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Advanced Communications Corporation v. Federal Communications Commission

July 30, 2004

ADVANCED COMMUNICATIONS CORPORATION, APPELLANT
v.
FEDERAL COMMUNICATIONS COMMISSION, APPELLEE
ECHOSTAR SATELLITE CORPORATION, INTERVENOR



Appeal of an Order of the Federal Communications Commission

Before: Rogers and Garland, Circuit Judges, and Williams, Senior Circuit Judge.

The opinion of the court was delivered by: Garland, Circuit Judge

Argued January 16, 2004

Advanced Communications Corporation (ACC) appeals from an order of the Federal Communications Commission (FCC) denying the company's petition to reopen the record in a proceeding closed nearly a decade ago. Because we conclude that the Commission did not abuse its discretion in declining to reopen, we affirm the decision below.

I.

The history of the Commission's earlier ACC proceeding is set forth in detail in our previous opinion involving this dispute, and we therefore provide only the necessary background here. See Advanced Communications Corp. v. FCC, 84 F.3d 1452, 1996 WL 250460 (D.C. Cir. May 3, 1996) (unpublished table decision) ( Advanced I ).

In 1984, the FCC awarded ACC a conditional construction permit to provide direct broadcast satellite (DBS) service. In the interest of "ensur[ing] the prompt use of DBS spectrum resources," id. at *1, FCC rules required ACC to satisfy two due diligence requirements applicable to all DBS permittees. First, ACC had to " `begin construction or complete contracting for construction' " within one year of receiving the permit. Id. (quoting 47 C.F.R. § 1001.19(b)). Second, ACC had to commence operating its system within six years of receiving the construction permit. Id. The company fulfilled the first requirement, and in 1986 it was assigned channels at two orbital locations. Despite a four-year extension, however, ACC failed to meet the second requirement. In April 1995, the FCC's International Bureau denied ACC's request for a second four-year extension to construct, launch, and operate a DBS system, and it cancelled ACC's construction permit.

On October 16, 1995, the Commission affirmed the denial of the extension and the cancellation of ACC's permit. Advanced Communications Corp., 11 FCC Rcd 3399, 3400 (1995) (hereinafter 1995 Order). Commissioners Quello and Barrett dissented. Id. at 3430, 3435. In a notice of proposed rulemaking published shortly thereafter, the Commission proposed to reassign the reclaimed channels and orbital locations (hereinafter collectively referred to as "spectrum") by auction. In the Matter of Revision of Rules and Policies for the Direct Broadcast Satellite Service, 11 FCC Rcd 1297, 1298 (1995). Commissioner Barrett again dissented. Id. at 1349. The proposal was ultimately adopted, and MCI Communications and EchoStar Communications won the subsequent auction for a total price of more than $700 million. MCI later assigned its spectrum to EchoStar, which currently provides DBS service to millions of customers nationwide.

ACC appealed the 1995 Order to this court, making three arguments: (1) the FCC's decision constituted an arbitrary departure from the agency's precedents; (2) the FCC failed to provide a reasoned explanation for its decision; and (3) in deciding to deny ACC's requested extension, the FCC improperly considered the revenues that would be gained from the auction of ACC's spectrum. Advanced I, 1996 WL 250460, at *2. The last argument, of particular importance here, was based on a claim that consideration of revenues by the FCC would violate section 309(j)(7)(A) of the Communications Act, which provides:

In making a decision pursuant to section 303(c) of this title to assign a band of frequencies to a use for which licenses or permits will be issued pursuant to this subsection, ... the Commission may not base a finding of public interest, convenience, and necessity on the expectation of Federal revenues from the use of a system of competitive bidding under this subsection.

47 U.S.C. § 309(j)(7)(A).

On May 3, 1996, this court rejected ACC's appeal. We concluded that the FCC's decision was consistent with its precedents, and that it included a reasoned explanation for the disposition. Advanced I, 1996 WL 250460, at *3-4. We also found that, "[w]hile the Commission was aware that substantial sums could be realized from the sale of any orbital slots and channels recovered from ACC, the Order d[id] not base its denial of ACC's renewal application on the expectation of such revenues." Id. at *4 (internal citation omitted). "Rather," we said, "the Commission's decision was predicated on ACC's failure to achieve any concrete progress toward the actual construction of its DBS system during its first extension period." Id. (internal quotation marks omitted). And we concluded that ACC had "pointed to nothing in the record that is sufficient to overcome the strong presumption of agency regularity." Id. In light of that conclusion, we found it unnecessary to decide "whether the Commission was in fact barred by law from taking into account the expected impact on federal revenues." Id.

ACC continued to pursue its case in other fora. In 1998, ACC sued MCI in Arkansas federal court, alleging tortious interference with contract and again claiming that the FCC had denied ACC's request for an extension because of the revenues that an auction would bring. The district court held that Advanced I collaterally estopped ACC from relitigating the revenues issue, Advanced Communications Corp. v. MCI Communications Corp., 101 F. Supp. 2d 1154, 1159-60 (E.D. Ark. 2000), and the Eighth Circuit affirmed, 263 F.3d 793, 795 (8th Cir. 2001). In October 2001, ACC petitioned this court for a writ of mandamus directing the FCC to invalidate the 1995 Order in light of two affidavits that it had recently obtained from (by then) former Commissioners Barrett and Quello. We denied the petition, declaring that it provided no justification for the extraordinary remedy of mandamus. In re: Advanced Communications Corp., 2001 WL 1699340, at *1 (D.C. Cir. Dec. 19, 2001).

In April 2003, Advanced petitioned the Commission to reopen the record for further proceedings based on what it contended was new evidence that the 1995 Order had been the product of improper considerations. The new evidence consisted of the aforementioned affidavits by the two Commissioners who had dissented from the 1995 Order. The identically worded affidavits, signed in October 2001, declared the affiants' view that "at least one of the Commissioners in the majority based his or her decision in the Advanced Order on the expectation of Federal revenues that would result from the reassignment by auction of the channels and orbital locations previously assigned to ACC." Affidavit of James H. Quello (J.A. 529); Affidavit of Andrew C. Barrett (J.A. 536). The FCC denied ACC's petition to reopen the record, concluding that the "new evidence that Advanced submits is nothing more than another attempt to re-argue the issue that it has presented in numerous prior court proceedings." Advanced ...


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