787 F.2d 609 | D.C. Cir. | 1986
Opinion PER CURIAM.
This case is the fourth of a series of appeals from cellular telephone licensing decisions of the FCC. The setting before us today is the Atlanta, Georgia market. The FCC awarded the Atlanta license to Gencom Cellular of Atlanta (Gen-Cell),
I
The principal legal challenge maintained by Celcom relates to the FCC’s comparative determination of geographic and population coverage. Celcom’s criticism attacks the FCC’s decision on two levels. First, Celcom argues that subsequent pronouncements of the FCC have wholly undermined any asserted public interest which the “coverage” criteria may once have embodied. Second, and more narrowly, Celcom attacks the FCC’s use of contour coverage as the yardstick for its comparative measurement of the applicants’ geographic and population coverage. After full consideration, we conclude that the preference awarded Gen-Cell for coverage is supported by substantial evidence and is neither arbitrary nor capricious.
The FCC has repeatedly affirmed that geographic and population coverage is a “major basis of comparison” of cellular applications.
We cannot agree in either respect. The FCC concluded, reasonably, that Gen-Cell’s coverage was not only quantitatively greater but that its pockets reflected substantial need. Gen-Cell’s pocket superiority was strengthened by its inclusion of Lake Lanier; it is undisputed that that facility draws over 16 million visitors annually. Atlanta, at 6 n. 8. The FCC found that a popular recreational area is “likely to have high mobile usage characteristics,” a “significant factor” under Cellular Rulemaking. 86 F.C.C.2d at 502. Crediting service to Lake Lanier is, in our view, no different conceptually than crediting service to an airport or a major highway. Moreover, the difference in coverage offered by the respective parties is greater than that in Chicago. At 226-27. It was reasonable for the FCC to conclude, on this record, that Gen-Cell’s coverage merited comparative credit.
Celcom contends that the comparison of coverage bears no relation to the public interest, not simply because such differences are “relatively minor,” an argument addressed in Chicago, at 225-26, but be
We are persuaded that Celcom’s creative analysis, when fairly viewed, mischaracterizes the FCC’s position. The recent Public Notice, which describes what changes to a cellular system are “major,” “minor,” and “permissive,” simply tracks the language of Cellular Rulemaking. Compare Public Notice No. CL-175 (Nov. 23, 1984) with 86 F.C.C.2d at 509-10. In its emphasis on flexibility, the original rulemaking provided that any applications proposing to alter CGSA boundaries would be “major” applications; that alterations in transmitter locations would be “minor” and thus would require prior approval in part to ensure FAA clearance;
Celcom attempts to reinforce its argument with references to the Commission’s later adoption of a lottery to replace the comparative process in markets below the top thirty. Celcom characterizes the FCC’s explanations as, in effect, the confessions of a penitent regulatory agency which has belatedly recognized the public-interest bankruptcy of the comparative process. Taken in context, however, the FCC’s language reveals that the lottery decision was reached not because the comparative process was deemed incapable of identifying the best applicant in the larger markets but because the difficulty, expense, delay, and administrative burden attendant to comparative proceedings had become too high. Cellular Lottery Selection, 56 Rad.Reg.2d (P & F) 8, 13-21 (1984).
We also reject Celcom’s attack on the comparative measurement of contour coverage — as opposed to CGSA coverage— as the requisite point of reference. The FCC’s comparison of contour coverage is not, as Celcom would, have it, contrary to the criterion enunciated in Cellular Rule-making. The major basis of comparison set forth there was “the geographic area that an applicant proposes to serve,” or the “proposed service area.” 86 F.C.C.2d at 502 (emphasis added). The very regulation which provides that the CGSA “shall be defined by the applicant as the area intended to be served,” 47 C.F.R. § 22.903(a) (1982) (emphasis added), goes on to state that the CGSA has two limited purposes, namely determining mutual exclusivity as to other systems and establishing standing for those who assert adverse effects. Id. § 22.903(b). Nothing in the rules requires that the CGSA be the basis of comparison of relative coverage.
The use of contours, moreover, is reasonable. Contours measure the actual coverage which the applicant will provide with the system as designed, while the CGSA represents not the area which the applicant
In addition, Celcom’s own application indicates that it expected that the parties’ respective 39 dBu contours would be compared. The first page of Celcom’s engineering statement includes a “Discussion of Coverage and Cellular Geographic Service Area (CGSA),” and discusses the “39 dBu coverage for the cellular plan” in relation to the CGSA. Celcom Engineering Statement, at 1 (June 1982). The accompanying exhibit, Map 1, identifies the 39 dBu contour area as the “Area of Proposed Coverage,” and contrasts it against the “Area of Proposed CGSA” in demonstrating that the 75% requirement had been met.
Celcom raises several additional arguments in this respect. The first is that contour coverage differences are merely design differences which should be ignored, by virtue of the fact that licensees will be able to modify their proposed designs to meet the exigencies of implementation. This broadside ignores the specific context — cellular design and cell spacing— in which the FCC has declared its intention not to dictate design choices. Celcom’s design-difference argument, when advanced in the coverage context, leads to the extraordinary proposition that all issues are, in the end, merely design differences, precluding any effective comparison.
Celcom next claims that it was unfairly penalized by the FCC’s coverage rule which, as Celcom sees it, awards aggression over caution. The pertinent FCC rule permits only de minimis extensions of CGSA beyond SMSA boundaries. 47 C.F.R. § 22.903(a) (1982); see Pittsburgh, slip op. at 10. The rule exists because of the obvious fact that radio signals do not respect political boundaries; de minimis extensions are often needed to ensure full
II
Celcom’s second major challenge is to the FCC’s award of a slight preference to Gen-Cell for its relative demand determination. Celcom claims that the FCC erred in rejecting the AU’s finding that no substantial evidence justified such a preference.
The FCC rejected the AU’s criticism of Gen-Cell’s sample source (the Yellow Pages) and low positive response rate, finding instead that Gen-Cell’s sample source and methodology were reasonable. Atlanta, at 10.
The AU’s primary criticism was that Gen-Cell had failed to demonstrate a nexus between its demand survey and its projection and distribution of demand; the ALJ observed that the growth rate employed in the demand projections could not be derived from the survey. Initial Decision, at 13, 29. The Commission, on the other hand, concluded that “any market demand study must contain certain assumptions which are not susceptible to proof in order to account for all relevant factors.” Atlanta, at 10; Pittsburgh, at 207 & n. 53. The FCC went on to conclude that Gen-Cell’s demand survey was indeed utilized to distribute demand throughout its system. These conclusions, we are persuaded, are adequately supported by the record. Gen-Cell’s demand-survey data, Gen-Cell Direct Exh. L, at 24, served as a launching point for its demand forecasts, Gen-Cell Direct Exh. G, at 2, 6, which relied as well upon other growth-related assumptions and demographic data. Gen-Cell Direct Exh. G. All important assumptions were explained, rather than left to the Commission’s speculation. Atlanta, at 10; Initial Decision, at 13; Gen-Cell Exhs. G, K, L.
Moreover, serious inadequacies plagued both Celcom’s and CMS’s demand studies. The ALJ characterized Celcom’s demand analysis as “patently defective,” Initial Decision, at 28; to its credit, Celcom readily concedes that its survey was intended neither to be statistically valid nor to serve as
Ill
In its final line of attack, Celcom raises a trio of claims of abuse of discretion on the part of the ALJ and the Commission. We find each of them unavailing.
First, Celcom argues that the ALJ abused his discretion in denying Celcom’s request for cross-examination of Gen-Cell’s officials on the efficacy of the new Gen-Cell partnership proposal. Under the Commission’s rules, the “[determination of what, if any, cross-examination is necessary is within the sound judicial discretion of the [ALJ].” 47' C.F.R. § 22.916(b)(6) (1985). The pertinent standards for exercise of this discretion under the cellular rules, as well as the APA, have been amply elaborated in Pittsburgh. At 197-99; see generally American Public Gas Association v. Federal Power Commission, 498 F.2d 718, 723 (D.C.Cir.1974); 5 U.S.C. 556(d) (1982); 47 C.F.R. § 22.916(b)(6) (1985). Suffice it to say that Celcom’s cursory assertions that “[t]hese are matters within Gencom’s knowledge, and written testimony may not be a fully effective substitute for cross-examination,” Objections to Revised Direct Case, at 3 (Sept. 26, 1983), fail to satisfy the more exacting standard imposing the burden on the requesting party to demonstrate the need for cross-examination.
Celcom next contends that the AU improperly permitted Gen-Cell to upgrade its application by amending it to include approximately eight lines of text describing Gen-Cell’s plan for assigning signalling channels. See Gen-Cell Motion for Leave to Amend Application, at 9-10 (Mar. 4, 1983). Under the rules, major amendments proffered after the Designation Order are permitted only by leave of the ALJ upon demonstration of good cause. 47 C.F.R. § 22.23(b) (1982); 47 C.F.R. § 22.918(b)(3) (1982) (recodified at 47 C.F.R. § 22.918(c)(4) (1985)); see Cellular Communications Systems, 89 F.C.C.2d 48, 91 (1982) (Order on Reconsideration). The ALJ found that Gen-Cell’s claim of inadvertent omission flowing out of a clerical error, Motion for Leave to Amend, at 9-12 & Exh. 10, constituted good cause for acceptance of the amendment. Order, FCC 83M-995, at 2 (Mar. 28, 1983).
Celcom argues that, notwithstanding Gen-Cell’s disclaimer of comparative credit, id. at 2 & n. 3, the very acceptance of an amendment rendering operable a theretofore nonfunctioning system had the forbidden effect of upgrading Gen-Cell’s proposal. Both the ALJ and the Commission properly rejected this contention, explaining that the evil of “one-upmanship”
Celcom concludes its final line of attack with the claim that the Commission abused its discretion in refusing to permit a last-minute amendment of Celcom’s application to reflect a stock agreement between Celcom and CMS. We disagree. The Commission’s rules, as we have just seen, provide that such amendments may be filed only with leave of the ALJ upon a showing of good cause by the party seeking the amendment. Under the rules, the Commission could reasonably conclude that it would be in the public interest to accept such an amendment if (1) it were not untimely; (2) “good cause” to amend were shown; and (3) the new entity (Celcom/CMS) would have been able to
As we read the record, the Commission’s action had no impact on the partial settlement itself, which may proceed with or without FCC sanction; the Commission concluded only that “good cause” had not been shown to permit a losing party to amend its application to reflect a stock agreement. This action scarcely rises to the level of a reversible abuse of discretion. The FCC reasonably found that a belated amendment of this sort did nothing to advance the goals of the cellular settlement policy but would, to the contrary, spawn yet further delays in a delay-ridden process.
IV
In summary, we conclude that the comparison of geographic and population coverage within the parties’ respective 39 dBu contours, rather than their CGSA’s, does not contravene the dictates of Cellular Rulemaking, and that the Commission could reasonably find that such a comparison adequately serves the public interest. We adhere to our holding in Pittsburgh that the parties to these comparative proceedings had adequate notice that their relative demand determination methodologies would be subject to comparative evaluation. Finally, we hold that the acceptance of one amendment upon a showing of good cause, rejection of another due to the absence of such a showing, and the denial of an inadequately supported request for cross-examination, did not work an abuse of discretion. We therefore conclude that the FCC’s ultimate award in the Atlanta cellular market reflects reasoned decision-making which is adequately supported by the record.
Affirmed.
. Gen-Cell is a partnership of two of the initial applicants in the Atlanta proceeding, Gencom, Inc. and Maxicom, Inc. Just prior to the hearing, the AU approved the merger, accepted
.Cellular Mobile Systems of Pennsylvania, Inc. v. FCC, 782 F.2d 182 (D.C.Cir.1985) (Pittsburgh). Celcom Communications Corporation ot Pittsburgh, Inc. intervened in the Pittsburgh appeal and filed a brief on the merits, but withdrew entirely from the case shortly before oral argument.
. Cellular Mobile Systems of Illinois, Inc. v. FCC, 782 F.2d 214 (D.C.Cir.1985) {Chicago).
. See Cellular Communications Systems, 86 F.C. C.2d 469, 502 (Report and Order), modified, 89 F.C.C.2d 58 (1981), further modified, 98 F.C.C.2d 571 (1982); petition for review dismissed sub nom. United States v. FCC, No. 82-1526 (D.C.Cir. Mar. 3, 1983) (Cellular Rulemaking).
. The Public Notice reiterates that these are minor changes and expands the prior-approval provision to require approval only if there is a need, such as for FAA clearance or an environmental impact statement.
. Celcom’s corporate affiliate, which eventually withdrew from the appeal, see n. 1 supra, also failed to raise this challenge in Pittsburgh.
. Even though the FCC has acknowledged the unreliability of the contours when employed for other purposes, it is too late in the day for Celcom to attack the use of Carey contours here. See Pittsburgh, at 187 n. 9. The contours were not challenged on reconsideration or appeal of Cellular Rulemaking. Nor did Celcom attempt to challenge the use of Carey contours either by appealing the Designation Order or by seeking to enlarge the issues. See Chicago, at 225 n. 19. Moreover, the rules themselves permit an applicant to utilize an alternative method when it believes that the Carey method is inaccurate. 47 C.F.R. § 22.903(c) (1982). Celcom never exercised this option.
. This is, of course, an implicit theme to which Celcom frequently returns — that the comparative process itself is, in effect, invalid.
.Celcom also argues that it had no notice that a separate preference would be awarded on the basis of the reliability of the applicants’ respective market survey methodologies. The identical arguments were raised by CMS affiliates in Pittsburgh and Chicago. Pittsburgh, at 202-05; Chicago, at 215. In those opinions, this court emphatically rejected the argument that the Designation Orders departed from the standards announced in Cellular Rulemaking "by making demand studies the subject of a separate preference and by basing the evaluation of an applicant’s 'ability to accommodate demand’ on the extent to which system planning reflected demand.” Pittsburgh, at 202-03, Chicago, at 222-23. Celcom fails to demonstrate that the analysis set forth in detail in our prior opinions is not fully controlling here.
. See Pittsburgh, at 185, 210 n. 56.
. A similar sample size was found to be sufficient in the Chicago proceeding. Rogers Radio-call, Inc., 96 F.C.C.2d 1172, 1179-80, reconsideration denied, 98 F.C.C.2d 1293 (1984), aff'd, Cellular Mobile Systems of Illinois, Inc. v. FCC, 782 F.2d 214 (D.C.Cir.1985). Moreover, comparative credit will not be denied simply because an otherwise satisfactory survey is limited to businesses when the applicant has stated that assumption clearly; has not attempted to project residential demand from business-derived data; and all other applicants have likewise limited their surveys to businesses. See Chicago, at 217, 218-19.
. A similarly qualitative explanation of projected demand was found adequate in Pittsburgh. At 208 n. 54.