Opinion for the Court filed by Circuit Judge TATEL.
This case presents a recurring question of administrative law: What constitutes sufficiently fair notice of an agency’s interpretation of a regulation to justify punishing someone for violating it? The Federal Communications Commission interpreted its now-superseded minority preference regulation as requiring not only that a majority of an applicant’s board of directors be minorities, but also that an applicant demonstrate actual control by minorities. Acting on this interpretation, the Commission denied appellants’ application to renew a commercial television broadcast license as a sanction for their earlier claim to a minority preference based on a majority-minority board. Although we defer to the Commission’s interpretation of its regulation as requiring actual minority control, we find that neither the regulation nor the Commission’s related statements gave fair notice of that requirement. We therefore vacate the Commission’s denial of appellants’ license renewal application.
*620 I
“Congress found that ‘the effects of past inequities stemming from racial and ethnic discrimination have resulted in a severe underrepresentation of minorities in the media of mass communications.’ ”
Metro Broad., Inc. v. FCC,
establish rules and procedures to ensure that, in the administration of any system of random selection under this subsection used for granting licenses or construction permits for any media of mass communications, significant preferences will be granted [to certain applicants to increase diversification of ownership]. To further diversify the ownership of the media of mass communications, an additional significant preference shall be granted to any applicant controlled by a member or members of a minority group.
Pub.L. No. 97-259, § 115(c)(1), 96 Stat. 1087 (1982), (codified at 47 U.S.C. § 309(i)(3)(A)).
Responding to this directive, the Commission issued a regulation granting preferences to minority applicants in lotteries for low-power and translator television station licenses. 47 C.F.R. § 1.1622(b). Low-power and translator television stations operate “on UHF channels at much lower power than full service (conventional) television stations.”
Neighborhood TV Co., Inc. v. FCC,
Limited to lotteries for low-power/translator television station licenses, section 1.1622 did not address minority underrep-resentation in the lucrative full-power, commercial television station market. A Commission advisory committee exploring the causes of underrepresentation in thаt market concluded that minority broadcasters faced serious shortages of capital. See Strategies for Advancing Minority Ownership Opportunities in Telecommunications 19 (May 1982). To address this problem, the committee suggested that the FCC encourage partnerships between minority entrepreneur broadcasters and established broadcasters. Id. at 24. The advisory committee warned, however, that the Commission’s multiple ownership regulation — which limited the number of commercial broadcast licenses in which a particular entity could have an interest— posed a significant barrier to such part *621 nerships. Because established broadcasters holding the maximum permissible number of licenses would be unable to have “interests” in additional licenses, minority entrepreneurs with whom they formed partnerships would be ineligible for television licenses. The advisory committee recommended that the Commission grant “waivers or expansion of multiple ownership and diversification requirements to established entrepreneurs who participate in telecommunications ventures with minorities.... For example, FCC policies should allow an established entrepreneur to acquire an equity interest in a minority-controlled property that otherwise would exceed multiple ownership limits.... ” Id. at 32.
In 1985, the Commission took a step toward facilitating the partnerships the advisory committee had recommended. It granted an exception to the multiple ownership limits for “minority-controlled” broadcast stations. As amended, the regulation stated:
No license for a ... TV broadcast station shall be granted, transferred or assigned to any party (including all parties under common control) if the grant, transfer or assignment of such license would result in such party or any of its stockholders, partners, members, officers or directors, directly or indirectly, owning, operating or controlling, or having a сognizable interest in, either:
(i) more than fourteen (14) stations in the same service, or
(ii) more than twelve (12) stations in the same service which are not minority-controlled.
47 C.F.R. § 73.3555(d)(1) (1990). In other words, section 73.3555 essentially limited broadcasters to having interests in twelve licenses, except that they could have interests in two additional licenses for “minority-controlled” stations. In language central to this case, section 73.3555 continued: “ ‘[Mjinority-controlled’ means more than 50 percent owned by one or more members of a minority group.” Id. § 73.3555(d)(3)(iii). 'Although section 73.3555 provided no further definition of “minority-controlled,” it concluded with this note: “The word ‘control’ as used herein is not limited to majority stock ownership, but includes actual working control in whatever manner exercised.” Id. § 73.3555 note 1.
Congress has since eliminated the multiple ownership limits. See Telecommunications Act of 1996, Pub.L. No. 104-104, § 202(c)(1)(A), 110 Stat. 56. But because the events leading up to this case occurred during the period section 73.3555 was in effеct, that section controls the disposition of this case, as all parties agree.
Created by Dr. Paul Crouch in 1973, appellant Trinity Christian Center of Santa Ana, Inc., d/b/a Trinity Broadcasting Network (“TBN”), is a non-profit “electronic evangelical ministry.” Crouch serves as TBN’s President. TBN produces its own religious programming, which it uses as the core of its twenty-four-hour broadcast. Its broadcasts also include religious programs produced by other ministries — “a wide variety of Protestant and Episcopalian denominations, as well as Catholic, Seventh Day Adventist, and Messianic Jewish programs.” Reaching viewers throughout the country, TBN’s programming is broadcast on TBN’s own commercial and translator television stations and on stations operated by smaller non-profit corporations like appellant Trinity Broadcasting Florida, Inc. (“TBF”), which Crouch created to carry TBN programming.
Pearl Jane Duff, an African American minister, started as a volunteer at TBN but was quickly hired as a salaried employee. She became Crouch’s assistant in 1981 and has worked at TBN in that capacity ever since. Shortly after Duff began working for TBN, she was appointed to the boards of TBN and TBF. She remained on those boards until resigning in the summer of 1984.
*622 In 1980, Crouch formed Translator-.TV, Inc. (“TTI”), predecessor to intervenor National Minority Television, Inc., a nonprofit, non-stock religious broadcast corporation. Crouch explained his creation of TTI as follows: In a conversation with Richard Wiley, former Chairman of the FCC, Wiley “impressed upon me very strongly that the emerging policy of the FCC was to foster the integration of minorities into broadcasting. He encouraged me to ... begin thinking of directions that TBN could take as our network grew to assist in the implementation of this emerging policy.” According to Crouch, he “conceived of the idea to organize a new company that would integrate minorities into broadcasting and further promote the emerging policy Mr. Wiley spoke to me about.... I felt that TTI would both help to implement the FCC’s minority ownership policy and hopefully allow TBN to develop, as new affiliates, stations that TTI might acquire.” Two of TTI’s three board members were minorities: Duff served as Vice President and Secretary, and Phillip Espinoza, an Hispanic pastor, served as Chief Financial Officer. Crouch, a non-minority and President of TTI, served as the third board member.
Focusing on the translator television market, TTI filed seventeen applications for FCC permits to construct translator television, stations to rebroadcast TBN programming. The Commission, however, had frozen all new translator television applications, so it took no action on TTI’s. When the Commission promulgated section 1.1622(b)(l)’s minority preference for translator television licenses, TTI amended its pending applications and filed certifications with the FCC claiming entitlement to minority preferences based on its majority-minority board. Because translator television station license applications were still frozen, the Commission had no occasion to assess TTI’s eligibility for a minority preference. TTI held no other licenses and conducted very little business while waiting for the Commission to act on its applications, functioning for all intents and purposes as a part of TBN: TTI maintained no separate bank account, it had no accountant or lawyer of its own, and its board conducted its annual meetings jointly with TBN’s affiliates.
Meanwhile, the Commission had promulgated section 73.3555, the minority exception to the high-power multiple ownership limit. At that time, Crouch and TBN held licenses for twelve high-power stations. TBN’s counsel, intervenor Colby May, advised Crouch that TBN could acquire interests in two additional stations as long as those stations were “minority-controlled.” May testified that he thought TTI was minority-controlled because a majоrity of its board members were minorities, and he so advised Crouch.
Deciding to broaden its focus from translator television to commercial television, TTI changed its name to National Minority Television, Inc. (“NMTV”) and applied for a license for a commercial high-power station in Odessa, Texas. NMTV was the first minority broadcaster to claim section 73.3555’s minority exception to the multiple ownership limit. In an attachment to its Odessa application entitled “Broadcast Interests and Statement of Compliance with Rule 73.3555(d),” NMTV asserted that issuing it the license was consistent with the multiple ownership regulation: “[WJhile one of NMTV’s.prin-cipals, Paul F. Crouch, presently has an interest in 12 commercial television facilities ... a majority of its directors are minorities, and NMTV is therefore minority controlled and in compliance with rule 73.3555(d)(1).” The application did not mention that NMTV board member Duff was employed by TBN, or that she had previously served on TBN’s board.
An attоrney in the Commission’s Mass Media Bureau assigned to review NMTV’s application contacted May, asking for more detail about NMTV. May explained that Trinity would provide NMTV’s financing and programming and that Duff worked for Trinity. “Concerned” about the over *623 lap between Trinity and NMTV, the Commission attorney went to his supervisor, who asked May for NMTV’s bylaws. May testified that the supervisor “was interested in determining that NMTV’s affairs were governed by the majority vote of its directors, and that unanimous votes were not required.” After May provided the requested information, the Mass Media Bureau and ultimately the Commission approved the application.
Having obtained the Odessa license and acting on May’s advice, NMTV began observing more of the formalities of a corporate entity.
See Trinity Broad. of Florida, Inc.,
14 F.C.C.R. 13570, 13591 ¶ 56,
Shortly after acquiring the Portland license, NMTV sold the Odessa license, freeing it to purchase another station, which it attempted to do by bidding on a license for a bankrupt Wilmington, Delaware station. In its application to the FCC for approval of the Wilmington purchase, NMTV asserted, as it had in the Odessa and Portland applications, that approving its license acquisition would not violate the multiple ownership limits because, since minorities constituted a majority of its board, it was minority-controlled. A petition filed by a challenger to NMTV’s application asserted that Crouch and TBN (not a minority-controlled corporation) actually controlled NMTV and that Crouch had therefore violated the multiple ownership regulation by having interests in more than twelve stations, none of which was minority controlled. Before the FCC could resolve the question of NMTV’s minority status, NMTV withdrew its application because its authorization from the Delaware bankruptcy court to purchase the license had expired.
The question of NMTV’s minority status aróse again, this time in the proceedings that led to the Commission’s denial of the commercial television license renewal at issue in this case. When TBN’s Florida affiliate, TBF, filed an application to renew its license for WHFT, Channel 45, a commercial television station in Miami, a competitor for the license asserted, as had the party opposing the Delaware license, that Crouch had violated the multiple ownеrship regulation by exerting control over NMTV. The Commission issued a Hearing Designation Order, instructing an Administrative Law Judge to determine, among other things, whether Crouch and TBN “exercised
de facto
control over” NMTV, whether Crouch and TBN abused the FCC’s processes “by using NMTV to evade the provisions” of the multiple ownership regulation, and whether TBF “is qualified to remain a Commission licensee” in light of any evidence adduced on the preceding two questions.
Hearing Designation Order,
8 F.C.C.R. 2475, 2481 ¶ 48,
Examining Crouch’s and TBN’s conduct from 1987 to 1991 (the period during which TBF held the Miami license), the ALJ concluded that TBN and Crouch exercised
de facto
control over NMTV and that NMTV was therefore not “minority-controlled.”
Trinity Broad. of Fla., Inc., Initial Decision of Administrative Law Judge,
10 F.C.C.R. 12020,
By a three to two vote, the Commission upheld the ALJ’s abuse of process determination with respect to NMTV’s high-power Odessa and Portland television station applications. Trinity, 14 F.C.C.R. 13570. Ruling that section 73.3555 required de facto minority control, the Commission found that TBN, not NMTV’s minority board, actually controlled NMTV. “Commission rules and precedent have always given fair notice that de facto control is required to take advantage of the special provision сoncerning minority ownership in the multiple ownership rules.” Id. at 13602 ¶ 86. “[T]he principals knew,” the Commission concluded, “that, because of the relationship between NMTV and TBN, them claim of minority control was at best doubtful and at worst false.” Id. at 13601 ¶ 83. This “serious abuse of process with respect to NMTV’s full power applications” warranted denying TBF’s license renewal application. Id. at 13601 ¶ 85, 13610 ¶ ¶ 100-01. In view of that conclusion, the Commission addressed only briefly the ALJ’s abuse of process determination with respect to the low-power/translator television license applications, reversing the ALJ because “applicants may well have been confused ... that the exercise of de facto control by nonminorities subverted the purposes of the minority ownership policy....” Id. at 13601 ¶ 85. Dissenting from the highpower abuse of process determination and the denial of TBF’s renewal application, two commissioners disagreed with the majority that seсtion 73.3555 provided fair notice: “[Section 73.3555] certainly did not make clear that a de facto control showing was necessary....” Id. at 13632 (Commissioners Furchgott-Roth and Powell, dissenting in part). “In these circumstances,” they said, “we find that imposition of the ‘death penalty of disqualification is both unfair and unwarranted.” Id. at 13634.
Appellants TBN and TBF, joined by intervenors NMTV and Colby May (throughout this opinion, we shall refer to these appellants and intervenors as “Trinity”), challenge both the Commission’s determination that TBN and Crouch abused Commission processes when NMTV filed high-power applications asserting that it was “minority-controlled,” and the Commission’s denial of TBF’s renewal application. Trinity does not challenge the Commission’s finding that TBN exercised de facto control over NMTV. Instead, it contends that TBN’s exercise of de facto control did not justify denying TBF’s license renewal. In support of this claim, Trinity makes several arguments, only two of which require our attention: (1) the Commission’s interpretation of section 73.3555 as requiring de facto minority control is unreasonable; and (2) even if the Commission’s interpretation is reasonable, the regulation failed to provide fair notice that de facto minority control was required. We consider each argument in turn.
II
Trinity argues that section 73.3555 requires only that a majority of a non-profit entity’s board members be minorities. According to Trinity, the regulation does not require that the minority board members exercise “actual,”
i.e., defacto,
control over the entity. Acknowledging our traditional
*625
deference to an agency’s interpretation of its own regulations, Trinity contends that no deference is warranted in this case because the Commission’s interpretation of section 73.3555 as requiring
de facto
minority control conflicts with the regulation’s plain language.
See Thomas Jefferson Univ. v. Shalala,
As the Commission points out, however, its de facto control requirement derives directly from the term being defined, i.e., “minority-controlled.” As the Commission also points out, the definition of “minority-controlled” does not even apply to Trinity, for it speaks only in terms of “ownership,” a concept having no meaning with respect to non-profit entities. For these reasons, we agree with the Commission that no conflict exists between section 73.3555’s plain language and the Commission’s ruling that majority-minority boards of directors of non-profit entities must exercise defacto control.
The question, then, is this: Does the Commission’s interpretation “sensibly conform” to both the purpose and the text of the regulation?
Buffalo Crushed Stone, Inc. v. Surface Transp. Bd.,
We begin with the concept of “minority-controlled.” As the Commission points out, interpreting section 73.3555 as not requiring de facto minority control would not only read the word “controlled” out of the regulation, but run counter to the Commission’s “longstanding focus on control” and real parties in interest. The Commission put it this way in its brief: “The agency has consistently looked beyond the ownership structure of licensees to determine who is the ‘real party in interest’—whether a person ‘is or will be in a position to actually or potentially control the operation of the station.’” Trinity’s interpretation, moreover, would undermine the regulation’s purpose. “[I]t is hard to imagine,” the Commission reasoned, “how an entity controlled by minorities in name only or in which the minorities’ interests are totally passive could foster the objective of the Commission’s policies to broaden minority voices and spheres of influence over the airwaves.” Trinity, 14 F.C.C.R. at 13602 ¶ 87 (internal quotation marks omitted). According to the Commission, interpreting the regulation to require only a majority-minority board “would provide an incentive for non-minorities to hire front-men.” The Commission’s positiоn *626 has intuitive logic: How could an entity actually controlled by non-minorities be “minority-controlled?”
In support of its interpretation of section 73.3555 as requiring that non-stock corporations demonstrate actual minority control, the Commission points to two additional authorities: (1) Note 1 of section 73.3555, which provides that “[t]he word ‘control’ as used herein is not limited to majority stock ownership, but includes actual working control in whatever manner exercised,” and (2) a footnote to the Commission’s 1985 Order adopting section 73.3555’s minority exception,
see Amendment of Section 73.8555,
Relying on
Southwest Texas Public Broadcasting Council,
Urging us not to defer to the Commission’s interpretation of section 73.3555, Trinity argues that requiring
de facto
minority control conflicts with prior Commission statements. It points first to the Commission’s statement that “[i]n a non-stock corporation the Commission
normally
looks to directors in evaluating ownership and control.”
Hearing Designation Order,
8 F.C.C.R. at 2475 ¶ 4 n. 1
(citing Roanoke Christian Broad., Inc.,
52 R.R.2d 1725,
Trinity next points to the Commission’s statement in connection with section 1.1622 (the low-power regulation) that “[i]f a majority of the governing board ... ' are minorities, the entity is entitled to a minority preference.”
Public Notice,
Mimeo No. 6030 at 4 (released August 19, 1983). This statement, Trinity argues, forecloses the Commission from interpreting section 73.3555 as requiring
de facto
minority control. We disagree. The statement was made in connection with the Commission’s regulation governing minority preferences in the
low-power
market, and until this procеeding the Commission had never addressed how section 73.3555 applies to non-stock corporations. As the Commission itself said when it promulgated section 73.3555, it “has adopted different standards of minority control depending on the
*627
mechanism used to foster its minority policies.”
Amendment of Section 7S.S555,
We are equally unpersuaded by Trinity’s contention that the Commission’s interpretation of section 73.3555 conflicts with the agency’s position before the Supreme Court in
Metro Broadcasting,
Trinity next argues that the Commission’s definition of “minority-controlled” undermines section 73.3555’s purpose. Acknowledging that section 73.3555 was designed to encourage established broadcasters to provide support to minority broadcasters, Trinity says that “a de facto control standard could lead to exceedingly difficult interpretive questions. A bright line ‘ownership’ standard [is] more workable than a more nebulous ‘ownership’ and de facto control standard.... [Bright-line] rules prevent ‘controversy and confusion,’ thereby ‘encourag[ing] settled expectations and, in doing so, foster[ing] investment by businesses and individuals.’ ”
Perhaps Trinity is correct. Perhaps requiring
de facto
minority control will discourage established broadcasters, or at least non-profit established broadcasters, from providing the kinds of assistance that the Commission had hoped section 73.3555 would foster and that Trinity made available to NMTV. A challenge to an agency’s interpretation of its own regulation, however, turns not on whether the
challenger
has articulated a rationale to support its interpretation, but on whether the
agency
has offered an explanation that is reasonable and consistent with the regulation’s language and history.
See GE,
Finally, Trinity observes that, in a dissent from the Commission’s Order adopting section 73.3555, Commissioner Patrick interpreted the regulation as not requiring
de facto
minority control: “Under the majority’s scheme, the right to purchase broadcast stations over the established ceiling turns upon the race of the proposed owners alone. No further showing is required with respect to how these new owners may contribute to diversity. No concern is given as to whether the 51% minority owners will exert any influence on the station’s programming or will have any control at all.”
Amendment of Section 73.3555,
To sum up, requiring de facto minority control of non-profit corporations represents a reasonable interpretation of section 73.3555. Although Trinity offers a plausible alternative interpretation, we cannot say, in view of the regulation’s language and underlying policy, that the Commission’s interpretation is “plainly wrong.”
*628 III
Were we simply reviewing the Commission’s interpretation of its regulation, our task would be at an end. But the Commission has not just interpreted section 73.3555. Concluding that Trinity had abused Commission processes by exercising
de facto
control over NMTV in violation of section 73.3555, the Commission imposed a severe penalty—denial of Trinity’s application to renew its commercial television station license. Because “[d]ue process requires that parties receive fair notice before being deprived of property,” we have repeatedly held that “[i]n the absence of notice—for example, where the regulation is not sufficiently clear to warn a party about what is expected of it—an agency may not deprive a party of property by imposing civil or criminal liability.”
GE,
In
Satellite Broadcasting Co., Inc. v. FCC,
Conceding that the denial of a broadcast license triggers due process protection, the Commission argues that section 73.3555 gave fair notice that nonprofit entities had to demonstrate de facto minority control. Trinity disagrees. Not only did section 73.3555 itself fail to make clear that non-profits had to show anything other than a majority-minority board, Trinity argues, but Commission statements in connection with the low-power minority preference regulation, together with Commission action on Trinity’s high-power applications, led it to believe that a mаjority-minority board was sufficient.
We begin again with section 73.3555’s requirement that an entity be “minority-controlled.” This time we ask not whether interpreting the term “minority-controlled” as requiring de facto minority control in the non-profit context is “plainly wrong,” but whether that interpretation is “ascertainably certain.” Although section 73.3555 never defines “minority controlled” in the context of non-profit' organizations, the Commission maintains that section *629 73.3555’s use of the word “controlled” should have made clear to Trinity that the agency was interested in actual control. Under the circumstances of this case, we disagree.
To begin with, the Commission never clearly articulates its theory of where or how section 73.3555 requires “actual minority control.” At various points in both its decision and in its brief here, the Commission appears to contend that the term “minority-controlled” requires an entity to show that minorities have
either
majority stock ownership
or
actual control; since non-profits lack stock owners and cannot show that they are “more than 50 percent owned by one or more members of a minority group,” they must demonstrate actual minority control.
See, e.g.,
14 F.C.C.R. at 13603-04 ¶88 (“[W]hat the Commission had in mind was 50 percent ownership that constitutes voting control or an equivalent degree of interest.”). Elsewhere, however, the Commission seems to agree with Trinity that “stock ownership” means board membership in the non-profit context. Viewed this way, the actual control requirement stems from the word “ownership” — entities must demonstrate not only that minorities own more than fifty percent of the stock or that they have majority-minority boards, but also that those “ownership” interests are
bona fide. Id.
at 13604 ¶ 90 (“[T]he Commission has consistently required that minorities have both a substantial equity interest and actual control of the station.”). In other words, both non-profits and stock corporations would have to show
de facto
minority control. As we said of a similar situation in
GE,
“[s]uch confusion does not inspire confidence in the clarity of the regulatory scheme.”
The Commission аrgues that “[a] reasonable reader could have ascertained that a regulation requiring ‘minority control’ by implication forbade control by non-minorities.” This argument might have some force but for the fact that the Commission’s only clear statements (until it refused to renew Trinity’s Florida license) about what constituted minority control over “non-stock corporations” like Trinity were these: “If a majority of the governing board ... are minorities, the entity is entitled to a minority preference,”
Public Notice,
Mimeo No. 6030 at 4 (released August 19,1983); and “[w]e agree ... that nonstock corporations ... should be judged as to minority status on the basis of the composition of the board.”
Random Selection Lotteries,
The Commission responds that the
absence
of a similar statement in connection with section 73.3555 should have alerted Trinity that a majority-minority board was insufficient for section 73.3555 purposes. But the standard is “ascertainable certainty.” Although we agree with the Commission that its statements in the low-power context do not “earr[y] over automatically” into the full-power realm, we also think that where, as here, the agency failed to provide a relevant definition for the key regulatory term — “minority cоntrolled”— the applicant is entitled to rely on the agency’s prior interpretation of a nearly
*630
identical regulation.
See Satellite Broad.,
Given the facts of this case, Trinity’s interpretation of section 73.3555 as requiring only a majority-minority board is particularly understandable. After NMTV’s predecessor, TTI, applied for low-power/translator television licenses, the Commission issued its low-power/translator television minority preference regulation along with its statement “that nonstock corporations ... should be judged as to minority status on the basis of the composition of the board.”
Random Selection Lotteries,
Neither Note 1 nor the Commission’s footnote reference to its 1982 Policy Statement gave Trinity “fair notice” that the Commission was abandoning its low-power approach and interpreting section 73.3555 to require minority directors of non-profit organizations to demonstrate actual control. Even setting aside the fact that the 1982 Policy Statement appears only in a footnote,
see McElroy Electronics Corp. v. FCC,
Nor can we find “ascertainable certainty” in Southwest Texas. Perhaps in hindsight the Commission’s action in that case — determining whether an unauthorized transfer of control had occurred by *631 going beyond the formality of legal title to examining a television station’s actual operations — could reflect a “long-standing” policy of looking at actual, rather than formal, control. But the Commission had given no indication that a general policy expressed in Southwest Texas, a case arising in a different factual setting under a different provision of the Communications Act, would transfer to section 73.3555’s definition of “minority-controlled.”
Finally, section 73.3555’s underlying purpose cannot provide the fair notice required by due process. Before an agency can sanction a company for its failure to comply with regulatory requirements, the agency “must have either put this language into [the regulation] itself, or at least referenced this language in [the regulation].”
Chrysler,
We find the Commission’s insistence that section 73.3555 provided fair notice particularly problematic in view of the Commission’s failure to explain satisfactorily how denying Trinity’s license can be reconciled with cases where it found regulatory requirements too unclear to justify sanctioning other broadcasters. In
Fox Television Stations, Inc.,
10 F.C.C.R. 8452,
If Fox’s “not facially implausible” interpretation did not warrant denying its license renewal application, how can Trinity’s “perhaps literally accurate” (the Commission’s own words) interpretation justify denying its license renеwal application? If the absence of “prior cases of a similar nature to serve as examples” persuaded the Commission not to sanction CBS for its misrepresentations, how can the Commission justify penalizing Trinity in view of the fact that not only was there no agency precedent regarding control of nonprofits, but Commission statements supported Trinity’s belief that a majority-minority board was sufficient to obtain a minority preference? The Commission never answers these questions— not in its decision, not in its brief, not at oral argument.
See Orion Communications Ltd. v. FCC,
For all of these reasons, our conclusion in
GE
applies here as well: “Where, as here, the regulations and other policy statements are unclear, where the petitioner’s interpretation is reasonable, and where the agency itself struggles to provide a definitive reading оf the regulatory requirements, a regulated party is not ‘on notice’ of the agency’s ultimate interpretation of the regulations, and may not be punished.”
IV
The Commission contends that even “[i]f the Court disagrees with our assessment” that the regulation clearly required de facto minority control, “it may still find that TBN intended to mislead the Commission by creating a sham ownership structure.... ” Conceding that the commercial television station application asked for information about neither the TBN/ NMTV relationship nor Duffs employment with TBN, the Commission faulted Trinity because “[a] reasonable person could appreciate that if all the circumstances had been made clear, the Commission would have had ample reason to inquire further and ultimately to deny NMTV’s application.” Trinity, 14 F.C.C.R. at 13601 ¶ 84. But this argument rests entirely on the Commission’s flawed conclusion that the regulation clearly required de facto minority control. Unless the de facto control requirement was ascertainably certain, a “reasonable pеrson” would not have been able to “appreciate” the need to disclose these facts. Indeed, in view of the low-power regulation’s statement that a majority-minority board entitled an entity to a minority preference, a “reasonable person” might well have thought that information about the relationship between NMTV and TBN was irrelevant. Asked about this at oral argument, Commission counsel candidly conceded that if the regulation was not clear, Trinity would have had no obligation to disclose the omitted information because it would not have known that the information was at all “material.”
The Commission also argues that Trinity had actual notice of the
de facto
control requirement. Not only does this amount to a
post-hoc
rationalization — the Commission nowhere relied on actual knowledge as a basis for finding abuse of process,
see SEC v. Chenery,
The Commission’s denial of Trinity’s license renewal application is vacated.
So ordered.