[00:00:02] Speaker 00:
Case number 17-1209 at L, PMCMTV LLC Petitioner versus Federal Communications Commission at L. Mr. Evans for the petitioner, Mr. Carr for the respondent.

[00:00:20] Speaker 01:
Good morning, and may it please the Court, six years ago I was before this Court in the initial phase of what we'll call PMCM versus FCC.

[00:00:31] Speaker 01:
Welcome back.

[00:00:34] Speaker 01:
In which this Court ruled over the very bitter and intense objection of the FCC that, in fact, my client had the right to relocate its station to New Jersey in compliance with the provisions of Section 331 of the Act.

[00:00:48] Speaker 01:
Since that time, the FCC's position has basically been, okay, the court made us allow you to relocate your VHF station to New Jersey, but we're only going to give you the skeleton of a VHF station.

[00:01:01] Speaker 01:
We're going to strip you of all the rights and all the privileges and all the appurtenances that normally come with

[00:01:06] Speaker 01:
We're going to make you be perceived as a UHF station to your over-the-air audience.

[00:01:14] Speaker 01:
We're going to have your cable audience view you as a UHF station by requiring that you be carried on your virtual channel rather than your over-the-air channel.

[00:01:22] Speaker 01:
We're going to make it so that cable systems indefinitely don't have to carry you at all on their systems.

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even though there's an absolute statutory right to such carriage.

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And we're going to make it that we're going to assign you a channel that makes it difficult or impossible for about half of your viewing audience to actually pick you up properly on their television sets.

[00:01:42] Speaker 01:
So that's why we're back here before you today.

[00:01:44] Speaker 05:
As I understand it, you sought Radio Frequency 3, and that's what they gave you, and that is a VHF

[00:01:55] Speaker 05:
channel.

[00:01:57] Speaker 05:
That's true.

[00:01:58] Speaker 05:
Okay, so then the question is just did they correctly apply the protocol given that you have radio frequency 3, the protocol seems to assign you to virtual channel 33.

[00:02:13] Speaker 01:
Well, that's what I'd like to talk to you about today.

[00:02:16] Speaker 01:
It turns out it's not that simple.

[00:02:19] Speaker 05:
Well, it's a question in the weeds of the protocol.

[00:02:22] Speaker 05:
It's not some massive FCC plan to disadvantage your station.

[00:02:27] Speaker 01:
Well, if you'll indulge me, let me explain.

[00:02:32] Speaker 01:
If I want to do anything today, I want to leave you with the certainty that the FCC's application of the protocols in Annex B is wrong.

[00:02:42] Speaker 01:
I can say that very confidently for two reasons.

[00:02:45] Speaker 01:
First of all, the FCC says that if you apply the piece of protocols, you will end up with a result that gives you a single, unique channel, major channel for any television station.

[00:02:58] Speaker 01:
The problem with that is when the Commission went through the exact exercise that you have to go through to arrive at what your virtual channel should be, it ended up with two virtual channels.

[00:03:08] Speaker 01:
You would think that would have told them that there was something wrong about their application of the PSEC rules, but it didn't.

[00:03:14] Speaker 01:
They just said, well, we're going to make a determination between the two.

[00:03:16] Speaker 03:
Well, let's get into the weeds.

[00:03:18] Speaker 03:
As I read NXB 1.4 per annum,

[00:03:24] Speaker 03:
Um, that sure seems to me to apply directly to your circumstance.

[00:03:31] Speaker 01:
Well, um, it, it, no, it does not apply directly.

[00:03:35] Speaker 03:
What is there in that subparagraph that.

[00:03:39] Speaker 01:
Well, you have to, there's, there's.

[00:03:41] Speaker 01:
There's been some ambiguity raised about what does it mean when you talk about a channel being previously used in the market.

[00:03:48] Speaker 01:
And what do we do with ambiguities in this court?

[00:03:53] Speaker 03:
When there's ambiguity in a regulation or a statute, what does the law tell us we have to do?

[00:04:00] Speaker 01:
In this instance, it's – normally you defer to an administrative agency and interpret it as a rule.

[00:04:05] Speaker 03:
Yes, that's what the law tells us to do.

[00:04:07] Speaker 01:
But in this case, remember, we're dealing with a rule or a protocol that was developed not by the FCC but by a completely independent agency.

[00:04:16] Speaker 01:
And as you can tell by the process, the FCC – Adopted by the – adopted by the FCC.

[00:04:20] Speaker 01:
Adopted by the FCC, but they – It has the force of law.

[00:04:24] Speaker 01:
Well, but they had to flounder around quite a bit to try to figure out what the ATS committee actually meant when it adopted these protocols.

[00:04:31] Speaker 01:
They had to go to them to try to figure out what the protocol is.

[00:04:35] Speaker 04:
Is there any authority for the proposition that a standard or protocol adopted by an agency should be given some sort of different review?

[00:04:50] Speaker 04:
by our court than if the agency had drafted that standard or protocol itself?

[00:04:58] Speaker 01:
No, I don't think there is.

[00:05:00] Speaker 01:
I was not able to find any authority to that effect.

[00:05:04] Speaker 01:
What we have here, though, is you have a situation wherein interpreting the rule that the ATS committee adopted, the Commission didn't have to look very far because the ATS committee itself adopted a clarifying

[00:05:17] Speaker 01:
change to the language in the rule that we're looking at right now that makes it absolutely clear that there is no ambiguity, and this is the way the rule should be applied.

[00:05:25] Speaker 03:
But you were the one that introduced the word ambiguity, I believe.

[00:05:28] Speaker 03:
Now you're saying there's no ambiguity.

[00:05:30] Speaker 01:
Confused.

[00:05:31] Speaker 01:
I'm saying if you look at the clarification that was issued by the ATS committee... Is that one that was adopted by the FCC?

[00:05:38] Speaker 01:
It's not the one that was adopted by the FCC, but they didn't say they were changing the 2006 rule.

[00:05:45] Speaker 01:
They said they were clarifying what the 2006 rule meant.

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And to me, it seems like even this court, if you had a situation where the people that adopted the rule said, here's what we meant by that rule, that that would have pretty important impact in the way you evaluate what the rule meant.

[00:06:02] Speaker 05:
But the text that has the force and effect of law,

[00:06:06] Speaker 05:
uses the phrase, uses the word market, right?

[00:06:12] Speaker 05:
It does not use, does not use the phrase DMA market, nor does it use the phrase service area.

[00:06:24] Speaker 05:
Why isn't that a classic case where the regulation doesn't speak to which of those two possible measurements of market they have in mind?

[00:06:37] Speaker 01:
Well, those are not the key words that are... I know there was a lot of discussion in the papers that you've seen about what does market mean and what does service area mean.

[00:06:46] Speaker 05:
You need to win on market and you need to win on use.

[00:06:50] Speaker 01:
Well, yes, but if we... Okay, so let's start with market.

[00:06:53] Speaker 05:
Why isn't that a perfectly reasonable to say the market is where the signal goes?

[00:07:02] Speaker 01:
Well, it's easier to start with use because then market flows from that.

[00:07:06] Speaker 01:
If you take it that the ATSC committee was correct when it said what we meant when we say that something was previously used in a market, we meant that that channel was previously allocated in the market.

[00:07:21] Speaker 01:
That makes the whole analysis so much simpler because we know for a fact that channel three was never previously allocated to our market.

[00:07:28] Speaker 05:
But use is just as ambiguous, right?

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It could mean allocated in the sense that you're using the word or it could mean use in a more ordinary common sense sense, right?

[00:07:47] Speaker 05:
If the signal reaches into Fairfield, Connecticut, Channel 3 in Hartford is using Channel 3 in Fairfield, Connecticut.

[00:07:57] Speaker 01:
Well, but under this allocation clarification that they issued, you don't have to worry about use.

[00:08:03] Speaker 01:
All you do is go back to the FCC's table of authorities and see, was Channel 3 ever allocated to a community in this market?

[00:08:11] Speaker 05:
You still have to answer the question whether use means allocation or the signal goes to the place at issue.

[00:08:21] Speaker 01:
Well, I can give you two answers to that.

[00:08:23] Speaker 01:
First of all, the use of the word allocation as a clarification by the committee made it clear what use means.

[00:08:31] Speaker 01:
It doesn't mean actual transmission over that signal in the market.

[00:08:35] Speaker 01:
It means allocation in the FCC's table to that market.

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So you don't have to worry about actual use.

[00:08:41] Speaker 01:
It's a matter of allocation.

[00:08:43] Speaker 03:
And then if you're looking at service areas, it becomes even more problematic because the FCC's theory is that you look at... Could you help me understand, and maybe you said this and I just missed it, why would we be looking to the clarification that was done by the committee?

[00:08:59] Speaker 03:
Is that something the FCC has adopted?

[00:09:01] Speaker 01:
It hasn't adopted it.

[00:09:03] Speaker 03:
They've adopted NXB, right?

[00:09:06] Speaker 03:
So shouldn't our inquiry be focused on NXB?

[00:09:11] Speaker 01:
Well, the reason I'm saying we look at the 2009 version is because it clarifies what they meant.

[00:09:16] Speaker 01:
It didn't change.

[00:09:17] Speaker 01:
They said we're not modifying the 2006 version.

[00:09:20] Speaker 01:
We're clarifying what we meant.

[00:09:22] Speaker 03:
Do you have any authority that points us, that says that we should look to such a clarifying amendment by some non-governmental authority?

[00:09:36] Speaker 03:
Well, it's the non-governmental authority that actually... No, but what we're looking at is what has been adopted by the FCC, and I don't believe they've adopted the clarification you're talking about.

[00:09:47] Speaker 01:
Maybe I'm wrong.

[00:09:47] Speaker 01:
No, no, you're right.

[00:09:48] Speaker 03:
They haven't adopted it.

[00:09:50] Speaker 03:
So what's the authority that you can point to that tells us that we ought to be considering the later clarification?

[00:09:59] Speaker 01:
Well, because if you're trying to reinterpret a rule or a protocol in this case, I think you look to anything you can to find what did the framers of that rule mean.

[00:10:08] Speaker 01:
In this instance, you could see the commission itself went and consulted a book that was written a few years before the protocol was written to see what one of the people on the committee had to say about it to try to determine what it meant.

[00:10:20] Speaker 01:
That's what they did.

[00:10:21] Speaker 01:
What the commission didn't do,

[00:10:23] Speaker 01:
for some strange reason they just they put their hands over their ears and their eyes and they said we are not going to look at what the committee said they meant in 2009 and 2013 because we haven't adopted that.

[00:10:36] Speaker 01:
My position is that that clarifies and they made it very clear we're not changing what we did in 2016 or 2006 we are clarifying what we meant.

[00:10:45] Speaker 04:
But don't courts often say we don't look to like subsequent statements by Congress about what they meant

[00:10:54] Speaker 04:
when they enacted a statute, because that's not really legislative history.

[00:11:00] Speaker 04:
How is your argument different than that?

[00:11:05] Speaker 01:
Well, they do say that, but in this instance, you're looking for whatever you can find that gives you what the meaning was by the framers.

[00:11:16] Speaker 01:
And to me, that's extremely conclusive, because they said, here's what we meant.

[00:11:21] Speaker 01:
I take your point Judge Wilkins, but why would you ignore what the people are telling you this is what we meant if there's some confusion that has to be resolved?

[00:11:32] Speaker 05:
Suppose you're right on all of that and market means what you say and use means what you say.

[00:11:41] Speaker 05:
The most that gets you is that

[00:11:44] Speaker 05:
1.4 doesn't definitively resolve the case against you, that doesn't get you an entitlement to use channel 3 and the FCC has, as a matter of discretion, says well if you're using, if we give you 3.10 that will tend to

[00:12:10] Speaker 05:
harm the branding of the old Channel 3, and that's not appropriate.

[00:12:16] Speaker 01:
Well, let me address both of those points.

[00:12:18] Speaker 01:
First of all, if you agree with me on the interpretation of B4, which is that it only relates to a previously allocated channel in that market, it means that paragraph B4 doesn't apply.

[00:12:30] Speaker 01:
So that takes you back to paragraphs B1 and B2.

[00:12:34] Speaker 05:
No, it doesn't, though, because you didn't have an existing analog license, whether it's the New York DMA or whether it's the coverage area from wherever the station's based in New Jersey.

[00:12:51] Speaker 05:
You didn't have that license.

[00:12:53] Speaker 01:
You're not an incumbent.

[00:12:55] Speaker 01:
Right.

[00:12:55] Speaker 01:
That's the commission's view.

[00:12:56] Speaker 01:
And if that's correct, then paragraph two would apply instead of paragraph one.

[00:13:00] Speaker 01:
Because paragraph one says, if you're a newly licensed station, which is what the FCC says, then you just use your digital over-the-air channel.

[00:13:09] Speaker 01:
So whether you apply one or two, it doesn't matter.

[00:13:11] Speaker 01:
As long as paragraph four doesn't apply, we would still be allocated channel three as our virtual channel.

[00:13:19] Speaker 01:
But to go to your further point, Judge Katz, about the FCC exercising its discretion, we thought it was pretty clear that the protocols actually give us Virtual Channel 3, but we said, look, even if they don't, here's a laundry list of factors that we know for sure apply to this situation that should govern.

[00:13:43] Speaker 01:
I mean, among the foremost of these that we knew from experience that Channel 3.10 applied, if it's applied, works perfectly.

[00:13:51] Speaker 01:
There's no confusion, there's no grand confusion, everybody can tune into the signal that they want to tune into instead of somebody else's.

[00:13:58] Speaker 01:
We also know from experience that Channel 33 doesn't work because we ran into the exact problems that the Commission said the application of Annex B is supposed to prevent.

[00:14:09] Speaker 01:
You also have the situation that we think is important that there are two other stations in the New Jersey market that are allowed to have this overlap of major channel.

[00:14:19] Speaker 01:
virtual channels with no interference or no objection by the FCC whatsoever, which thus is sort of the definition of arbitrary and capricious treatment.

[00:14:27] Speaker 05:
With no objection by the competing broadcaster?

[00:14:31] Speaker 01:
No, that's right, there's no objection, but it sort of shows you that there's really no problem here that the FCC is so concerned about the sky falling if there's overlapping major channels.

[00:14:40] Speaker 05:
There's no objection, there's no controversy for the FCC to resolve.

[00:14:44] Speaker 01:
Well, I think the question is, is it a rule or is it not a rule?

[00:14:47] Speaker 01:
If you're going to say, oh, we're only going to enforce that if somebody complains, it's not really a rule.

[00:14:54] Speaker 01:
The other thing, and I've just got a little bit of time left, but the other thing that we have to stress is that the Commission went completely overboard on assigning importance to brand protection in this case.

[00:15:07] Speaker 01:
There's nothing in the FCC's charter that says that they have any authority or any responsibility whatsoever to protect brands.

[00:15:15] Speaker 01:
And yet here, that has been exalted into the single highest priority that the FCC is

[00:15:21] Speaker 01:
saying it has to place a value on to the detriment of people actually receiving a broadcast signal to the detriment of local programming.

[00:15:29] Speaker 02:
Unless my colleagues have any further questions, we'll hear from the FCC now.

[00:15:33] Speaker 02:
Thank you.

[00:15:56] Speaker 06:
Good morning.

[00:15:57] Speaker 06:
Good morning, your honor.

[00:15:58] Speaker 06:
May it please the court.

[00:15:59] Speaker 06:
My name is James Carr.

[00:16:01] Speaker 06:
I represent the Federal Communications Commission.

[00:16:06] Speaker 06:
Mr. Evans spent a lot of time focusing on Annex B14, but I think it's important to focus on PMCM's argument about why it feels it's entitled to Channel 3 under Annex B. As Judge Katz has pointed out, the focus there is on Annex B11.

[00:16:25] Speaker 06:
And PMCM has been claiming that the plain language of B11 guarantees WJLP

[00:16:35] Speaker 06:
the assignment of Channel 3.

[00:16:37] Speaker 06:
And that plain language argument falters.

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It doesn't even survive the first few words of Annex B11.

[00:16:45] Speaker 06:
because that provision starts for broadcasters with existing NTSC licenses, existing analog licenses.

[00:16:52] Speaker 05:
What's the answer to your friend's point about two?

[00:16:57] Speaker 05:
Just help me through it because the exercise I went through is to say, okay, one clearly doesn't apply because they don't have an existing license.

[00:17:07] Speaker 06:
four either resolves the case in your favor or doesn't apply in which case you have discretion and I didn't go the one extra step to look at two and yes and it's understandable why you didn't look at two your honor because I think it's for the first time this morning that Mr. Evans has mentioned two but but two the way I read it

[00:17:30] Speaker 06:
assumes you have a broadcaster without any sort of conflict where there are no other broadcasters in the service area who are disputing the channel assignment.

[00:17:42] Speaker 06:
And that's why the commission believes that B14 is the more appropriate protocol to apply here because you have a newly licensed digital broadcaster in a market where the particular channel was previously used.

[00:18:00] Speaker 05:
But we're only reaching this one or two question on the assumption that you've lost on four.

[00:18:07] Speaker 05:
Yes.

[00:18:07] Speaker 05:
Right.

[00:18:08] Speaker 05:
So yes.

[00:18:08] Speaker 05:
So we come to it.

[00:18:10] Speaker 05:
So we assume you lose on four and it's just an assumption.

[00:18:13] Speaker 05:
Right.

[00:18:14] Speaker 05:
So then you go you go to one and you say, well, they they had a license in Nevada, but that doesn't count.

[00:18:23] Speaker 05:
The relevant question is, do they have the license in New York?

[00:18:26] Speaker 05:
So they have no existing

[00:18:28] Speaker 05:
And NTSC means analog, right?

[00:18:31] Speaker 05:
That's correct.

[00:18:31] Speaker 05:
No existing analog license in New York.

[00:18:35] Speaker 05:
Okay, so they're out of one, but then you come to two and it says new broadcaster without an existing analog license.

[00:18:45] Speaker 05:
Why wouldn't you read that to mean in New York to make two parallel to one?

[00:18:51] Speaker 06:
Again, I think if you read the entire annex in context, I think two is assuming you have a situation where there's no conflict with other broadcasters.

[00:19:05] Speaker 06:
I take your point that you're assuming that B14 doesn't apply here.

[00:19:10] Speaker 06:
I think another important factor to keep in mind here is that the commission was under no illusions when it adopted annex B.

[00:19:18] Speaker 06:
that that particular set of protocols was going to resolve every conceivable possibility, every conceivable situation.

[00:19:27] Speaker 06:
It does resolve most situations involving channel allocation.

[00:19:32] Speaker 06:
In fact, most, the majority of allocations are handled by B11 because you have a situation where the digital transition occurs.

[00:19:41] Speaker 06:
Most stations are still in the same market where they were before the transition.

[00:19:45] Speaker 06:
After the transition, they maintain their analog channel as their virtual channel, even if they're on a different digital radio frequency channel.

[00:19:57] Speaker 06:
The Commission understood from the start that there might be situations where Annex B would not resolve this, where it wasn't clear, and the Commission retained the discretion

[00:20:08] Speaker 06:
to deal with situations where there were disputes over channels by weighing the different situations.

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And I think that's what we have here.

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Even assuming NXP doesn't resolve this issue, the Commission is weighing the different factors and considering what should it do.

[00:20:24] Speaker 06:
It has a dispute among broadcasters about who should be on channel three.

[00:20:30] Speaker 06:
And when you think about it for a second, on the equities, here's WJLP, a newcomer to the market,

[00:20:37] Speaker 06:
has just started broadcasting in New Jersey less than four years ago.

[00:20:41] Speaker 06:
It's moving into a market, and its service area overlaps with two stations, WSSB in Hartford, KYW in Philadelphia, which have been using Channel 3 for more than 50 years.

[00:20:53] Speaker 06:
And they object, and the Commission has valid concerns, as those broadcasters did, about the possibility of brand compromise, brand dilution.

[00:21:03] Speaker 05:
That all makes perfect sense in the abstract.

[00:21:08] Speaker 05:
Yes.

[00:21:08] Speaker 05:
But the one possible hiccup, right, is this other statute which says under these circumstances, the new entrant into New Jersey, which didn't have a

[00:21:25] Speaker 05:
VHF station is supposed to be supposed to sort of come in as a VHF station and in this fictitious world now where VHF is supposed to be better but they're coming in sort of a half VHF station.

[00:21:42] Speaker 05:
I get the radio frequency but not the branding.

[00:21:45] Speaker 05:
So why isn't that a problem under that statute?

[00:21:49] Speaker 06:
I don't think it's a problem under that statute because that statute, written in 1982, was focused on very high frequency channels.

[00:21:57] Speaker 06:
It's focused on radio frequency channels.

[00:22:00] Speaker 06:
It doesn't say anything about virtual channels.

[00:22:05] Speaker 06:
And frankly, if it was enough to have a virtual channel,

[00:22:09] Speaker 06:
on a VHF location.

[00:22:13] Speaker 06:
There would have been no need to have a reallocation of PMCM to New Jersey.

[00:22:19] Speaker 06:
WWR, which had been on a VHF channel in New Jersey, moved after the digital transition to a higher number on the band, but it's still at Virtual Channel 9.

[00:22:32] Speaker 06:
And so virtual channel is a different concept from VHF channel.

[00:22:38] Speaker 06:
It may well be that 331 has outlived its usefulness because at this point with the digital transition, VHF channels are simply, they're not any longer technological superior to UHF channels.

[00:22:56] Speaker 06:
In fact, in some instances there are,

[00:22:59] Speaker 06:
there are inherent reception issues.

[00:23:01] Speaker 06:
That's part of the reason why WWR moved to a higher channel.

[00:23:08] Speaker 03:
Could you respond to Mr. Evans' point about the later clarification of subsection four?

[00:23:17] Speaker 06:
Yeah, I'm a little

[00:23:20] Speaker 06:
befuddled by it because, and we discussed this in our brief, he focuses a lot on this term allotted, previously allotted, and if you look at the subsequent version it says something about previously allotted for NTSC, that's analog, in a market.

[00:23:41] Speaker 06:
If he's talking about channel allotments or the table of allotments that the commission puts out, that doesn't talk about markets, it talks about communities.

[00:23:53] Speaker 06:
And you can say, well, a community is in a particular market, but that still begs the question, what's the definition of market?

[00:24:00] Speaker 06:
The table of allotments doesn't specify anything about

[00:24:04] Speaker 06:
designated market areas or service area.

[00:24:07] Speaker 06:
It just talks about particular communities.

[00:24:09] Speaker 05:
I'm sorry.

[00:24:10] Speaker 05:
So allotment, the concept of allotment is not necessarily or technologically connected to the DMA.

[00:24:21] Speaker 06:
Not necessarily.

[00:24:25] Speaker 06:
It's focused on particular communities.

[00:24:29] Speaker 06:
I think the DMA is a separate concept.

[00:24:32] Speaker 05:
I thought the way it works is you would have said channel three was never allotted in the New York market because it would have produced interference with the Hartford station or the Philadelphia station.

[00:24:52] Speaker 06:
No, is that the wrong way of thinking about it?

[00:24:56] Speaker 06:
That certainly would be a possibility depending on the power of the station in New York using Channel 3.

[00:25:07] Speaker 06:
And I think that's one of the concerns that was at issue here as well, even with virtual channels.

[00:25:13] Speaker 06:
That if, when PMCM initially said it was going to be using Channel 3,

[00:25:19] Speaker 06:
There was a concern among the other broadcasters, Meredith and CBS, that if it was going to be using Channel 3, 3.1, there would be reception issues where it was not clear which station would be received when there were two stations in overlapping service areas both using Channel 3.

[00:25:47] Speaker 06:
If I could turn to the cable carriage issue, I know that really hasn't been discussed, but I'd just like to make the point.

[00:25:58] Speaker 06:
PMCM is making an argument that the must carry statute is unambiguous and that the phrase channel number on which a station is broadcast over the air unambiguously means the radio frequency channel.

[00:26:13] Speaker 06:
The commission disagreed and it explained why.

[00:26:17] Speaker 06:
That phrase is undefined in the statute.

[00:26:21] Speaker 06:
And at the time that must carry statute was passed in 1992, there wasn't any difference between the channel on which the broadcaster aired its programming, that is the radio frequency channel, and the channel to which viewers tuned.

[00:26:39] Speaker 06:
to receive that station.

[00:26:41] Speaker 06:
That situation has changed since the digital transition, and it was reasonable for the Commission to read that phrase, channel number, on which the station is broadcast over the air, to refer now to the virtual channel, the channel from the viewer's perspective.

[00:26:59] Speaker 06:
And that phrase, channel number,

[00:27:02] Speaker 06:
is at least ambiguous in terms of it suggests the number by which viewers identify the channel.

[00:27:11] Speaker 06:
And that now is different from the radio frequency channel.

[00:27:14] Speaker 06:
For example, channel four in Washington

[00:27:17] Speaker 06:
Everybody, WRC in Washington, everybody knows it's channel four.

[00:27:22] Speaker 06:
In fact, its digital RF channel is now channel 48.

[00:27:25] Speaker 06:
There probably aren't too many people who know that, but the viewing public knows to tune to channel four to get that channel.

[00:27:32] Speaker 06:
And the commission's approach to this made perfect sense because it preserved the same system that had been in place before the digital transition.

[00:27:43] Speaker 06:
Before the digital transition, if I'm a non-Cable subscriber one day, I tune to Channel 4 to get WRC.

[00:27:49] Speaker 06:
The next day, I subscribe to Cable, and if I want to get WRC, once again, I turn to Channel 4.

[00:27:57] Speaker 05:
And the point of the must-carry statute was to protect the broadcasters vis-a-vis cables.

[00:28:02] Speaker 06:
Precisely.

[00:28:04] Speaker 06:
And the idea is that the broadcasters want to reach non-cable viewers and cable subscribers on the same channel.

[00:28:13] Speaker 06:
And they're able to do that through the Commission's interpretation of this statute's virtual channel, which, by the way, has been in place since 2008.

[00:28:22] Speaker 06:
and it's worked just fine for the past 10 years.

[00:28:25] Speaker 06:
PMCM's alternative interpretation would cause considerable chaos and disruption among cable channel lineups if new stations were able to claim channel positions based on their RF channel

[00:28:40] Speaker 06:
that could have a cascading effect through cable channel lineups in various systems throughout the country.

[00:28:48] Speaker 06:
And so there's no reason for the Court to go in that direction when the statute is ambiguous and the Commission interpreted it reasonably.

[00:28:56] Speaker 03:
I'd like to ask a question of you about your friend's Spectrum Act claim.

[00:29:04] Speaker 03:
Is the repacking process completed?

[00:29:08] Speaker 06:
It is, Your Honor, and I think the best way to understand that is the

[00:29:19] Speaker 06:
The commission in the incentive auction order, and that is cited, unfortunately we don't cite it in the brief, but we cite the April 2017 notice announcing the end of the process, both the repacking and the reverse and forward auctions.

[00:29:34] Speaker 06:
In footnote one of that notice, there is a citation to the incentive auction order, and that paragraphs 529 and 30 of that order, the commission explains how it interprets that endpoint, and in its view,

[00:29:52] Speaker 06:
And it may also be helpful to look at Judge Srinivasan's very fine opinion in National Association of Broadcasters in 2015 where he explains the process.

[00:30:04] Speaker 06:
It's basically a three-step process.

[00:30:06] Speaker 06:
You have the reverse auction.

[00:30:08] Speaker 06:
You then have a channel reassignment to clear spectrum.

[00:30:14] Speaker 06:
so that you can go forward with the forward auction.

[00:30:16] Speaker 06:
If the commission doesn't complete the so-called repacking or channel reallocation or reassignment before the forward auction, it doesn't know what it's able to sell.

[00:30:28] Speaker 06:
It's clearing away spectrum so it has blocks of spectrum that it can then go to the wireless providers and say, here's what's up for bid.

[00:30:36] Speaker 06:
So by the conclusion of the forward auction, you have the reverse and forward auctions concluded and you have the repacking concluded.

[00:30:45] Speaker 06:
Now that's not to say, and I will hasten to add, Mr. Evans is correct, that there are still some possible adjustments going forward.

[00:30:54] Speaker 06:
But the commission made clear when it discussed this issue at paragraphs 529, 530, 531 of the incentive auction order that it did not regard those subsequent adjustments

[00:31:07] Speaker 06:
as somehow making the repacking non-final, as continuing the repacking.

[00:31:12] Speaker 06:
So in our view, the relevant prohibition period here ended in April of 2017.

[00:31:21] Speaker 06:
If there are no further questions, thank you very much, Your Honors.

[00:31:24] Speaker 06:
Thank you.

[00:31:26] Speaker 03:
Mr. Evans, I don't believe you asked for rebuttal time, but I think you meant to.

[00:31:30] Speaker 01:
I told him before.

[00:31:32] Speaker 03:
Okay, you can tell us, so we'll give you back two minutes.

[00:31:37] Speaker 01:
Maybe I can very quickly address your point, Judge Kansas, about what allotment means in this context.

[00:31:45] Speaker 01:
Channels are allotted to communities, and communities are in markets.

[00:31:49] Speaker 01:
So the reason I said the allotment issues resolves anything, we don't have to worry about markets because we know that channel three has never been allotted to any community, either in the DMA or in the overlap areas that the commission is concerned about.

[00:32:05] Speaker 01:
So under any definition of market, we know that that channel has never been allotted to the market.

[00:32:12] Speaker 01:
Because it's a community based... I see.

[00:32:14] Speaker 05:
So that's an argument.

[00:32:15] Speaker 05:
If you win on the proposition that use means allotment, you don't need to win on market.

[00:32:22] Speaker 01:
Right.

[00:32:22] Speaker 01:
Because you then absolutely know for a fact that there was no previous allocation to that market.

[00:32:28] Speaker 01:
I was going to correct Council's statement that the repacking process is done because it clearly is not done, and he finally conceded that with your question, Your Honor.

[00:32:39] Speaker 01:
And I would just close by completing the point that I started at the beginning of my argument, which is that you can be sure that the FCC is wrong.

[00:32:47] Speaker 01:
in its assessment of Annex B because the Commission insists that the purpose of Annex B is to guarantee that there will never be two non-commonly-owned major channels that are overlapping in the same service area with the same major channel.

[00:33:03] Speaker 01:
We know that's wrong because you just look at paragraph 8 of the 2006 version and what it says is it guarantees that there will never be an overlap of the two-part combination in the market.

[00:33:15] Speaker 01:
Not the major channel, but a two-part combination in the same market.

[00:33:20] Speaker 01:
So the Commission has clearly misinterpreted that absolutely clear statement of what NXP guarantees

[00:33:26] Speaker 01:
And that's confirmed, because if you look at paragraphs 5, 6, and 7 of Annex B, it gives you instances of when there are going to be overlapping major channels, which are okay, and they're permitted and contemplated by the protocols, as long as the minor channels are different.

[00:33:40] Speaker 01:
So the FCC has to be wrong in the way it's interpreted this annex.

[00:33:44] Speaker 03:
Thank you very much.

[00:33:45] Speaker 01:
Thank you, Your Honor.

[00:33:46] Speaker 03:
The case is submitted.