[00:00:02] Speaker 00:
Case number 15-1145, NTCH, Inc., Appellant vs. Federal Communications Commission.

[00:00:09] Speaker 00:
Mr. Evans for the Appellant, Ms.

[00:00:10] Speaker 00:
Flood for the Apple Lead, and Ms.

[00:00:12] Speaker 00:
Stetson for the Intervener.

[00:00:42] Speaker 03:
Good morning, Mr. Evans.

[00:00:44] Speaker 03:
Good morning and may it please the court, I am Donald Evans on behalf of NTCH, the appellant here.

[00:00:50] Speaker 03:
The case before us today has two very distinct components.

[00:00:54] Speaker 03:
One is a fairly conventional administrative law analysis of whether the FCC, when presented with significant and substantial harms that would result from the proposed applications,

[00:01:05] Speaker 03:
took the necessary step of finding that those harms were balanced out by some countervailing benefits.

[00:01:12] Speaker 03:
Or in the FCC's parliaments, and using the criteria that it itself applies, did they weigh the evils against verified and substantiated benefits that would countervail those harms.

[00:01:26] Speaker 03:
The second component of this is really more intriguing, and it concerns the extraordinary and baffling

[00:01:33] Speaker 03:
series of actions by Verizon and the FCC that resulted in Verizon acquiring hundreds and maybe even thousands of common carrier radio licenses in direct and flagrant contravention of the Communications Act's prohibitions on alien ownership.

[00:01:49] Speaker 03:
It's possible or conceivable that the grant of these applications is among the single greatest illegal awards of federal assets in the history of the United States.

[00:02:02] Speaker 03:
I don't think that's an exaggeration.

[00:02:04] Speaker 03:
So this is a serious problem.

[00:02:07] Speaker 03:
But instead of the FCC looking into that, investigating it, either offering or demanding some sort of explanation for how this occurred, the FCC before you is just throwing up a barrage of jurisdictional arguments to try at all costs to prevent judicial review of what's happened here.

[00:02:28] Speaker 03:
If I may, I'd like to first address the roaming part of the case, because it's really the easiest one and the simplest one to describe.

[00:02:37] Speaker 03:
The issues there arise because my clients, a public interest group, a trade association, and others all convinced the FCC that there was a serious problem with the roaming market in the United States.

[00:02:51] Speaker 03:
Because of consolidation in the cellular industry, it was no longer possible for smaller carriers to get reasonable roaming rates from particularly the big two, Verizon and AT&T.

[00:03:01] Speaker 03:
Because they had gotten so big and their coverage areas were so broad, they really had no need or incentive to enter into reasonable roaming agreements with other carriers.

[00:03:12] Speaker 03:
And without those roaming agreements, the other carriers, like my client, could not be competitive.

[00:03:18] Speaker 03:
So the FCC recognized that the acquisition by Verizon here of an additional large cache of spectrum would only make a bad situation worse.

[00:03:30] Speaker 03:
And in paragraph 84 of what we'll call the Spectrum Code Order, the order that granted the applications that issue here, the FCC specifically found that there was a significant problem with the availability of both voice and data roaming rates or arrangements with other carriers.

[00:03:48] Speaker 03:
But that was a significant issue.

[00:03:51] Speaker 03:
The availability of data roaming specifically was a critical problem in the industry.

[00:03:56] Speaker 03:
And the transfer of licenses

[00:04:01] Speaker 03:
to Verizon would be to an entity that had no incentive whatsoever to enter into reasonable roaming arrangements.

[00:04:09] Speaker 03:
That created in the FCC's mind a concrete potential harm to future competition.

[00:04:15] Speaker 03:
And in a later paragraph, the FCC said that those harms were substantial and likely.

[00:04:21] Speaker 03:
Now the FCC went on, so we know we've got a real problem here.

[00:04:25] Speaker 03:
The FCC went on to describe what its deliberative process is in balancing harms against benefits in paragraph 97 of the spectrum co-order.

[00:04:36] Speaker 03:
There they said, if you've got an identified harm,

[00:04:39] Speaker 03:
that's proposed to be counterbalanced by the applicants.

[00:04:44] Speaker 03:
The applicants have to provide verifiable, substantiated evidence that the benefits are actually going to occur.

[00:04:51] Speaker 03:
And where the harms have been found to be substantial and likely as they were here, then the benefits have to be commensurately substantial and likely.

[00:05:01] Speaker 03:
In other words, there's a higher standard that applies to the benefits if the harms are substantial.

[00:05:06] Speaker 05:
Now we review that under a very differential standard.

[00:05:10] Speaker 05:
The FCC made a determination that the conditions that it put on the spectrum code transfer were adequate to mitigate the anti-competitive effects.

[00:05:20] Speaker 05:
So what is it that you're asking us to do and how can you address the commission's argument that that would not redress the harm you've identified?

[00:05:33] Speaker 05:
So what specifically are you asking us to order?

[00:05:37] Speaker 03:
I'm asking you to order that the commission's – that the benefits that the commission found counterbalanced the harms were not real benefits.

[00:05:47] Speaker 03:
I mean, if you look at them carefully, they really were either no benefits whatsoever in the case of the commitment by Verizon to provide commercially reasonable roaming rates,

[00:05:59] Speaker 03:
or in the case of spinning off some spectrum to T-Mobile, there may have been a small benefit, but very slight and certainly not enough to countervail the significant harm that the commission had found.

[00:06:11] Speaker 03:
And that's just a matter of looking at what the proposed benefits were.

[00:06:15] Speaker 03:
If you look at the, Verizon came in at the last minute, literally six days before this spectrum co-order was adopted, and they threw on the table a commitment to say, look, what we will do to satisfy the roaming problem is we will commit to

[00:06:30] Speaker 03:
agree to abide by the existing data roaming rule that's in effect.

[00:06:33] Speaker 05:
Which were then under challenge, even if they prevailed in their challenge.

[00:06:36] Speaker 05:
So, I mean, you're asking us to do something that, as you know from reading our cases, we're very hesitant to do, to get in and second guess a balancing determination made by the FCC?

[00:06:49] Speaker 02:
I understand that, but this is a pretty clear case.

[00:06:52] Speaker 05:
More precise question that they've raised a challenge that you don't have standing and part of the analysis there is that we would have to find that whatever it is that the remedy that you are seeking

[00:07:05] Speaker 05:
would provide a more than speculative redress for the harm that you've identified.

[00:07:10] Speaker 05:
So I'd like you to address at the threshold that question.

[00:07:13] Speaker 05:
What exactly are you seeking and how can you assure us that what you're seeking would in fact redress the anti-competitive effect that you've identified?

[00:07:25] Speaker 03:
Okay, well, remember the problem we complained about and which the Commission had identified was that

[00:07:31] Speaker 03:
we and many others could not get reasonable roaming rates from Verizon.

[00:07:35] Speaker 05:
Because now Verizon was going to be an even bigger player in the market and there was going to be less competition and the prices were going to be, or the terms were going to be less favorable.

[00:07:43] Speaker 03:
Right.

[00:07:43] Speaker 03:
So we proposed two solutions to that problem.

[00:07:46] Speaker 03:
One was to not let Verizon acquire these licenses at all because as the FCC itself found, that would leave an additional competitive player in the market who would be likely to

[00:07:57] Speaker 03:
be an alternative competitive source of roaming for everybody in the market.

[00:08:02] Speaker 03:
The other more precise solution that we proposed to the FCC was that they impose express conditions on Verizon that would actually require it to make reasonable roaming rates available, as opposed to just doing what it had been doing, which was nothing.

[00:08:18] Speaker 05:
That's not quite right, is it?

[00:08:19] Speaker 05:
Because the conditions were relatively new conditions.

[00:08:22] Speaker 05:
So when you say they hadn't fixed the problem, these conditions were relatively new conditions.

[00:08:27] Speaker 05:
Well, and whether it works.

[00:08:29] Speaker 05:
under challenge but they were saying I mean the FCC's judgment was those are conditions the FCC came up with saying this is gonna this is gonna guarantee reasonable access and you want so you want us to those were not FCC Verizon proposed those but the FCC adopted them as part of the conditions and they're on the transaction because FCC has required that they be there

[00:08:52] Speaker 05:
Well taken.

[00:08:54] Speaker 05:
So you say you had proposed two solutions.

[00:08:55] Speaker 05:
Don't let Verizon acquire or impose these conditions.

[00:08:58] Speaker 05:
So you would want us, what I'm asking is what is it that you would want us to order?

[00:09:02] Speaker 05:
You want us to undo the approval?

[00:09:05] Speaker 03:
Undo the approval and say this... Isn't enough?

[00:09:10] Speaker 05:
Go ahead.

[00:09:10] Speaker 03:
These applications cannot be granted because the proponents of the application who have the burden of demonstrating that the benefits outweigh the harms have not met that burden.

[00:09:20] Speaker 03:
Therefore, the applications cannot be granted.

[00:09:23] Speaker 03:
If the commission wants to revisit that issue on remand, I suppose it could.

[00:09:28] Speaker 03:
But what has to happen is the grant has to be reversed because it was an incorrect grant of the application.

[00:09:37] Speaker 04:
Now you say, if they, go ahead.

[00:09:39] Speaker 04:
What are you doing with your procedural argument?

[00:09:41] Speaker 04:
That is, if they didn't follow their own procedures on forbearance?

[00:09:46] Speaker 03:
On the – you want to go to the alien ownership situation?

[00:09:50] Speaker 04:
I want to go on your challenge on the forbearance.

[00:09:53] Speaker 04:
That is, you were claiming that, as I understand it, their forbearance with respect to – in the order does not follow their own procedures, which require the requesting authority to do it in advance, and executive agencies to be consulted, et cetera.

[00:10:13] Speaker 04:
I mean, what is your argument?

[00:10:16] Speaker 03:
Okay, do you want me to I should go ahead and just shift them to the alien because that's that's where it comes in to judge Pilar Did I answer your questions about about what what I'm asking for what what I'm asking for is for the FCC to When this is when this is sent back to them as I think it has to be because they had not properly showed that the benefits outweighed the the harms They could I suppose they could look at it again, but they they have to do that and

[00:10:45] Speaker 03:
And one solution would be to impose conditions that concretely require Verizon to provide reasonable roaming rates to people like us.

[00:10:54] Speaker 05:
And that would directly address our problem.

[00:10:56] Speaker 05:
You say if we were to invalidate this approval, there would be an additional competitive player in the market.

[00:11:03] Speaker 05:
But not so, right?

[00:11:05] Speaker 05:
Before the Spectrum was acquired by Verizon, there wasn't an additional competitive player in the market.

[00:11:11] Speaker 05:
Spectrum co-held them, but hadn't developed the Spectrum.

[00:11:15] Speaker 05:
So I'm just trying to get at the standing issue and looking at what you're asking through that lens in terms of whether what we would do would address the harm that you've identified.

[00:11:25] Speaker 05:
And if it's wholly speculative, some other course of conduct that the FCC takes and some other purchaser or maybe Verizon under different terms,

[00:11:34] Speaker 05:
It's our duty as a federal court to satisfy ourselves that we have jurisdiction, that your client has standing.

[00:11:42] Speaker 05:
And I'm just trying to get some kind of clarity on how we can be confident that the remedy that you're seeking wouldn't just be very speculative in terms of remedying the harm that you've identified.

[00:11:59] Speaker 03:
Well, there's two ways to answer that.

[00:12:00] Speaker 03:
One is if it went back to the FCC and they simply imposed the conditions, which

[00:12:04] Speaker 03:
which we've said would be a solution to the problem, clearly we have standing for that because that solution goes directly to the specific problem that we have.

[00:12:13] Speaker 03:
The solution of requiring or preventing Verizon from even acquiring the SpectrumCo licenses is a more structural one.

[00:12:23] Speaker 03:
The FCC recognizes that competition is furthered if there's a multiplicity of players in the market.

[00:12:30] Speaker 03:
It recognized, specifically in the SpectrumCo order, that SpectrumCo is out there as a potential player in the communications marketplace, and that that served as some sort of a check on the

[00:12:43] Speaker 03:
on the ability of Verizon to dominate the market the way it actually does.

[00:12:49] Speaker 05:
On the foreign licensing, Judge Edward had asked about they didn't even follow their own procedures under the forbearance order.

[00:12:56] Speaker 05:
And that is concerning.

[00:12:58] Speaker 03:
Yeah.

[00:13:00] Speaker 03:
I mean, the whole situation with the alien ownership is problematic.

[00:13:04] Speaker 03:
And maybe to get to the answer to your question, Judge Edwards, I have to give you a little bit of the background.

[00:13:10] Speaker 03:
And you have to actually start with 1985, because that's when the commission came out with a declaratory ruling saying, very unmistakably, we consider that indirect minority interests held by a non-controlling partner are counted in determining whether the 20% alien ownership prohibition level is met.

[00:13:33] Speaker 03:
That was very clear, unmistakable, as of 1985.

[00:13:36] Speaker 03:
The other thing that the commission said in that 1985 order was,

[00:13:41] Speaker 03:
We have an absolute statutory obligation not to grant licenses if there's a over 20% minority alien ownership.

[00:13:50] Speaker 03:
And we have the obligation to revoke licenses if that happens.

[00:13:55] Speaker 03:
The reason I stress that is because Verizon and the FCC are saying that the commission has complete discretion prosecutorily to revoke or not to revoke.

[00:14:05] Speaker 03:
But at least in 1985, the Commission was saying, we have an obligation to revoke if we find that this situation exists.

[00:14:13] Speaker 03:
So the Commission adopts the 1985 order, fast forward to 2000.

[00:14:18] Speaker 03:
Vodafone gets approved by the FCC to take a controlling interest in Verizon.

[00:14:24] Speaker 03:
And then shortly after that, it changes from a controlling position to a non-controlling position.

[00:14:29] Speaker 03:
That theoretically, according to the declaration that the FCC made in 2000, should have triggered a statutory absolute obligation by the FCC to revoke the Verizon licenses.

[00:14:41] Speaker 03:
I mean, that should have been the outcome.

[00:14:42] Speaker 04:
Okay, so forgetting that for a minute.

[00:14:43] Speaker 04:
So tie your argument, I want to make sure I understand that, on the current forbearance.

[00:14:48] Speaker 04:
In other words, your argument is they, given those facts, go ahead.

[00:14:52] Speaker 03:
Okay, well, the reason that's important is because that's dealing with the past licenses that were granted.

[00:14:56] Speaker 03:
Yeah, no, I understand.

[00:14:57] Speaker 03:
Now we get to 2012, and it seems to dawn on the FCC that it's granted all these licenses without complying with Section 310B3 of the Act.

[00:15:06] Speaker 03:
So they hastily conduct a rulemaking proceeding to develop

[00:15:10] Speaker 03:
a rationale for forbearing from Section 310B3, and they prescribe like five or six different absolute requirements that have to be met by somebody that's seeking forbearance.

[00:15:22] Speaker 03:
Then four days later, before that order is even, you know, effective because it hasn't been published in the Federal Register yet, the Commission adopts the spectrum court order in which it grants forbearance but doesn't comply with the single one, not one of the requirements that it said had to be met before forbearance could be granted.

[00:15:41] Speaker 03:
So I think that leaves us in a very bizarre situation because you've got the old applications that were granted

[00:15:49] Speaker 03:
Clearly unlawfully, but the commission seemed to be unwilling to acknowledge that explicitly.

[00:15:54] Speaker 04:
What's the remedy, in your view, if you're right, that they failed to follow procedures that they prescribed and they clearly are in play here?

[00:16:02] Speaker 04:
I mean, I'll ask them, but I see what they say.

[00:16:05] Speaker 04:
It's a little perplexing to me.

[00:16:06] Speaker 04:
But what is your remedy if you're right?

[00:16:08] Speaker 03:
The remedy is the grant of the application has to be reversed, because clearly the application was erroneously granted.

[00:16:16] Speaker 03:
At the time it was granted,

[00:16:18] Speaker 03:
And the forbearance approach that the commission took was patently erroneous because it didn't even comply with their own procedures.

[00:16:28] Speaker 05:
Although given that that's a rule with prospective

[00:16:33] Speaker 05:
I mean, the whole point is we don't want to have major providers with foreign interest unless the Commission has gone through the steps that the Forbearance Order requires.

[00:16:45] Speaker 05:
But that's now no longer the case.

[00:16:47] Speaker 05:
There's no foreign interest.

[00:16:48] Speaker 05:
The Vodafone has been, is no longer part of Verizon ownership.

[00:16:53] Speaker 05:
So isn't that issue moot?

[00:16:56] Speaker 03:
No.

[00:16:57] Speaker 03:
And I mean, this is really the key to what we're looking at here, because the FCC, you know, the whole course of practice of the FCC over the 10 or 12 years of granting these licenses illegally is something that I think has to be considered in the context of a revocation proceeding.

[00:17:19] Speaker 03:
But with respect to the SpectrumCo applications, it's sort of the same issue that comes up.

[00:17:24] Speaker 03:
How did this happen?

[00:17:25] Speaker 03:
Why did the FCC grant these applications in the way it did?

[00:17:29] Speaker 03:
Even though the foreign ownership was now gone, but the issue that remains is, how did this happen?

[00:17:36] Speaker 03:
Why did it happen?

[00:17:37] Speaker 03:
Why did the FCC sit on our petition for reconsideration, which if they had acted on it within the lawfully prescribed time period,

[00:17:45] Speaker 03:
they would have been required to rescind the grant.

[00:17:47] Speaker 05:
I hear you on that.

[00:17:48] Speaker 05:
The chronology is telling.

[00:17:51] Speaker 05:
But telling of what?

[00:17:52] Speaker 05:
I mean, it may be that it does seem that there were, at least you've identified, potential violations, even assuming that there is something that had that circumstance continued that might warrant a remedy.

[00:18:11] Speaker 05:
It's a much harder question.

[00:18:12] Speaker 05:
What we as a federal court

[00:18:15] Speaker 05:
are empowered to do about what we're assuming is a violation of their own forbearance order, just for purposes of this exchange.

[00:18:24] Speaker 05:
But even assuming that, if they're no longer in violation, we remand so that the FCC can say, oh, well, there's no foreign ownership here.

[00:18:33] Speaker 05:
Therefore, we don't have to find this to be on balance in the public interest.

[00:18:37] Speaker 03:
If that's all there was to it, I would agree with you.

[00:18:40] Speaker 03:
But that's not all there is to it.

[00:18:42] Speaker 03:
What would have to be looked at, I think,

[00:18:44] Speaker 03:
in the same way that you would have to look at it as how did the 10 years of licenses get granted, is you'd have to look here and say, how was this granted?

[00:18:53] Speaker 03:
Why did the FCC sit on our petition for reconsideration for such a long time?

[00:18:58] Speaker 03:
Why did it somehow know that Verizon was getting rid of the foreign ownership that was going to moot the whole problem?

[00:19:04] Speaker 04:
So let's assume all the answers are of a sort that you would expect, then what happens?

[00:19:10] Speaker 03:
What happens is I think there's a serious, I mean,

[00:19:13] Speaker 03:
To me, there's a potential for a very, very serious issue here.

[00:19:16] Speaker 03:
We don't know.

[00:19:17] Speaker 04:
No, no.

[00:19:18] Speaker 04:
I have to be a little bit more concrete.

[00:19:19] Speaker 04:
I don't know what that means.

[00:19:20] Speaker 04:
So, do they wring their hands and say, you know, shame on us?

[00:19:25] Speaker 04:
I'm talking about in concrete terms.

[00:19:26] Speaker 04:
Let's assume that they answer all the questions that you just raised, and I'm not belittling them because I think there are some serious questions here.

[00:19:33] Speaker 04:
But let's assume the answers are all what you expect.

[00:19:36] Speaker 04:
So what?

[00:19:37] Speaker 03:
What happens?

[00:19:38] Speaker 03:
Let's look at it this way.

[00:19:40] Speaker 03:
We gave you some examples of some small guys that falsely represented that they were American citizens when they weren't.

[00:19:47] Speaker 03:
In those cases, the FCC doesn't think twice about it.

[00:19:50] Speaker 03:
They put the license into revocation proceedings and they either take the license away or they look into the situation and they find out what the facts are.

[00:19:58] Speaker 03:
In this case, Verizon specifically represented in all the past applications and in this particular application,

[00:20:05] Speaker 03:
that Vodafone's qualifications to be a minority owner in Verizon had been previously approved by the FCC and that there was no need for any further foreign ownership.

[00:20:16] Speaker 03:
I'm still trying to be more concrete.

[00:20:18] Speaker 04:
So you're saying that the FCC should at least consider, in light of what you're suggesting to be the case, whether they're going to now go and revoke.

[00:20:29] Speaker 04:
Because that's – they've got discretion on that.

[00:20:32] Speaker 04:
I know you argue otherwise.

[00:20:34] Speaker 04:
You think it's mandatory.

[00:20:35] Speaker 04:
I think your argument's a little bit – a little bit difficult.

[00:20:38] Speaker 04:
But you're saying the Court can certainly say you have to consider it.

[00:20:41] Speaker 03:
Yes.

[00:20:42] Speaker 03:
And on the discretion aspect, it's very interesting because the Commission and Verizon rely on

[00:20:49] Speaker 03:
heckler versus cheney to support you know broad prosecutorial discretion to do nothing in these circumstances but what they seem to have ignored is that is that there were two exceptions that cheney identified

[00:21:01] Speaker 03:
One to prosecutorial, you know, complete prosecutorial discretion.

[00:21:04] Speaker 03:
One is if the substantive statute provides guidelines that guide the enforcement action.

[00:21:10] Speaker 03:
And in this case, of course, we have Section 312 of the Act, which lays out seven specific conducts that Congress considered suitable for revocation consideration.

[00:21:23] Speaker 03:
And in FCC versus Pottsville, Judge Frankford very eloquently indicated that the public interest standard is a tool that must guide the FCC's determinations not only of granting applications, but revoking applications.

[00:21:40] Speaker 03:
And there's one other exception that's in Heckler versus Cheney, which is

[00:21:50] Speaker 03:
The other exception in Heckler v. Cheney is an important one under these circumstances, because that exception, it's an unusual one, but it applies very well here.

[00:21:59] Speaker 03:
It says if the agency has consciously and deliberately engaged in a policy which effectively abdicates its statutory responsibilities.

[00:22:10] Speaker 05:
All right, Mr. Evans, you're well over your time.

[00:22:13] Speaker 05:
And so let's hear from Ms.

[00:22:15] Speaker 05:
Flood for the commission.

[00:22:18] Speaker 05:
And we'll give you a brief rebuttal time.

[00:22:24] Speaker 08:
Good morning.

[00:22:25] Speaker 08:
May it please the Court, Maureen Flood, for the Federal Communications Commission.

[00:22:28] Speaker 08:
I'd like to start with the foreign ownership issue.

[00:22:31] Speaker 08:
The fact of the matter is this Court lacks jurisdiction to consider every one of NTCH's arguments concerning the foreign ownership status.

[00:22:40] Speaker 08:
of Verizon Wireless.

[00:22:41] Speaker 08:
It's challenged the forbearance grant is moot.

[00:22:44] Speaker 08:
It lacks Article 3 standing to assert that the commission should have initiated a license revocation proceeding.

[00:22:51] Speaker 08:
And even if it did have standing, the agency's decision not to do so is unreviewable under the APA.

[00:22:58] Speaker 08:
The only live issue is... Is that APA?

[00:23:00] Speaker 05:
Is that jurisdictional or is that just...

[00:23:03] Speaker 05:
You know, the notion that this is committed to the... It is jurisdictional.

[00:23:07] Speaker 08:
As we point out in our brief, this Court has found that under Fort Sumter Tours, it is in fact jurisdictional.

[00:23:12] Speaker 08:
And, you know, my final point here is that the only lie... Then which is jurisdictional?

[00:23:17] Speaker 08:
The APA point.

[00:23:18] Speaker 08:
The fact that under the APA,

[00:23:20] Speaker 08:
decisions that are committed to our discretion by law are non-reviewable by the court.

[00:23:27] Speaker 08:
The court found that in Fort Sumter Tours, and I would point out here that the agency did in fact reasonably exercise its discretion in not seeking

[00:23:36] Speaker 08:
enforcement action are not initiating that license revocation proceeding.

[00:23:40] Speaker 08:
I'll get to that.

[00:23:41] Speaker 08:
The only live issue before the court is the roaming issue, and NTCH's complaints about the roaming conditions are baseless.

[00:23:49] Speaker 04:
The commission... Wait, I want to go back to the forbearance.

[00:23:53] Speaker 04:
You're going through it quickly.

[00:23:54] Speaker 04:
I'm not sure if I'm following it that quickly.

[00:23:57] Speaker 04:
There are procedural notions that the SEC has in mind to follow.

[00:24:01] Speaker 04:
They weren't followed here.

[00:24:02] Speaker 08:
That's correct, Your Honor, but even if the Commission erred in following its own procedures, were this Court to remand, there's nothing to forbear from.

[00:24:11] Speaker 08:
Verizon bought out Vodafone's stick in Verizon Wireless, so there's no foreign ownership in Verizon Wireless.

[00:24:17] Speaker 08:
The Commission couldn't forbear from Section 310B3 on remand because Verizon Wireless is no longer subject to the foreign ownership restrictions in that provision of the statute.

[00:24:27] Speaker 05:
Can you give us an explanation?

[00:24:28] Speaker 05:
I mean, the chronology does

[00:24:31] Speaker 05:
at least on its face, wreak a little of hanky-panky, long delay, then they sell the ownership, and then, I mean, there was plenty of time to fulfill the conditions of the forbearance order.

[00:24:44] Speaker 08:
There weren't actually, Your Honor, because Verizon Wireless filed its assignment applications long before the Commission adopted the Forbearance Order.

[00:24:52] Speaker 08:
Now, you know, Council for NTCH is arguing that we did something improper by adopting the Forbearance Order so close in time to our resolution of the Spectrum Co-Elite transactions, but that's not true.

[00:25:04] Speaker 08:
If the Commission simply wanted to help Verizon Wireless,

[00:25:07] Speaker 08:
We could have forborn from Section 310B3 on our own motion in the order on review, and we decided not to because we had a proceeding already underway where we proposed to adopt procedures for granting forbearance from Section 310B3.

[00:25:24] Speaker 08:
for an entire class of carriers, which included Verizon Wireless.

[00:25:27] Speaker 08:
So yes, the Commission, so to speak, put the pedal to the metal to get that order out prior to its decision in the Spectrum Coorder, but it did so, so it could apply those procedures to Verizon Wireless.

[00:25:38] Speaker 08:
So Verizon Wireless would be treated as all, the same as all carriers in that class, respectively.

[00:25:44] Speaker 05:
But then it wasn't.

[00:25:46] Speaker 08:
I'm sorry, I don't understand the question.

[00:25:47] Speaker 08:
They didn't apply, the commission did not then follow the procedures that it established in the forbearance order.

[00:26:01] Speaker 08:
Arguably, Verizon Wireless's assignment applications that it filed before the forbearance order satisfied that standard.

[00:26:09] Speaker 01:
They saw it, they disclosed the foreign ownership.

[00:26:12] Speaker 08:
That's exactly right.

[00:26:13] Speaker 01:
And then they sought to have it declared in the public interest to get the license.

[00:26:19] Speaker 05:
That's exactly right.

[00:26:19] Speaker 05:
This was in 2012, and so they just said, nothing's changed.

[00:26:22] Speaker 05:
We're grandfathering it.

[00:26:23] Speaker 08:
That's exactly right.

[00:26:24] Speaker 08:
And if you look at the orders cited in footnote 25 of the reconsideration order, those were the all tele-enroll cellular transactions.

[00:26:32] Speaker 08:
That's exactly what happened.

[00:26:33] Speaker 08:
The petitioners came, or in that case, Verizon Wireless came in and said, Vodafone has a 45% stake in me.

[00:26:39] Speaker 08:
I think it would be in the public interest if you allowed me to acquire these licenses.

[00:26:44] Speaker 08:
And the commission issued a declaratory ruling

[00:26:47] Speaker 08:
saying that that would be the case.

[00:26:49] Speaker 04:
So for purposes of our procedures... There was no petition for forbearance as your procedures prescribed.

[00:26:55] Speaker 04:
You constructed it to paint it that way.

[00:26:58] Speaker 04:
And I understand if I'm arguing your case, I would too.

[00:27:01] Speaker 04:
But that's not what happened.

[00:27:02] Speaker 04:
You really are, Sue Espante, now creating this.

[00:27:05] Speaker 04:
They weren't coming in and their references to their ownership

[00:27:09] Speaker 04:
You know, they were almost, as an aside, and they certainly wouldn't put anyone on notice that this was to get commission forbearance.

[00:27:17] Speaker 08:
I just, well, Your Honor, I would go back to the forbearance order where it talks about a petition for declaratory ruling or a similar request.

[00:27:24] Speaker 04:
And given that, the information... Petition forbearance because of the foreign ownership.

[00:27:30] Speaker 04:
So you're putting everyone on notice that that's what the issue is.

[00:27:33] Speaker 08:
That's correct, Your Honor.

[00:27:34] Speaker 04:
It's not the same as taking what they submitted and then saying, well, they also had an appendix that listed all of their parts, and if you looked at them carefully, you could have figured it out.

[00:27:44] Speaker 04:
That can't be what the FCC meant.

[00:27:46] Speaker 08:
I do think it is, Your Honor, because I think I go back to the fact that as a petition for declaratory ruling or similar request, but let me say this.

[00:27:53] Speaker 08:
We did put the applications out, right?

[00:27:56] Speaker 08:
We did put the applications out and sought comment on the applications.

[00:28:00] Speaker 08:
And the applications clearly describe Vodafone's 45% stake in the company.

[00:28:05] Speaker 04:
Now, if NTCH believed that Verizon Wireless's acquisition of those licenses were borrowed by section... Where was there something that said we are petitioning for forbearance because we know that we're otherwise over the line?

[00:28:20] Speaker 04:
I missed that.

[00:28:21] Speaker 04:
It may be there, I can't find it.

[00:28:22] Speaker 04:
It wasn't in there, Your Honor, but we put the application... What I'm trying to say to you is, if you take an honest look at the procedures that you now say are in play, that's what it looks like the FCC means to require.

[00:28:34] Speaker 04:
You understand where you are, you have to file this notice before the foreign ownership reaches a certain point and see whether or not forbearance will be allowed.

[00:28:43] Speaker 04:
None of that was followed.

[00:28:45] Speaker 08:
Okay, Your Honor, we were so close.

[00:28:47] Speaker 08:
We adopted the forbearance order and the commission in its discretion decided that rather than going back and requiring Verizon Wireless to jump through specifically the procedural hoops of the forbearance order,

[00:29:03] Speaker 08:
that those applications were functionally the same as a petition.

[00:29:06] Speaker 08:
But that being said, even, I go back to the point that even if we didn't follow our forbearance procedures to a T, there's no remedy for petitioners' honor, ma'am, because this is no longer a live case of controversy.

[00:29:19] Speaker 04:
What would we forbear from?

[00:29:19] Speaker 04:
I understand what you need to argue on the mootness, but I still don't understand on the procedures.

[00:29:24] Speaker 04:
You set up a set of procedures which look pretty clear, including looking for advice from other executive agencies.

[00:29:31] Speaker 04:
None of this was followed.

[00:29:33] Speaker 08:
Your Honor, the reason we did, first of all, we can send applications to executive agencies at our discretion, but putting that aside, there was no need to do so here because Verizon Wireless's foreign ownership status hadn't changed.

[00:29:47] Speaker 08:
The commission of prior transactions, and those transactions are cited,

[00:29:50] Speaker 08:
In footnote 25 of the reconsideration order, the commission and prior decisions had found that Vodafone's 45% stake in the company satisfied the 310B4 public interest test.

[00:30:05] Speaker 08:
So given that Verizon and this proceeding was representing that Vodafone still owned a 45% stake in the company,

[00:30:11] Speaker 08:
There was no reason to resend those applications to the executive branch for their review.

[00:30:16] Speaker 04:
Yeah, except that no rules say, even if they satisfy for, it doesn't matter, on the forbearance question.

[00:30:24] Speaker 08:
Your Honor, our rules say that even if they have a prior B-4 finding, they still have to go through the Section 310B-3 test.

[00:30:31] Speaker 08:
Right.

[00:30:32] Speaker 08:
But we here reasonably apply the prior Section 310B-4 findings, which consider... Did the agency spell out this argument?

[00:30:41] Speaker 04:
Did the agency give this rationale somewhere?

[00:30:44] Speaker 08:
Not in the orders, no, we did not.

[00:30:45] Speaker 04:
That's normally the way we do business.

[00:30:47] Speaker 04:
It looks like such an obvious point, and normally an agency would say, don't get excited.

[00:30:52] Speaker 04:
We understand that you're going to get agitated.

[00:30:55] Speaker 04:
If we don't give an explanation, here it is.

[00:30:57] Speaker 04:
Now, you giving an explanation, the agency has never offered.

[00:31:00] Speaker 08:
Your Honor, well I would point out that the agency said in paragraph 176 of the order that our consent was contingent upon Verizon Wireless's continued compliance with the agreement between Verizon Wireless and Vodafone with the executive branch from 2000.

[00:31:17] Speaker 08:
That was the Bell Atlantic Vodafone order.

[00:31:21] Speaker 08:
So arguably there was no need to

[00:31:23] Speaker 08:
reason this application to the executive branch given that we can we condition our consent on their continued compliance with that agreement and that agreement was subsequently amended over time which we know in paragraph 176 the order the fact of matter here is the department the Department of Justice and the FBI

[00:31:41] Speaker 08:
don't care whether this is a section B3 or B4 transaction, what they care about is that Vodafone has a 45% stake in Verizon Wireless.

[00:31:50] Speaker 08:
And on repeated occasions, they had an opportunity to look at that, and we required Verizon Wireless to continue to comply with that agreement.

[00:31:58] Speaker 08:
So there was no need to send this.

[00:32:00] Speaker 05:
I'm sorry, but you had mentioned, I thought the touchstone for purposes of the

[00:32:05] Speaker 05:
prior examination of foreign ownership was the 2000 approval or are you talking, then you mentioned several different approvals.

[00:32:14] Speaker 08:
Right, so in 2000 we approved the Vodafone Bell Atlantic transaction which allowed Vodafone to have a stake in the company.

[00:32:22] Speaker 08:
Mr. Evans is right, after that transaction

[00:32:26] Speaker 08:
vote of phone state dropped to 45%.

[00:32:29] Speaker 08:
Now, we on subsequent occasions looked at that 45% stake under section three time before, because whereas Mr. Evans argument is that every license acquired between 2000 and 2012 violated section three time be three.

[00:32:46] Speaker 08:
That's incorrect.

[00:32:48] Speaker 08:
And footnote 25, the reconsideration order and actually paragraph 11 made that point.

[00:32:58] Speaker 01:
the reconsideration petition, wasn't it?

[00:33:01] Speaker 01:
That's correct, and arguments should... One of the arguments that the Commission made inside the movement was that it was procedurally barred because it wasn't raised earlier.

[00:33:11] Speaker 01:
That's correct.

[00:33:12] Speaker 08:
But you didn't raise that in your previous... Your Honor, we have so many reasons already as to why the... We have three different reasons as to why this Court shouldn't reach the foreign ownership issue.

[00:33:23] Speaker 08:
We decided not to put it in our briefing...

[00:33:37] Speaker 01:
That's correct.

[00:33:42] Speaker 01:
But there's an exception to that?

[00:33:44] Speaker 08:
There's an exception where the party could not have known the facts at the time of the underlying proceeding, and that clearly can't be the case here.

[00:33:54] Speaker 01:
Because they knew it.

[00:33:55] Speaker 08:
They knew.

[00:33:55] Speaker 08:
I mean, they absolutely knew.

[00:33:57] Speaker 01:
You know, there's a Supreme Court case, even though you haven't raised that.

[00:34:01] Speaker 01:
There's a Supreme Court case that says that the court should consider it.

[00:34:07] Speaker 01:
It's called EEOC versus FORA.

[00:34:11] Speaker 01:
The Supreme Court decision said that that kind of statute, which is common throughout administrative agencies, may not be jurisdictional, but it's sufficiently close to being jurisdictional that the court's sua sponte should consider it.

[00:34:30] Speaker 01:
And here we have the Commission basically relying on that proposition.

[00:34:35] Speaker 08:
That's correct.

[00:34:35] Speaker 08:
You know, I want to go back for a second to be it's complicated point.

[00:34:40] Speaker 08:
Council for NTCH seems to be arguing that every license Verizon Wireless acquired.

[00:34:45] Speaker 08:
between 2000 and 2012 was acquired in violation of Section 310B3, and that's not correct.

[00:34:51] Speaker 08:
It depends on how Verizon Wireless acquired the licenses.

[00:34:54] Speaker 08:
So in the transaction below, Verizon Wireless was subject to Section 310B3, because Verizon Wireless would be the license holder.

[00:35:02] Speaker 08:
In other proceedings, specifically the Altel proceeding and the Rural Cellular proceeding, which are cited in footnote 25, and we discussed.

[00:35:09] Speaker 05:
That's JA108, is that the footnote you're talking about?

[00:35:11] Speaker 05:
Rural Cellular and Atlantis Holdings is what you're

[00:35:15] Speaker 05:
Right.

[00:35:16] Speaker 08:
And so there Verizon Wireless acquired the licenses pursuant to Section 310B4 because what happened was it acquired another licensee.

[00:35:25] Speaker 08:
That licensee became a subsidiary of Verizon Wireless and the licensee held the licenses.

[00:35:30] Speaker 08:
So Vodafone's stake in Verizon Wireless was in a U.S.

[00:35:34] Speaker 08:
organized entity and that entity controlled the license holder.

[00:35:39] Speaker 08:
So it's not accurate to say that the commission turned a blind eye to Verizon Wireless's non-compliance in section 310B3 for a period of years, because it really depends on how to acquire the licenses.

[00:35:50] Speaker 08:
But this also goes to the point that the commission previously had evaluated Verizon Wireless's stake, or Vodafone's stake in Verizon Wireless, and found that it satisfied the section 310B4 test.

[00:36:03] Speaker 05:
That's very, I mean, this field where

[00:36:09] Speaker 05:
what Verizon means to the U.S.

[00:36:11] Speaker 05:
market is very different in 2000 and 2008 and 2012.

[00:36:19] Speaker 05:
An assessment that some ownership stake was

[00:36:24] Speaker 05:
With in the public interest or not contrary to public interest in the earlier year.

[00:36:28] Speaker 08:
It's a little bit, but it's a different issue.

[00:36:30] Speaker 08:
Your honor, when we look at foreign ownership, and this is born out in the Bell Atlantic order, we typically look at competition along foreign routes.

[00:36:37] Speaker 08:
We don't look at the size of rise in wireless in the domestic telecommunications market.

[00:36:42] Speaker 08:
And as we pointed out in the forbearance order, you know, when we granted forbearance, this class of care... Explain that a little bit.

[00:36:48] Speaker 05:
You look at competition along foreign routes.

[00:36:49] Speaker 05:
Could you elaborate a little bit on that?

[00:36:50] Speaker 08:
When we look at foreign ownership in the company, we look at issues that are related to the foreign ownership.

[00:36:56] Speaker 08:
We look at the fact that Vodafone has a 45% stake in the company.

[00:37:00] Speaker 08:
has no bearing whatsoever on Verizon Wireless's spectrum holdings.

[00:37:05] Speaker 08:
In this company, there are two different issues.

[00:37:07] Speaker 08:
And in the forbearance order, and I think this is where you're going about Verizon's spectrum holdings and the fact that today it's a far more dominant provider, right, in domestic telecommunications markets.

[00:37:18] Speaker 08:
When we went through our forbearance test and the forbearance order, you know, we explained that sections 201 and 202 of the Act, which require common carriers like Verizon Wireless to provide

[00:37:29] Speaker 08:
services at just and reasonable rates still applied not withstanding foreign ownership.

[00:37:40] Speaker 05:
What is the purpose behind the foreign ownership restrictions?

[00:37:44] Speaker 08:
The purpose behind the foreign ownership restrictions, it goes back to the 1934 Act, and at the time, Congress didn't want foreign entities to have a significant interest in U.S.

[00:37:57] Speaker 08:
entities.

[00:37:57] Speaker 08:
And I think it actually goes back to concerns about – well, frankly, concerns about broadcast, primarily.

[00:38:06] Speaker 08:
Congress didn't want foreign entities to use broadcast stations to broadcast propaganda and it's changed over time.

[00:38:12] Speaker 05:
So why is the inquiry that the FCC uses, you said something about looks at their foreign roots, that you said something like that, looks at the like Vodafone's, so they don't look at the at the

[00:38:25] Speaker 05:
domestic market at all, they look at what you said.

[00:38:30] Speaker 08:
The issue is here, whether Vodafone has a 65% interest in Verizon Wireless or a 45% interest or a 30% interest in the domestic telecommunications market.

[00:38:43] Speaker 08:
Verizon Wireless is still going to be subject to the provisions of Section 201 and 202 of the Act.

[00:38:49] Speaker 08:
And so NTCH's complaint here is that Verizon Wireless is not offering roaming on just and reasonable rates under Section 201 and 202, irrespective of Vodafone's foreign ownership or its stake in Verizon Wireless.

[00:39:06] Speaker 08:
Verizon Wireless is still subject to those protections and insofar as NTCH thinks it's being abused by Verizon Wireless, it can bring a 208 complaint to the Commission, which it did, and our Enforcement Bureau found it lacking and denied it.

[00:39:24] Speaker 08:
We filed that decision in a July 1st, 28-J letter.

[00:39:28] Speaker 08:
Can we talk about the roaming conditions?

[00:39:31] Speaker 05:
Way over.

[00:39:32] Speaker 05:
We're way over.

[00:39:33] Speaker 05:
I'll give you a minute.

[00:39:34] Speaker 08:
Okay, well there's such in the roaming conditions.

[00:39:36] Speaker 08:
The Commission reasonably predicted that its newly adopted data roaming rules would protect small wireless carriers like NTCH.

[00:39:46] Speaker 08:
Those rules have been in effect for 11 months.

[00:39:48] Speaker 08:
The Commission had no basis to find that they were ineffective.

[00:39:52] Speaker 08:
During that period, not a single carrier filed a roaming complaint with the agency.

[00:39:57] Speaker 08:
The date of roaming order that adopted those rules provided an avenue for carriers like NTCH to file a roaming complaint.

[00:40:04] Speaker 08:
NTCH did.

[00:40:05] Speaker 08:
And as I pointed out, our Enforcement Bureau denied that complaint in July of this year.

[00:40:11] Speaker 04:
All right.

[00:40:11] Speaker 04:
This is the settlement in which Verizon promised to obey the law?

[00:40:15] Speaker 05:
No, that's part of the approval year.

[00:40:18] Speaker 01:
Even if it wasn't for them.

[00:40:19] Speaker 01:
Right.

[00:40:20] Speaker 05:
All right.

[00:40:22] Speaker 05:
Thank you.

[00:40:22] Speaker 05:
Thank you.

[00:40:29] Speaker 07:
Morning, Ms.

[00:40:30] Speaker 07:
Stetson.

[00:40:30] Speaker 07:
Good morning, Your Honors.

[00:40:31] Speaker 07:
May it please the Court, Kate Stetson for Verizon.

[00:40:34] Speaker 07:
Just a couple of quick points.

[00:40:35] Speaker 07:
First, Judge Edwards, I think perhaps the conceptual problem we're having with

[00:40:41] Speaker 07:
whether and how the FCC applied the forbearance order has to do with what Ms.

[00:40:46] Speaker 07:
Flood mentioned was the case even before the forbearance order came to be, which was that back in 2000, the FCC already had approved a foreign ownership, a controlling ownership in Verizon up to 65.1 percent.

[00:41:01] Speaker 07:
So you have the forbearance order coming out in 2012 saying,

[00:41:04] Speaker 07:
you have to go through this process for B3 before your percentage exceeds this certain amount.

[00:41:11] Speaker 07:
The problem with Verizon was Verizon's percentage at that point had already been exceeded and approved under a separate regime.

[00:41:18] Speaker 07:
So if you look at Joint Appendix 83, 84, and 85,

[00:41:22] Speaker 07:
What the FCC does with respect to this particular license application is it looks at the previous order under B4.

[00:41:32] Speaker 07:
It also mentions, importantly, I think to your point, the 2008 commitment made to DOD

[00:41:39] Speaker 07:
DOJ, DHS, FBI, and says, we're going to grant this condition.

[00:41:44] Speaker 07:
We find it's in the public interest under B3 pursuant to our forbearance authority on condition that that letter remain in place.

[00:41:52] Speaker 07:
That's a standard condition of this approval as well.

[00:41:55] Speaker 07:
That is the way that the FCC was able to come to terms with a forbearance situation that already preexisted the forbearance order.

[00:42:05] Speaker 07:
I think that's the timing problem the FCC confronted, and I think it solved it.

[00:42:10] Speaker 07:
All of this, of course, is assuming that NTCH gets past the mootness issue.

[00:42:15] Speaker 07:
And that the problem there, I think, is I think Judge Pillard, you asked what is to be done on remand.

[00:42:23] Speaker 07:
And what Mr. Evans said was, well, we should ask how did this happen?

[00:42:27] Speaker 07:
Why did this happen?

[00:42:28] Speaker 07:
There's not really a mechanism for that kind of board of inquiry.

[00:42:35] Speaker 07:
at the point where the license no longer is held by a foreign owner.

[00:42:39] Speaker 07:
This issue is moot, and it was moot a year before the FCC issued its reconsideration order.

[00:42:45] Speaker 07:
So in term.

[00:42:46] Speaker 05:
I wonder if you could, I mean, I didn't want to cut you off if anybody wants to follow up on that, but I wonder if you could also address the standing argument, and in particular, with respect to both the spectrum co-order and the order on the prior licenses.

[00:43:03] Speaker 07:
Sure.

[00:43:04] Speaker 07:
With respect to the order on the prior licenses, let me take that first.

[00:43:09] Speaker 07:
Are you referring then to the FCC's statement about clearing up any dispute about ownership of Verizon's licenses generally, not this one?

[00:43:18] Speaker 07:
As the FCC, I think, thoroughly explains in its brief, that is a dicta, that is pure dicta.

[00:43:26] Speaker 07:
So even before we get to a standing question, I think the fact that we are here talking about not those other licenses awarded in different proceedings that are not before us, that were not involved in the spectrum co-application, has nothing to do with the appeal here today.

[00:43:43] Speaker 07:
That's the fundamental problem with Mr. Evans' argument.

[00:43:46] Speaker 07:
The standing problem is, I think, the second one.

[00:43:48] Speaker 07:
It's usually the first here.

[00:43:49] Speaker 07:
It's the second.

[00:43:50] Speaker 05:
Nothing to do, meaning it's just beyond the scope of the order.

[00:43:53] Speaker 05:
So it isn't even a standing question.

[00:43:54] Speaker 05:
It's just it's not before us, because it's not part of the reconsideration order.

[00:43:58] Speaker 05:
The reconsideration order didn't take action with respect to them.

[00:44:03] Speaker 05:
And therefore, the time for challenging those is long past.

[00:44:06] Speaker 05:
Exactly.

[00:44:07] Speaker 05:
That's exactly right.

[00:44:08] Speaker 07:
Yes.

[00:44:08] Speaker 07:
We are here on an appeal from an order pertaining to the spectrum co-applications.

[00:44:14] Speaker 07:
And then with respect to the spectrum co-applications, I think we in our brief, I think at about page 16 or 17, talk about a parade of ifs.

[00:44:26] Speaker 07:
Essentially, if Mr. Evans gets his wish, and we can talk about your question, Judge Pillard, what he's asking for.

[00:44:31] Speaker 07:
If he gets his wish, this goes back.

[00:44:33] Speaker 07:
And apparently, under NTCH's view, there is some kind of a new proceeding, either a revocation

[00:44:39] Speaker 07:
or a re-examination, at which point perhaps somebody else gets the licenses, at which point perhaps somebody else charges different roaming rates, at which point perhaps MTCH benefits from that.

[00:44:50] Speaker 07:
That is not the stuff of standing.

[00:44:52] Speaker 07:
That is a series of speculative transactions, most of which are outside of the FCC's or MTCH's power.

[00:45:00] Speaker 07:
Judge Pillard, the last thing I'll say is you asked Mr. Evans what he was asking for here.

[00:45:04] Speaker 07:
If you look at page 30 of MTCH's reply brief,

[00:45:09] Speaker 07:
you will see the list of wishes.

[00:45:12] Speaker 07:
They want to remail with instructions not to act on the applications until the Commission has conducted a full hearing.

[00:45:19] Speaker 07:
The Commission should be directed to impose reasonable roaming rates.

[00:45:22] Speaker 07:
The Commission should be directed to initiate a show cause hearing.

[00:45:26] Speaker 07:
The problem with the first one is that it's fully within the Commission's discretion and moot.

[00:45:31] Speaker 07:
The problem with the second one is that the Commission, as Judge Prillard pointed out, has vast discretion to impose reasonable conditions.

[00:45:38] Speaker 07:
And the problem with the third is that it is fully within the Commission's enforcement discretion.

[00:45:43] Speaker 07:
If there are no further questions.

[00:45:46] Speaker 05:
Thank you, Ms.

[00:45:47] Speaker 05:
Sesson.

[00:45:48] Speaker 05:
Mr. Evans, you exceeded your time, but we'll give you two minutes.

[00:45:55] Speaker 03:
Thank you, Your Honor.

[00:45:56] Speaker 03:
I just wanted to finish the point that I was making before I sat down before on the exception in the Heckler-Cheney case, which is a situation where the agency consciously and deliberately adopts a policy that effectively abdicates its statutory responsibilities.

[00:46:12] Speaker 03:
I would say that this is that case because the FCC permitted the grant of all these licenses over a course of 12 years unlawfully, and I think that's a conscious and deliberate

[00:46:22] Speaker 03:
abdication of its statutory responsibilities that takes this out of the pure discretion situation.

[00:46:28] Speaker 03:
To address Judge Randolph's concern about why did we only file this on a petition for reconsideration, there was no way anybody could know that what was at stake here was a forbearance petition.

[00:46:40] Speaker 03:
The application itself said there are no new foreign ownership issues raised by this application.

[00:46:47] Speaker 03:
When the FCC put it out on public notice,

[00:46:49] Speaker 03:
They've specifically denominated in the public notice that these are 310D applications, which are the regular standard assignment transfer of control applications.

[00:46:58] Speaker 03:
Nothing anywhere indicated that forbearance was anywhere in the works.

[00:47:03] Speaker 03:
I had no reason to think that this was in the offing because Verizon hadn't requested it and at no point did the FCC even hint about it until the August 17th order came out, a few days before the order came out.

[00:47:17] Speaker 03:
That's why the FCC didn't even challenge our petition for reconsideration as being untimely or unlawful because they knew that we couldn't have known that this whole thing was happening until the last minute when we couldn't do anything.

[00:47:31] Speaker 03:
The FCC refers to the denial of our roaming complaints that we actually did end up filing against Verizon.

[00:47:37] Speaker 03:
That denial is now before the court and the court will see when it takes that up how wrong the FCC was in denying the complaint because the rates are absolutely outrageous and it shows why we had to come to the FCC in this context seeking some sort of relief.

[00:47:54] Speaker 03:
On the dicta point that was discussed with counsel for Verizon, I find that to be a very interesting

[00:48:00] Speaker 03:
argument, because they're saying that the Spectrum Code Order only dealt with the forbearance with respect to the licenses that were issued there.

[00:48:07] Speaker 05:
Mr. Evans, your time has expired.

[00:48:11] Speaker 05:
You can finish your sentence.

[00:48:13] Speaker 03:
But if that's the case, that means that all the licenses that the Commission continued to grant to Verizon after the Spectrum Code Order were also unlawful, because according to the DICTA argument, that means none of those have been foreborn from.

[00:48:27] Speaker 03:
And therefore, the foreign ownership was still in place, but there was no lawful mechanism for those licenses to be granted.

[00:48:35] Speaker 05:
Thank you, Mr. Evans.

[00:48:36] Speaker 05:
The case is submitted.