U.S. 367, 376 (1969) (“Without government control, the [broadcast] medium would be of little use because of the cacophony of competing voices, none of which could be clearly and predictably heard.”). PMCM also claims that the Commission’s construction is unreasonable, because, even on its own terms, it allegedly would not prevent harmful interference in certain circumstances. Br. 42-43. Because this argument was not raised below, it is barred by 47 U.S.C. § 405(a), which prevents the Court “‘from considering any issue of law or fact upon which the Commission has been afforded no opportunity to pass.’” American Family Ass’n v. FCC, 365 F.3d 1156, 1166 (D.C. Cir. 2004) (quoting section 405(a)); accord AT&T Corp. v. FCC, 317 F.3d 227, 235-36 (D.C. Cir. 2003). In any event, PMCM’s argument fails on the merits. As noted above, because the second sentence of section 331(a) – in stark contrast with the preceding sentence – makes no mention of technical feasibility, the Commission concluded that that sentence addresses a universe of applications in which “technical feasibility is assured” and thus where harmful interference would never be a problem. Order ¶ 14 (J.A. 202). PMCM itself offered no plausible alternative reading, since, by PMCM’s lights, the statute imposes upon the Commission the ministerial duty of granting “reallocations” of channels from anywhere in the country to unserved states regardless of USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 42 of 89 36 whether the reallocated channel causes harmful interference. PMCM 9/15/09 ex parte at 3 (J.A. 166). PMCM also errs in contending that the Commission’s Order impermissibly rewrites the second sentence of section 331(a) to “alter . . . the term ‘notwithstanding any other provision of law’ to read ‘notwithstanding some, but not all, other provisions of law.’” Br. 29. The Commission did no such thing. Rather, it reasonably construed the statute to mean that “reallocations” within the meaning of the second sentence must be granted on a non-discretionary basis “notwithstanding” the competitive selection process and the section 307(b) criteria that otherwise would apply. Order ¶¶ 14, 16 (J.A. 202, 203). Focusing on the Commission’s explanation that “reallocation” should be construed in light of Congress’s intent to remove the impediment of comparative hearings for licensees willing to reallocate their channels to New Jersey, PMCM contends that the Commission mistakenly assumed that only nearby stations faced such a risk in changing their community of license. Br. 35-36 (citing Order ¶ 16 (J.A. 203)). PMCM argues that, because licensees of distant channels faced the same risk when changing their communities of license, Congress’s intent to remove that risk provides no reasonable basis for the Commission to interpret “reallocation” narrowly. Id. PMCM misreads USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 43 of 89 37 the Order. The Commission stated that the licensee of a distant channel that wanted to operate on the same channel (say, Channel 2) in New Jersey or Delaware “could have petitioned the Commission to allocate a new channel [2] to New Jersey or Delaware had it been technically feasible for the Commission to do so” with no impact on the licensee’s existing distant license. Order ¶ 16 (J.A. 203); see also Bureau Order at 5 (J.A. 124) (noting that the licensee of a distant channel could “petition for a new channel allocation, not a reallocation” without putting the license for its existing distant channel at risk). By contrast, the licensee of a nearby Channel 2 station could not obtain the allocation of a new simultaneously-operating channel on the same frequency in either New Jersey or Delaware, because of harmful interference with its existing channel. In that situation, rather than requesting allocation of a “new channel,” it could request a “reallocation” pursuant to the second sentence of section 331(a). Absent the “alternative mechanism” (Order ¶ 14 (J.A.202)) provided by that sentence, at the time section 331(a) was enacted, USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 44 of 89 38 the licensee would have risked losing its license in a comparative hearing. 16 The Commission’s interpretation of “reallocation” properly addresses that limited concern. PMCM next contends that the Commission’s construction is inconsistent with this Court’s observation in Multi-State that “‘[t]he plain language of section 331 commands that if any licensee volunteers to move to an unserved state, ‘the Commission shall, notwithstanding any other provision of law, order such reallocation and issue a license. . . .’” Br. 17 (quoting Multi-State, 728 F.2d at 1524) (emphasis removed). But, unlike this case, no allocation of a new channel using normal procedures – pursuant to the first sentence of section 331(a) – was technically feasible in Multi-State. Order ¶ 23 (J.A. 208). Moreover, the licensee that agreed to the reallocation of its channel in Multi-State was merely moving its offices and studios from New York City to Secaucus, New Jersey, and was not moving its broadcast transmission facilities or otherwise presenting any new threat of harmful 16 PMCM notes that, subsequent to the enactment of section 331, the Commission amended its rules to allow a licensee to seek reallocation of its channel to a new community of interest without placing its existing authorization at risk, so long as the new community of interest is mutually exclusive with the existing allotment. Br. 37 (citing Modification of FM and TV Authorizations to Specify a New Community of License, 4 FCC Rcd 4870, 4872-73 (¶ 22) (1989)). That change has no bearing on the meaning of section 331, which was designed to remove impediments to reallocation that existed at the time section 331 was enacted in 1982. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 45 of 89 39 interference to existing stations. WOR-TV Reallocation Order, 53 Rad.Reg. 2d at 470 (¶ 2). “[I]ts transmitter w[ould] remain atop the World Trade Center in New York City,” thereby allowing the licensee to continue broadcasting within its existing coverage area. Ibid. Accordingly, that licensee’s request was governed by the second sentence of section 331(a). The language from Multi-State on which PMCM relies responds to the claim that, notwithstanding the applicability of the second sentence of section 331(a) to the licensee’s reallocation request, the Commission nevertheless should have “conduct[ed] a comparative hearing to determine which of two or more competing license applicants would better service the public interest.” Id. at 1524. It thus has no bearing on PMCM’s request to move its stations thousands of miles, which the Commission reasonably determined is not governed by the second sentence of section 331(a). Indeed, although the Court in Multi-State “did not examine or construe the term ‘reallocate,’” its analysis of the term “allocate” strongly supports the Commission’s conclusion in the Order that the second sentence of section 331(a) should not be interpreted in isolation, divorced from the preceding sentence. Order ¶¶ 17, 18 (J.A. 203-04). See Multi-State, 728 F.2d at 1522 (rejecting appellants’ construction of “allocated” because statutory USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 46 of 89 40 interpretation “requires more than a superficial and isolated examination of the statute’s plain words”). Finally, PMCM argues that the Commission’s construction of section 331(a) is inconsistent with the statute’s purpose “‘to provide each “unserved” state with an operating commercial VHF station’” because it reduces the pool of parties potentially eligible to seek mandatory “reallocation.” Br. 24-25 (quoting Multi-State, 728 F.2d at 1524). PMCM’s reading, however, would effectively eliminate the Commission’s ability to remedy the problem of unserved areas through the first sentence of section 331(a) – a provision that itself otherwise would maximize the pool of potential licensees. Nothing in the text of the statute or the legislative history suggests that Congress intended to maximize the pool of reallocation requesters at the expense of other goals – including the goal of avoiding harmful interference in license allocations. Although PMCM’s reading would increase the number of potential parties requesting moves under the second sentence of section 331(a), it also would undermine Congress’s concerns about technical USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 47 of 89 41 feasibility. A faithful reading of the statute does not require such a self- defeating result. Public Citizen, 491 U.S. at 454. 17 * * * In sum, the Commission reasonably concluded that the reallocation procedure specified in the second sentence of section 331(a) is limited to situations involving the “shifting of a channel from one community to another community under circumstances where the channel cannot be used simultaneously [by different broadcasters] at both locations because such dual operations would cause interference.” Order ¶ 1 (J.A. 196). Because it is undisputed that the operation of PMCM’s stations in Nevada and Wyoming would not have precluded allocation of the same television channels for use in New Jersey and Delaware, the Commission correctly determined that section 331(a) did not require it to grant PMCM’s requests. 17 PMCM similarly contends that the Commission’s construction “would inexplicably preclude . . . non-contiguous states – Alaska and Hawaii – and most U.S. territories” from relief under the second sentence of section 331(a). Br. 43-44. That result, however, is hardly “inexplicable.” If a non- contiguous state or territory is without a VHF station, resort to the reallocation procedure in the second sentence would be entirely unnecessary: there would be no technical feasibility impediment (stemming from out-of- state or territory VHF stations) to allocating a new VHF channel to that state or territory. USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 48 of 89 42 CONCLUSION For the foregoing reasons, the Court should deny PMCM’s appeal. Respectfully submitted, AUSTIN C. SCHLICK GENERAL COUNSEL PETER KARANJIA DEPUTY GENERAL COUNSEL RICHARD K. WELCH DEPUTY ASSOCIATE GENERAL COUNSEL /s/ Laurence N. Bourne LAURENCE N. BOURNE COUNSEL FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 (202) 418-1740 February 2, 2012 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 49 of 89 2 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PMCM TV, LLC, APPELLANT, v. FEDERAL COMMUNICATIONS COMMISSION, APPELLEE. NO. 11-1330 CERTIFICATE OF COMPLIANCE Pursuant to the requirements of Fed. R. App. P. 32(a)(7), I hereby certify that the accompanying “Brief for Appellee” in the captioned case contains 8,820 words. /s/ Laurence N. Bourne Laurence N. Bourne Counsel Federal Communications Commission Washington, D.C. 20554 (202) 418-1740 (Telephone) (202) 418-2819 (Fax) February 2, 2012 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 50 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 51 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 52 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 53 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 54 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 55 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 56 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 57 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 58 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 59 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 60 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 61 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 62 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 63 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 64 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 65 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 66 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 67 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 68 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 69 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 70 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 71 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 72 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 73 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 74 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 75 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 76 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 77 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 78 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 79 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 80 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 81 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 82 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 83 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 84 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 85 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 86 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 87 of 89 USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 88 of 89 11-1330 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PMCM, TV, LLC, Appellant v. Federal Communications Commission, Appellee. CERTIFICATE OF SERVICE I, Laurence N. Bourne, hereby certify that on February 2, 2012, I electronically filed the foregoing Brief for Appellee with the Clerk of the Court for the United States Court of Appeals for the D.C. Circuit by using the CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. Donald J. Evans Harry F. Cole Anne G. Crump Fletcher, Heald & Hildreth, P.L.C. 1300 N. 17 th Street -11 th Floor Arlington, VA 22209 Counsel for PMCM TV, LLC /s/ Laurence N. Bourne USCA Case #11-1330 Document #1356260 Filed: 02/02/2012 Page 89 of 89