The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 14, 2002 Decided March 22, 2002
No. 00-1458
COMSAT Corporation,
Petitioner
v.
Federal Communications Commission and
United States of America,
Respondents
PanAmSat Corporation,
Intervenor
On Petition for Review of an Order of the
Federal Communications Commission
Lawrence W. Secrest, III argued the cause for petitioner.
With him on the briefs were William B. Baker, Daniel E.
Troy, Howard D. Polsky and Robert A. Mansbach. Warren
Y. Zeger entered an appearance.
C. Grey Pash, Jr., Counsel, Federal Communications Com-
mission, argued the cause for respondents. With him on the
brief were Jane E. Mago, General Counsel, Daniel M. Arm-
strong, Associate General Counsel, FCC, and Charles A.
James, Assistant Attorney General, Catherine G. O'Sullivan
and Andrea Limmer, Attorneys, U.S. Department of Justice.
Henry Goldberg and Joseph A. Godles were on the brief for
intervenor. W. Kenneth Ferree entered an appearance.
Before: Sentelle and Rogers, Circuit Judges, and
Williams, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
Williams.
Williams, Senior Circuit Judge: Under s 9 of the Commu-
nications Act of 1934, Congress requires the Federal Commu-
nications Commission to "assess and collect regulatory fees to
recover the costs of ... enforcement activities, policy and
rulemaking activities, user information services, and interna-
tional activities." 47 U.S.C. s 159(a)(1). In executing this
mandate, the Commission collects fees according to the
Schedule of Regulatory Fees found at 47 C.F.R. s 1.1156.
The statute authorizes the Commission to adjust these fees
annually to reflect changes in operating costs or in the
regulatory "services" it provides. 47 U.S.C. ss 159(b)(2) &
(3); see also id. s 159(g) (showing original fee schedule prior
to agency amendment).
Until 1995, the Commission exempted petitioner COMSAT
from the s 9 regulatory fees charged to satellite service
providers for each "space station" in operation. See Report
and Order, Assessment and Collection of Regulatory Fees for
Fiscal Year 1995, 10 FCC Rcd 13512, 13550 p 110 (1995)
("1995 Order"). The exemption arose from COMSAT's status
as the United States signatory to the International Telecom-
munications Satellite Organization ("Intelsat"), which was
formed via intergovernmental treaty and is immune from
governmental regulation. See PanAmSat Corp. v. FCC, 198
F.3d 890, 896 (D.C. Cir. 1999); 22 U.S.C. s 288 note (Public
International Organizations Entitled to Enjoy Certain Privi-
leges, Exemptions, and Immunities); id. s 288a(b) (establish-
ing immunity for certain international organizations).
COMSAT's exemption from space station fees naturally
inhibited the Commission in fulfilling its congressional man-
date to recover all regulatory costs. See, e.g., COMSAT
Corp. v. FCC, 114 F.3d 223, 226 (D.C. Cir. 1997) ("COMSAT
I"); see also 1995 Order, 10 FCC Rcd at 13550 p 110 (ex-
pressing intention "to explore other ways to recover the
regulatory costs imposed on the Commission" by COMSAT's
activities). The Commission therefore attempted to institute
a special "signatory fee" for COMSAT in 1996. COMSAT I,
114 F.3d at 225-26; see also Report and Order, Assessment
and Collection of Regulatory Fees for Fiscal Year 1996, 11
FCC Rcd 18774, 18787-91 p p 37-47 (1996) ("1996 Order").
We held in COMSAT I, however, that the signatory fee
exceeded the Commission's authority to amend the fee sched-
ule under s 159(b)(3) because it was not imposed "pursuant
to any rulemaking or change in law." COMSAT I, 114 F.3d
at 227-28. We vacated that portion of the 1996 Order, id. at
228, and the Commission subsequently dropped the signatory
fee in future rulemakings, PanAmSat, 198 F.3d at 893; see
Report and Order, Assessment and Collection of Regulatory
Fees for Fiscal Year 1997, 12 FCC Rcd 17161, 17186-87 p 65
(1997) (declining to recover signatory costs); see also Report
and Order, Assessment and Collection of Regulatory Fees for
Fiscal Year 1998, 13 FCC Rcd 19820, 19835-36 p p 50-53
(1998) (not mentioning signatory costs).
In 1998, PanAmSat, a competitor of COMSAT and interve-
nor in this case, sought review of the Commission's exemption
of COMSAT from space station fees. See PanAmSat, 198
F.3d at 891-92. We held that the language of s 9 made "no
suggestion that Comsat should be exempt," and that requir-
ing COMSAT's payment of regulatory fees "would serve s 9's
general purpose of recovering the Commission's costs for its
regulatory activities." Id. at 894. We also noted that
COMSAT was already subject to regulatory fees under s 8
for "launch and operation of stations," id. at 895, and that the
regulatory immunity granted to Intelsat was "most plausibly"
confined to it alone (i.e., it did not extend to COMSAT), id. at
896. We therefore remanded to the Commission for recon-
sideration of the exemption. Id. at 898.
In its 2000 Order, citing our decision in PanAmSat and
Congress's March 2000 enactment of the Open Market Reor-
ganization for the Betterment of International Telecommuni-
cations Act ("ORBIT"), Pub L. No. 106-180, 114 Stat. 48
(2000), the Commission determined that COMSAT was sub-
ject to space station fees under s 9. Report and Order,
Assessment and Collection of Regulatory Fees for Fiscal
Year 2000, 15 FCC Rcd 14478, 14485-90 p p 17-27 (2000)
("2000 Order"). It then assessed COMSAT's s 9 space sta-
tion fee at $1,609,050--calculated as $94,650 for each of its 17
geosynchronous space stations. See id. at 14507 (schedule of
regulatory fees). COMSAT now brings this petition for
review.
* * *
We review the Commission's determination to impose s 9
space station fees on COMSAT under the familiar standard of
Chevron U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984). Our inquiry here, however, is
substantially limited by PanAmSat's holding that the statute
did not "compel[ ] an exemption for Comsat" from s 9 regula-
tory fees. See PanAmSat, 198 F.3d at 896.
COMSAT attempts to limit PanAmSat, characterizing the
case as only foreclosing its claims for "legal immunity" under
the Intelsat treaty. COMSAT contends that the scope of s 9
more generally was not in issue in PanAmSat, and is thus a
matter of first impression. This reading of PanAmSat
strikes us as unconvincing. The language there addressed
the issue of COMSAT's exemption from s 9 space station fees
quite generally, and was not confined to only whether
COMSAT had legal immunity arising from its relationship to
Intelsat. For example, we broadly held that "the statute
plainly does not require--and may not permit--Comsat's
exemption from space station regulatory fees," id. at 895, that
"the legislative history's embrace of fees for satellites 'direct-
ly licensed by the Commission under Title III' seems reason-
ably to encompass Comsat," id. at 896, and that "the FCC [at
the time] was mistaken in its conclusion that the statute
compelled an exemption for Comsat," id. Indeed, the
PanAmSat opinion referred to the Intelsat treaty only as an
aid to interpreting the statute and its legislative history.
COMSAT is correct, however, that PanAmSat left open the
possibility that there might be "some ambiguity in the cover-
age of the 'space station' category in s 9, such that the
Commission might 'permissibly' read the statute as allowing a
Comsat exemption." Id. But assuming there is enough
ambiguity in s 9's "space station" category to permit the
Commission to fashion an exemption for COMSAT, we cannot
find the Commission's refusal to find an exemption unreason-
able. See Chevron, 467 U.S. at 843-44. Unlike other
foreign-licensed satellites, COMSAT clearly generates signifi-
cant regulatory costs through its signatory activities, see, e.g.,
1996 Order, 11 FCC Rcd at 18790 p 45, and COMSAT histori-
cally has not paid for these costs. In light of s 9's policy
favoring the recovery of regulatory costs, the Commission has
good reason for forcing COMSAT to bear its "proportionate
share of the [space station] fees." 2000 Order, 15 FCC Rcd
at 14489 p 24. Furthermore, the previously unrecoverable
costs have been borne by COMSAT's competitors. See 1996
Order, 11 FCC Rcd at 18790 p 46 (demonstrating that if
signatory costs were recovered, the Commission could lower
the s 9 space station fee). Clearly, the Commission might
reasonably endeavor to prevent such cross-subsidization.
In response, COMSAT first argues that COMSAT I pre-
cludes the Commission from recovering signatory-related
costs. But COMSAT I did not so hold. It stands only for
the narrow proposition that under the procedural require-
ments of the Communications Act, the Commission may not
impose new fee structures absent a new "rulemaking or
change in law." COMSAT I, 114 F.3d at 227-28; see also
PanAmSat, 198 F.3d at 894-95. Nothing in COMSAT I
prevents the Commission from recovering its signatory-
related costs through proper application of its existing s 9 fee
structure.
COMSAT next argues that the Commission's decision is
unreasonable because the original statutory fee schedule lists
the "space station category" with a parenthetical reference
that is inapplicable to the licensing of Intelsat satellites:
Space Station (per operational station in geosynchronous
orbit) (47 C.F.R. Part 25).
47 U.S.C. s 159(g) (emphasis added). Since Intelsat satel-
lites are not regulated under that section of the regulations,
see 2000 Order, 15 FCC Rcd at 14487 p 21, COMSAT argues
that it cannot be subject to s 9 space station fees. We
disagree. The Commission views the parenthetical as noth-
ing more than a marker used by Congress to aid the Commis-
sion in understanding the schedule; this is neither precluded
by the language nor unreasonable. See Chevron, 467 U.S. at
843-44. And the Commission's conduct thus far has been
consistent with this view; the agency's annually amended
schedule at 47 C.F.R. s 1.1156 has never mentioned the
marker. See 47 C.F.R. s 1.1156 (1999); 47 C.F.R. s 1.1156
(1998); 47 C.F.R. s 1.1156 (1997); 47 C.F.R. s 1.1156 (1996);
47 C.F.R. s 1.1156 (1995). The Commission perhaps could
have interpreted the parenthetical as limiting the category to
exclusively those space stations regulated under 47 C.F.R.
Part 25, but that possibility does not render the opposite view
unreasonable. As the Commission explained in the Order,
s 9's "primary mandate is for the Commission to recover the
costs of its regulatory activities." 2000 Order, 15 FCC Rcd at
14487 p 22; see also 47 U.S.C. s 159(a). The Commission's
interpretation of the parenthetical facilitates fulfillment of
this mandate; COMSAT's does not.
Aside from the question whether the Commission can im-
pose space station fees on COMSAT at all, COMSAT also
challenges the amount charged. Because it only uses 17% of
the transponder capacity of the Intelsat system, see
COMSAT Brief at 54, COMSAT contends that its space
station fee should be prorated accordingly. But we again
cannot find the Commission's rejection of this proposal unrea-
sonable. The Commission has previously rejected sugges-
tions to assess space station fees "on the number of transpon-
ders used rather than the number of space segments." 2000
Order, 15 FCC Rcd at 14490 p 26 (citing 1995 Order, 10 FCC
Rcd at 13550-51 p 111). The Commission has also noted that
assessing fees per satellite is more consistent with the Con-
gress's original schedule, see 47 U.S.C. s 159(g) (establishing
original schedule that assessed fees "per operational station"),
and is apparently less administratively burdensome on the
Commission and regulatees, see 1995 Order, 10 FCC Rcd at
13550-51 p 111. Furthermore, the Commission has main-
tained that the costs associated with regulating satellite sys-
tems are reasonably related to the number of operational
satellites. 1995 Order, 10 FCC Rcd at 13550-51 p 111. As
COMSAT offers no evidence demonstrating that regulatory
costs are generally more closely related to the number of
transponders than to the number of satellites, we must reject
the request to mandate its proration theory. See also id.
(noting that commenter "provided ... no demonstrable evi-
dence that the costs of regulating the various satellite sys-
tems is [sic] more closely related to the number of transpon-
ders that a satellite carries than to the total number of
operational satellites").
While we reject COMSAT's proration argument, we do not
suggest that the fees imposed on COMSAT were well-
apportioned. Indeed, the $1.6 million in fees assessed to
COMSAT seem to bear no relation to the signatory-related
costs that the Commission identified COMSAT as having
created and that it has said it wishes to recover. Signatory-
related costs apparently amounted to only $233,425 in 1996,1
__________
1 In its 1996 Order, FCC estimated that signatory-related costs
amounted to 14.7% of "the costs attributable to space station
regulatory oversight ($3,175,850)." 1996 Order, 11 FCC Rcd at
18790 p 45. The signatory-related costs for 1996 were thus
$466,850. However, since COMSAT is signatory to two separate
international organizations (Intelsat and the International Mobile
Satellite Organization), the Commission divided that figure by two.
See id. at 18787-88 p 37, 18790 p 45; see also Notice of Proposed
Rulemaking, Assessment and Collection of Regulatory Fees for
Fiscal Year 1996, 11 FCC Rcd 16515, 16528 p 46 (1996) (making a
similar signatory-related cost calculation, albeit with slightly lower
and although the record lacks reported figures for 2000, an
extrapolation on the basis of the change in the regular fee per
satellite would yield an estimate for Intelsat signatory-related
costs in 2000 of about $442,000, only about a quarter of the
fees actually assessed.2
We do not reach this issue, however, because it was not
raised on this appeal. Indeed it appears that the Commission
was and perhaps remains willing to consider a request for a
fee reduction on this ground. It said in the 2000 Order that
reductions of fees were "granted on a case-by-case basis" and
that COMSAT remains "free to submit such a request." 2000
Order, 15 FCC Rcd at 14490 p 27 (noting that the Commis-
sion "express[es] no view in this rulemaking proceeding
whether such a reduction in fees should be granted"); see
also 47 C.F.R. s 1.1166 (establishing procedures for request-
ing fee waivers or reductions).
Since s 9 of the statute as interpreted in PanAmSat is
sufficient to justify the Commission's actions, we need not
reach issues raised by the Commission's ancillary reliance on
ORBIT.
* * *
COMSAT's petition for review is
Denied.
__________
figures). For reasons not disclosed by the parties, it appears that
only fees charged with reference to Intelsat satellites are before us.
2 According to the 2000 Order, regulatory costs associated with
(geosynchronous) space stations in 2000 are estimated at $6,010,513.
See 2000 Order at 14532 attachment C. (Here, we use the same
figure corresponding to the "Pro-Rated Revenue Requirement" for
"Space Stations (Geosynchronous)" as in the 1996 Order.) Assum-
ing that signatory costs remained at 14.7% of total space station
regulatory costs as in 1996, see 1996 Order, 15 FCC Rcd at 18790
p 45, signatory costs in 2000 were approximately $883,545. Again,
because COMSAT is signatory to two organizations, id., the Com-
mission would presumably divide this figure by two to yield
$441,773.