[Federal Register Volume 63, Number 84 (Friday, May 1, 1998)]
[Rules and Regulations]
[Pages 24126-24129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11616]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[CC Docket No. 92-297; RM-7872; PP-22 et al.; FCC 98-71]
Dismissal of All Pending Pioneer's Preference Requests; Review of
the Pioneer's Preference Rules
AGENCY: Federal Communications Commission.
ACTION: Final rule; denial of petition for reconsideration.
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SUMMARY: By this action, the Commission denies a petition for
reconsideration filed by QUALCOMM Incorporated. QUALCOMM contends that
the Commission is obligated to consider on its merits QUALCOMM's
request for a pioneer's preference in the 2 GHz broadband Personal
Communications Service (PCS). However, the Commission affirms that it
no longer has the authority to award pioneer's preferences because the
Balanced Budget Act of 1997 (Budget Act) terminated the pioneer's
preference program. The intended effect of this action is to affirm the
Commission's previous Order, which formally terminated the pioneer's
preference program and dismissed all pending pioneer's preference
requests.
EFFECTIVE DATE: May 1, 1998.
FOR FURTHER INFORMATION CONTACT: Rodney Small, Office of Engineering
and Technology, (202) 418-2452; internet: rsmall@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Memorandum Opinion and Order (MO&O) adopted April 16, 1998, and
released April 23, 1998. The full text of this Commission decision is
available for inspection and copying during regular business hours in
the FCC Reference Center (Room 239), 1919 M Street, NW., Washington,
DC. The complete text of this decision also may be purchased from the
Commission's duplication contractor, International
[[Page 24127]]
Transcription Service, Inc., (202) 857-3800, 2100 M Street, NW., Suite
140, Washington, DC 20037.
Summary of MO&O
1. On October 20, 1997, QUALCOMM filed a petition for
reconsideration of the Commission's Order, 62 FR 48951, September 18,
1997, which dismissed all pending pioneer's preference requests,
including QUALCOMM's 2 GHz broadband PCS request. For reasons that
follow, we deny the petition for reconsideration.
2. In 1994, we denied QUALCOMM's 2 GHz broadband PCS request. In
January 1997, however, the United States Court of Appeals for the
District of Columbia Circuit (Court) granted QUALCOMM's petition for
review of our action, vacated our denial of QUALCOMM's pioneer's
preference request, and remanded the proceeding to us for further
consideration.
3. On August 5, 1997, President Clinton signed into law the Budget
Act. Among other things, the Budget Act revised the expiration date of
the pioneer's preference program, as set forth in section 309(j)(13)(F)
of the Communications Act of 1934, as amended. That section had been
added in 1994 legislation domestically implementing the General
Agreement on Tariffs and Trade (GATT), and read prior to enactment of
the Budget Act: ``The authority of the Commission to provide
preferential treatment in licensing procedures (by precluding the
filing of mutually exclusive applications) to persons who make
significant contributions to the development of a new service or to the
development of new technologies that substantially enhance an existing
service shall expire on September 30, 1998.'' The Budget Act advanced
that date to ``the date of enactment of the Balanced Budget Act of
1997.'' Thus, the pioneer's preference program expired on August 5,
1997. In our Order, we formally terminated the pioneer's preference
program and dismissed all pending pioneer's preference requests,
including QUALCOMM's.
4. On October 9, 1997, QUALCOMM filed with the Court a ``Motion to
Enforce Mandate and Supporting Memorandum,'' contending that our Order
misconstrued the Budget Act and requesting the Court to order us to
consider QUALCOMM's pioneer's preference request on its merits. On
October 16, 1997, counsel for the Commission filed an opposition to the
motion, pointing out, inter alia, that QUALCOMM's motion was
procedurally improper because QUALCOMM had not filed a petition for
reconsideration of the Order affording us an opportunity to address its
contentions. On October 20, 1997, while QUALCOMM's motion was still
pending before the Court, QUALCOMM filed with the Commission a petition
for reconsideration of the Order. On November 5, 1997, the Court
dismissed the motion on the grounds that QUALCOMM had failed to exhaust
its administrative remedies, stating that the ``appropriate procedure
for QUALCOMM to seek relief is to petition to the Commission to
reconsider its decision dismissing QUALCOMM's application.''
5. In its petition for reconsideration, QUALCOMM argues that ``the
FCC's application of the Budget Act violates the rule against
retroactive application of the law,'' that ``the language of the Budget
Act suggests that Congress intended to permit continuation of the
[pioneer's preference] program, while placing restrictions on the
Commission's authority to preclude the filing of mutually exclusive
applications,'' and that ``QUALCOMM is entitled to a fair hearing on
the merits of its pioneer's preference application.'' QUALCOMM also
claims that, in terminating the pioneer's preference program and
dismissing its request for a preference without providing for public
notice and comment, our Order violated the requirements of the
Administrative Procedure Act (APA). We reject each of these arguments.
6. Retroactivity. We find QUALCOMM's characterization of our Order
dismissing its pioneer's preference request as an improper
``retroactive'' application of the Budget Act to be without merit. The
Order appropriately gave prospective effect to this statute in
concluding that as of the date of its enactment, August 5, 1997, we no
longer had authority to grant pending requests for pioneer's
preferences. Thus, contrary to QUALCOMM's claim, our action did not
violate the traditional presumption against retroactivity that the
Supreme Court reiterated in Landgraf v. USI Film Products, 511 U.S. 244
(1994).
7. Moreover, our application of the Budget Act in this case is
consistent with the firmly-established principle that, ``when a law
conferring jurisdiction is repealed without any reservation as to
pending cases, all cases fall with the law.'' Bruner v. United States,
343 U.S. 112, 116-117 (1952). The Supreme Court has explained that
application of a new jurisdictional rule normally does not raise
concerns about retroactivity ``because jurisdictional statutes speak to
the power of the court rather than to the rights or obligations of the
parties.'' Landgraf, 511 U.S. at 273. Similarly, application of the
Budget Act in this case does not produce an impermissible retroactive
effect because that statute addresses our authority to act, not the
merits of QUALCOMM's pioneer's preference request.
8. Accordingly, we find that we properly applied the time-honored
tenet of statutory construction that, ``when a law conferring
jurisdiction is repealed without any reservation as to pending cases,
all cases fall with the law.'' Bruner, 343 U.S. at 116-17. Moreover,
even if the Budget Act properly could be characterized as altering the
substantive law applicable to pioneer's preferences, the statute's
application in QUALCOMM's case does not raise the retroactivity
concerns identified in Landgraf. As the Supreme Court explained, a new
statute is considered retroactive only if ``it would impair rights a
party possessed when he acted, increase a party's liability for past
conduct, or impose new duties with respect to transactions already
completed.'' Landgraf, 511 U.S. at 280. See also Saco River Cellular,
Inc. v. FCC, No. 91-1248, slip op. at 9 (DC Cir. Jan. 16, 1998) (Saco
River). The Budget Act has none of these effects. It neither increases
QUALCOMM's liability for past conduct nor imposes new duties relating
to completed transactions. Additionally, this new statute does not
impair any right possessed by QUALCOMM ``because none vested on the
filing of its [request].'' Chadmoore Communications, Inc. v. FCC, 113
F.3d 235, 241 (DC Cir. 1997).
9. Further, in its remand order, the Court in Freeman Engineering
did not find that QUALCOMM had a vested right to a pioneer's
preference; it simply required us to reevaluate whether QUALCOMM's
request for a preference should be granted or denied. Thus, the effect
of the remand was to return QUALCOMM's preference request to pending
status before the Commission and afforded QUALCOMM no greater or lesser
rights than those of any other party with a pending preference request.
Clearly, Congress had the power to enact legislation that terminated
our authority to grant pending requests for pioneer's preferences; and
``the mere expectations of a license applicant cannot bar the
legitimate exercise of such congressional power.'' Multi-State
Communications, Inc. v. FCC, 728 F.2d 1519, 1526 n.12 (DC Cir.), cert.
denied, 469 U.S. 1017 (1984). The mere fact that a statute is ``applied
in a case arising from conduct antedating the statute's enactment or
upsets expectations based in prior law'' does not render the statute
[[Page 24128]]
retroactive.'' Saco River, slip op. at 9, quoting Landgraf, 511 U.S. at
269.
10. Scope of Sunset Provision in Budget Act. QUALCOMM asserts that
the Budget Act does not bar us from awarding pioneer's preferences, but
only limits our power to provide preferential treatment to pioneers by
precluding the filing of mutually exclusive applications. We disagree.
Our preference program rewarded innovators by enabling them to obtain
licenses without having to face competing (i.e., mutually exclusive)
applications. We are not at liberty to grant some other sort of
preference to communications pioneers. Section 309(j)(13)(A) of the
Communications Act provides that we ``shall not award licenses'' by
giving preferential treatment to innovators ``except in accordance with
the requirements'' of section 309(j)(13). 47 U.S.C. 309(j)(13)(A).
Following its amendment by the Budget Act, section 309(j)(13) contains
no provision authorizing us to give preferences to innovators in the
licensing process. Further, while sections 7(a) and 303(g) give us the
authority to award pioneer's preferences in the absence of an explicit
statute to the contrary, section 309(j)(13)(F) is just such a statute.
11. QUALCOMM contends, however, that Congress did not intend for
the Budget Act's immediate termination of the pioneer's preference
program to affect its pending preference request because the House
Report on the 1994 GATT Legislation stated that Congress did not intend
to ``affect the rights of persons who have been denied a pioneer's
preference.'' Petition for Reconsideration at 6 (quoting Report to
accompany H.R. 5110, 103 Cong. 2d. House Rept. 103-826 (House Report)).
We are not persuaded by QUALCOMM's argument. The quoted statement from
the House Report does not address the sunset provision set forth in
section 309(j)(13)(F) of the Communications Act. Instead, the statement
in question clarified that a different provision of the Act, section
309(j)(13)(E), which precluded further administrative and judicial
review of certain grants of pioneer's preference requests, was not
intended to ``affect the rights of persons who have been denied a
pioneer's preference.'' House Report at 8 (emphasis added). That is,
Congress intended simply to make clear in 1994 that parties like
QUALCOMM could appeal the denial of a pioneer's preference request
despite the no review provision.
12. Right to a Hearing. QUALCOMM argues that the Order violated its
right to due process by denying its ``right to a fair hearing [that
had] vested long before Congress changed the law relating to pioneer's
preferences on a going forward basis.'' We disagree. QUALCOMM does not
have a constitutional ``right to a fair hearing'' unless that hearing
concerns constitutionally protected liberty or property interests:
``The requirements of procedural due process apply only to the
deprivation of interests encompassed by the [Constitution's] protection
of liberty and property.'' Board of Regents v. Roth, 408 U.S. 564, 569
(1972). Although QUALCOMM claims a property interest in a fair hearing,
any hearing that it would receive at this point would not implicate any
property interest because we no longer have authority to grant
QUALCOMM's preference request. As the U.S. Court of Appeals for the
District of Columbia Circuit recently reaffirmed, ``[t]he filing of an
application creates no vested right to a hearing; if the substantive
standards change so that the applicant is no longer qualified, the
application may be dismissed.'' Chadmoore, 113 F.3d at 241 (quoting
Hispanic Information & Telecommunications Network v. FCC, 865 F.2d
1289, 1294-95 (DC Cir. 1989)); see also Melcher v. FCC, 134 F.3d 1143,
1164-65 (DC Cir. 1998).
13. While QUALCOMM contends that it has a vested right in a
pioneer's preference, neither we nor the court has ever found that
QUALCOMM was entitled to a preference under our rules. Further,
QUALCOMM has no right to a hearing that cannot yield the benefits it
seeks. A hearing is a means to an end, and the end that QUALCOMM
seeks--grant of a pioneer's preference--is no longer available. A
hearing thus would be futile. Accordingly, our decision to dismiss
QUALCOMM's preference application ``simply respects the statutorily-
fixed deadline'' for exercising our authority to award pioneer's
preferences: ``[I]n thus following the legislature's direction, the
[Commission] contravened no due process right to fundamentally fair
procedures.'' Spannaus v. FCC, 990 F.2d 643, 645 (DC Cir. 1993).
14. APA Notice and Comment Requirements. QUALCOMM argues that
``[t]he APA requires that the Commission allow an opportunity for
notice and comment before promulgating rules other than those `of
agency organization, or practice.' '' The APA also, however, permits us
to proceed without notice and comment procedures when good cause exists
for finding such procedures are ``impracticable, unnecessary, or
contrary to the public interest.'' 5 U.S.C. 553(b)(B). Similarly,
publication or service of a rule change at least 30 days before its
effective date is not required when good cause is found. 5 U.S.C.
553(d)(3). Such is the situation before us. The unambiguous language of
the Budget Act terminating our authority to grant pioneer's preferences
effective upon enactment of the Act made it unnecessary for us to
follow public notice and comment procedures or to provide for at least
30 days advance publication in order to amend our rules to terminate
the pioneer's preference program and to dismiss pending pioneer's
preference requests.
15. Other Matters. In comments filed November 6, 1997, QUALCOMM
argues that the Order interpreted the sunset provision of section
309(j)(13)(F) in a manner inconsistent with past Commission precedent
but failed to explain the reasons for this departure from precedent.
Specifically, QUALCOMM claims that in the Second Report and Order and
Further Notice of Proposed Rule Making (Second R&O) in the Pioneer's
Preference Review Proceeding, 60 FR 13396, March 13, 1995, we
interpreted section 303(j)(13)(F) as applying only to pioneer's
preference requests filed after September 1, 1994, but in our Order we
applied that provision to pioneer's preference requests, such as
QUALCOMM's, which were filed before that date. Because the Order relied
on the sunset provision as the basis for dismissing QUALCOMM's request,
QUALCOMM asserts that it was denied administrative due process because
the Commission changed its interpretation of the sunset provision
without explanation.
16. As an initial matter, we agree with observations made by
PrimeCo Personal Communications, L.P. and Sprint PCS, in their
opposition to the petition, that QUALCOMM's comments constitute a late-
filed supplement to its petition for reconsideration. Accordingly,
pursuant to section 1.429 of the Commission's rules, we are dismissing
those comments. Nonetheless, we note sua sponte that the ``unexplained
departure from precedent'' argument advanced in QUALCOMM's comments is
without merit. In the Second R&O, in rejecting comments suggesting that
we immediately repeal the pioneer's preference program, we explained
that, for preference requests filed after September 1, 1994, section
309(j)(13)(F) directed us to continue this program until September 30,
1998, and that for preference requests filed on or before September 1,
1994, we did not find any valid reason for terminating the program
earlier. No commenter in that
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proceeding had raised, and we did not discuss, whether we had the
authority to continue the pioneer's preference program beyond the date
specified in section 309(j)(13)(F) for preference requests filed on or
before September 1, 1994. It is clear, however, that we retained no
such authority. The GATT legislation required the termination of the
entire pioneer's preference program by a date certain, September 30,
1998. That we retained the discretion to terminate the program with
respect to earlier-filed preference requests (but chose not to exercise
that discretion) does not imply that we had discretion to continue the
program in any respect beyond the date set forth in the legislation.
Our actions in the Order dismissing QUALCOMM's preference request and
terminating the pioneer's preference program as of the date set forth
in section 309(j)(13)(F) as amended by the Budget Act, August 5, 1997,
are thus fully consistent with our actions in the Second R&O.
17. Finally, we note that in comments filed November 12, 1997,
Global Broadcasting Company, Inc. requests that we ``consider on the
merits'' the pioneer's preference request filed by Web SportsNet, Inc.
and Gregory D. Deieso but also dismissed in our Order. We are
dismissing these comments as an improperly late-filed petition for
reconsideration of our action dismissing the preference request, but
also note that we have no authority to grant the relief requested.
Ordering Clauses
18. Accordingly, it is ordered that the petition for
reconsideration filed on October 20, 1997 by QUALCOMM Incorporated is
denied. This action is taken pursuant to sections 4(i) and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. 154(i) and
303(r).
19. It is further ordered that the comments filed on November 6,
1997 by QUALCOMM Incorporated and on November 12, 1997 by Global
Broadcasting Company, Inc. are dismissed. This action is taken pursuant
to section 1.429(d) of the Commission's rules.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-11616 Filed 4-30-98; 8:45 am]
BILLING CODE 6712-01-P
