ECHOSTAR SATELLITE L.L.C., PETITIONER v. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS NATIONAL ASSOCIATION OF BROADCASTERS, ET AL., INTERVENORS
No. 04-1304
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 12, 2005 Decided July 25, 2006
On Petition for Review of Orders of the Federal Communications Commission
Joel Marcus, Counsel, Federal Communications Commission, argued the cause for respondents. With him on the brief were Thomas O. Barnett, Acting Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Robert J. Wiggers, Attorneys, Samuel L. Feder, General Counsel, Federal Communications Commission, and Daniel M. Armstrong, Associate General Counsel. John A. Rogovin, Attorney, entered an appearance.
Thomas P. Olson argued the cause and filed the brief for intervenors National Association of Broadcasters, et al.
Before: GINSBURG, Chief Judge, and SENTELLE, Circuit Judge, and WILLIAMS, Senior Circuit Judge.
GINSBURG, Chief Judge: EchoStar Satellite L.L.C., a provider of direct-to-the-home satellite television service, petitions for review of two orders in which the Federal Communications Commission adopted an improved version of its Individual Location Longley-Rice (ILLR) model for predicting the strength of broadcast television signals. In response to congressional
I. Background
A network television broadcaster generally has “exclusive rights,” pursuant to the Copyright Act,
In the wake of the SHVA, the Commission adopted the ILLR computer model “to predict whether a household is likely to be able to receive a signal of the required strength” and thereby “minimiz[e] the need for on-site testing.” See Satellite Delivery of Network Signals to Unserved Households for Purposes of the Satellite Home Viewer Act, Report & Order, 14 F.C.C. Rcd. 2654, ¶ 7 (1999) (SHVA Order). When it was adopted, EchoStar and others criticized the ILLR model because it did not account for loss of signal strength due to variations in land cover -- for example, buildings and vegetation -- also known as “clutter loss.” See id. ¶ 82. The Commission acknowledged that land cover affects signal intensity, but declined to include a clutter loss factor in the model because it was “not aware of a standard means of including such information in the ILLR that has been accepted by the technical and scientific community.” Id. ¶ 83.
In response, the Congress enacted the Satellite Home Viewer Improvement Act of 1999 (SHVIA), directing the Commission to “take all actions necessary ... to develop and prescribe by rule a point-to-point predictive model for reliably and presumptively determining the ability of individual locations to receive signals [of Grade B intensity].”
Pursuant to the SHVIA, the Commission conducted the rulemaking here under review, proposing to adjust the ILLR model to incorporate “the effects of both vegetation and buildings.” See Establishment of an Improved Model for Predicting the Broad. Television Field Strength Received at Individual Locations, Notice of Proposed Rulemaking, 15 F.C.C. Rcd. 1843, ¶ 9 (2000) (ILLR Notice). In particular, the Commission proposed to subtract from each predicted signal strength a “clutter loss value” based upon one of ten different categories of land cover, using data from the Land Use and Land Cover (LULC) database published by the United States Geological Survey. Id. ¶¶ 9-11. Loss of signal strength would be calculated using the figures in “Clutter Losses and Environmental Noise Characteristics Associated with Various LULC Categories,” IEEE Transactions on Broadcasting, Vol. 44, No. 3 (Sept. 1988), by Professor Thomas N. Rubinstein. Id. ¶ 11. Recognizing certain limitations inherent in Professor Rubinstein‘s figures, see id. ¶¶ 11-12, the Commission solicited “comment on whether other data are available that would allow [it] to expand the application of clutter loss considerations, and whether there are other approaches that are scientifically supported and could be integrated into the ILLR model to take into account losses due to vegetation and man-made structures.” Id. ¶ 11.
Various broadcasters, satellite carriers, and engineers commented upon the proposed rule. Many criticized the methodology underlying the Rubinstein data and one engineer, Richard L. Biby, submitted an alternative set of clutter loss figures. Most significant, an empirical study jointly submitted by the National Association of Broadcasters and the Association for Maximum Service Television, Inc. compared “approximately 1,000 intensity measurements,” taken during field testing in five geographic regions, with the signal strength predicted by the existing ILLR model and the model as adjusted for clutter loss based upon the Rubinstein and the Biby data. The NAB/AMST study reported for each measurement whether the various models correctly predicted the presence of a Grade B signal, predicted service at an unserved location (over-predicted), or predicted no service at a served location (under-predicted). The study concluded the proposed models were “less accurate” than the ILLR model already in use because they produced a lower percentage of correct predictions. Finally, the Associations argued that the SHVIA required the Commission to leave its “highly accurate” model in place “[a]bsent an empirically validated method of improving the accuracy of the ILLR.” The NAB/AMST study was the only empirical study submitted by any commenter, and no commenter, including EchoStar, criticized the study prior to the Commission‘s initial decision.
Relying upon the NAB/AMST study, the Commission concluded that for both VHF and UHF channels “the ILLR model without clutter corrections prove[d] superior to [the alternatives] by making the correct prediction more often.” Establishment of an Improved Model for Predicting the Broad. Television Field Strength Received at Individual Locations, First Report and Order, 15 F.C.C. Rcd. 12,118, ¶ 14 (2000) (ILLR Report and Order). With respect to VHF channels, the Commission concluded that reducing predicted signal strength to take account of clutter loss would “make the ILLR model less accurate because it already produces more under-predictions than over-predictions.” Id. Accordingly, the Commission set the “clutter loss values for VHF channels to zero,” id. ¶ 15, thereby leaving the results
EchoStar petitioned for reconsideration, arguing the Commission had “abdicated its responsibility” under the SHVIA to take into account clutter loss values in its predictive model for VHF channels. EchoStar also objected that the Commission had relied upon the NAB/AMST study without having made the supporting data available for comment. (The two Associations later filed those data with the Commission, approximately one month before EchoStar‘s reply was due.) Finally, EchoStar argued the Commission had unlawfully refused to permit it to conduct on-site signal strength tests at the premises of customers who claim to have been erroneously identified as served, rather than requiring those customers to pursue the waiver and testing process outlined in
The Commission denied EchoStar‘s petition, explaining it had not “ignore[d]” clutter loss but rather had “made a considered determination that the most accurate ILLR predictions for VHF stations under certain groundcover conditions, including buildings, are made by setting the corresponding loss values to zero.” Establishment of an Improved Model for Predicting the Broad. Television Field Strength Received at Individual Locations, Memorandum Opinion and Order, 19 F.C.C. Rcd. 9964, ¶ 13 (2004) (Reconsideration Order). The Commission also noted that the data underlying the NAB/AMST study “ha[d] been publicly available since well before” it issued the ILLR Notice, that the Associations had filed the data in the record since issuance of the final rule, and that EchoStar had “reviewed and utilized the raw data in its arguments.” Id. ¶ 10. Finally, the Commission rejected EchoStar‘s argument that the statute permits it, instead of following the waiver and testing procedures in
II. Analysis
EchoStar makes three arguments: The Commission (1) by setting to zero the clutter loss term in the ILLR model for VHF stations, violated
A. Land Cover
EchoStar first argues the Commission failed to “ensure that [its predictive] model takes into account terrain, building structures, and other land cover variations.”
The Commission makes two counterarguments, of which only the second is grounded in the decisions under review. First, it argues the ILLR model already takes into account land cover variation because the model “was itself derived from empirical observations of signal intensity, and those observations would themselves have reflected some degree of clutter loss.” Because the statute directs the Commission only to ensure the model “takes into account” variations in land cover -- and not specifically to incorporate a variable for land cover -- the Commission argues it has complied with the statute by determining that “the bias [toward under-prediction] present in the existing ILLR model has the effect of accounting for land [cover].” Though some broadcasters made this argument before the Commission, the agency never adopted it. Because we must rely only upon the reasons given by the agency, not “counsel‘s post hoc rationalizations for agency action,” we disregard this ground for upholding the orders.*
Motor Vehicle Mfrs. Ass‘n of U.S. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 50 (1983) (“It is well established that an agency‘s action must be upheld, if at all, on the basis articulated by the agency itself“); Chamber of Commerce of U.S. v. SEC, 412 F.3d 133, 143 (D.C. Cir. 2005).
Second, as it did in the rulemaking, the Commission takes the position that any changes it makes to the model must comply with the statutory “command that [it] craft a reliable predictive model.” See
Citing our decision in Colorado v. United States Department of the Interior, 880 F.2d 481 (1989), EchoStar nonetheless argues the “Congress, not the Commission, determined that the time was right to incorporate land cover variations into the ILLR model, and the Commission had no power to second-guess that determination.” In Colorado we held unlawful a model adopted by the Department of the Interior (DOI) to assess damages to natural resources from the release of oil or hazardous substances, as required by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA),
Actually, this case is quite different from Colorado. As we explained in the companion case of Ohio v. United States Department of the Interior, 880 F.2d 432 (1989), our insistence there that the model incorporate a term for restoration cost was based not merely upon its inclusion in a list of factors the regulations were to “take into consideration,” but also upon the Congress having expressed in other provisions of the CERCLA a “clear preference for restoration as the basic measure of natural resources damages.” Id. at 444-46. We thought it “would be odd indeed for a Congress so insistent that all damages be spent on restoration to allow a ‘lesser’
This conclusion does not, as EchoStar hyperbolically contends, render the mandate of
B. NAB/AMST Data
EchoStar next argues the Commission violated § 553 of the Administrative Procedure Act,
The Commission responds that EchoStar was not entitled to the data because the Commission itself neither had nor relied upon them when it issued its final rule. Rather, the Commission based its analysis upon the description, methodology, and results of the study contained in the public comments filed by the Associations. See Air Transp. Ass‘n of Am. v. FAA, 169 F.3d 1, 7 (D.C. Cir. 1999) (the “critical factual material that is used to support the agency‘s position on review” must be made available for review).
We need not decide whether EchoStar was entitled to these data before the Commission issued its final order for the simple reason that EchoStar, although on notice of the findings and conclusions of the NAB/AMST study, did not ask for the data before the Commission issued its final rule. The record reflects the following sequence of events in 2000: (1) On February 22 the Associations submitted their comments on the ILLR Notice, in which comments they summarized the findings of their empirical study, the key finding being that the “ILLR model is already a highly accurate predictor of whether households receive -- or do not receive -- a Grade B signal.” (2) On March 14 EchoStar submitted its reply comments, in which it did not even mention the NAB/AMST study, and the Associations submitted their reply comments, including a chart comparing the accuracy of the various models under consideration. (3) On May 26 the Commission issued the final rule. (4) On July 10 EchoStar petitioned for reconsideration, objecting to the
EchoStar asserts “the most critical discussion of the NAB/AMSTV study ... appeared in the NAB/AMSTV‘s reply comments” filed on March 14, 2000, which included the chart comparing the accuracy of the proposed modifications and of the model then in use. Because the Associations’ March 14 filing merely provided further documentation of the study they had described in their February comments, we are doubtful about the greater significance of the later filing, but we will assume as much for the sake of the argument. In any event, as the Commission points out, EchoStar did not criticize the study in any way or protest the lack of raw data in its response to the Associations’ initial comments, in which they described and relied heavily upon the study; in fact EchoStar did not even mention the study, which suggests not that EchoStar was blindsided in March but that its current objection to the unavailability of the raw data then is an afterthought.
Moreover, EchoStar could have criticized the study, or requested more time in which to do so, during the two months between the filing of the Associations’ reply comments and the issuance of the Commission‘s decision. Under the agency‘s liberal ex parte rules EchoStar could have submitted a written presentation at any time during the rulemaking -- even, as Commission counsel said at oral argument, at the “11th hour.” See
Arguing that disclosure of the raw data came too late because the Commission already had issued its final rule, EchoStar cites Advocates for Highway & Auto Safety v. FHA, 28 F.3d 1288, 1292 (D.C. Cir. 1994), where we noted that an “agency is not likely to be receptive to suggested changes once the agency puts its credibility on the line in the form of final rules.” But it is no doubt for precisely this reason that parties avail themselves of the opportunities, ex parte or not, to object to evidence in the record before the Commission adopts a final rule. Cf. United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952) (“courts should not topple over administrative decisions unless the administrative body ... has erred against objection made
We also reject EchoStar‘s argument, based upon passing references in the ILLR Report and Order to the Commission‘s “further analysis” and “verif[ication]” of aspects of the NAB/AMST study, that the Commission developed its own “data and analysis” upon which EchoStar should have had a chance to comment. As the Commission explains in its brief -- and the record suggests nothing to the contrary -- these are references merely to the agency staff‘s own cogitations upon the evidence in the record. Were parties entitled to comment upon every observation an agency staff member draws from the record as it accrues, rulemaking proceedings would be interminable. The APA does not contemplate so exquisite a process. Cf. Cmty. Nutrition Inst. v. Block, 749 F.2d 50, 58 (D.C. Cir. 1984) (“Rulemaking proceedings would never end if an agency‘s response to comments must always be made the subject of additional comments“).
C. Waiver and Testing
If the ILLR model predicts a certain household is served and its satellite carrier accordingly denies it retransmission of a distant network signal, then the satellite subscriber may ask the network station (through the satellite carrier) for a waiver of that denial.
EchoStar contends that a satellite subscriber claiming to live in an unserved household incorrectly identified by the predictive model as being served may truncate the potentially time-consuming waiver and testing procedure specified in
In support of this view, EchoStar points out that under the SHVA, “actual measurement of signal strength at the household premises [was] the only conclusive way to determine whether the household [was] unserved.” See SHVA Order, 14 F.C.C. Rcd. 2654, ¶ 45 (“Individual testing is the key mechanism under the SHVA for proving that a specific household is unserved“);
The Commission is not unsympathetic to the policy argument underlying EchoStar‘s position; it noted in its Reconsideration Order that “EchoStar has raised a valid public interest concern with the efficiency of the process used to determine SHVIA eligibility.” 19 F.C.C. Rcd. 9964, ¶ 24. The Commission further noted, however, that the “statute delineates a specific sequence of events preceding testing: waiver request, waiver denial, the subscriber‘s request for an on-site test, selection of a qualified tester by the satellite carrier and the network station, and then the on-site test.” Id. ¶ 23. Inferring the Congress intended that the sequence detailed in the statute be exclusive, the Commission rejected EchoStar‘s claim of right to a streamlined process.
We agree with the Commission. Pre-SHVIA, in the absence of any express statutory guidance to the contrary, the Commission reasonably may have concluded that individual testing was “the key mechanism” for determining whether a household was unserved, SHVA Order, 14 F.C.C. Rcd. 2654, ¶ 45, but the statute is no longer so opaque. Instead, a prediction of the ILLR model presumptively establishes whether a household is unserved,
In sum, the Commission‘s reading of the SHVIA is the only reasonable one; EchoStar‘s contrary reading finds no support in, and is actually inconsistent with, the statute. We therefore uphold the Commission‘s reading under Chevron step one and end our inquiry here. See Chevron, 467 U.S. at 842 (if “the intent of Congress is clear,” then “that is the end of the matter“).
III. Conclusion
For the foregoing reasons, EchoStar‘s petitions are
Denied.