[00:00:02] Speaker 02: Case number 15-1500, Nueva Esperanza Inc. [00:00:06] Speaker 02: Appellant versus Federal Communications Commission. [00:00:08] Speaker 02: Ms. [00:00:08] Speaker 02: Rao for the appellant, Mr. Novak for the appellee. [00:00:15] Speaker 02: Good morning. [00:00:28] Speaker 01: May it please the court, this case turns on the proper interpretation of the FCC statement, which prohibits groups from colluding to agree to share time and points before the mutually exclusive phase of the low power FM application process. [00:00:43] Speaker 01: Now, the FCC agrees that the statement includes this prohibition, but reads the prohibition to apply to only a very narrow subset of circumstances. [00:00:52] Speaker 01: That limitation is irrational and does not comport either with the policy behind the statement and the low-power FM system or with common sense. [00:01:04] Speaker 01: If I may start with addressing the commission's argument, [00:01:11] Speaker 01: The fourth paragraph of the statement includes the clear language that. [00:01:16] Speaker 00: Can I just, instead of starting with the fourth, can you start with the third? [00:01:19] Speaker 00: Which is that, so what is it, let's just assume the fourth doesn't even exist. [00:01:25] Speaker 00: If you just look at the third, what is it about the third that doesn't cover this case? [00:01:31] Speaker 01: So the third paragraph is permissive. [00:01:34] Speaker 01: It says that groups may apply knowing that they may decide later to aggregate points so they can negotiate a timeshare agreement. [00:01:43] Speaker 01: So the proper reading of the third paragraph is that [00:01:47] Speaker 01: Entities enter into the low-power FM licensing application system knowing the rules, knowing that once the Commission has awarded points and if groups are tied at that point, they can then enter into time and point sharing agreements to [00:02:05] Speaker 01: to get rid of the tie. [00:02:07] Speaker 01: So groups, of course, can go into the process knowing that there's a point in time down the road where they may then decide to share points. [00:02:15] Speaker 01: But we don't think that this says that they can go into the process with an agreement already inked. [00:02:21] Speaker 00: So suppose if the fourth paragraph doesn't exist at all, and we're only talking about the third, do you read the third to preclude the possibility that you can't have an ex ante agreement? [00:02:32] Speaker 01: We think the third is consistent with the notion that you can't have an ex ante agreement. [00:02:36] Speaker 00: You can have an ex ante. [00:02:40] Speaker 01: No, we think it's consistent with our argument that you can't, however... Cannot. [00:02:44] Speaker 01: Cannot. [00:02:45] Speaker 01: But if the fourth paragraph doesn't exist, we don't think... It's not our argument that the third paragraph alone gets us where we need to go. [00:02:51] Speaker 00: So it sounds like basically the way you're reading the third is to say, [00:02:56] Speaker 00: You can know that you can agree later. [00:02:59] Speaker 00: That's right. [00:03:00] Speaker 00: But you just can't act on your knowledge ahead of time by having an understanding that, look, if it turns out we're all tied at the end of the day, here's how we could think about apportioning the time. [00:03:12] Speaker 01: That's our reading of the third and fourth paragraph and how to read the statement as a whole to make it consistent. [00:03:18] Speaker 00: And what sense would it make for the agency to draw that kind of distinction if it wants to allow for the possibility and indeed promote the possibility that in the event of a tie, [00:03:28] Speaker 00: there's going to be an apportionment that's going to be agreed upon, and mutual agreement is a good thing, and we want to promote that. [00:03:33] Speaker 00: Why would the agency say, but by the way, don't even talk about it beforehand, wait to see what happens, and then if you get tied, you can enter into an agreement, but beforehand it's verboten? [00:03:45] Speaker 01: So first, that line is one that the FCC has drawn clearly in this statement. [00:03:51] Speaker 01: In the fourth paragraph, it says groups can't apply with a prior understanding that they'll share the time and points. [00:03:56] Speaker 00: So I'm not worried about what the fourth paragraph says. [00:03:59] Speaker 00: I know you want to get there, and I can understand why you want to get there. [00:04:02] Speaker 00: But why just as a matter of common sense? [00:04:06] Speaker 00: Suppose the agent just completely misspoke in the fourth. [00:04:08] Speaker 00: Why would it want to do that? [00:04:10] Speaker 00: What sense would it make to draw that distinction? [00:04:11] Speaker 01: So the ultimate purpose of the Low Power FM scheme as a whole is to increase the diversity of voices on the airwaves. [00:04:20] Speaker 01: And saying that groups can't enter into the application process with a pre-existing agreement to share time and points promotes this diversity of voices being able to eventually enter the winning group and receive the license. [00:04:33] Speaker 00: How? [00:04:33] Speaker 01: So the facts of this case are a good example. [00:04:37] Speaker 01: So the Germantown entities all represent Germantown, which is a 3.3 square mile part of Northwest Philadelphia. [00:04:45] Speaker 01: They all have very similar interests. [00:04:47] Speaker 01: Now Esperanza represents the Hispanic community in Philadelphia. [00:04:51] Speaker 01: The NAACP, we're interested in putting voices on the radio to promote racial justice. [00:04:58] Speaker 01: These are interests that are [00:05:00] Speaker 01: different than the interests of the Germantown entities. [00:05:03] Speaker 01: So if you draw a line and say you can't have an agreement to share time and points at the application phase, what it does is it allows for these other groups to have a good shot at entering into the final time sharing agreement that wins. [00:05:17] Speaker 04: Isn't that what happened here? [00:05:19] Speaker 04: What happened here is... Not everyone in the original was deemed eligible. [00:05:25] Speaker 04: Someone that was, I think, dropped out, and another party that was not came in. [00:05:29] Speaker 01: That's right. [00:05:29] Speaker 01: But the three entities, the three Germantown entities from the beginning, three out of the four, are the same that entered into the ultimate timeshare agreement in this case. [00:05:38] Speaker 01: And so what that meant, because there were seven, all you needed was four. [00:05:42] Speaker 01: That means there was only one spot open [00:05:44] Speaker 01: essentially for other entrants to come in. [00:05:48] Speaker 01: Had there not been an agreement at all, then all of the seven entities would have had an equal opportunity. [00:05:56] Speaker 04: So that the locking up four didn't give any assurance of having a majority? [00:06:03] Speaker 01: There were more than seven applicants at the initial phase. [00:06:07] Speaker 01: The way the process works is the FCC looks at the applications and awards points and makes sure everyone is technically complying with the application requirements. [00:06:16] Speaker 01: So once they get to the phase of awarding points, there were seven entities. [00:06:21] Speaker 01: And then there's a 90-day period where the groups... [00:06:25] Speaker 04: understanding would have preceded that, correct? [00:06:29] Speaker 01: That's right. [00:06:29] Speaker 01: It preceded the application. [00:06:31] Speaker 04: So you were saying that in that preceding period they could somehow assure themselves of a majority? [00:06:37] Speaker 01: Well, they had a better chance of assuring themselves of a majority because they had an agreement. [00:06:41] Speaker 04: It wasn't a done deal, of course, because... So why does it in any way frustrate the agency's policy of inviting a diversity of voices? [00:06:51] Speaker 01: Because in this situation, they did, in fact, those four entities could have, in fact, locked down the... As it turned out. [00:06:59] Speaker 01: Yes, as it turned out. [00:07:00] Speaker 04: Not ex ante. [00:07:02] Speaker 01: Ex ante, what happened was the agreement made it more likely that those groups would prevail and less likely that Esperanza and NAACP... [00:07:12] Speaker 01: Because they have a group of four. [00:07:13] Speaker 04: So regardless of how- Okay, not more likely that they would be deemed eligible. [00:07:17] Speaker 01: No, I'm sorry. [00:07:18] Speaker 01: More likely that they would actually receive the license, which is what we were concerned about, and that's what the FCC is concerned about. [00:07:23] Speaker 00: They are- But the whole thing is contingent on the possibility that they end up in a tie, right? [00:07:30] Speaker 00: Because if you're not one of the entities that ends up in a- if you're not one of the applicants that ends up in the tie, you're out of their mix, period. [00:07:36] Speaker 01: You should be out of the mix. [00:07:39] Speaker 01: The FCC, and if I may address the fourth paragraph because it's relevant to your question, the FCC reads the fourth paragraph, which explicitly prohibits groups from entering into agreements to share time and points. [00:07:52] Speaker 01: They read the fourth paragraph as limited to situations where if just one applicant of that group succeeds in getting through to the final stage. [00:07:59] Speaker 01: So A, B, and C reach an agreement, A gets through, and B and C are piggybacked onto that agreement. [00:08:05] Speaker 01: That's the one situation in which the Commission acknowledges that this statement creates a rule of no ex ante agreements. [00:08:16] Speaker 01: That, we think, is an example of a situation in which you can't have XNT agreements but can't be read as an exclusive situation, a list of all the situations in which that is the case. [00:08:26] Speaker 01: So here's a good example. [00:08:27] Speaker 01: A, B, and C, again, if A and B get through to the final phase but C does not, [00:08:32] Speaker 01: C would get piggybacked in the same way as in the commission's hypothetical. [00:08:38] Speaker 01: But that's no less of a concern of C getting piggybacked with A and B versus B and C getting piggybacked with A. The same concerns are at play here. [00:08:48] Speaker 01: But only if just one applicant succeeds, if that language is read literally and as an exclusive list, [00:08:56] Speaker 01: then the scenario that I put forth is not covered, and the commission's goals are afforded in that situation as opposed to the very similar one. [00:09:06] Speaker 04: Did you just say then that even if C is determined not to be eligible, it can come back into the group? [00:09:11] Speaker 01: Well, that's what the commission wants to prohibit. [00:09:14] Speaker 04: That's one... Yeah, yeah. [00:09:16] Speaker ?: Okay. [00:09:16] Speaker 01: with the fourth paragraph, that's one of the concerns. [00:09:20] Speaker 01: And the reason is because, I mean, so we talked about the diversity of voices, there's also, the commission wants to have strong entities actually receiving the license and getting air time, and the reason for that is because these are highly sought after licenses, and you want entities to actually be operating these stations [00:09:46] Speaker 01: What happened in this case is that G-Town radio went to its friends, other entities in Germantown, and said, look, you guys should apply for this low-power license. [00:09:58] Speaker 01: You can apply separately. [00:09:59] Speaker 01: We have these sort of overlapping board structures. [00:10:02] Speaker 01: But we all represent Germantown. [00:10:04] Speaker 01: We'll apply separately. [00:10:05] Speaker 01: And then if we all get through, we'll share time and points. [00:10:09] Speaker 01: And that's exactly what happened here. [00:10:11] Speaker 01: That undermines. [00:10:12] Speaker 04: But everyone has to be capable of operating, even if they're the only one. [00:10:17] Speaker 01: That is a requirement of applying. [00:10:22] Speaker 04: All of the groups listed... It's not as if somebody who couldn't really operate is being brought into the group. [00:10:29] Speaker 01: There's no evidence of that in this case, but we don't. [00:10:32] Speaker 00: It wouldn't be allowed. [00:10:34] Speaker 00: It couldn't happen, I don't think, right? [00:10:36] Speaker 01: That's right. [00:10:37] Speaker 01: I believe that's correct. [00:10:43] Speaker 01: But the example... [00:10:46] Speaker 01: The gamesmanship concerns in the fourth paragraph, which are clearly spelled out here, multiple groups should not attempt to maximize their chances of receiving the permit by submitting multiple applications. [00:10:58] Speaker 01: Those gamesmanship concerns are at play in not just the if just one applicant succeeds scenario, they're at play in the if [00:11:06] Speaker 01: two alpha can succeed or they're at play in the situation in this case where it turns out that all of the groups in the pre-existing arrangement get through because they increase their chances that that group with the pre-existing arrangement will ultimately get the license to the exclusion of other groups that, as deemed by the commission, are equally able to operate and have received the same number of points. [00:11:31] Speaker 04: Is it fair to read if just one [00:11:32] Speaker 04: applicant succeeds as meaning if less than all succeed. [00:11:37] Speaker 01: We don't think that that's the proper... It's literally only if one succeeds, not if two? [00:11:44] Speaker 01: It can't be if just one, for the reason I said. [00:11:46] Speaker 01: If A and B go through and C doesn't, the same exact concerns are at play as if A gets through and B and C are piggybacked in. [00:11:54] Speaker 01: But if you're going to rewrite the sentence, which you have to do to have it make any sense, [00:12:02] Speaker 01: To have it be a rational assertion of the agency's stated goals in this paragraph, which is maximizing the chances of receiving the permit and of promoting the diversity on the airways. [00:12:18] Speaker 01: If I may turn to the issue of whether this guidance is authoritative and binding, because I'm sure my colleague will raise this issue. [00:12:27] Speaker 01: This statement was clearly directed at the entrance into the low power FM system. [00:12:35] Speaker 01: It is a list of do's and don'ts. [00:12:37] Speaker 01: It tells them what they can do and what they must not do. [00:12:39] Speaker 01: It appeared on the FCC's official website under the authorship of Bill Lake, the chief of the Media Bureau. [00:12:47] Speaker 01: Mr. Lake is designated by the regulations to have the same authority that the Media Bureau itself has, so he clearly had the authority to bind the agency as a whole. [00:12:59] Speaker 01: This court's precedent says that there's no, I mean, it's clear that there's no medium that is or isn't authoritative. [00:13:05] Speaker 01: The court just needs to look at the indicia of authoritativeness on the face of the document. [00:13:11] Speaker 01: And we think that this document has all of those indicia. [00:13:17] Speaker 01: It can't be the case that the agencies are able to put up guidance on the internet when it's convenient for them because of cost saving and because this is the way that people interact nowadays, but then back away from that same internet guidance on the internet when it's convenient for them by saying, oh, well, we didn't go through notice and comments, so it can't possibly be a binding rule. [00:13:37] Speaker 01: If I may, if there are no further questions, I'll reserve my remaining time. [00:14:00] Speaker 03: Good morning, Your Honors, and may it please the Court. [00:14:02] Speaker 03: I'm Scott Novak for the FCC. [00:14:05] Speaker 03: I'd like to begin by walking through what the staff blog post here actually says, because I do think Esperanza is taking a single sentence of this blog post out of context and misrepresenting what it means. [00:14:16] Speaker 03: As Judge Srinivasan recognized, there are two paragraphs of this blog post that are potentially relevant here, and they each deal with two very different kinds of agreements. [00:14:26] Speaker 03: So the paragraph beginning with third deals with time-sharing agreements. [00:14:30] Speaker 03: And what that paragraph says is that organizations in a community could apply separately knowing they may later decide to aggregate points so they can negotiate a time-sharing agreement if the commission determines they're tied with the highest point total. [00:14:44] Speaker 03: And that's essentially what happened here. [00:14:46] Speaker 03: The timeshare applicants chose to file separate applications, knowing they would then be allowed to enter into a timesharing agreement and aggregate points. [00:14:55] Speaker 03: And the blog post specifically allows this. [00:14:58] Speaker 00: So what about the response on the other side, which is that [00:15:02] Speaker 00: When it doesn't expressly sanction entering into an agreement before everybody's been determined to be tied, and therefore, I forget what the term is for the... Tender to selectee. [00:15:14] Speaker 00: Tender to selectee, right. [00:15:15] Speaker 00: So before you're a tender to selectee, what it's talking about is that you can go into it individually knowing that in the event of a tie, you could later enter an agreement, but that doesn't tell you that you're authorized to engage in those kinds of negotiations in agreements ex ante. [00:15:30] Speaker 03: So I want to respond to that in two or three different ways, and I hope we'll have the opportunity to elaborate on each of them. [00:15:35] Speaker 03: One good one. [00:15:37] Speaker 02: Yes, we'll do. [00:15:38] Speaker 03: Well, Judge Ginsburg, I think the first point goes to something that Your Honor observed earlier, which is even if we were to draw a line between knowledge or plans or discussions on the one hand and, quote unquote, agreements on the other hand, Esperanza wouldn't be helped here, because Esperanza hasn't shown that there was an agreement here. [00:15:56] Speaker 03: It hasn't shown there was any final agreement between the winning applicants when they applied. [00:16:00] Speaker 03: What Esperanza alleged is an agreement between one set of applicants. [00:16:04] Speaker 03: But the winning timeshare agreement was between a different set of applicants. [00:16:08] Speaker 03: And I think the fact that a different agreement was negotiated later demonstrates there was no concrete agreement in place earlier. [00:16:15] Speaker 03: I would also direct your honors to page 140 of the joint appendix where the Germantown applicants say, here's what we did. [00:16:22] Speaker 03: And they say, applicants recognize their best chance was by working together at the outset with plans to potentially aggregate points during the mutually exclusive stage. [00:16:32] Speaker 03: So that is exactly what the blog post says. [00:16:35] Speaker 03: I don't think there was an agreement here. [00:16:37] Speaker 03: I understand why Esperanza wants to say there was an agreement. [00:16:40] Speaker 03: But I think that a quote-unquote agreement, which was apparently still malleable and the parties were still free to change their minds later, isn't really an agreement at all. [00:16:49] Speaker 00: So go past that one and then suppose that there's the conceptual question that whether you can enter into an agreement. [00:16:55] Speaker 03: Yes. [00:16:58] Speaker 03: Our view, Your Honor, and this is my second point, is that we don't draw any line, and we have never drawn a line, and you won't find one anywhere in the LPFM rules, between discussions and agreements. [00:17:09] Speaker 03: And I think it'd be problematic to do so, because we would essentially have to try to read the party's minds in every case to try to figure out, assuming on Esperanza's view that an agreement doesn't have to be a final enforceable agreement, we would have to read the party's minds to try to figure out at what point did any discussions mature enough [00:17:28] Speaker 03: to cross some intangible line into being an agreement. [00:17:32] Speaker 04: Let me go back to your first point, because this raises a question. [00:17:35] Speaker 04: Suppose that the four parties entered into a firm agreement that if any of them succeeds, those who succeed will agree to share time and will invite anyone else who has succeeded to join. [00:17:51] Speaker 04: Firm agreement. [00:17:53] Speaker 04: That's not a problem? [00:17:55] Speaker 03: So, Your Honor, my first response to that is that under our rules, we wouldn't respect any agreement until after the tentative selectees are announced. [00:18:05] Speaker 03: So as far as we're concerned, that wouldn't have any effect under our rules. [00:18:09] Speaker 02: I guess we're trying to understand the real world here. [00:18:12] Speaker 02: If you want diversity, you can't have people [00:18:16] Speaker 02: deciding against diversity in advance, and then ultimately winning, because that means the non-diverse people are locked out. [00:18:27] Speaker 02: And I don't know enough about Germantown to know what's going on here, but just reading the record that's before me. [00:18:35] Speaker 02: So that theoretically is what the concern is here. [00:18:41] Speaker 02: And we can all, from our own experience, think of examples where exactly this [00:18:46] Speaker 02: this happens. [00:18:47] Speaker 02: So the argument is if you have a policy in favor of diversity, you ought to let anybody apply, see who's qualified, and then the agreements take place, not lock them up beforehand. [00:19:02] Speaker 02: And I gather that the Commission subsequently has decided that what it calls game ownership is okay. [00:19:10] Speaker 02: and that the policy decision by the Commission, but at least I understood the petition to say, in very strong words, it doesn't make any sense if indeed it has this other policy favoring diversity. [00:19:27] Speaker 03: Your Honor, our stated goals for the LPFM service do include diversity and localism, but those aren't the only goals, and we're not pursuing them at all costs. [00:19:36] Speaker 03: Among other things, we want to be able to get these licenses out quickly into the hands of people who can cooperate effectively together. [00:19:44] Speaker 03: And so we don't want to go back to the era of having to do comparative hearings to try to measure which group is the most diverse. [00:19:51] Speaker 03: We established a point system, which attempts to quickly and objectively measure, through various proxies, diversity. [00:19:59] Speaker 03: And as far as our system is concerned, if applicants are entitled to a given number of points, they receive those points. [00:20:07] Speaker 03: That's how we measure diversity, without trying to inspect, well, [00:20:12] Speaker 02: So it doesn't matter in Germantown if all the FM stations are playing country music. [00:20:21] Speaker 02: It would still be consistent with the policy and the point system. [00:20:26] Speaker 03: It would, Your Honor. [00:20:27] Speaker 02: Now, it's a little simpler here because... No, but I mean, that's the result of what the Commission has done. [00:20:37] Speaker 03: Yes. [00:20:38] Speaker 02: So all over the country, we will be hearing [00:20:41] Speaker 02: Nothing wrong with country music, but I'm just saying that we'll be hearing country music. [00:20:48] Speaker 03: mitigates that concern, is that in order to receive, in this case, the five points that each of these applicants received, they need, among other things, to have had an established community presence for at least two years, and they need to be separate organizations that are under separate control. [00:21:05] Speaker 03: I do want to be clear here. [00:21:07] Speaker 03: These organizations are not ones that just propped up to apply for this. [00:21:10] Speaker 03: Germantown life dates back to 1950. [00:21:12] Speaker 02: I know, but it doesn't matter under the commission's approach. [00:21:16] Speaker 02: There are country music stations everywhere, all right? [00:21:22] Speaker 02: And if you're talking about diversity, doesn't the Commission have to consider what the product is? [00:21:29] Speaker 02: I mean, otherwise there is no, potentially no diversity. [00:21:34] Speaker 03: So what we require is that the organizations be separate organizations that have their own established mission statement and that they have an established presence as individual organizations. [00:21:47] Speaker 03: Now, we are not going to inspect to try to figure out, because I think this would go back to the era of comparative hearings where we'd have a difficult system to administer and wouldn't be able to do quickly and objectively. [00:21:57] Speaker 02: So what I'm trying to understand is how do you avoid having all the stations with country music? [00:22:03] Speaker 02: If somebody decides to fund country music and sets up all these organizations under your system, there is no diversity. [00:22:11] Speaker 02: Isn't that the point? [00:22:12] Speaker 03: Well, under that scenario, I mean, I think this is kind of far out because [00:22:17] Speaker 03: Among other things, the LPFM rules don't allow an owner of an LPFM station to have an attributable interest in another station. [00:22:25] Speaker 03: So if you had someone who was establishing several different stations and there was some overlapping control. [00:22:30] Speaker 02: That's not my hypothetical. [00:22:31] Speaker 02: We all know country music is throughout the country, OK? [00:22:34] Speaker 02: Different forms of country music. [00:22:37] Speaker 02: And if you're talking about diversity, presumably we want to hear some classical music every now and then or something like that. [00:22:45] Speaker 02: I mean, I'm trying to make this as neutral as possible, even though I don't think that's what's happening here. [00:22:51] Speaker 02: But the way you're describing the process, it doesn't promote what the Commission says it's interested in promoting, because everybody can figure out a way, as your rulemaking engagementship points out, to beat the diversity point. [00:23:10] Speaker 03: So what I think that rule-making recognized is that if you're going to have a point system, if we're not going to go back to the era of long, drawn-out, subjective, comparative hearings, there's always going to be some remote possibility, some remote scenario you might be able to envision where someone might look at the end result and not think that it is. [00:23:29] Speaker 02: Well, for example, you could have a point system that says if this region of five square miles already has two country music [00:23:39] Speaker 02: low-power FM stations, a third low-MF station applicant has to offer something else. [00:23:49] Speaker 03: So this ultimately was a policy cut by the Commission? [00:23:52] Speaker 02: Right. [00:23:52] Speaker 03: You could have that system. [00:23:54] Speaker 03: We're not denying that. [00:23:55] Speaker 03: But you would have difficulty administering that system in the way that we feel best serves our goals, which includes being objective and easily being able to quickly administer licenses. [00:24:04] Speaker 02: OK, but I just gave you an objective point system. [00:24:06] Speaker 03: Yes, Your Honor. [00:24:07] Speaker 02: And I'm just [00:24:10] Speaker 02: trying to understand the commission's position here. [00:24:14] Speaker 02: If you have a point system that has nothing to do with diversity of product, much less offeror, how do you promote diversity? [00:24:26] Speaker 02: So I think we have difficulty administering that system, because of course some will- I know you want to go back to the problems of comparative hearings, but I'm suggesting there's another way to do it. [00:24:40] Speaker 03: So, Your Honor, I mean, we could have a rule that says, you know, in a very concrete, low level of generality, you can't have more than one country music station. [00:24:50] Speaker 03: But suppose we had a rule that said you can't have more than one station that has similar programming. [00:24:54] Speaker 03: Well, how do we measure what's similar programming? [00:24:56] Speaker 02: No, Counsel, it's very easy. [00:24:58] Speaker 02: The level of generality. [00:24:59] Speaker 02: I was being very specific. [00:25:00] Speaker 02: I don't want to single out country music, but that was just an easy example, all right? [00:25:06] Speaker 02: When I turn on my car radio, for example, [00:25:09] Speaker 02: I can find all kinds of music on the FM station. [00:25:15] Speaker 02: But the way the commission has set it up, five years from now, I may be hearing only one type. [00:25:22] Speaker 02: That's all I'm getting at. [00:25:23] Speaker 02: I don't see how the system itself promotes diversity. [00:25:27] Speaker 04: Maybe I'm mistaken. [00:25:28] Speaker 04: I thought we were talking about diversity of programming in the course of the day on a single station. [00:25:36] Speaker 03: Yes, you're right. [00:25:37] Speaker 04: All the commercial stations continue to exist, all the existing non-property. [00:25:42] Speaker 04: These low-power supplements are your expectation as well. [00:25:46] Speaker 04: If we have a bunch of community organizations, more rather than fewer, or at least more rather than one, we would likely elicit a diversity program. [00:25:55] Speaker 04: So you could have an auction, but that doesn't work if you're trying to invest in organizations like this. [00:26:01] Speaker 04: You could have a comparative hearing, but that doesn't work for anybody and has long been proven inefficient. [00:26:09] Speaker 04: And so you're taking a reasonable inference that multiple organizations will have different points of view. [00:26:16] Speaker 03: Yes, yes. [00:26:16] Speaker 03: And our view is that we think for those reasons that LPFM stations, given the non-commercial nature and how this is designed, will generally have different programming than what's already on commercial stations. [00:26:27] Speaker 00: What was your third verse? [00:26:30] Speaker 00: Because the first one was that there wasn't any ex ante agreement here at all. [00:26:34] Speaker 00: The second one was if you try to draw a distinction between discussions and agreements, that would be unadministrable. [00:26:39] Speaker 03: You're on a cut? [00:26:40] Speaker 00: You had a third response. [00:26:41] Speaker 03: Could I just quickly return to Judge Rogers' question before turning back to that? [00:26:44] Speaker 00: That's fine. [00:26:45] Speaker 03: So Judge Rogers, our submission here, there are two last points that I want to make. [00:26:50] Speaker 03: So one is our basic submission that [00:26:53] Speaker 03: Ultimately, we need an objective system here. [00:26:57] Speaker 03: And there would be difficult cases of the margins if we were to do things differently. [00:27:02] Speaker 03: And that was a policy call. [00:27:03] Speaker 03: And the other point that I want to make is that if you have a community that is sustaining multiple independent, long-standing stations that have similar content, I don't know there'd be the worst thing in the world to say, well, there's a demand for that content in this community. [00:27:19] Speaker 03: and maybe it's okay to have those on there. [00:27:22] Speaker 03: Now, our preference is generally for diversity, but we're balancing against other goals here. [00:27:28] Speaker 03: Now, Judge Srinivasan, yes. [00:27:29] Speaker 03: So my response to this question about whether this falls within the language of the third paragraph here. [00:27:35] Speaker 03: So my first response is that there simply isn't an agreement on this record. [00:27:40] Speaker 03: And my second response was that you don't want to administer the line between the specials and agreements. [00:27:45] Speaker 03: You don't want to administer the line. [00:27:47] Speaker 03: And our system happens to happily avoid that problem. [00:27:50] Speaker 02: And what's the third response? [00:27:51] Speaker 03: The third response is that [00:27:54] Speaker 03: Even if the court isn't sure whether this falls strictly within the word of that third paragraph, it certainly doesn't fall under the fourth paragraph, which is what Esperance is trying to rely on, and the juxtaposition of those two matters. [00:28:07] Speaker 03: So in the paragraph beginning with fourth, [00:28:09] Speaker 03: which is the one that Esperanza is focusing on here. [00:28:12] Speaker 03: The blog post says that groups can't file separate applications if there is a prior understanding that the groups will later share time or ownership if just one applicant succeeds in getting a license. [00:28:23] Speaker 03: And that paragraph forbids what I refer to as piggybacking agreements. [00:28:27] Speaker 03: that allow an organization that isn't a tentative selectee to piggyback on a winning applicant and to share in its airtime. [00:28:34] Speaker 03: And that would violate the rule that only tentative selectees can share in an LPFN station's airtime. [00:28:39] Speaker 00: So beforehand, they don't know if they're a tentative selectee? [00:28:43] Speaker 03: Yes. [00:28:44] Speaker 00: So the way you're phrasing it, you're assuming that they are a tenant of selectee. [00:28:50] Speaker 03: So these piggybacking agreements are, I think, agreements that would say, essentially, I say to you, if I win this license, and even if you aren't a tenant of selectee as well, I will nonetheless [00:29:03] Speaker 03: let you put some of your programming on my airtime. [00:29:06] Speaker 03: And that violates that rule about only tennis electees sharing the station's airtime, and it also violates the requirement to disclose all real parties and interests who have control over stations airtime. [00:29:17] Speaker 03: And if you look at the rest of the fourth paragraph, that's what this entire paragraph is about, but that's not what happened here. [00:29:23] Speaker 03: We have here, and again, this is juxtaposing the third paragraph with the fourth paragraph, we have here is a time-sharing agreement in which all of the applicants have to be tentative selectees. [00:29:33] Speaker 00: So it's okay, in other words, it's okay under the third paragraph to have an agreement if the agreement is conditioned on all the agreeers being tentative selectees. [00:29:42] Speaker 00: It's not okay to have an agreement that expands beyond that and allocates share time even to somebody who's not going to become a tentative selectee. [00:29:49] Speaker 03: Yes, Your Honor, that's how the Commission has interpreted our rules here. [00:29:52] Speaker 03: Now, I don't think that scenario is presented for the reasons that we already discussed. [00:29:56] Speaker 03: I don't think there was an agreement. [00:29:58] Speaker 03: But our submission is that if you look at our rules, we have never drawn any distinction between knowledge or discussion and agreements. [00:30:06] Speaker 03: This is, in our view, we wouldn't draw any line between this and what's in the third paragraph. [00:30:11] Speaker 03: And so I think correctly understood, the staff blog post fully supports our position and not Esperanza's. [00:30:17] Speaker 03: The third paragraph specifically authorizes time-sharing agreements, which is the kind of agreement we have at issue here. [00:30:23] Speaker 03: And the fourth paragraph is about an entirely different type of agreement that isn't at issue here. [00:30:28] Speaker 00: And the fourth paragraph, the sentence, the critical sentence is, therefore, multiple groups should not attempt to maximize the chances of receiving an LPFM construction permit. [00:30:36] Speaker 00: What's the mechanism by which they're maximizing their chances of receiving an LPM [00:30:40] Speaker 00: LPFM construction permit? [00:30:43] Speaker 03: So there are a few different scenarios which we lay out in detail in our brief and it does go I think to the court recognized earlier this ex ante ex post distinction what information you have available when. [00:30:54] Speaker 03: So I can imagine a scenario stations A and B are both applying for an LPFM license. [00:31:00] Speaker 03: And they don't know for certain because there's limited information available at that time that they will be tied. [00:31:06] Speaker 03: They will both be tended to select T's. [00:31:08] Speaker 03: And so you can imagine reciprocal piggybacking agreements. [00:31:11] Speaker 03: They just want to make sure they have a chance to each get some of their programming on the airtime. [00:31:15] Speaker 03: And A says to B, if I'm the sole winner, I will let you have some of your programming on my airtime in exchange for B agreeing with A that if B is the sole winner, it'll let A have some of its airtime. [00:31:29] Speaker 03: So these are scenarios. [00:31:30] Speaker 00: But why does that maximize the chance? [00:31:32] Speaker 00: Why does that improve the chance of getting an LPFM permit? [00:31:35] Speaker 03: Because it improves the chances that they will. [00:31:40] Speaker 00: It doesn't seem to me it improves the chance of getting a permit. [00:31:43] Speaker 00: It might improve the chances that they get some benefit of a permit from airtime later. [00:31:47] Speaker 03: So there's a terminological issue here. [00:31:50] Speaker 03: And it's easiest to see when we talk about timeshare applications. [00:31:54] Speaker 03: So when if you have a timeshare and there's two or three or four stations, [00:31:58] Speaker 03: the terminology we use is not that each one of them gets a share of the license, each gets an individual license. [00:32:04] Speaker 03: Now that license may be limited to only a share of the airtime, but each has a license. [00:32:09] Speaker 03: So the scenario that I'm discussing with these piggybacking agreements would be functionally equivalent to each station having a license, each having a chunk of time in which you can [00:32:20] Speaker 00: Having a license, having a long chunk of time, I'm just quibbling with this word just so I make sure I understand your argument. [00:32:28] Speaker 00: The words are maximize the chances of receiving a construction permit. [00:32:32] Speaker 00: And in the scenario you outlined, which is the one I understand, which is A and B get together and say, look, I don't know if we're going to tie, I have no idea, but let's just go ahead and agree that regardless, we're going to have an allocation of 50-50 on airtime. [00:32:44] Speaker 00: So how does that improve the chances of getting a permit? [00:32:47] Speaker 03: I take your honest point that maybe in retrospect, that could have been worded slightly differently to say maximize the chances of being able to broadcast programming. [00:32:57] Speaker 00: OK. [00:32:57] Speaker 03: The same way that Judge Ginsburg's question earlier, I do think if just one applicant, I think we understand that language to mean if you were then all of the applicants. [00:33:06] Speaker 03: And I think this goes to another broad point in this case, which is that [00:33:12] Speaker 03: This blog post was simply informal staff advice, and it isn't the kind of thing that is thoroughly vetted and has this level of precision where we need to be parsing it word for word here. [00:33:24] Speaker 03: So I think the court can and should affirm on the ground that the blog post simply doesn't say what Esperanza is trying to make it say. [00:33:31] Speaker 03: But even if the court assumes Esperanza's reading or isn't sure about what the blog post means, that still wouldn't be controlling. [00:33:38] Speaker 03: Is this court recognized in Malkin that this sort of informal staff advice, which doesn't purport to have been thoroughly vetted by the commission, isn't guaranteed to be precise and accurate? [00:33:48] Speaker 03: And the court held in Malkin that it, quote, should not engender reliance and that it, quote, does not stop the government agency later. [00:33:55] Speaker 03: And that was true in Malkin, even though they are like here. [00:33:58] Speaker 03: The advice that issue came from what the court called an FCC insider who was presenting prepared remarks at an official seminar sponsored by the agency specifically to educate the public. [00:34:09] Speaker 03: And I think if instead of a blog post, Bill Lake was speaking at a seminar and he said the exact same thing this blog post says, I don't think there's much question that would be dismissed as just informal staff advice and non-binding. [00:34:22] Speaker 03: And the blog post here is really just the modern day equivalent of the seminar in Melkin. [00:34:27] Speaker 03: Now today, rather than having to have a series of traveling seminars around the country, we can make these informal communications over the internet, but that doesn't change the fact that they're still just informal staff advice and shouldn't engender reliance. [00:34:41] Speaker 03: And... [00:34:42] Speaker 03: When the FCC wants to provide official guidance that's been carefully vetted and is meant to be relied on, we do that through an order or a public notice or another official formal document. [00:34:53] Speaker 02: So let me ask you, when the chief of the media bureau says, we will permit in a community to work together to file a single, nobody can rely on that? [00:35:07] Speaker 03: Your Honor, I think that's no different than in Malkin. [00:35:09] Speaker 02: That's what I'm asking. [00:35:10] Speaker 02: So unless these, I mean, the way we're using the web these days is it's useless. [00:35:19] Speaker 02: Ignore it. [00:35:21] Speaker 03: Your Honor, I think that parties who are applying for an LPFM permit and are asking to enter into a heavily regulated industry have some duty to familiarize themselves with the Commission's rules and practices. [00:35:34] Speaker 02: I understand that point. [00:35:35] Speaker 02: And we're dealing with a lot of community groups that don't have a lot of money, that don't have a lot of high-paid legal people on their staffs, much less access to. [00:35:45] Speaker 02: And so they go to the web to find out what the FCC is saying we need to do. [00:35:50] Speaker 02: So either Mr. Lake should say, this is just my personal opinion, and you can't rely on anything I say. [00:36:00] Speaker 02: But here's what I think may be the way to proceed. [00:36:06] Speaker 02: No, I'm serious about this. [00:36:07] Speaker 02: Because organizations will spend time and money trying to follow this advice, and then they find out it's useless. [00:36:18] Speaker 03: So I think there are two separate points there. [00:36:20] Speaker 03: I want to respond to each of them. [00:36:22] Speaker 03: First, the fact that some of these applicants may be unsophisticated cuts both ways. [00:36:27] Speaker 03: Because if we want to communicate with unsophisticated applicants, we need to simplify our explanation. [00:36:36] Speaker 03: And sometimes these are complicated rules. [00:36:39] Speaker 03: And so these informal communications can't always have the degree of precision and nuance and explain every little detail here. [00:36:47] Speaker 03: Ultimately, [00:36:49] Speaker 03: If something is appearing just in a blog post and not some other formal context, and you really want to rely on something, you should make sure that that is in a formal order or in the commission's rules. [00:36:59] Speaker 02: Now, the other part of that question about- I mean, I'm just a community organization, and I'd like to have an FM station, and I want to get a construction permit. [00:37:11] Speaker 02: Maybe this should just alert me up front. [00:37:14] Speaker 03: So first, let me just- What do you think about that? [00:37:18] Speaker 03: First, let me just practice my answer to this. [00:37:20] Speaker 02: You can speak as an individual. [00:37:21] Speaker 03: Yes, yes. [00:37:22] Speaker 03: So first, let me just say that all the organizations here filled out a Form 318 and the instructions to that form, which is long and detailed, specifically say, consult the commission's rules in Title 47 of the CFR. [00:37:34] Speaker 02: We're talking about agreements. [00:37:36] Speaker 02: All right. [00:37:37] Speaker 02: We're talking about agreements. [00:37:39] Speaker 02: And you see the problem, don't you, counsel? [00:37:43] Speaker 03: Your honor, I think that if you're talking about some sort of a disclaimer or something that might have given a warning here that some stronger warning, don't rely on this, that's something that I think we'd like to consider doing in the future. [00:37:59] Speaker 03: But I think we need an authority to cite in support of that. [00:38:01] Speaker 03: And that's in part because of this court's decision in appellation power. [00:38:05] Speaker 04: I'm not sure if you mentioned this at the outset of this portion of your argument, but in your brief you maintained that this point was not preserved, right? [00:38:14] Speaker 03: I don't think we're on to... To the extent there's a fair notice argument that's independent of the other arguments here. [00:38:21] Speaker 04: I thought this certainly seemed to me to bear unfair notice. [00:38:24] Speaker 03: I think so, Your Honor, and I don't think fair notice is preserved. [00:38:27] Speaker 02: Well, they responded in their motion before the Commission. [00:38:32] Speaker 02: And they didn't start the paragraph by saying, this is a fair notice argument, but read what they told the commission. [00:38:39] Speaker 02: Isn't that fair notice? [00:38:41] Speaker 03: So Your Honor, my answer here would simply be that I encourage the court to go and look at the citation they give in their reply brief. [00:38:48] Speaker 02: No, they quoted it in their reply brief. [00:38:50] Speaker 02: Are they misquoting it? [00:38:52] Speaker 03: What they're quoting isn't actually raising a fair notice argument. [00:38:55] Speaker 03: They quote a single sentence, which is buried in one of their filings, which says a tautology. [00:39:01] Speaker 03: It says, Nueva Esperanza relied on the information that was available to us. [00:39:06] Speaker 03: And that isn't nearly at the level of raising a fair notice argument. [00:39:10] Speaker 03: There are a lot of other elements that would need to be there. [00:39:12] Speaker 03: Like what? [00:39:16] Speaker 02: My understanding is that the typical form of a fair notice argument takes the form, I reasonably relied on this information or on the lack of information, and I was- Actually, what it says according to the reply brief is, quote, without clear direction from the commission on this issue, Esperanza relied on the information at its disposal to decide how to proceed in the application process. [00:39:42] Speaker 02: had the policy on pre-application and pre-mutuality exclusive phase agreements to aggregate points and agree to timeshare been clear, Esperanza would have found partners with which to make agreements like the timeshare applicants. [00:39:58] Speaker 02: That's page 25 of the reply brief. [00:40:02] Speaker 02: You don't think that's enough to say it wasn't clear to us, so we didn't have fair notice, that we should have gone ahead and tried to get partners for this pre-award agreement? [00:40:12] Speaker 03: I don't think it is. [00:40:13] Speaker 03: So first of all, I want to point out that actually that argument that was being made before the commission is the opposite of the argument they're now pressing before the court. [00:40:20] Speaker 03: Because that argument, and again, if you look at that filing, you'll see this is the theory of that entire section, is that there was no guidance at all. [00:40:27] Speaker 03: And now what they're arguing is that there was binding guidance in the blog post. [00:40:31] Speaker 03: So these are contradictory positions. [00:40:34] Speaker 03: Now I do think there's certainly a lot more substantiation that would be needed. [00:40:37] Speaker 03: First of all, there's nothing in the record where they've ever actually averred that anyone at Esperanza [00:40:43] Speaker 03: had actually read, seen this blog post before they filed their application. [00:40:47] Speaker 03: And they didn't mention it in their initial application to deny. [00:40:50] Speaker 03: It was only after the other parties pointed to the blog post that they picked up on this language that I think they were trying to take advantage of. [00:40:57] Speaker 03: I think that claim that they would have found other applicants who would have joined with them requires a lot of substantiation. [00:41:04] Speaker 03: I think as we discussed earlier, [00:41:06] Speaker 03: In order to have obtained five points and to be an attentive selectee here, there are a lot of requirements that would have needed to be met, including that it would have to be an organization that had an established community presence of several years, and that the organization would have had to pledge that if it was the sole winner, it was going to construct and operate the station alone. [00:41:26] Speaker 03: And there's no reason to think there's anyone else out there in this community who they would have been able to find and round up. [00:41:32] Speaker 03: So I think that they would have needed more substantiation on that ground, too. [00:41:36] Speaker 03: And the other point on this Fair Notice issue, I think that to bring a Fair Notice argument, it's normally, I reasonably relied on this information or lack of information, and I was unfairly penalized as a result. [00:41:48] Speaker 02: So it's magic words at your argument. [00:41:51] Speaker 03: I think it's not magic words, but the substance would need to be there. [00:41:54] Speaker 02: I mean, what I read says that, Council. [00:41:56] Speaker 02: Doesn't it? [00:41:56] Speaker 02: It says it wasn't clear, so we didn't go ahead and do this. [00:42:00] Speaker 02: And now, after the fact, it's too late, and that harmed us. [00:42:04] Speaker 03: I think it needs to be presented in a way that it's not the commission's duty to have to try to carefully parse through every piece of paper we get, and we get a lot of paper, and to try to have to imagine legal theories somebody might be raising and try to make those arguments. [00:42:20] Speaker 02: So what are the magic words that should have been in here so I'm clear? [00:42:24] Speaker 03: So I think, number one, there would have needed to be some demonstration of reliance. [00:42:29] Speaker 02: Demonstration of reliance. [00:42:30] Speaker 03: At least the... In the pleading. [00:42:33] Speaker 03: Yes, this was an application for review. [00:42:36] Speaker 03: I mean, this is not just a complaint. [00:42:38] Speaker 03: And I think that goes to another issue here. [00:42:40] Speaker 03: If you look at the reply brief, Esperanza keeps talking about this is what we alleged, we alleged, we alleged. [00:42:46] Speaker 03: Well, this isn't a motion to dismiss. [00:42:48] Speaker 03: This is coming up to the court on an administrative record. [00:42:51] Speaker 03: We have a record here. [00:42:52] Speaker 03: So I think there would have needed to be something, at least a declaration from somebody saying, I read this and relied upon it. [00:42:58] Speaker 03: There's no substantiation of reliance. [00:43:01] Speaker 03: There's no even attempt to substantiate the claim beyond just asserting it in part of a single sentence. [00:43:07] Speaker 02: So these motions should be treated as Rule 56 motions. [00:43:11] Speaker 03: I think that analogy might be fair in the administrative context. [00:43:15] Speaker 03: I can't tell the court that I fully thought through. [00:43:17] Speaker 02: And not just on Rule 60 being. [00:43:20] Speaker 03: I think that's correct. [00:43:21] Speaker 03: I think that there needs to be, ultimately this comes down to section 405A. [00:43:27] Speaker 03: It's about whether the commission had an opportunity to pass upon the arguments. [00:43:31] Speaker 03: And I don't think that burying a sentence, which is just the tautology that we relied on the information available to us, and even with that next sentence after, [00:43:40] Speaker 03: would have led the commission to know in the course of this long filing, there was a serious fair notice argument being presented here. [00:43:47] Speaker 03: I would certainly expect the word's fair notice. [00:43:50] Speaker 03: I don't know whether there's a magic word's test, but I do think it matters that the word's fair notice aren't there. [00:43:56] Speaker 03: And I think they would also have to spell out a theory of how they were penalized. [00:44:00] Speaker 03: Miss Esperanza wasn't penalized here. [00:44:02] Speaker 03: It received every point that it asked for. [00:44:05] Speaker 03: It said it was entitled to five points. [00:44:08] Speaker 03: It was granted five points. [00:44:09] Speaker 03: When aggregated with the social justice project, it received 10 points. [00:44:13] Speaker 03: So Esperanza received everything they asked for. [00:44:15] Speaker 03: Their problem really is that someone else scored even more points. [00:44:19] Speaker 03: And so the argument isn't really one that we shouldn't penalize Esperanza, because we never did. [00:44:25] Speaker 03: Esperanza is trying to argue that based on a supposed staff rule appearing in this blog post, the commission should have been obligated to penalize the other applicants. [00:44:36] Speaker 03: And that just is completely backwards and runs up against a lot of case law from this circuit in Comcast and Vernal Enterprises, saying that the Commission itself can't be bound by staff action. [00:44:47] Speaker 03: So the answer can't be right, that the Commission, when this issue came up, was required to apply the supposed rule that supposedly appeared in a staff blog post when the Commission has taken a look and say, we disavow this rule, we don't support it, we don't believe this rule exists. [00:45:03] Speaker 03: So there are a number of problems coming out of that argument. [00:45:05] Speaker 03: If I can just quickly go back to the question. [00:45:07] Speaker 00: Just so I understand, your argument about the penalty part of this, it's not just that it doesn't seem to be limited to they didn't spell out a theory of penalty. [00:45:15] Speaker 00: It's that substantively they couldn't. [00:45:17] Speaker 00: That's your view. [00:45:18] Speaker 00: Yes. [00:45:18] Speaker 00: That there is no way to demonstrate a regular penalty. [00:45:20] Speaker 03: Well, and perhaps the reason why it wasn't spelled out is because they couldn't. [00:45:23] Speaker 03: I think that's exactly correct. [00:45:24] Speaker 03: Um, Judge Rogers, I do want to touch on this question that you asked earlier, which which I took to be just kind of a common sense question. [00:45:31] Speaker 03: Why don't you have some sort of a clear disclaimer here? [00:45:35] Speaker 03: And as I was saying, that is something we'd like to consider doing in the future, but [00:45:40] Speaker 03: In this court's Appalachian Power decision, the guidance document there had a disclaimer saying, this is not finding advice. [00:45:49] Speaker 03: This is just guidance. [00:45:50] Speaker 03: It's not guaranteed to be accurate. [00:45:52] Speaker 03: Don't rely upon it. [00:45:53] Speaker 03: And what the court said is that page 1023 of Appalachian Power was that, well, that's just boilerplate, and it has no effect. [00:46:01] Speaker 02: I know you can't win. [00:46:02] Speaker 03: Well. [00:46:05] Speaker 03: Your honor, we would like to consider adding a disclaimer in the future. [00:46:09] Speaker 03: But ultimately, how we read this court's case law is that there needs to be an authority that says that disclaimer is enforceable. [00:46:15] Speaker 03: And we're hoping that might ultimately turn out to be this case, something that clarifies that. [00:46:20] Speaker 03: informal staff advice of the type here in this blog post isn't binding and shouldn't engender reliance. [00:46:26] Speaker 03: We actually think Malkin gets you that far, but apparently there are parties who are disagreeing and challenging that now, so we think a clear rule here would be helpful. [00:46:35] Speaker 03: And let me just quickly run through. [00:46:37] Speaker 03: The distinctions here, which I think would be evident to anyone who has done basic job of familiarizing themselves with commission practice, the distinctions between the sort of official documents we use when we want to give carefully vetted advice that's meant to be relied on. [00:46:51] Speaker 02: So an APA expert. [00:46:57] Speaker 03: Your honor, I don't know. [00:46:59] Speaker 02: I'm just pressing it, counsel. [00:47:00] Speaker 02: This is complicated stuff. [00:47:01] Speaker 02: I mean, that's what you said. [00:47:02] Speaker 02: It is complicated. [00:47:04] Speaker 02: And the commission in these seminars and blog posts is trying to help clarify some of the complexity that lawyers make all their big fees on themselves with commission practice. [00:47:18] Speaker 02: So I appreciate that, all right? [00:47:20] Speaker 02: I'm not questioning that. [00:47:22] Speaker 03: Well, I don't think it's complicated here. [00:47:25] Speaker 03: It's here if we take a look at this blog post. [00:47:27] Speaker 03: The blog post has no discussion of or citation of legal authority. [00:47:31] Speaker 03: It has no ordering clauses. [00:47:32] Speaker 02: I know, but it's the chief of the media bureau to whom all kinds of authority has been delegated by the commission. [00:47:41] Speaker 03: Your Honor, I don't think that can distinguish this case from mine. [00:47:45] Speaker 03: Because Malcolm II involved an FCC insider who was speaking at an FCC sponsored seminar that was meant to provide information to the public. [00:47:54] Speaker 03: Well, Your Honor, it is true that Malkin didn't say who exactly the insider was. [00:47:58] Speaker 03: But take a look at the dissent in Malkin. [00:48:00] Speaker 03: It points out that there were multiple bureau and division chiefs involved in that seminar. [00:48:06] Speaker 03: So I don't think the involvement of even high-level staffers can distinguish this case from Malkin. [00:48:11] Speaker 02: So this has been a blog post by the chairman of the commission. [00:48:13] Speaker 02: still wouldn't have made any difference. [00:48:15] Speaker 03: Certainly not, your honor. [00:48:16] Speaker 03: And that's in part because given our commission structure, the chairman alone doesn't have the power to do anything. [00:48:22] Speaker 03: And that's another reason why we try to proceed. [00:48:25] Speaker 00: I don't know if you want to tell the chairman that I [00:48:30] Speaker 03: But certainly, perhaps at most, the court could say the source of the advice might be one factor to look at. [00:48:39] Speaker 03: But I think even then, you would need to distinguish between if someone happens to be the chief or is just identified that way versus whether it is being attributed to them in the institutional capacity. [00:48:50] Speaker 03: This doesn't say, as some documents do, by the chief. [00:48:53] Speaker 03: It says by Bill Lake, and that was in mention his role. [00:48:56] Speaker 02: Actually, it says it's by Bill Lake, comma, chief. [00:49:00] Speaker 03: Yes, Your Honor, and I'm pointing out that's not how our orders look when we do them. [00:49:08] Speaker 02: Anything further, counsel, because I do think we have your argument. [00:49:13] Speaker 03: So let me just make one final policy point in conclusion, which I think is important to keep in mind, which is that I venture that regulated parties and the public find these blog posts and other informal communications to be useful and to be helpful and valuable. [00:49:26] Speaker 03: But if a court is going to rule that anything we say in an informal communication can be taken out of context and used against us, we're not going to be able to continue communicating in this way. [00:49:36] Speaker 02: You think that's what the court would write? [00:49:39] Speaker 03: I hope not, Your Honor, but in any event, I think that's such a rule, anything that would deter agencies from making a sincere effort to try to reach out to parties informally. [00:49:50] Speaker 03: Speaking to the public. [00:49:51] Speaker 03: Speaking to the public. [00:49:52] Speaker 02: Yes. [00:49:52] Speaker 03: I think it would be bad for everyone, and I don't think that's something we want to encourage. [00:49:56] Speaker 02: Thank you. [00:49:56] Speaker 03: Thank you, Your Honors. [00:49:58] Speaker 02: Council for Petitioner. [00:50:08] Speaker 01: So just to start, where opposing counsel concluded, this court does not need to reach any sort of broad opinion about the nature of internet guidance as a whole. [00:50:19] Speaker 01: And there's nothing in the way that this court should write an opinion that would have any bearing on any agency's ability to communicate with the public. [00:50:26] Speaker 01: So let's just take that off the table. [00:50:30] Speaker 01: As a factual matter, all of the entities received five points, and the only reason that Esperanza was not able to receive the license was because of this prior arrangement. [00:50:42] Speaker 01: So we were harmed in that way. [00:50:45] Speaker 01: Judge Srinivasan, you pointed out that in fact the only situation in which anyone's chances of receiving a permit are increased by any sort of pre-existing agreement to SharePoints is in a situation where all of the entities do make it through to the final round. [00:51:01] Speaker 01: And so if you're to put any meaning on this chances of maximizing the ability to receive the permit, it needs to apply to our situation where everyone goes through to this round. [00:51:13] Speaker 01: In fact, opposing council acknowledges that you can't limit the application of the fourth paragraph to, as it says, if just one applicant succeeds in getting a construction permit and would [00:51:24] Speaker 01: to adopt a broader reading of it. [00:51:27] Speaker 01: We're not taking issue with the point system. [00:51:29] Speaker 01: The point system is fine. [00:51:31] Speaker 01: The problem is like-minded groups getting together to gain an advantage in this situation. [00:51:40] Speaker 01: There was an agreement reached in this case, and we think that that's adequately alleged. [00:51:45] Speaker 01: The commission, or I'm sorry, yes, the commission did not reach a finding either way on whether there was an agreement. [00:51:52] Speaker 01: It just said this, it doesn't say what you think it says, and anyway, it's not binding. [00:51:57] Speaker 01: So if... [00:52:00] Speaker 01: So we think the court should find for us vacant and remand to the Commission for additional fact-finding if necessary on the question of whether an agreement was reached, but we think there's sufficient evidence here. [00:52:12] Speaker 04: Excuse me, if we agree with the Commission that it doesn't say what you think it says, then it doesn't matter whether it's finding [00:52:19] Speaker 01: That's correct. [00:52:21] Speaker 01: This is not going to require the commission in the future to wade into these sticky questions of whether an agreement was reached or not reached, what point up until agreement you can go, because there was an agreement in this case, and that's all we're asking the court to find. [00:52:41] Speaker 01: We think that's consistent with the commission's regulations, which provide that you can only submit a time-sharing agreement [00:52:49] Speaker 01: after the mutually exclusive stage begins. [00:52:55] Speaker 00: But wouldn't the upshot of your... I mean, it's of course true that one can write an opinion that doesn't require, in this case, policing the line between discussions and agreements, but isn't the upshot of your position that under the third paragraph [00:53:09] Speaker 00: You can enter into discussions, but you can't get to the point of an agreement. [00:53:12] Speaker 00: And in which case, if that were the policy, that's what the FCC would have to do. [00:53:16] Speaker 00: So that sheds light on whether that's, in fact, what the third paragraph means. [00:53:20] Speaker 00: Right. [00:53:20] Speaker 01: So we think that's an appropriate reading of the third paragraph, but not a necessary reading of the third paragraph. [00:53:26] Speaker 01: because you can just read the third paragraph to say, essentially, they may decide later, meaning the entities enter into this process knowing that they may team up with other people, but it doesn't necessarily mean that they've already had communications to that effect. [00:53:42] Speaker 00: But then that wouldn't mean that they can't have any... In other words, it's true that the third paragraph could be read to mean they may decide later. [00:53:50] Speaker 00: That leaves a big... [00:53:52] Speaker 00: question unanswered, which is what can they do in anticipation of the fact that they may decide later. [00:53:58] Speaker 01: And we don't think the court needs to reach that, but it is consistent with our position that entities can discuss sort of vaguely the idea that yes, there is this later stage and potentially we would share time and points with you or maybe with these other people. [00:54:17] Speaker 01: That's totally consistent with our position. [00:54:20] Speaker 01: In fact, there's a public notice in this case that the SEC cites at page nine of their brief which says that [00:54:28] Speaker 01: Mutually exclusive applicants may communicate with each other at any time before or after that mutually exclusive phase and they put a lot of stock on that but all we think that says is once you have applied then you can talk necessarily talk to people so we don't think that that's [00:54:46] Speaker 01: requirement of an opinion finding for us in this case. [00:54:50] Speaker 01: So the FCC's concern is with piggybacking of groups that wouldn't otherwise necessarily get the permit and we think that that concern equally applies in our case as it does in the if just one situation or if the one or more situation gets through. [00:55:08] Speaker 01: Just very briefly on Malkin, we think this case is [00:55:11] Speaker 01: very much the single shovel from Malkin. [00:55:14] Speaker 01: In Malkin, all we knew is that it was an FCC insider, which would just describe essentially anyone who works at the FCC. [00:55:20] Speaker 01: And as Judge Rogers points out, the guidance here was by Bill Lake, chief of the media bureau. [00:55:26] Speaker 01: He was [00:55:28] Speaker 01: His position was noted very prominently in the statement itself. [00:55:33] Speaker 01: That the statement is written as opposed to oral, we think, adds additional weight and authoritativeness to the statement. [00:55:39] Speaker 01: This was not an off-the-cuff remark. [00:55:41] Speaker 01: This was written in a blog post, which we can presume went through some sort of vetting before it was posted on the FCC's official website. [00:55:50] Speaker 04: If, to go back a bit and then go forward, if we think that it doesn't mean what you think it means and it doesn't matter whether it's binding, does it also not matter whether it's clear to you, clear or not? [00:56:05] Speaker 01: So if you disagree, if you accept the FCC's reading, which obviously we think is irrational and incorrect, if you accept that reading, we still have a preserved fair notice argument, which is an alternative argument we made both here and, as Judge Rogers points out, before the commission, where essentially, if it means [00:56:27] Speaker 01: If their reading can't be clear either way, essentially. [00:56:34] Speaker 01: Opposing counsel already said that you can't read if just one applicant succeeds, to mean if just one applicant succeeds. [00:56:40] Speaker 01: So if it's not [00:56:42] Speaker 01: clearly if our interpretation is not correct, then it's at least ambiguous enough that we think we have concerns of fair notice. [00:56:50] Speaker 01: And that is essentially entities go to the FCC's website. [00:56:54] Speaker 01: These are, as Judge Rogers points out, not particularly sophisticated. [00:56:58] Speaker 01: They're local entities. [00:56:59] Speaker 01: They go to the FCC's website, and they receive information on the low-power FM application process. [00:57:08] Speaker 01: our reading is not correct, then the third and fourth paragraphs essentially make no sense and could, and it is rational for us to have assumed that we couldn't enter into these pre-existing agreements. [00:57:19] Speaker 01: Had we known. [00:57:20] Speaker 00: I mean, that seems a little, it's a little bit of tricky position for you, because if the notice is completely ambiguous, then it doesn't seem to me, it's hard to rely on something that's completely ambiguous to preclude you from doing something that, as to which is ambiguous, right? [00:57:36] Speaker 01: if it it's ambiguous enough that the germantown entities thought it was acceptable to do what they did and we thought it was unacceptable. [00:57:44] Speaker 01: There's a reading that it's acceptable and unacceptable so this is akin to [00:57:49] Speaker 01: There's a case that is in our briefs the satellite broadcasting company case where it is they were supposed to file in Gettysburg but they filed in Washington DC and it was equally plausible the court describes these situations where X or Y could be the reading as playing Russian roulette essentially you're a group is staking their ability to [00:58:14] Speaker 01: A group is interacting with the commission, thinking X is correct, when in fact Y is correct. [00:58:20] Speaker 01: But the text of the regulations in that case and the statement in this case could equally apply to either reading. [00:58:28] Speaker 01: And so we can't be penalized for our totally reasonable reading of the statement. [00:58:37] Speaker 01: And we were penalized because had we known that it was acceptable, assuming, of course, this court does think it's acceptable to come to these agreements, meaning we've lost our primary argument, then had we known that it was acceptable, we would have reached out to these other groups and potentially entered into this winning group before the mutually exclusive phase of the process. [00:59:04] Speaker 02: Anything further? [00:59:05] Speaker 01: No, we would just ask this Court to vacate the Commission's order and remand to the Commission for the appropriate remedy. [00:59:13] Speaker 01: Thank you. [00:59:14] Speaker 02: We'll take the case under advisement.