[00:00:02] Speaker 00:
Page number 16-1290, Press Communications LLC Appellants versus Federal Communications Commission.

[00:00:10] Speaker 00:
Mr. Cove for the Appellant.

[00:00:12] Speaker 00:
Ms.

[00:00:13] Speaker 00:
Sunda-Razin for the Appellee.

[00:00:15] Speaker 00:
Mr. Murchison for the Intervener.

[00:00:51] Speaker 00:
We proceed.

[00:00:52] Speaker 04:
Thank you, Your Honor, and may it please the Court.

[00:00:55] Speaker 04:
I'm Harry Cole, Counsel for Press Communications, LLC.

[00:00:59] Speaker 04:
At the Council table with me this morning is my colleague, Anne Goodwin Crump, and I would advise the timekeeper that I'd like to reserve three minutes of my time for rebuttal.

[00:01:06] Speaker 02:
I actually, I'm obliged to make a disclosure here.

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I actually attended Atlantic City High School for two years in 1949 and 1950.

[00:01:19] Speaker 02:
I went away to boarding school after that.

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I have checked, and that is not a grounds for recusal, but I thought it should be disclosed.

[00:01:28] Speaker 05:
Were you a DJ on their radio station?

[00:01:33] Speaker 02:
I applied for a DJ, but not at Atlantic City High School.

[00:01:38] Speaker 02:
I was rejected on the grounds that I had a bad accent, but the truth of the matter is I wasn't any good.

[00:01:48] Speaker 04:
Thank you, Roger.

[00:01:48] Speaker 04:
Duly noted.

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Press's application to improve the facilities of its station WBHX was dismissed by the SEC because the application supposedly proposed two impermissible short spacings.

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One was between stations WZBZ and WAJM, and the other was between WZBZ and WJBR.

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The SEC was wrong on both counts.

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Press's application did not involve any impermissible short spacings.

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This morning, I'd like to address both of the supposed short spacings, but before I

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application involved a involuntary shift of another station.

[00:02:34] Speaker 04:
That's quite true.

[00:02:35] Speaker 02:
Uh, and the SEC says, well, if it's involuntary, you have to ask for a waiver.

[00:02:43] Speaker 02:
Certainly.

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Now there's a there's an argument you might have to ask for a waiver anyway.

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But they say for sure when when your application would involve an involuntary shift with somebody else,

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What's wrong with that position?

[00:03:01] Speaker 04:
Well, Your Honor, first, the notion of voluntary versus involuntary is not a matter of, is not a material factor in any of the SEC precedent.

[00:03:11] Speaker 02:
Well, no, and the issue has not come up one way or another before, right?

[00:03:14] Speaker 02:
This is the first case.

[00:03:17] Speaker 04:
As far as I'm aware of that, that may be the case.

[00:03:19] Speaker 02:
Well, while agencies can move through adjudication dealing with new matters as they come up.

[00:03:27] Speaker 04:
Well, that's correct.

[00:03:27] Speaker 04:
But the FCC has, on multiple occasions for a long time, back 40, 50 years, required involuntary channel changes that did not involve short spacings at all.

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And the FCC has

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But this does involve short space.

[00:03:46] Speaker 02:
It does involve a short space, Your Honor, but also since this is a new case, this is a new situation.

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There's no precedent for this situation.

[00:03:54] Speaker 04:
That's that's correct, Your Honor.

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That's as far as I'm aware.

[00:03:56] Speaker 02:
So then why?

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an application for a waiver?

[00:04:05] Speaker 04:
Well, to the extent that the Commission has a policy about any kind of waivers, I think we've discussed that, that it requires a showing by a short space proponent that there be no... But those prior cases did not involve involuntary

[00:04:25] Speaker 04:
That's correct, Your Honor.

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But again, the end result of this is if the Commission denies our application, the Commission is left with a FM channel arrangement.

[00:04:37] Speaker 02:
Well, we don't know what would happen if a waiver hadn't been sought.

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To the extent, Your Honor, that there was a waiver required, a waiver request required, we presented all the information the Commission has sought.

[00:04:55] Speaker 02:
But you didn't ask for a waiver?

[00:05:00] Speaker 04:
We presented the evidence that the FCC has repeatedly asked for in situations such as this.

[00:05:06] Speaker 02:
In cases where there was not an involuntary shift.

[00:05:09] Speaker 04:
That's correct, Your Honor, but there was no, given the fact that there was no precedent indicated that we needed to do anything more than what had been done in the past.

[00:05:20] Speaker 05:
So the agency has to have precedent?

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for making a request for an applicant?

[00:05:28] Speaker 04:
Well, if the agency is going to impose a pleading requirement or a substantive requirement on the applicant, it seems to me the agency has to give the applicant notice.

[00:05:37] Speaker 03:
Well, they did.

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They said you're going to need a waiver.

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You want to file one and then you didn't.

[00:05:41] Speaker 04:
Well, we made the necessary showing.

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What are we supposed to say?

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They didn't... They said, do you want to seek a waiver?

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And you didn't take them up on that.

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So I think the notice issue is a non-issue, unless I'm missing something.

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Well, Your Honor, so they say, okay, you asked for a waiver.

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What did we say?

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We said, here's the showing that everybody else has ever had to make.

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You deliberately made a decision, as Judge Pillard points out, not to seek the waiver the FCC asked for.

[00:06:07] Speaker 04:
Not to request not to include the language.

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We request a waiver.

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That's right.

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Now you did that deliberately.

[00:06:14] Speaker 02:
No, with the presumed knowledge that that was a risk.

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If you saw the way and you wanted to argue, you didn't need a waiver.

[00:06:23] Speaker 04:
We wanted to argue that we had made the necessary showing.

[00:06:25] Speaker 04:
Yes, your honor.

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You didn't want to ask for a waiver because there was a risk.

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You felt there was a risk you might be turned down.

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I mean, we're all reasonably good lawyers.

[00:06:38] Speaker 02:
We can figure out what you—well, that's—that was a costly choice, wasn't it?

[00:06:45] Speaker 04:
Your Honor, as far as we were concerned, we analyzed every case that had come down.

[00:06:51] Speaker 02:
We understood that the FCC was, with respect to short spacings, short space situations, attempting, through a long line of precedent, to allow them... If the FCC had denied the waiver, you could then have claimed that it was arbitrary and capricious to deny the waiver, because denying the waiver was inconsistent with the standards they applied in the past.

[00:07:13] Speaker 02:
You could have had that argument, but you don't have it because you didn't seek a way.

[00:07:17] Speaker 04:
But there have been no standards in the past.

[00:07:20] Speaker 02:
No, this is a new case.

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So I have a question about the substantive standards.

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The FCC has directed us to the note 73.203, which seems to say that the grandfathering provision in 73.213 doesn't apply to minor modifications like this one.

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And what do you make of that?

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Well, the answer to that is there's ample precedent, Your Honor.

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both on the short spacing side and the non-short spacing side that permits, where the Commission has permitted precisely this kind of change based on the showing that we have made.

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In addition, I should point out that the FCC did not mention that section or that note in its decision.

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As I recall, that just pops up in their brief.

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So do you believe that presents a chenery problem or?

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That they didn't raise the issue below?

[00:08:21] Speaker 04:
Yes, Your Honor.

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And I guess if I could get back to your point, Judge Shulman, very briefly at least, the bottom line here is whether or not we asked for a waiver.

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the FCC's end result, and I understand what you're saying, but the end result is that the FCC will be approving a situation that is demonstrably inferior under FCC precedent to what would be the case if press's application were granted.

[00:08:59] Speaker 03:
Well, they've made a public interest determination to the contrary.

[00:09:04] Speaker 03:
I mean, you've made an argument that it's inferior, but they've made the contrary determination.

[00:09:11] Speaker 04:
Without considering, Your Honor, as far as I can tell, either in the decision or in their brief, the fact that Press's application would have eliminated an existing short spacing.

[00:09:21] Speaker 03:
Which one is that?

[00:09:23] Speaker 04:
Understand that these are all in New Jersey, and New Jersey is very congested spectrum-wise.

[00:09:27] Speaker 04:
A lot of radio stations, and they've been bunched up for lots of years.

[00:09:30] Speaker 02:
Well, I don't think it's useful to condemn New Jersey.

[00:09:33] Speaker 02:
I feel bad about that.

[00:09:34] Speaker 04:
Your Honor, I'm promoting New Jersey.

[00:09:37] Speaker 04:
But the WBZ was subject to a short spacing with WBHX.

[00:09:47] Speaker 04:
If WBZBZ moved channels as proposed by press, that short spacing would be eliminated.

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So there would be net loss of one short spacing, which is all to the good.

[00:10:01] Speaker 04:
Commission president firmly supports that.

[00:10:04] Speaker 04:
you would not be any worse off because, as we said in the brief, the WZBZ, WJBR short spacing, which the commission has claimed to be problematic, would not change in any respect whatsoever.

[00:10:19] Speaker 04:
They would still be precisely 105 kilometers apart.

[00:10:22] Speaker 04:
They would still be on first adjacent channels.

[00:10:24] Speaker 04:
There would be no change at all as far as the short spacing situation there.

[00:10:28] Speaker 04:
So what the commission is doing is accepting the situation.

[00:10:31] Speaker 03:
Your position is it eliminates the short spacing because it eliminates the boards.

[00:10:34] Speaker 03:
the board discussion.

[00:10:35] Speaker 04:
No, no, that's a third short spacing.

[00:10:38] Speaker 04:
That's the other short spacing that I want to talk about today.

[00:10:40] Speaker 04:
The JVR one is the one involving the waiver and the involuntariness.

[00:10:46] Speaker 04:
The AJM is the lack of renewal application.

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But if ZBZ were to be moved,

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as proposed, the net result would be no worsening at all of short spacing, but in fact an improvement of short spacing under well-established FCC criteria.

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So our position has been that the Commission cannot legitimately – it's arbitrary and capricious for the Commission to conclude that something that is demonstrably worse is preferable to something that is demonstrably better.

[00:11:23] Speaker 04:
Now, if I could get to the WAJM.

[00:11:25] Speaker 04:
Do you have any further questions on that, Your Honor?

[00:11:29] Speaker 04:
WAJM.

[00:11:33] Speaker 02:
That's the Atlantic City High School.

[00:11:34] Speaker 04:
That's your animal model, Your Honor.

[00:11:36] Speaker 04:
Yes.

[00:11:37] Speaker 02:
Well, I wouldn't put it that way.

[00:11:42] Speaker 04:
That's the scene of the crime.

[00:11:42] Speaker 04:
How would that be?

[00:11:44] Speaker 04:
The Communications Act specifies that

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Unless there's a license renewal application pending, a broadcast license and all related rights exist only for the term of the license, and a license term shall not extend longer than eight years.

[00:12:00] Speaker 04:
The FCC claims that when press filed this application in August of 2010, press was required to protect the licensed facilities, those are the FCC's terms, of WAJM.

[00:12:12] Speaker 04:
But AGM's license had expired four years before, and there was no renewal pending.

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So statutorily, when press filed this application, WAGM was without a license or any related rights, and press was not required to protect it.

[00:12:28] Speaker 04:
To the FCC, though, a license expiration date is largely immaterial because – and for support, they point to this FCC-generated, uncodified agency policy, and the policy provides that after expiration,

[00:12:46] Speaker 04:
eight years come, eight years go, no renewal is filed, a license still remains in effect indefinitely in a kind of unspecified zombie-like state unless and until the FCC eventually gets around to issuing a public notice.

[00:13:02] Speaker 04:
And the public notice only says the expiration date is come and gone.

[00:13:07] Speaker 04:
And that supposedly serves as what the FCC refers to as a cancellation of the license.

[00:13:12] Speaker 04:
And at that point, the dead licensee still has a right to seek reconsideration of the cancellation.

[00:13:19] Speaker 04:
And there's no particular pressure agency-wide to issue this cancellation notice, because as we've seen as we pointed out in the brief, licenses can remain and have remained in effect for weeks, months, years, and even decades after the expiration date.

[00:13:36] Speaker 04:
So essentially the FCC, through this policy, has been allowing itself to extend licenses indefinitely, which is flatly inconsistent with the mandatory eight-year statutory limit in the statute.

[00:13:49] Speaker 03:
I think they would frame it a little more narrowly.

[00:13:51] Speaker 03:
I mean, obviously we'll hear from them.

[00:13:53] Speaker 03:
But not that they're extending the license indefinitely, but that they are recognizing a renewal priority or a residual priority in the prior

[00:14:04] Speaker 04:
license holder.

[00:14:06] Speaker 04:
Well, again, Your Honor, the statute provides that the license and all rights related thereto.

[00:14:12] Speaker 03:
Right, I understand your position on that is very clear in the briefing, and I think the question for us is whether that cutting off of the station's rights

[00:14:23] Speaker 03:
eliminates any authority in the commission to, for example, do what it's done now and having a policy that they'll notify people of lapse and say, you know, do you want to renew?

[00:14:38] Speaker 03:
They're doing some house cleaning, but does the limitation on the stationholders' right necessarily also limit the authority of the commission?

[00:14:48] Speaker 04:
I don't think so, Your Honor, because the

[00:14:52] Speaker 02:
You don't think so?

[00:14:53] Speaker 04:
I do not think so.

[00:14:54] Speaker 02:
I don't think it... I think your argument is it does.

[00:15:01] Speaker 04:
What we're arguing is not that the FCC cannot renew or reinstate or whatever verb you want to use, a license which is dead and gone a couple years online.

[00:15:13] Speaker 04:
What we're saying is that the FCC cannot, prior to the filing of that license application, accord that

[00:15:21] Speaker 04:
that licensee any rights because according them rights is contrary to the statute.

[00:15:27] Speaker 03:
What about once the license application is filed?

[00:15:30] Speaker 03:
It says, okay, you didn't have any rights before, but now you've filed an application and

[00:15:36] Speaker 03:
You know, we recognize that you've been operating all this time, and so we're going to penalize you for that.

[00:15:43] Speaker 03:
But we also recognize you've been operating all this time.

[00:15:45] Speaker 03:
So once you pay the penalty, we're going to nunk, protunk, treat you as continuously licensed.

[00:15:52] Speaker 04:
Well, there are a couple of problems with that, Your Honor.

[00:15:54] Speaker 04:
Mainly, that effectively waives the deadline to the advantage of the- No, no.

[00:15:59] Speaker 03:
As they argue, they penalize the violation of the deadline.

[00:16:02] Speaker 04:
Yeah, but they let the application back in the door.

[00:16:05] Speaker 03:
So your argument is contrary to the statute?

[00:16:08] Speaker 04:
Yes.

[00:16:10] Speaker 03:
Your argument is that we have to read 301 to prohibit the commission from giving any priority to an incumbent station whose license has lapsed.

[00:16:27] Speaker 04:
I'm arguing, Your Honor, that 301 prohibits the FCC from according any rights to a station whose license is expired and for which there is no license renewal pending.

[00:16:38] Speaker 03:
I'm trying to distinguish between the rights of the station and the prerogatives of the FCC as regulator.

[00:16:44] Speaker 03:
There are no rights in the station.

[00:16:46] Speaker 03:
And so if the FCC doesn't want to give incumbency priority for renewals, it doesn't have to.

[00:16:52] Speaker 03:
But let's say the FCC does want to do that.

[00:16:55] Speaker 03:
and say, you know, you have no rights, but here we as regulator are going to organize renewals in a way that says, you know, we think it's in the public interest to have continuities.

[00:17:05] Speaker 03:
People sometimes miss the deadline.

[00:17:07] Speaker 03:
We're going to give a priority now within a maybe cabin period of time to the actual incumbent station.

[00:17:15] Speaker 03:
You don't have a right to that, folks, but we're going to create a policy in which we allow you to do that.

[00:17:20] Speaker 04:
You think that's beyond the authority on the commission?

[00:17:23] Speaker 04:
I think that's beyond 301 because of 301.

[00:17:25] Speaker 04:
The Congress specifically said, if you have a license, you've got these rights, and that's that.

[00:17:29] Speaker 04:
And I don't think the Congress contemplated in any way, shape, or form that the Commission could then say, OK, fine, here's your eight years, but we're going to give you another 10.

[00:17:38] Speaker 02:
Wait a minute.

[00:17:39] Speaker 02:
You would not object.

[00:17:40] Speaker 02:
You wouldn't say the FCC couldn't do that if nobody else's interests were at stake.

[00:17:46] Speaker 02:
Would you?

[00:17:47] Speaker 02:
Suppose the Atlantic City Station had applied for

[00:17:53] Speaker 02:
renewal and nobody else was involved.

[00:17:58] Speaker 02:
And the FCC said, well, you lost your rights under the statute, but nevertheless, we're going to allow you to have a renewal or a new license because you have the expertise and there's no reason not to give it to you.

[00:18:15] Speaker 02:
Is it your suggestion the FCC wouldn't have authority to do that?

[00:18:20] Speaker 04:
the FCC has done that repeatedly, but in situations where there is no intervening person like press, and whether or not the FCC could legitimately, could properly do that under the statute, I do not think so, Your Honor, but in a situation where there's no blood, no fall, and nobody's going to appeal it, it happens, and it's been happening for years.

[00:18:40] Speaker 03:
All right, thank you.

[00:18:40] Speaker 03:
Let's hear from Mr. Sanderson.

[00:19:00] Speaker 01:
Good morning, may it please the court.

[00:19:01] Speaker 01:
My name is Thayla Sandresen and I represent the Federal Communications Commission.

[00:19:05] Speaker 01:
There's been some discussion this morning about the short spacing deficiency with the student run station and I'm happy to address that.

[00:19:12] Speaker 01:
But before I do, I would point out to this court that the other short spacing deficiency with the Delaware station, WJBR,

[00:19:20] Speaker 01:
is a separate and independent reason for dismissing Press's application.

[00:19:26] Speaker 01:
That deficiency involves a straightforward application of the Commission's rules that Press failed to even address in its reply brief, despite the fact that it was raised by both the Commission and the intervener.

[00:19:38] Speaker 01:
And Press's failure to cure that deficiency

[00:19:41] Speaker 01:
or seek a waiver of the rule, which it could have done, renders its application defective on the basis of the Delaware deficiency alone.

[00:19:50] Speaker 03:
And was that ground relied on by the Commission?

[00:19:53] Speaker 03:
I'm sorry, Your Honor.

[00:19:54] Speaker 03:
Was that a ground relied on by the Commission in the decision petitioned from?

[00:19:59] Speaker 01:
The Commission discussed both deficiencies, but

[00:20:07] Speaker 01:
So we discussed both deficiencies, and I'm not sure we used the term independent and separate, but it's clear that either one of these deficiencies sinks the application.

[00:20:18] Speaker 01:
You'll need two deficiencies to make a minor modification application defective.

[00:20:23] Speaker 01:
All you need is one.

[00:20:25] Speaker 01:
And so the court may not even reach the issue with the student rent station.

[00:20:28] Speaker 01:
So with respect to the Delaware deficiency the note to 73.203 is directly on point here and I would refer your honors to our commission's brief page seven of the appendix where you can see the language.

[00:20:41] Speaker 01:
So that note says that if you are a minor modification applicant seeking to change your channel you must quote meet the minimum spacing requirements of section 72.307

[00:20:53] Speaker 01:
at the site specified in the application without resort to the provisions of the Commission's rules permitting short space stations as set forth in Section 73.213.

[00:21:05] Speaker 03:
And Mr. Cole has said you're foreclosed from relying on that here because the Commission didn't rely on that in its decision.

[00:21:13] Speaker 01:
Your honor, as this court has long held, the issue is whether the agency's path is reasonably discerned.

[00:21:19] Speaker 01:
Yes, you're right, it's not cited in the order.

[00:21:22] Speaker 01:
The note is a common sense illustration of the fact that when you are grandfathered,

[00:21:31] Speaker 01:
You are grandfathered to the situation you were in at that time.

[00:21:35] Speaker 01:
So decades ago, when we had amended our rules to increase the required minimum distance between stations, we suddenly had all of these stations that were out of compliance with the new rules through no fault of their own.

[00:21:47] Speaker 01:
So we said, OK, rather than moving all these stations and causing...

[00:21:50] Speaker 01:
I'm sorry exactly we grandfathered at the channel they were on at that time they weren't compliant with the rules at any old channel it was specific to that channel and so that's what the note says your grandfathered to the channel you are but if you want to change your channel

[00:22:08] Speaker 01:
you thereby lose your grandfathering rights.

[00:22:10] Speaker 01:
That's why the press cannot rely.

[00:22:12] Speaker 03:
I'm having a little trouble reconciling.

[00:22:14] Speaker 03:
So section 73.213 suggests that grandfathered short space stations may be modified or relocated.

[00:22:25] Speaker 03:
Typically, I assume that's pursuant to a minor modification as long as they meet the minimum interference and public interest requirements.

[00:22:33] Speaker 03:
So then if 73.203 says you can only do a modification if you could show that doesn't result in short spacing, then how can the 73.213 flexibility ever take effect or be borne out in practice?

[00:22:53] Speaker 01:
So here, Your Honor, where there is a change in channel, set the note to 73.203 applies.

[00:23:04] Speaker 01:
So if you're changing your channel, you must meet the general minimum distance separation rule outlined in 73.207.

[00:23:14] Speaker 01:
You cannot rely on the exception to that general rule, which is outlined in 73.213.

[00:23:22] Speaker 02:
I thought, didn't the FCC opinion, specifically setting a council appellant needing to seek a waiver?

[00:23:33] Speaker 01:
The deficiency letter that the Bureau sent to press told them, identified two deficiencies.

[00:23:40] Speaker 01:
In that letter there was no specific language they needed to request a waiver.

[00:23:44] Speaker 02:
I thought they were specifically told that.

[00:23:47] Speaker 01:
In the letter, I don't believe the waiver language is actually used in the letter, but we do say that if your defects are not corrected within 30 days, your application will be dismissed with no further opportunity for amendment.

[00:24:01] Speaker 01:
Press is represented by experienced counsel who regularly appears before the FCC.

[00:24:06] Speaker 01:
They're well aware that our rule on defective applications says that if you have an application that is deemed effective and is not accompanied by a request for a waiver,

[00:24:16] Speaker 01:
it will be dismissed.

[00:24:18] Speaker 02:
I thought an answer to Judge Pillard's question.

[00:24:21] Speaker 02:
Council said, yes, we were notified that we had to seek a waiver.

[00:24:28] Speaker 01:
My recollection of the letter that press was sent did not use that exact language.

[00:24:35] Speaker 01:
You must cure or seek a waiver.

[00:24:37] Speaker 01:
But if press is conceding that they receive notice of a waiver, then all the better.

[00:24:43] Speaker 01:
But in any event,

[00:24:45] Speaker 01:
press.

[00:24:45] Speaker 01:
The bureau wasn't hiding the ball here.

[00:24:47] Speaker 01:
We told them that there are two deficiencies here.

[00:24:51] Speaker 01:
We gave notice and an opportunity to cure or they could have sought a waiver and had every opportunity to do that.

[00:24:58] Speaker 01:
And instead they rejected those options.

[00:25:01] Speaker 01:
And as Judge Silverman, as you pointed out, that was a costly mistake for them.

[00:25:05] Speaker 01:
They could have sought a waiver.

[00:25:07] Speaker 01:
So with respect to the Delaware deficiency, the note to 73.203 is directly on point here.

[00:25:13] Speaker 01:
The press did not even wrestle with that language in its reply brief.

[00:25:17] Speaker 01:
That deficiency alone is fatal to press's application.

[00:25:22] Speaker 02:
In other words, your position is you cannot rely on the grandfathered status of the station to which you would like to move.

[00:25:35] Speaker 02:
That's right, Your Honor.

[00:25:36] Speaker 02:
That is your legal position.

[00:25:39] Speaker 02:
That's right.

[00:25:40] Speaker 02:
And I gather your legal position is if you want to do that, you have to seek a waiver.

[00:25:45] Speaker 01:
That's right.

[00:25:46] Speaker 01:
That's right, Your Honor.

[00:25:47] Speaker 03:
And what's your position in response to the basic argument that Mr. Cole was making that the Commission lacks authority to have a policy prioritizing incumbent applications over new applications after a license has

[00:26:08] Speaker 03:
unlawful, you know, lapsed and there's been unlawful continued broadcasting.

[00:26:13] Speaker 01:
So Section 307 of the Communications Act does not specify a remedy for what happens when a license expires.

[00:26:23] Speaker 01:
And Section 707 also does not have issue, specify a remedy in a circumstance like this where there is no renewal application that has been

[00:26:33] Speaker 01:
Now, in comparison, there are other provisions of the Communications Act that divest the Commission of Discretion because the remedy is stated in the statute.

[00:26:43] Speaker 01:
I feel we don't have that.

[00:26:43] Speaker 03:
I have a slightly different question, which is, given that 301 says a license shall be eight years and only eight years and no other rights are accorded,

[00:26:52] Speaker 03:
does the commission have any other source of authority by which it says, yeah, we're not according to many rights, but we are coming up with a housekeeping practice and policy that says people who have not renewed are nonetheless not going to be subject to cutoff by new filers if we think it's in the public interest.

[00:27:13] Speaker 03:
And so we're going to reckon, we're going to

[00:27:16] Speaker 03:
Take that position.

[00:27:17] Speaker 03:
What would be the authority for that?

[00:27:19] Speaker 03:
Because I think Mr. Cole is saying you are acting contrary to the statute by even having such a policy.

[00:27:26] Speaker 01:
So as we describe in paragraph 10 of the commission's order, one of the fundamental goals of the Communications Act is to preserve continuity of service and avoid disruptions in service to the public.

[00:27:38] Speaker 01:
So if you have a radio station that's been on the air for years and years, it has a steady base of listeners.

[00:27:43] Speaker 02:
That's a policy call.

[00:27:44] Speaker 02:
Where is the legal support?

[00:27:52] Speaker 02:
opposition that the statute language which cuts off rights does not preclude you from granting a priority.

[00:28:02] Speaker 01:
The legal support, Your Honor, is that the language of the statute is silent as to what the consequences are when a station's license expires.

[00:28:12] Speaker 01:
And as this Court has long held, where Congress includes specific language in one section of the Communications Act and not the other, presumption is that the exclusion is intentional.

[00:28:24] Speaker 01:
Congress intended to leave to the FCC's discretion how to fashion remedies in a circumstance like this, where a high school station's license has undeniably expired.

[00:28:36] Speaker 01:
But here, the press is asking you to look at the grant of the renewal application in isolation.

[00:28:41] Speaker 01:
But that's not what we can do here.

[00:28:42] Speaker 01:
You have to look at everything that the Commission did.

[00:28:45] Speaker 01:
We imposed a significant monetary forfeiture of over $6,000.

[00:28:49] Speaker 01:
to this high school station.

[00:28:51] Speaker 01:
We also required them to abide by a number of requirements through a compliance plan.

[00:28:56] Speaker 01:
So we imposed penalties.

[00:28:59] Speaker 01:
We certainly didn't let them go scot-free, but consistent with preserving continuity of service, we reasonably determined that we were not going to simply yank this license

[00:29:10] Speaker 01:
is yank the station off.

[00:29:11] Speaker 03:
So you're relying, for example, on Section 303, general powers and duties of the commission, 309, authority to set licensing criteria and renewal criteria.

[00:29:26] Speaker 03:
Is that what you're looking to more generally, rather than just the negative implication that Mr. Cole would point to from 301?

[00:29:32] Speaker 01:
Yes, Your Honor, that's right.

[00:29:32] Speaker 01:
We're relying on our public interest authority here.

[00:29:38] Speaker 01:
If there are no further questions, we would ask that the commission's order be affirmed.

[00:29:42] Speaker 01:
Thank you.

[00:29:43] Speaker 00:
Thank you.

[00:29:50] Speaker 03:
And we have an argument from Mr. Murchison for intervener.

[00:30:01] Speaker 06:
May I please the court?

[00:30:02] Speaker 06:
My name is Matt.

[00:30:02] Speaker 03:
I'm sorry.

[00:30:03] Speaker 03:
The clock says two minutes, but the schedule I have says three minutes because Mr. Mercheson have will give you three minutes.

[00:30:14] Speaker 06:
That's gonna change your argument.

[00:30:18] Speaker 03:
Take a deeper first.

[00:30:20] Speaker 03:
Yeah.

[00:30:22] Speaker 06:
May it please the court, my name is Matt Purchase and I'm serving as pro bono counsel for the Atlantic City Board of Education, the licensee of WHAM.

[00:30:30] Speaker 06:
I think just first to put a finer point on the short spacing issue that you've heard from both counsel on with respect to the WJBR and WZBZ short spacing arrangement.

[00:30:40] Speaker 06:
I think Judge Silverman, you put your finger on the key issue here, which is that this, what press sought to do here was really unprecedented.

[00:30:50] Speaker 06:
They sought to undertake an involuntary channel change and seek refuge under the grandfathering provision of section 73.213.

[00:31:00] Speaker 06:
That was specifically identifying the deficiency letter, and I believe footnote three,

[00:31:05] Speaker 06:
And I think, you know, even setting aside if it were the case that they would need to seek a waiver, again, this is kind of an unprecedented situation, but if that were the way out of this, I think any lawyer would kind of come up with that by looking at the deficiency letter and seeing the rules that were identified as having been violated.

[00:31:27] Speaker 06:
I would also just respond to Judge Wilkins' question about, you know, Chenery and Section 73.203 note the fact that it wasn't specifically identified in the Commission's order.

[00:31:39] Speaker 06:
I don't think that presents a Chenery issue because I think, as Commission's counsel has ably pointed out, that was what they were doing.

[00:31:46] Speaker 06:
in the order.

[00:31:47] Speaker 06:
I think it's reasonably discernible from the order that that's precisely the policy they set out to carry out in the order.

[00:31:55] Speaker 06:
They have this rule, 73.207, which sets forth the minimum spacing requirements for these stations.

[00:32:01] Speaker 06:
That says 113 kilometers for a distance between a Class A and a Class B station.

[00:32:06] Speaker 06:
Here, it's undisputed that the stations were 105 kilometers apart.

[00:32:10] Speaker 02:
You're talking about the Delaware station.

[00:32:11] Speaker 06:
Yes, yes, Your Honor.

[00:32:14] Speaker 06:
And, you know, that 73.203 note says you can't rely on the grandfathering provisions of 73.213.

[00:32:20] Speaker 06:
That's the whole discussion in the order, and I think it's also clear from the deficiency letter and from, you know, the Bureau's order, which are obviously also in the record.

[00:32:31] Speaker 06:
I also just point out that, you know, on this public interest question, Mr. Cole referenced, you know, the fact that this might result in some, you know, lessening of the short spacing.

[00:32:44] Speaker 06:
First of all, that is an issue that

[00:32:46] Speaker 06:
really is within the heartland of the Commission's discretion here, you know, allocating frequencies, figuring out where stations should be and what the public interest is.

[00:32:56] Speaker 06:
And I'd also just point out that, you know, the upshot of Press's application, if it were granted in full, would be the loss of a broadcaster.

[00:33:04] Speaker 06:
I mean, WAJM would go off the air.

[00:33:06] Speaker 03:
What's your position, Mr. Murchison, on the Section 301 question?

[00:33:10] Speaker 03:
And is it your position that your client had a right to renew the license after its expiration?

[00:33:18] Speaker 03:
And if so, how do you square that with Section 301?

[00:33:21] Speaker 03:
Or is it... I mean, you also talk about a due process right, and how does that...

[00:33:30] Speaker 03:
square with Section 301?

[00:33:32] Speaker 06:
Sure.

[00:33:32] Speaker 06:
So I'll take the statutory question first.

[00:33:34] Speaker 06:
So I think if you look at Section 301 in the context of Sections 307 and 309, I think it becomes clearer what the rights are that are involved here.

[00:33:45] Speaker 06:
So if you look at, for instance, Section 309H, it sets forth the statement that must be included in the license itself in order to effectuate Sections 301 and Section 307C1, which sets forth the eight-year period.

[00:33:59] Speaker 06:
And it says,

[00:34:00] Speaker 06:
The station license shall not vest in the licensee any right to operate the station, nor any right in the use of the frequencies designated in the license.

[00:34:09] Speaker 06:
So that seems quite different from the application of a processing policy to decide which applications get priority over others.

[00:34:18] Speaker 06:
That seems to be something that's squarely within the commission's discretion.

[00:34:22] Speaker 06:
And actually, the Supreme Court in the Popsville case, which we cite in our brief,

[00:34:26] Speaker 06:
I think makes this clear.

[00:34:28] Speaker 06:
That case says, the subordinate questions of procedure in ascertaining the public interest when the Commission's licensing authority is invoked, which is this case, including, quote, whether applications should be heard contemporaneously or successively,

[00:34:42] Speaker 06:
are explicitly and by implication left to the Commission's own devising.

[00:34:46] Speaker 06:
I think that's precisely the situation here, and I don't think according, you know, procedural priority is what Congress intended when they used the word rights in Section 301.

[00:34:58] Speaker 03:
You push the boundaries of that a little bit by characterizing what the school board has at stake here as a property right protected by due process.

[00:35:06] Speaker 06:
Yeah, so to address the due process question, I think due process notice, I think what we're really aiming at, and I think what the commission identified in its order as a due process issue, is that consistently, the commission has, at a minimum, allowed late filed renewal applications to be filed.

[00:35:27] Speaker 06:
and it has penalized that late filing through the imposition of a fine, which it did here.

[00:35:32] Speaker 06:
It has penalized the unauthorized operation of the station in those situations, and it's done so here.

[00:35:40] Speaker 02:
I think... Is there any other case where the FCC has given priority to a station, arguably, who lost its rights under the statute vis-à-vis another applicant?

[00:35:53] Speaker 06:
I think the superior case is along those lines.

[00:35:57] Speaker 06:
It was a similar situation.

[00:36:02] Speaker 06:
The timing in that one was a bit different, but I think that's the closest thing we have to the situation, where you had a similar arrangement of parties.

[00:36:10] Speaker 06:
You had one that had not filed its renewal application on a timely basis, and you had another that had come in and tried to modify their facilities in a way that went back and back.

[00:36:19] Speaker 06:
I think that's right, Your Honor.

[00:36:20] Speaker 06:
But back to the due process issue.

[00:36:23] Speaker 03:
Do you think we should avoid reaching that question?

[00:36:29] Speaker 06:
No, I don't think it's necessary.

[00:36:31] Speaker 06:
I think it's entirely consistent with the statute and the commission's rules to look at this as a first time issue and realize that the commission has discretion in assigning priority to applications before it.

[00:36:45] Speaker 06:
And just to close the loop on the due process question, I think that the issue there is just that there is this long-standing policy of accepting late-filed renewal applications.

[00:36:54] Speaker 06:
It would have been a hard swerve indeed if the Commission had suddenly said, you know, we're changing our procedure here.

[00:37:05] Speaker 02:
Certainly you could have that policy interpreting rights not to be implicated if no one else is involved.

[00:37:15] Speaker 02:
But if someone else is involved, you have a more acute question as to the statutory's meaning.

[00:37:24] Speaker 06:
Yes, Your Honor, certainly.

[00:37:25] Speaker 06:
Certainly.

[00:37:26] Speaker 06:
And the interplay of this due process question is fraught in that respect.

[00:37:32] Speaker 03:
I mean, it's also tough under due process.

[00:37:34] Speaker 03:
If it's a matter of grace on the part of the Commission, within its authority, but nonetheless a matter of grace, the due process argument becomes a pretty steep one.

[00:37:40] Speaker 06:
I think perhaps that's correct.

[00:37:43] Speaker 06:
I think it is true that the commission looked at due process as a relevant factor here.

[00:37:49] Speaker 06:
And I just kind of actually draw the contrast between this case and the SNR wireless case that you, Judge Piller, put out just a month ago, where you had a similar situation where you had

[00:38:02] Speaker 06:
in an abstract way, where there was this need to cure and this idea that you should be able to negotiate a cure and that the line of cases that had preceded that didn't really put you on notice, that you didn't have the ability to cure.

[00:38:16] Speaker 06:
I think the commission's recognition of the due process interests at stake here are kind of what should have happened in that case.

[00:38:23] Speaker 06:
It realized there was an opportunity to negotiate a cure with WAJM and that's precisely what it did with its consent decree.

[00:38:31] Speaker 06:
If there are no further questions.

[00:38:33] Speaker 03:
We'll give Mr. Call a couple of minutes for rebuttal.

[00:38:43] Speaker 03:
Did he have any time left?

[00:38:47] Speaker 03:
We'll give you a minute.

[00:38:50] Speaker 04:
I'll get started.

[00:38:51] Speaker 04:
Your Honor, with respect to the notion of relying on the public interest, I would refer the court to network IP.

[00:39:00] Speaker 04:
the network IP decision, which relates to waivers of deadlines and other FCC rules.

[00:39:06] Speaker 04:
In network IP, this court said the criteria used to make waiver determinations are essential.

[00:39:13] Speaker 04:
If discretion is not restrained by a test more stringent than, quote, whatever is consistent with the public interest, then how to effectively ensure power is not abused.

[00:39:21] Speaker 04:
In this case, we had press

[00:39:24] Speaker 04:
And that's what Congress said in 301 and 307.

[00:39:27] Speaker 04:
It's got eight years, four years after the deadline had passed, filing an application which cut off the rights of anybody else, including WAJM, assuming that WAJM still had any rights.

[00:39:41] Speaker 04:
The licensee knows if it wants to renew it, it knows how to renew it.

[00:39:45] Speaker 04:
It's not a big deal.

[00:39:46] Speaker 04:
And the fact that it failed not for three months, four months, but for four and a half years.

[00:39:52] Speaker 03:
What would make a difference in your view if it were three months or four months?

[00:39:55] Speaker 03:
Or how about a week?

[00:39:57] Speaker 04:
To my way of thinking, it doesn't make any difference at all.

[00:39:59] Speaker 04:
That's what I thought.

[00:40:00] Speaker 04:
The commission's, the superior broadcasting case is the only other case that we know about.

[00:40:06] Speaker 04:
And there, the commission said 30 days.

[00:40:09] Speaker 03:
So in your view, a week is too long.

[00:40:13] Speaker 04:
Yes.

[00:40:13] Speaker 03:
30 days is too long.

[00:40:14] Speaker 03:
In fact, the policy that the commission has now adopted to try to tie up this thing, that's unlawful also.

[00:40:21] Speaker 04:
No, no, that's fine.

[00:40:22] Speaker 04:
Because the commission's rules say you have to file your license renewal application four months before it expires.

[00:40:29] Speaker 03:
And if you don't, we're going to send you a letter saying.

[00:40:32] Speaker 04:
We'll send you a letter before it expires.

[00:40:34] Speaker 04:
So you will still have a chance to file a renewal application.

[00:40:37] Speaker 04:
before it expires.

[00:40:38] Speaker 04:
And once the renewal application is filed, then the statute kicks in.

[00:40:41] Speaker 04:
You've got a pending renewal application.

[00:40:43] Speaker 04:
Yes, it's late.

[00:40:44] Speaker 04:
Yes, you'll probably get fined for that.

[00:40:45] Speaker 03:
But... But if you miss that by a day, it laughs year on year.

[00:40:48] Speaker 04:
But if you miss the explanation by a day, my view is the statute says tough.

[00:40:53] Speaker 04:
You know, you've got no rights.

[00:40:54] Speaker 04:
FCC's out of luck.

[00:40:54] Speaker 04:
Public's out of luck.

[00:40:55] Speaker 02:
And so in our situation, you've got... But in a case in which there's no other party involved, the FCC could simply treat the application as if it was an application for a new license.

[00:41:05] Speaker 02:
and give approval.

[00:41:08] Speaker 04:
Not that easy, Your Honor, because in order to file for a new license, you have to go through a different set of processes.

[00:41:15] Speaker 04:
And so the Commission would have to construct some reinstatement or some process along those lines, queries to whether or not that would still be consistent, but that's what they would have to do if there were no intervening party like press.

[00:41:29] Speaker 03:
Thank you, Mr. Call.

[00:41:30] Speaker 04:
Thank you, Your Honor.

[00:41:30] Speaker 03:
Case is submitted.