Opinion for the Court filed by Chief Judge GINSBURG.
Rаnger Cellular and Miller Communications, Inc. (sometimes hereinafter referred to collectively as Ranger) petition for review of an order in which the Federal Communications Commission interpreted a provision in the Balanced Budget Act of 1997, Pub.L. No. 105-33, 111 Stat. 251, 47 U.S.C. § 309(2), to allow new applicants to apply for certain cellular telephone licenses. Ranger, which had submitted an application for a cellular license several years beforehand, argues that providers of cellular telephone service are “commercial radio or television stations” within the meaning of 47 U.S.C. § 309(2), for which the Commission may not accept new applications. The petitioner also claims that, even if the statute did not bar new cellular applications, the Commission departed from precedent in holding that the public interest would be served by its accepting new applications, and that the Commission opened the applicant pool with the unlawful purpose of enhancing federal revenues, in violation of 47 U.S.C. § 309(j)(7)(B). We reject Ranger’s arguments and deny the petition for review.
I. Background
Prior to 1993 the Commission awarded licenses for use of the radio spectrum through either a comparative hearing or a lottery. Lottery entrants would file a simple application and pay a nominal fee. The Commission then held the lottery and determined a winner, subject to the losing parties’ right to file a petition to disqualify the winner. If the winner was disqualified, then the Commission held another lottery. After 1986 the Commission used the lottery system exclusively to assign all cellular licenses.
The comparative hearing process, which required each party to present a detailed case to the Commission showing why it should win the license, was far more complex and often led to protracted litigation.
See, e.g., Bechtel v. FCC,
Ranger and Miller filed applications in 1988 and 1989 respectively to participate in a lottery for certain Rural Service Area (RSA) cellular telephone licenses. The Commission awarded most of the licenses but by the mid-1990s six licenses for RSAs were still pending due to the disqualification or withdrаwal of the original winner. The Commission then granted interim operating authority (IOA) to cellular telephone licensees in adjacent areas to provide service until such time as the Commission awarded a permanent license.
*257
See In the Matter of Implementation of Competitive Bidding Rules to License Certain Rural Service Areas, Notice of Proposed Rule Making,
16 FCC Rcd. 4296, ¶ 9 & n. 21,
Meanwhile, the Congress, in thе Omnibus Budget Reconciliation Act of 1993, Pub.L. No. 103-66, § 6002(a), 107 Stat. 312, 387, had amended the Communications Act of 1934 by adding § 309(j), 47 U.S.C. § 309(j), which authorized the Commission to award almost all spectrum licenses by competitive bidding and limited the use of lotteries. With respect to cellular telephone licenses in particular, the 1993 legislation provided that the Commission: “shall not issue any license or permit [by lottery] ... unless ... one or more appliсations for such license were' accepted for filing by the Commission before July 26, 1993.” § 6002(e),
Before the Commission had finally decided how to award cellular telephone licenses, however, the Congress passed the Balanced Budget Act of 1997, Pub.L. No. 105-33, § 3002(a), 111 Stat. 251, which amended § 309(j) by requiring the Commission to use competitive bidding (except in a few specifically enumerated circumstances) and terminated the Commission’s authority to use a lottery (except for a small class of broadcast licenses). See 47 U.S.C. § 309(i). More important for the purposes of this case, the Congress amended the Communications Act of 1934 by adding § 309(Z), which states, under the heading “Applicability of competitive bidding to pending comparative licensing cases,” that:
With respect to competing applications for initial licenses or construction permits for commercial radio or television stations that were filed with the Commission before July 1,1997, the Commission shall ... treat the persons filing such applications as the only persons eligible to be qualified bidders for purposes of such proceeding.
(Emphasis added). This section bars the Commission from' accepting new applications for certain “commercial radio or television stations.” The Conference Report on the 1997 Act described the scope of this provision as follows:
The conferees adopted a new provision with respect to the applicability of competitive bidding to pending comparative licensing cases. New section 309(Z) of the Communications Act requires the Commission to use competitive bidding to resolve any mutually exclusive applications for radio or television broadcast licenses that were filed with the Commission prior to July 1,1997.
H.R. Conf. Rep. No. 217, 105th Cong., 1st Sess. at 573 (1997) (emphasis added).
Against this background, the Commission in April 1999 dismissed all pending applications for the cellular telephone licenses at issue in this ease because it was “without authority to process the pending mutually exclusive RSA applications pursuant to the rules and requirements [of the lottery system] under which they were filed.”
In the Matter of Certain Cellular Rural Service Area Applicatiоns,
14 FCC Rcd. 4619, ¶ 5,
The Commission rejected Ranger’s argument that the term “commercial radio or television stations” in § 309(Z) included cеllular telephone licenses and therefore required the Commission to limit the pool of bidders to those who had filed an application prior to July 1, 1997. The Commission reasoned that the statute - by its terms and in accordance with its purpose and its legislative history - in using the phrase “commercial radio and television stations” referred only to broadcast stations and therefore did not cover сellular telephone services. The Commission went on to decide that competitive bidding with open eligibility would best serve the public interest: “the bidder who is willing to pay the most will be highly motivated to rapidly put the license to a use that the public finds valuable because only such a use will make its investment worthwhile.” Id. ¶ 13. The Commission also rejected Ranger’s comment that an auction would violate 47 U.S.C. § 309(j)(7)(b), which prohibits thе Commission, in making certain regulatory decisions, from “bas[ing] a finding of public interest, convenience, and necessity solely or predominantly on the expectation of Federal revenues from the use of a system of competitive bidding under this subsection.” The Commission explained: “Our determination to permit open eligibility in the RSA auction is based on our statutory obligations to promote competition and rapid deployment of services to rural areas, not to enhance the Federal Treasury.” Id. ¶ 21.
The Commission conducted the auction for the RSA cellular licenses on June 4, 2002. Ranger did not participate.
II. Analysis
On appeal Ranger argues first that the Commission’s interpretation of § 309(Z) conflicts with the plain meaning of, and in any event, is not a reasonable reading of, the statute. Second, the pеtitioner maintains the Commission could not, consistent with precedent specifying the relevant equitable considerations, conclude that the public interest favored opening the auction to new applicants. Finally, the petitioner contends the Commission opened the.auction unlawfully in order to maximize federal revenues.
We consider Ranger’s first argument under the familiar two-step anаlysis of
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
*259 A. Section 309(2)
Section 309(i) required the Commission, with respect to pending comparative license cases involving applications “for commercial radiо or television stations,” to limit the pool of applicants to those who had filed “competing applications for initial licenses or construction permits” before July 1, 1997. The Commission determined that a cellular telephone license is not a license for a “commercial radio or television station” because the quoted phrase denotes only broadcast stations. Order, 17 FCC Rcd. ¶ 17.
Rangеr offers several non-frivolous arguments that § 309(2) must be read to apply to licenses to provide cellular telephone service. First, Ranger notes that cellular service is regulated as a “commercial mobile radio service,” 47 C.F.R. § 20.9(a), which seems to’ place it neatly within the more general class of “commercial radio and television stations” referenced in § 309(2). Relatedly, according to Ranger, when the Congress wanted to refer only to a broadcast station, it said either “broadcast station” or “broadcasting station.”
See, e.g.,
47 U.S.C. §§ 307(c), 311(c)(1), 315. Second, Ranger argues that the inclusion of the phrase “initial licenses or construction permits” in § 309(2) indicates the Congress intended to cover more than just broadcast stations because the Commission issues a “construction permit” only for a broadсast station, whereas an “initial license” is issued for a common carrier radio or a commercial mobile radio service. Therefore, the argument goes, the Commission’s reading renders the phrase “initial license” superfluous. Ranger also points out that the Commission has sometimes referred to commercial mobile radio service as “commercial radio.”
See, e.g., In re Appliсation of 360 Degrees Communications Company,
14 FCC Rcd. 2005,
Although not without force, Ranger’s arguments do not demonstrate that § 309(2) simply must be rеad as applying to cellular telephone licenses. First, the phrase “commercial radio and television stations” is not defined, nor is it used, in the 1997 Act outside the provision adding § 309(2) to the Communications Act. The Commission points out that the phrase “commercial radio” had been used, however, in both the Communications Act and the regulations promulgated thereunder, to mean only broadcast radiо. See, e.g., 47 U.S.C. § 158(g), 47 C.F.R. §§ 73.3526(e)(14), 73.3555(c)(2). The Commission then makes the point that the conjunction of “television stations,” which are unquestionably engaged in broadcasting, with “commercial radio” in the same phrase suggests the Congress meant to cover only broadcast media, and thereby casts serious doubt upon the interpretation advanced by Ranger.
Furthermore, the heading of § 309(2) strongly favors the Commission’s view that it does not apply to cellular telephone service. The heading - which was part of the 1997 Act, not a later addition by the Reviser - refers to “pending comparative licensing cases.” This implies that the provision is inapplicable to cellular telephone services, licenses for which have not been the subject of comparative hearings since at least 1986. On the other hand, as of 1997 broadcаst licenses had for more than 50 years been awarded through comparative *260 hearings. The reference to comparative licensing in § 309(Z) therefore implies the Congress meant to apply that section only to broadcast stations.
Hence we turn to the legislative history of § 309(Z), which, although of distinctly lesser weight than an argument from the text of the 1997 Act, also supports the reading that limits § 309(i) to broadcаst licenses. The Committee Report describes § 309(1) specifically as applying to “any mutually exclusive applications for radio or television broadcast licenses,” not to the broader category of licenses for all radio and television stations. H.R. Conf. Rep. No. 217 at 573 (emphasis added). The use of the modifier “broadcast” in the report clearly implies that the Congress intended to limit the scope of § 309(Z) to broadcast licenses.
We are led to conclude that, the Congress has not directly spoken to the question whether § 309(Z) covers only broadcast stations; the statute simply is not unambiguous on that score. We must go on to determine, therefore, whether the Commission has offered a reasonable interpretation of § 309(Z).
From the foregoing discussion of the parties’ positions, it is obvious that, for thе same reasons the Commission’s arguments cast doubt upon the clarity of § 309(l), the agency offers a reasonable interpretation of the statute. Not surprisingly, therefore, Ranger proffers no reason to reject the Commission’s interpretation apart from the reasons for which it argued the meaning of the statute is plainly otherwise. Again, the Commission has shown that § 309(Z), viewed in the context of the 1997 Act, supрorts a reading that covers only broadcast stations. Although this reading is not the only possible interpretation of § 309(7), it is certainly a reasonable one and therefore commands our deference.
B. Public Interest
Ranger contends the Commission neither followed nor distinguished its precedents for determining whether to open a pending applicant pool to newcomers,
citing Competitive Bidding in the Broadcast Services,
13 FCC Rcd. 15920,
We think the Commission reasonably applied appropriate factors to the circumstances of this case. The Commission first opined that open eligibility “generally favor[s]” the public interest because “maximizing the pool of auction applicants helps to ensure that licenses are awarded to entities that value them most highly and are, therefore, most likely to offer prompt service to the public.” Order, 17 FCC Rcd. ¶ 10. Opening the pool would be particularly useful in this case because otherwise there would be only three eligible bidders. Id. ¶ 19. Another “importаnt factor in [the Commission’s] decision” was that the licenses covered rural areas, for which the Commission has a special responsibility under § 309(j)(4)(B) to promote the rapid development of service. Id. ¶ 14. And, the Commission added, the IOA licensees *261 “may have a substantial interest in bidding for permanent authorizations in markets where they have been providing interim cellular service,” id. ¶ 15.
The Commission has also properly distinguished its precedents. The MDS Order, the Commission noted, addresses not issues of eligibility, see Order, 17-FCC Red. ¶ 18 n.61, but whеther to hold an auction or to conduct a lottery for the licenses there in question. MDS Order, 10 FCC Rcd. ¶ 88. In addition, the Commission explained that the concern expressed in Competitive Bidding in the Broadcast Services - that reopening the filing window would not “expedite ... the commencement of service to the public,” 13 FCC Rcd. ¶ 108 - did not obtain in this case because customers in the RSAs were already receiving cellular telephone service from the IOA liсensees. See Order, 17 FCC Rcd. ¶ 9 n.29. We conclude the Commission considered the relevant factors and did not act in an arbitrary and capricious manner in applying the public interest standard.
C. Revenue Enhancement
Finally, Ranger argues the Commission violated 47 U.S.C. § 309(j)(7)(B), which provides that “in prescribing regulations pursuant to Paragraph 4(A) of this subsection, the Commission may not base a finding of public interest, convenience and necessity solely or prеdominantly on the expectation of Federal revenues from the use of a system of competitive bidding under this subsection.” Specifically, Ranger contends the Commission opened the bidding to newcomers “solely or predominantly” for the purpose of enhancing what the licenses would fetch.
The Commission argues first that § 309(j)(7)(B) “applies only in specifically-enumerated circumstances, of which determining eligibility to participate in an auction does not appear to be one.” The Commission maintains that, on the contrary, it “is charged with assigning spectrum to the party that places the highest value on the use of the spectrum, because that party is presumed to be most likely to use the licenses efficiently.”
The Commission clearly has the better of the argument here: Section 309(j)(7)(B) simply does not apply to this case. It applies only to regulations concerning “alternative payment schedules and methods of calculation” to be used in specifying the methodology of competitive bidding. So far as § 309(j)(7)(B) is concerned, therefore, the Commission is free to consider revenue enhancement when determining whether to expand the pool of eligible bidders.
Unfortunately, the Commission did not notice that § 309(j)(7)(B) was inapplicable to this proceeding until briefing the matter to this court. In the
Order
itself the Commission instead explained why it was in compliance with that provision. We do not ordinarily consider an argument made for the first time on review.
District of Columbia v. Air Florida, Inc.,
We would be tilting at a non-existent windmill were we to consider whether the Commission has complied with an inapplicable statute.
Cf. United States Nat’l Bank of Oregon v. Independent Ins. Agents of America, Inc.,
III. Conclusion
We conclude that the Commission offered a reasonable interpretation of an ambiguous statute, justified its decision under the public interest standard, and was not subject to 47 U.S.C. § 309Cj)(7)(B). For those reasons the petition for review is
Denied.