Eagle Broadcasting Group, Ltd. v. Federal Communications Commission

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 8, 2009 Decided April 28, 2009

No. 08-1066

EAGLE BROADCASTING GROUP, LTD.,

APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION,

APPELLEE

Appeal of an Order of the Federal Communications

Commission

Howard M. Weiss argued the cause for appellant. With him

on the briefs were Peter Tannenwald and Davina S. Sashkin.

Daniel M. Armstrong, Associate General Counsel, Federal

Communications Commission, argued the cause for appellee.

With him on the brief were Matthew B. Berry, General Counsel,

Joseph R. Palmore, Deputy General Counsel, and Pamela L.

Smith, Counsel.

Before: ROGERS and BROWN, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

EDWARDS, Senior Circuit Judge: In 1996, Congress passed

§ 403 of the Telecommunications Act of 1996, Pub. L. No. 104-

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104, 110 Stat. 56 (“the Telecommunications Act”), which

amended the Communications Act of 1934, 47 U.S.C. § 151 et

seq. (“the Act”). Section 403, as enacted in 1996, added a new

subpart (g) to § 312 of the Act, providing in relevant part:

If a broadcasting station fails to transmit broadcast signals

for any consecutive 12-month period, then the station

license granted for the operation of that broadcast station

expires at the end of that period, notwithstanding any

provision, term, or condition of the license to the contrary.

47 U.S.C. § 312(g) (1996). In 2004, after the occurrence of the

events giving rise to this case, Congress added the following

language to the provision:

except that the Commission may extend or reinstate such

station license if the holder of the station license prevails in

an administrative or judicial appeal, the applicable law

changes, or for any other reason to promote equity and

fairness.

47 U.S.C. § 312(g) (2004).

At issue in this case is a decision by the Federal

Communications Commission (“FCC” or “Commission”)

declaring that the broadcast license of Eagle Broadcasting

Group, Ltd. (“Eagle”) had expired pursuant to § 312(g). Eagle

was licensed to operate radio station KVEZ(FM) from a site

known as “Black Peak” (the “Black Peak site”) but ceased

broadcasting in June 2001 due to interference and land use

issues. The FCC granted Eagle a temporary license to operate

from its studio, but the station again went silent on December

20, 2002. Subsequently, Eagle applied to the Commission for

a construction permit to broadcast from a new site in the

Buckskin Mountains (the “Buckskin site”), but it failed to obtain

the necessary clearance from the Federal Aviation

Administration (“FAA”) and the FCC. Eagle then failed for 12

3

consecutive months to resume broadcasting from its licensed site

at Black Peak.

When the FCC determined that Eagle had not resumed

broadcasting as of December 20, 2003, it declared that Eagle’s

license had expired pursuant to § 312(g). Eagle protested,

arguing that its license had not expired because it had

transmitted broadcast signals from the Buckskin site in

November 2003. Eagle contended that it did not matter that its

broadcast transmissions from the Buckskin site were

unauthorized. The FCC rejected Eagle’s petitions for

reconsideration. Pointing to § 301 of the Act, the Commission

noted that the Act clearly prohibits any person from transmitting

broadcast signals except with a license granted by the

Commission. The FCC therefore held that Eagle’s unauthorized

broadcasts from the Buckskin site were insufficient to avoid the

strictures of § 312(g). See Eagle Broadcasting Group, Ltd., 23

F.C.C.R. 588 (2008) [hereinafter, Order].

Eagle’s principal argument on appeal is that the station did

“transmit broadcast signals” within the meaning of § 312(g)

before the one-year deadline. Eagle argues that Congress would

have inserted the word “authorized” in the statute had it intended

for the provision to be interpreted as the FCC has interpreted it

in this case. According to Eagle, the plain language of the

statute allows a station to transmit any signals from any location

to avoid the automatic expiration of a license under § 312(g).

We disagree. The FCC acted well within its statutory authority

and pursuant to reasoned decisionmaking in rejecting Eagle’s

claim that unauthorized broadcasts by unlicensed stations are

adequate to avoid license termination under § 312(g). And,

contrary to Eagle’s claims, the FCC’s action was neither

arbitrary and capricious nor an abuse of discretion.

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I. BACKGROUND

A. Statutory and Regulatory Background

Section 301 of the Act bans any person from transmitting

signals by radio “except under and in accordance with this

chapter and with a license . . . granted under the provisions of

this chapter.” 47 U.S.C. § 301. The Act defines broadcasting as

the “dissemination of radio communications intended to be

received by the public.” Id. at § 153(6).

Prior to the enactment of the Telecommunications Act, the

Commission addressed “silent stations” – radio stations which

were authorized to broadcast but were silent – in one of two

ways. The FCC would either grant the station temporary

authority to remain off the air if it found such a grant to be in the

public interest, or it would initiate a revocation proceeding,

which often included lengthy procedural requirements such as

an evidentiary hearing. See Implementation of Section 403(l) of

the Telecommunications Act of 1996 (Silent Station

Authorizations), 11 F.C.C.R. 16,599, 16,599 (1996) [hereinafter,

Silent Station Authorizations].

In 1996, the Telecommunications Act added a new

subsection to the Act, providing for the automatic expiration of

a station’s license when it failed to broadcast for 12 months.

The new provision stated:

If a broadcasting station fails to transmit broadcast signals

for any consecutive 12-month period, then the station

license granted for the operation of that broadcast station

expires at the end of that period, notwithstanding any

provision, term, or condition of the license to the contrary.

47 U.S.C. § 312(g) (1996). After the occurrence of the events

giving rise to this case, Congress amended § 312(g) by adding

language giving the Commission discretion to “extend or

reinstate” a license in order to, inter alia, “promote equity and

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fairness.” See 47 U.S.C. § 312(g) (2004) (amended by

Consolidated Appropriations Act, 2005, Pub. L. No. 108-447,

118 Stat. 2809 (2004)).

Because broadcast towers may interfere with air traffic

safety, § 303(q) of the Act directs the Commission to mandate

broadcast tower safety features, such as “painting and/or

illuminination,” when “there is a reasonable possibility” that a

tower “may constitute . . . a menace to air navigation.” 47

U.S.C. § 303(q). The Commission’s rules provide that an

applicant who proposes to construct a broadcast antenna with

certain specifications must notify the FAA of the proposed

construction. See generally Construction, Marking, and

Lighting of Antenna Structures, 47 C.F.R. § 17.1, et seq. (2009).

The rules make it clear that:

(a) Effective July 1, 1996, the owner of any proposed or

existing antenna structure that requires notice of proposed

construction to the Federal Aviation Administration must

register the structure with the Commission. . . .

(b) . . . . [E]ach owner of a proposed structure . . . must

submit a valid FAA determination of “no hazard.”

....

(d) If a final FAA determination of “no hazard” is not

submitted along with FCC Form 854, processing of the

registration may be delayed or disapproved.

Id. § 17.4.

B. Facts

Through its owner, Maurice W. Coburn, Eagle acquired

control of radio station KVEZ(FM) in 1995. KVEZ(FM) was

licensed to operate from a site known as Black Peak in the

community of Parker, Arizona, but ceased broadcasting from the

site on June 23, 2001 due to interference and land use issues.

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See Order, 23 F.C.C.R. at 589; Letter from Maurice W. Coburn

to Secretary of FCC (June 5, 2002), reprinted in Joint Appendix

(“J.A.”) 145. On February 15, 2002, Eagle filed an application

with the FCC for a construction permit to move to the Buckskin

site. See Order, 23 F.C.C.R. at 589; Application for

Construction Permit, J.A. 146.

On April 24, 2002, the Commission’s staff (the “Staff”)

notified Eagle of a deficiency in the Buckskin site application.

Order, 23 F.C.C.R. at 589. Eagle had failed to respond to a

question that asked for a Commission tower registration number

– a number an applicant receives after a FAA determination that

the proposed broadcasting facility poses no hazards to air

navigation. Because the Buckskin site is within the glide scope

of air traffic using the Avi Suquilla Airport in Parker, Arizona,

the FCC stated that FAA approval of the proposed tower was

necessary. Id. at 594; FCC’s Br. at 6. The Staff informed Eagle

that “public safety factors required both FAA approval and

Commission registration of the tower proposed in the Buckskin

Application.” Order, 23 F.C.C.R. at 589.

On June 5, 2002, instead of supplying the requested

information, Eagle requested special temporary authority

(“STA”) to broadcast the signal of KVEZ(FM) from the

station’s studio in Parker, Arizona. Letter from Maurice W.

Coburn to Secretary of FCC (June 5, 2002), J.A. 145. The

request explained that the Black Peak broadcast site was no

longer available due to interference and land use restrictions.

Although a new site had been identified, approval would take

more time than Eagle could afford under § 312(g)’s one-year

silence deadline; thus, Eagle requested authority to temporarily

broadcast from its studio location. Id. The Commission granted

the STA on June 19, 2002, but reminded Eagle that, because the

station had been silent since June 23, 2001, the license would

expire as a matter of law if it did not resume broadcasting on or

before June 23, 2002. Letter from Edward P. De La Hunt,

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Associate Chief of FCC Audio Division, to Maurice W. Coburn

(June 19, 2002), J.A. 142-43.

On July 10, 2002, Eagle notified the FCC that the station

had “recommenced its regular broadcast under the [STA]

granted by the [FCC]” and noted that “[a]s FCC files will

indicate, KVEZ is awaiting approval of an alternate site, so that

relocation construction can begin.” Letter from Maurice W.

Coburn to Edward P. De La Hunt (June 28, 2002), J.A. 141.

However, the STA expired on December 19, 2002, and on

December 20, 2002, KVEZ(FM) again went silent. In a letter

written that day, Eagle notified the FCC that the station was

silent as of noon. The letter reported:

Our reason for going temporarily dark is that we are in the

process of moving to our new transmitter site as previously

approved by the F.C.C.

While we regret this brief period of darkness, it seems

unavoidable under the circumstances. As your files will

indicate, we were asked, after the F.C.C. had already

cleared us to move, to obtain a [clearance] from the FAA

(we had been under the impression that such a [clearance]

would not be needed). While we filed our request

promptly, it took the FAA several months to finally give its

OK.

....

We are proceeding with all deliberate speed to make

the required upgrade to full power status, at the approved

location, but we are requesting permission to remain dark

for 30 to 60 days while all necessary construction and

installations are completed.

Letter from Maurice W. Coburn to Edward P. De La Hunt (Dec.

20, 2002), J.A. 140.

8

On January 23, 2003, the Commission again requested that

Eagle supplement the incomplete application for the Buckskin

site. Letter from Rodolfo F. Bonacci, Supervisory Engineer of

FCC Audio Division, to Eagle (Jan. 23, 2003), J.A. 138.

Specifically, the letter requested that Eagle register the proposed

antenna structure with the Commission, and reminded Eagle that

FAA approval was “necessary in order to obtain FCC antenna

structure registration.” Id. The FCC advised that action on the

application would be withheld until Eagle responded. Finally,

it warned that Eagle’s failure to respond would “result in the

dismissal of the application” pursuant to a Commission rule

which allows an application to be dismissed for failure to

respond to an official request for additional information. Id. at

139; see 47 C.F.R. § 73.3568(a)(1).

Eagle still failed to respond with documentation of FAA

approval. Instead, Eagle sent a series of letters to the FCC

implying that FAA approval had either been obtained or was

unnecessary. For example, on February 26, 2003, Eagle wrote

another letter reporting on the “progress in moving KVEZ to its

new approved site.” Letter from Maurice W. Coburn to Edward

P. De La Hunt (Feb. 26, 2003), J.A. 137. The letter noted: “As

you will no doubt recall, after your office approved of our new

transmitter-antenna site, it took several months to get clearance

from the FAA and then LaPaz County. We are working with all

due diligence to complete the move and installation.” Id.

Additionally, on November 24, 2003, Eagle notified the

FCC that the station had “completed its installation of a new

transmitter and antenna at the previously approved site [n]orth

of the city of license, Parker, Arizona.” Letter from Maurice W.

Coburn to Edward P. De La Hunt (Nov. 24, 2003), J.A. 136.

The letter stated:

We are pleased to inform the Commission that 15:30 hours

on November 22, 2003, marked the resumption of regular

broadcasting activities of KVEZ-FM in Parker, Arizona.

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....

The patience and assistance of your Staff throughout our

many relocation problems is most appreciated.

Id.

And finally, on November 26, 2003, Eagle wrote to the

Commission and stated that the FAA had informed Eagle that

“since the station antenna site was not within the flight path of

the Parker area airport, and not of significant height to either be

lighted or painted with the orange/white pattern, that no special

authorization was required.” Email from Jerry Hale, Consultant

to Eagle, to Rodolfo E. Bonacci, Supervisory Engineer of FCC

Audio Division (Nov. 26, 2003), J.A. 134-35.

By reply sent on December 9, 2003, the Commission

requested Eagle to submit a copy of the FAA’s letter to “prove

what you said below is correct,” i.e., that no FAA authorization

was necessary. Email from Khoa Tran, FCC to Jerry Hale (Dec.

9, 2003), J.A.134. The letter also notified Eagle that, because

the station had been silent since December 20, 2002, the “license

is going to expire on 12/20/03.” Id. Eagle’s consultant

responded the next day that he would “send a copy of the FAA

information this week” and stated that “Mr. Coburn has notified

the FCC in writing and by phone, as well as e-mail which I sent

that KVEZ FM Parker, Arizona had returned to the air as of

November 22, 2003.” Email from Jerry Hale to Khoa Tran

(Dec. 10, 2003), J.A. 134. The email requested that the FCC

“verify that the Commission has received the appropriate notice

so that the license will not expire on December 20. If we need

to do any additional filings, please advise.” Id.

Eagle never submitted any FAA letter or any documentation

indicating that it had received “clearance” from the FAA with

respect to the Buckskin site application. The Staff contacted the

FAA on its own in June 2004 and was informed that the FAA

“had no record of receiving any application or issuing any

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determination for the site specified in the Buckskin

Application.” Order, 23 F.C.C.R. at 594 n.35. Rather, the FAA

had only “provided an August 7, 2002 determination of no

hazard to Eagle for a tower approximately 229 miles away from

the Buckskin site.” Id. at 594.

In early January 2004, the Staff received a complaint that

station KVEZ(FM) was operating from a site the FCC had not

approved. Id. at 590. On January 28, 2004, the Staff contacted

the station for clarification. Email from Glenn Greisman,

Industry Analyst for FCC Media Bureau-Audio Division, to

Maurice W. Coburn (Jan. 28, 2004), J.A. 133. Eagle was

instructed to provide the Commission with a file number to

identify any “previously approved site.” Id. Maurice Coburn

and Eagle’s consultant each telephoned the Staff to report that

“the station was operating at the site proposed in the Buckskin

application.” Order, 23 F.C.C.R. at 590.

The FCC concluded that Eagle had not transmitted from its

place of license – the Black Peak site – for over one year.

Although Eagle represented that it was once again broadcasting,

it was indisputably operating from an unauthorized and

unlicensed facility. The Buckskin site application remained

pending and Eagle had no authority to transmit broadcast signals

away from the Black Peak site. And Eagle had not received

FAA approval for operation of a broadcast tower at the

Buckskin site. On February 17, 2004, the Staff informed Eagle

that the pending Buckskin site application had been dismissed

as moot and the call letters (the identifying code letters for the

station assigned by the FCC) had been deleted because the

underlying license for the Black Peak site had expired as a

matter of law on December 21, 2003 pursuant to § 312(g).

Letter from Peter H. Doyle, FCC Audio Division Chief, to Eagle

(Feb. 17, 2004), J.A. 130 [hereinafter, Staff Decision]. The

Staff Decision explained: “A broadcaster cannot avoid the

statutory deadline set forth in § 312(g) by resuming operations,

11

as here, without an authorization, permanent or temporary, from

the Commission.” Id. at 131.

Eagle petitioned for reconsideration on March 18, 2004.

Petition for Reconsideration (“Reconsideration Petition”), J.A.

113. Eagle subsequently filed a supplement to the

Reconsideration Petition in light of Congress’ amendment to

§ 312(g), noting that “[t]he statute, as amended, now directs the

Commission to extend or reinstate broadcast licenses as

appropriate ‘to promote equity and fairness.’” Supplement to

Petition for Reconsideration (“Supplement”), J.A. 24. The

Reconsideration Petition, the Supplement, and two other

petitions filed by Eagle requesting license renewal were referred

to the Commission for review. Order, 23 F.C.C.R. at 588.

C. Order on Appeal

The Commission denied all four petitions. Order, 23

F.C.C.R. at 588. First, the Commission disagreed with Eagle’s

contention that “unauthorized transmissions are sufficient to

avoid the consequences of § 312(g).” Id. at 592. The

Commission explained:

Section 301 . . . provides that no person shall transmit radio

signals except in accordance with authority granted by the

Commission. It further provides that no license shall be

construed to create any right beyond the terms, conditions,

and authority of the license. The sanctions set forth in

Section 312 enforce these provisions. Section 312(g),

which establishes the specific sanction for extended failure

to broadcast, cannot be read to create an exception to

Section 301 licensing requirements. Indeed, if read to

permit unauthorized operation to avoid license expiration,

Section 312(g) would encourage violation of Section 301

and defeat its own purpose of ensuring timely construction

and operation of authorized facilities that serve the public.

12

Id. Thus, the Commission rejected Eagle’s claim that its

unauthorized transmissions from the Buckskin site were

sufficient to avoid license termination.

The Commission also rejected Eagle’s assertion that it

reasonably believed the transmissions from the Buckskin site

were authorized. Id. at 593. Eagle claimed that it believed the

Staff had erroneously determined that FAA approval was

required to construct the proposed tower at the Buckskin site,

and that this “mistake” had been resolved. The Commission

found that Eagle’s claim of an innocent mistake was inconsistent

with the facts. Noting the number of shifting theories Eagle had

presented regarding the issuance of a FAA air hazard

determination, the Order concluded that “Eagle’s claim that it

held an authorization to operate at Buckskin is frivolous.” Id. at

594.

Commission construction permits are written documents.

The Commission never issued, and therefore Eagle never

received, a construction permit or any other document

establishing that the Buckskin application had been granted.

To the contrary, as noted above, the staff advised Eagle in

writing that the application could not be granted until Eagle

supplied tower notification/registration information.

Eagle’s alleged belief that the application had been granted

by the fall of 2003 is also inconsistent with its consultant’s

contacts with the staff in November and December 2003 to

address the FAA-related deficiency that continued to

prevent staff action. Eagle’s pro se status at that time did

not exempt it from complying with Commission rules or

statutory provisions.

Id. at 594-95.

The Order also rejected Eagle’s claim that, under FCC case

precedent, Eagle should have been assessed a monetary

forfeiture, in lieu of license expiration, for unauthorized

13

operations. The FCC distinguished the forfeiture cases cited by

Eagle, saying that “Eagle fails to comprehend the critical

differences between rule violations and Section 312(g).” Id. at

596. The Commission noted that it had “discretion to shape

penalties for rule violations,” and distinguished the forfeiture

cases as inapplicable because “[t]hey do not address Section

312(g), focusing only on other rule violations.” Id.

Finally, the Commission rejected Eagle’s alternative request

for discretionary license reinstatement under the amended

§ 312(g). Id. at 599-600. The Commission first noted that

Eagle’s license expired on December 21, 2003, before the 2004

legislation was enacted. The Commission then concluded that,

in any event, Eagle had failed to qualify under the statute for

license reinstatement. Eagle had not obtained permission to

construct a tower or operate from the Buckskin site, and Eagle’s

claim that it was “confused” about the status of its permit was

not credible. The Commission also noted that the Staff had

warned Eagle about the risk of license expiration under

§ 312(g). The Order characterized Eagle’s claim that it had

resumed operations at an authorized site as “misleading” and

“false.” Id. at 601.

Eagle raises three central arguments on appeal. First, Eagle

asserts that § 312(g), by its plain terms, only prescribes license

expiration in cases of utter silence. Because it transmitted from

the Buckskin site, Eagle claims that it cannot be said that it

“fail[ed] to transmit broadcast signals” for a consecutive 12-

month period. Second, Eagle argues that the FCC’s action was

arbitrary and capricious because the Commission imposed a

monetary forfeiture, rather than license expiration, against other

similarly situated licensees who operated unauthorized facilities

for more than a 12-month consecutive period. Finally, Eagle

argues that the FCC should have reinstated its license under the

2004 amendment to § 312(g), which vests the Commission with

14

discretion to reinstate a license that has expired if doing so

would “promote equity and fairness.” 47 U.S.C. § 312(g).

II. ANALYSIS

A. Standard of Review

In order to determine whether the Commission permissibly

terminated Eagle’s license pursuant to § 312(g), the court

applies the familiar two-part test of Chevron USA Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984).

“Chevron instructs us to accord agency interpretations of

statutes they administer varying degrees of deference.” Nat’l

Ass’n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1228 (D.C.

Cir. 2007). Under Chevron Step One, the court examines the

statute de novo in order to determine “whether Congress has

directly spoken to the precise question at issue.” Chevron, 467

U.S. at 842. If so, “that is the end of the matter; for the court, as

well as the agency, must give effect to the unambiguously

expressed intent of Congress.” Id. at 842-43. However, “if

Congress has [not] directly spoken to the precise question at

issue,” the Court moves on to Chevron Step Two. Id. at 842.

Under Step Two, “[i]f Congress has explicitly left a gap for the

agency to fill, there is an express delegation of authority to the

agency to elucidate a specific provision of the statute by

regulation. Such legislative regulations are given controlling

weight unless they are . . . manifestly contrary to the statute.”

Id. at 843-44. Where, on the other hand, the legislative

delegation to the agency is “implicit rather than explicit,” we

will uphold any “reasonable interpretation made by the

administrator” of the agency. Id. at 844.

Even when an agency’s construction of its statute passes

muster under Chevron, a party may claim that the disputed

agency action is “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).

15

Section 706(2)(A) of the APA provides that a

reviewing court shall “hold unlawful and set aside agency

action, findings, and conclusions found to be . . . arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A). This is the

APA’s “catch-all” provision governing the scope and

standards of review, and the courts rarely draw any

meaningful distinctions between acts that are “arbitrary,

capricious, or an abuse of discretion.” Block v. Pitney

Bowes Inc., 952 F.2d 1450, 1454 (D.C. Cir. 1992).

“[A]rbitrary, capricious, [or] an abuse of discretion” review

under § 706(2)(A) is now routinely applied by the courts as

one standard under the heading of “arbitrary and

capricious” review. And it encompasses both review of the

factual basis of an agency’s action, see Citizens to Preserve

Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971), and

review of an agency’s reasoning as distinguished from its

factfinding, see Bowman Transp., Inc. v. Ark.-Best Freight

Sys., Inc., 419 U.S. 281, 285-86 (1974). Moreover, the

arbitrary and capricious standard governs review of all

proceedings that are subject to challenge under the APA.

See Consumers Union of U.S., Inc. v. FTC, 801 F.2d 417,

422 (D.C. Cir. 1986). Thus, if an action is subject to review

under the APA, it does not matter whether it is a formal or

informal adjudication or a formal or informal rulemaking

proceeding – all are subject to arbitrary and capricious

review under § 706(2)(A).

HARRY T. EDWARDS & LINDA A. ELLIOTT, FEDERAL

STANDARDS OF REVIEW – REVIEW OF DISTRICT COURT

DECISIONS AND AGENCY ACTIONS 167 (2007). “Normally, an

agency [action] would be arbitrary and capricious if the agency

has relied on factors which Congress has not intended it to

consider, entirely failed to consider an important aspect of the

problem, offered an explanation for its decision that runs counter

to the evidence before the agency, or is so implausible that it

16

could not be ascribed to a difference in view or the product of

agency expertise.” Motor Vehicle Mfrs. Ass’n of the United

States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43

(1983) (internal quotation marks and citation omitted).

Additionally, “an agency may not treat like cases differently.”

Freeman Eng’g Assocs., Inc. v. FCC, 103 F.3d 169, 178 (D.C.

Cir. 1997) (internal quotation marks and citation omitted). And

“an agency’s unexplained departure from precedent must be

overturned as arbitrary and capricious.” Comcast Corp. v. FCC,

526 F.3d 763, 769 (D.C. Cir. 2008).

As noted above, Eagle contends that the FCC “wrongly

interpreted 47 U.S.C. § 312(g) to require authorized

transmissions in order to avoid expiration of a licence.” Eagle’s

Br. at 12. Eagle also argues that the FCC’s action was arbitrary

and capricious because the agency treated Eagle differently than

other similarly situated licensees, id. at 22, and an abuse of

discretion because Eagle’s license should have been reinstated

pursuant to the 2004 amendment to § 312(g), id. at 27. We find

no merit in these claims.

B. Chevron Step One

Eagle argues that the FCC’s decision to cancel Eagle’s

license pursuant to § 312(g) should be invalidated under

Chevron Step One, because it is at odds with the plain meaning

of the statute. Under Chevron Step One, the court applies the

traditional tools of statutory construction in order to discern

whether Congress has spoken directly to the question at issue.

Chevron, 467 U.S. at 842-43. If this “search for the plain

meaning of the statute . . . . yields a clear result, then Congress

has expressed its intention as to the question, and deference is

not appropriate.” Bell Atlantic Tel. Cos. v. FCC, 131 F.3d 1044,

1047 (D.C. Cir. 1997).

Eagle argues that § 312(g) only allows for license expiration

in the case of utter silence. Eagle was required to resume

17

broadcasting within one year of December 20, 2002 – the date

that it went silent – in order to avoid expiration under § 312(g).

The station purported to “resume broadcasting” on November

22, 2003. Focusing on the statutory language “fails to transmit

broadcast signals,” Eagle first emphasizes that the Act defines

broadcasting as “the dissemination of radio communications

intended to be received by the public.” 47 U.S.C. § 153(6).

Eagle then argues that “[t]here is no question that [it] operated

a radio transmitter and intended that its service be received by

the public.” Eagle’s Br. at 9. Thus, according to Eagle, the FCC

erred by reading a restriction into the statute that the broadcast

must be an authorized transmission. Eagle asserts: “Had it

intended to say what the FCC believes it intended, Congress

could have easily inserted the word ‘authorized’ between

‘transmit’ and ‘broadcast’ in the statute.” Eagle’s Br. at 15.

Eagle asks the court to interpret the omission of the word

“authorized” as a signal that Congress intended any broadcast to

count for the purposes of § 312(g).

There is no doubt that § 312(g) does not, by its plain terms,

state that unauthorized transmissions are sufficient to avoid

expiration pursuant to § 312(g). In other words, the statutory

text “fails to transmit broadcast signals” surely does not plainly

indicate that unauthorized and unlicensed broadcast

transmissions are sufficient to avoid the strictures of § 312(g).

The most that can be said is that § 312(g), standing alone, is

silent with respect to whether transmissions must be authorized

in order to avoid license expiration.

Actually, when § 312(g) is read in context, i.e., as a part of

the entire Act, Eagle’s “plain meaning” argument falls apart.

See, e.g., Sierra Club v. EPA, 551 F.3d 1019, 1027 (D.C. Cir.

2008) (stating that the meaning of certain words and phrases

must be examined in context as part of the Chevron Step One

inquiry). Section 301 of the Act positively requires a purported

broadcaster to secure a license from the FCC to transmit

18

broadcast signals by radio. 47 U.S.C. § 301. Unlicensed radio

transmissions are not recognized under the Act. And nothing in

§ 312 says otherwise. It is therefore an understatement to say

that it strains credulity to suggest that the reference to

“broadcast signals” in § 312(g) includes unauthorized and

unlicensed transmissions.

Moreover, Eagle conceded at oral argument that its reading

of § 312(g) would allow a station to avoid expiration by

broadcasting from any site, even one that is thousands of miles

removed from the authorized location. Recording of Oral

Argument at 8:08. In other words, according to Eagle, the

company could have avoided license expiration by broadcasting

from a site in New York. Section 312(g) cannot be read to

plainly dictate this absurd result.

Section 312(g) refers only to broadcasters who have a

“station license” to transmit radio signals. As the parties

acknowledged at oral argument, Eagle’s license was specifically

limited to one permissible site of operation – Black Peak. When

Eagle failed to transmit from this place of license for more than

a year, its license expired by operation of law. Under the

statute, unauthorized and unlicensed transmissions are no better

than silence. If anything, the plain meaning of § 312(g) says just

the opposite of what Eagle contends.

C. Chevron Step Two

Even if we assume that § 312(g) does not admit of “plain

meaning” in support of the FCC’s construction, the agency’s

interpretation easily survives scrutiny under Chevron Step Two.

When, as in this case, “the legislative delegation to an agency on

a particular question is implicit rather than explicit . . . a court

may not substitute its own construction of a statutory provision

for a reasonable interpretation made by the administrator of an

agency.” Chevron, 467 U.S. at 844. We find the FCC’s

construction of § 312(g) eminently reasonable.

19

The FCC reasonably determined that § 312(g) must be read

in conjunction with § 301. Section 301 makes clear that

broadcast transmissions cannot occur except as authorized by a

FCC license. Indeed, a license to broadcast is the “central

requirement” of the Act. Ruggiero v. FCC, 317 F.3d 239, 245

(D.C. Cir. 2003). And § 312(g) creates no exception to § 301.

Moreover, as noted above, a FCC license specifies both the

licensee’s site and bandwidth. An unauthorized transmission is

neither condoned nor recognized by the Act. Rather, it is

prohibited. Thus, in assessing a licensee’s rights under § 312(g),

the FCC reasonably concluded that an unauthorized

transmission counts for nothing.

Eagle’s contention that the FCC’s position in this case is at

odds with the Commission’s 1996 order implementing § 312(g),

see Silent Station Authorizations, 11 F.C.C.R. 16,599, is not

persuasive. It is true that the implementing order does not

mention the need to operate from authorized facilities to avoid

the strictures of § 312(g). This proves nothing, however,

because the requirement of authorized transmissions is clear

from § 301.

Eagle quotes a portion of the implementing order that states:

“[t]he 1996 Act is clear that the relevant period of the silence is

that of the station. The period is not based on any particular

licensee or facility.” Eagle’s Br. at 21 (quoting Silent Station

Authorizations, 11 F.C.C.R. at 16,601). Eagle argues that this

language suggests that the FCC’s focus on the license status of

its facilities has no place in a § 312(g) inquiry. But Eagle

ignores the next sentence in the implementing order, which

states:

Accordingly, the assignment or transfer of a broadcast

license, the modification of the licensed facilities, special

temporary authorizations to remain silent (STAs), and other

transactions will not toll or extend the 12-month period,

notwithstanding any provision in any authorization to the

20

contrary. Neither can the Commission prevent the

automatic expiration of the license by waiver.

Silent Station Authorizations, 11 F.C.C.R. at 16,601. Rather

than suggesting that unauthorized transmissions were

permissible, the implementing order emphasized that expirations

under § 312(g) are mandatory and stressed that not even agency

actions could toll the 12-month period.

In sum, the Commission’s interpretation of § 312(g) easily

passes muster under Chevron Step Two.

D. The Commission’s Action Was Not Arbitrary and

Capricious

It is well understood that “an agency’s unexplained

departure from precedent must be overturned as arbitrary and

capricious.” Comcast Corp., 526 F.3d at 769. Eagle argues that

the Commission’s disputed action in this case was arbitrary and

capricious, because in other cases involving similar fact patterns

the Commission imposed monetary forfeitures against licensees

rather than declaring their licenses expired pursuant to § 312(g).

The Commission argues that the cases cited by Eagle are

factually distinguishable, in part because most did not involve

applications of § 312(g). In addition, all but one of the cases

cited by Eagle were staff decisions and thus had no binding

precedential effect. “[U]nchallenged staff decisions are not

Commission precedent, and agency actions contrary to those

decisions cannot be deemed arbitrary and capricious.” Id. at

770.

Only one case cited by Eagle, Maria L. Salazar, 19

F.C.C.R. 5050 (2004), involves a decision of the Commission.

Salazar is inapposite, however, because it did not involve the

application or enforcement of § 312(g). Eagle argues that this

“misses the point,” because the Commission’s failure to apply

§ 312(g) in Salazar was a sub silentio determination that

21

unauthorized transmissions are sufficient to avoid license

expiration under § 312(g). Eagle’s Br. at 25. We disagree.

In Salazar, the licensee was cited for a host of rule

violations, including transmitting from an unauthorized site.

However, the record does not indicate that the licensee failed to

transmit authorized broadcasts over a stretch of 12 months. In

fact, another order in the same case makes clear that the station

in Salazar was simultaneously transmitting from two locations

– one authorized and one unauthorized. Maria L. Salazar,

Notice of Apparent Liability, 17 F.C.C.R. 14,090, 14,090-91

(2002). Because the station in Salazar never ceased transmitting

from an authorized location, it was not silent, and the

Commission’s imposition of a money forfeiture in that case

without a license revocation is in no way inconsistent with the

action taken in this case.

E. The Commission Did Not Abuse its Discretion in Refusing

To Reinstate Eagle’s License Under the 2004 Amendment

to § 312(g)

As noted above, the 2004 amendment to § 312(g) vests the

Commission with discretion to reinstate a license that has

expired if doing so would “promote equity and fairness.” 47

U.S.C. § 312(g). Eagle contends that the Commission abused its

discretion in declining to reinstate its license under the 2004

amendment to § 312(g). Assuming, arguendo, that the

Commission was obliged to apply the 2004 version of § 312(g)

when it considered Eagle’s petition for reconsideration, we find

no abuse of discretion.

Eagle claims that there were “mitigating circumstances”

that should have caused the Commission to act favorably on its

petition for reconsideration. In particular, Eagle cites its

“misunderstanding” as to what it would take to obtain

authorization for the Buckskin site, lack of counsel to assist in

the processing of its applications, and “good faith” mistakes. In

22

Eagle’s view, “What we have here is a failure of

communication.” Eagle’s Br. at 30. We view the record quite

differently.

The Commission determined that Eagle never received

approval for the Buckskin site from the FAA or from the FCC.

And the Commission found that Eagle never offered a

convincing explanation to support its claim of a good faith belief

that it was acting with authorization. In fact, Eagle’s claim that

it believed it had obtained a license for the Buckskin site and

that the FAA approved the site appears to be disingenuous. As

the Commission points out, “it does not require legal counsel or

any level of sophistication to avoid making false statements on

simple matters of fact (such as whether or not an FAA clearance

letter existed that would be forwarded to the Commission later

in the week).” FCC’s Br. at 29. Moreover, the record makes

clear that Eagle received a number of warnings from FCC Staff

about the risk of expiration under § 312(g). Eagle had fair

warning of the rules and had every reason to understand what

was required of the company in order to avoid license expiration

under § 312(g). In these circumstances, the Commission acted

with justification and without abusing its discretion in denying

Eagle’s petition to reinstate its license.

III. CONCLUSION

For the reasons stated above, we affirm the Commission’s

decision invoking § 312(g) to terminate the broadcasting license

of Eagle Broadcasting Group, Ltd.