DC Circuit Rejects Mako Challenge of Incentive Auction
The U.S. Court of Appeals for the D.C. Circuit rejected Mako Communications' and Beach TV's challenge of FCC treatment of low-power TV stations, said an opinion issued Tuesday. Judges Sri Srinivasan, Thomas Griffith and David Sentelle said the FCC didn't violate its authority or incorrectly interpret congressional intent in not protecting LPTV stations in the incentive auction. The ruling referenced the court's previous finding against challenges by NAB and several broadcasters against incentive auction rules (see 1506120050). It suggests the D.C. Circuit won't be receptive to Free Access and Broadcast Telemedia's ongoing second challenge of the rules, several broadcast attorneys told us.
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Mako's and Beach TV's argument was based on subsection (b)(5) of the Spectrum Act, which bars the FCC from altering the spectrum usage rights of LPTV stations. “The Commission’s treatment of LPTV stations in the challenged orders rests on a reasonable understanding of subsection (b)(5),” said the opinion, authored by Srinivasan. “We reject petitioners’ arbitrary-and-capricious arguments to the same effect.” The "ruling validates the Commission's Incentive Auction design in light of the Spectrum Act’s goals,” emailed a spokesman for the FCC Incentive Auction Task Force. “The Commission values the important role that low-power TV and TV translator stations play in the communities they serve. With that in mind, we have taken -- and continue to consider -- steps to assist any displaced low power stations to find feasible channels after the close of the auction." Mako and Beach TV didn't comment.
D.C. Circuit deference to FCC interpretation of the Spectrum Act in this case and in the case brought by NAB and several broadcasters suggests the court will continue to defer, said Fletcher Heald broadcast lawyer Davina Sashkin, who isn't connected with the case. Free Access and Broadcast Telemedia filed an opening brief in its second challenge of the auction Monday (see 1608290057). FAB's first challenge of the auction rules, which used arguments similar to Mako's, was tossed for lacking standing (see 1608010060), since FAB owns no LPTV licenses. Though new LPTV co-filers address that issue, FAB's new arguments that the auction is an illegal punishment of broadcasters, and allowing wireless carriers to evict LPTV stations from their spectrum is unconstitutional, are likely to run into the court's deference to the FCC as Mako's did, several broadcast attorneys told us. FAB didn't comment.
The petitioners argued it always has been clear that LPTV stations are secondary to full-power broadcasters, but the incentive auction suborns them to wireless service as well, which they said was outside FCC authority. The D.C. Circuit disagreed, saying LPTV's secondary status to wireless services predates the Spectrum Act. “LPTV stations’ subordination to wireless services had been made explicit by at least 2004,” said Srinivasan in the opinion, pointing to the FCC digital LPTV order. That order included procedures for notifying LPTV stations they were displaced by a wireless provider, Srinivasan said.
The court did recognize the Spectrum Act's ban against altering LPTV usage rights would prevent the FCC from evicting such a station from its spectrum when it isn't interfering with a primary license holder. It's a “good thing” the opinion recognizes “LPTV stations have rights, and Congress intended to protect those rights,” emailed Fletcher Heald broadcast attorney Peter Tannenwald. It's bad for LPTV that the court decision deferred to the FCC, “which appears to continue to narrow those rights without sufficient concern about the adverse consequences that they admit will follow,” Tannenwald said. LPTV interests spent “lots of money” on this case and the other auction challenges, said LPTV Spectrum Rights Coalition President Mike Gravino in an email blast. “Sure could have used that money to buy access to the key members of Congress we need to fix the problems of the auction legislation.”