LPTV Points Get Mixed Reaction at DC Circuit
The U.S Court of Appeals for the D.C. Circuit panel hearing oral argument in two low-power TV challenges of FCC incentive auction repacking policy Thursday seemed receptive to points made by the agency and petitioner Mako Communications but questioned the standing of petitioner Free Access & Broadcast Telemedia. FAB invests in LPTV but isn't a licensee. Oral arguments in the cases were heard back to back, with questions asked in one case bleeding into the other. An attorney following the matters speculated that Judges Sri Srinivasan, Thomas Griffith and David Sentelle may release decisions as a single opinion. Though several attendees speculated about what the court's reactions might indicate for a final decision, they all said it's difficult to predict a final opinion from oral argument.
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Another LPTV challenge of the auction from petitioners Fifth Street Videohouse and WMTM was set for oral argument Monday, but a stipulation of voluntarily dismissal was jointly filed by the broadcasters and the FCC late Thursday. Another joint letter filed with the court Wednesday indicated settlement talks were taking place. The broadcasters declined to comment on the proposed settlement.
Mako argued the FCC should protect LPTV stations in the repacking, and auction rules violate a Spectrum Act provision protecting the spectrum usage rights of LPTV stations (see 1604050063). FAB made similar arguments, but focused on the point that the FCC didn’t adequately study the auction’s effects on LPTV before instituting the rules, making those rules arbitrary and capricious. The issue of the FCC’s study wasn’t raised in oral argument Thursday or asked about by the judges, but judges paid much attention to the LPTV spectrum rights clause in the Spectrum Act.
The judges asked attorneys to define what the clause protecting LPTV spectrum usage rights protects, and what services LPTV is secondary to. LPTV is secondary to full power stations for purposes of interference, said both FAB’s attorney Adam White, of Boyden Gray, and Mako attorney Scott Caulkins, of Caulkins and Bruce. The FCC’s repacking plan and displacement of LPTV is an expansion of that secondary status that the Spectrum Act clause is intended to prevent, Caulkins and White said. “I’m not sure where you get the interference only,” Sentelle said. If Congress had intended LPTV to be protected in the repacking, it would have been explicitly stated in the Spectrum Act, said FCC Associate General Counsel Jacob Lewis.
Srinivasan said he read the LPTV clause as preventing the commission from having any additional rights over LPTV than it has over full powers under the Spectrum Act, and Lewis agreed. One attorney attendee saw this as a good sign for the FCC, since much of Mako’s argument is based on that Spectrum Act clause. Others saw Mako’s arguments as gaining some traction. Sentelle said the clause says nothing in the act can be construed as altering LPTV spectrum rights -- it doesn’t mention the commission.
The consequence of protecting LPTV stations in the auction would double the number of stations in the auction, Lewis told the court. That would “unduly constrain” the auction, flying in the face of congressional intent in holding the auction in the first place, Lewis said.
Since FAB owns options to buy several stations, laws barring shareholders of companies from having standing to bring cases on behalf of those companies don’t apply to it, FAB attorney White argued. Allowing option holders to have standing where shareholders don’t could be precedential, Lewis said. Judges seemed to agree, peppering White with questions about the standing to the point that he had to ask the D.C. Circuit to allow him to move on to the merits of the case. “You’re asking us to give you rights not given to someone with greater property rights,” Griffith said. Several attendees told us the court would likely say FAB doesn’t have standing, but since the cases overlapped so much, FAB could still benefit from a ruling in Mako’s favor.