Northstar Wireless, LLC v. FCC

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 14, 2022 Decided June 21, 2022

No. 18-1209

NORTHSTAR WIRELESS, LLC AND SNR WIRELESS LICENSECO,

LLC,

PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION,

RESPONDENT

T-MOBILE USA, INC.,

INTERVENOR

Consolidated with 18-1210, 20-1507, 20-1508

On Petitions for Review of and Notices of Appeal

from Orders of the Federal Communications Commission

Catherine E. Stetson argued the cause for petitioners.

With her on the briefs were Christopher J. Wright, Timothy J.

Simeone, Daniel Tingley, Ari Q. Fitzgerald, and Michael J.

West.

2

Bryan N. Tramont and Jennifer B. Tatel were on the briefs

for intervenor DISH Network Corporation in support of

petitioners. Joseph W. Lindsay entered an appearance.

Lawrence J. Spiwak was on the brief for amicus curiae

Phoenix Center for Advanced Legal and Economic Public

Policy Studies in support of petitioners.

Maureen K. Flood, Counsel, Federal Communications

Commission, argued the cause for respondent. With her on the

brief were Robert B. Nicholson and Robert J. Wiggers,

Attorneys, U.S. Department of Justice, and Jacob M. Lewis,

Associate General Counsel, Federal Communications

Commission. Richard K. Welch, Deputy Associate General

Counsel, entered an appearance.

James P. Young, C. Frederick Beckner III, Christopher T.

Shenk, Alice A. Wang, Russell H. Fox, Robert G. Kidwell,

Bennett L. Ross, and Jeremy J. Broggi were on the brief for

intervenors AT&T Services, Inc., et al. in support of

respondents. Helgi C. Walker entered an appearance.

Before: MILLETT and JACKSON*, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge MILLETT.

MILLETT, Circuit Judge: In late 2014 and early 2015,

petitioners Northstar Wireless, LLC (“Northstar”), and SNR

Wireless LicenseCo, LLC (“SNR”) placed more than $13

billion in winning bids at a Federal Communications

Commission auction to license wireless spectrum. Because

* Circuit Judge Jackson was a member of the panel at the time

the case was argued but did not participate in this opinion.

3

both Northstar and SNR were brand new companies with

virtually no revenue, they each claimed the 25% discounts on

their winning bids that the Commission offered in such

auctions to very small businesses. After the auction concluded,

though, the Commission determined that neither company was

eligible for the very-small-business discount because both were

de facto controlled by their biggest investor, the large

telecommunications company DISH Network Corporation

(“DISH”).

Northstar and SNR (collectively, “Companies”) petitioned

for review of that decision. In 2017, we affirmed the

Commission’s order in part. See SNR Wireless LicenseCo,

LLC v. FCC, 868 F.3d 1021, 1025 (D.C. Cir. 2017). While we

held that the Commission’s decision to deny the discounts was

generally sound, we found that agency precedent required the

Commission to give the Companies a chance to cure the

problems in their agreements with DISH. Id. This court

remanded for the Commission to afford the Companies that

opportunity. Id.

Back before the Commission, Northstar and SNR each

modified their agreements with DISH in substantially identical

fashion. After the Companies were afforded the opportunity to

meet with Commission staff and some Commissioners, the

Commission found that the Companies remained under DISH’s

de facto control and denied them the 25% discount on their bid

prices. Northstar and SNR have again sought our review,

contending that the Commission flouted this court’s orders in

SNR Wireless by not working closely enough with them to

reduce DISH’s control, wrongfully found them to be controlled

by DISH, and penalized them without fair notice.

We reject the Companies’ challenges to the Commission’s

orders. The Commission complied with our previous decision

4

by affording the Companies an opportunity to cure. The

Commission also reasonably applied its precedent to the

Companies and gave them fair notice of the legal standards that

it would apply in analyzing their claims to be very small

companies.

I

A

The Communications Act of 1934 tasks the Commission

with regulating “all the channels of radio transmission”—that

is, the electromagnetic spectrum used to send and receive

wireless data. 47 U.S.C. § 301; see also NTCH, Inc. v. FCC,

950 F.3d 871, 874 (D.C. Cir. 2020) (per curiam). Because

transmissions can interfere with one another when they are

broadcast in the same portions of spectrum, the Commission

“awards licenses to operate in specific frequency ranges, or

‘bands.’” AT&T Servs., Inc. v. FCC, 21 F.4th 841, 843 (D.C.

Cir. 2021) (citation omitted). Licensed companies can use

spectrum to transmit content such as phone calls and videos.

In 1993, Congress gave the Commission the authority to

license spectrum through competitive auctions. See Omnibus

Budget Reconciliation Act of 1993, Pub. L. No. 103-66,

§ 6002, 107 Stat. 312, 387–397 (codified at 47 U.S.C.

§ 309(j)). Congress directed the Commission, in designing its

auction rules, to “promot[e] economic opportunity and

competition * * * by disseminating licenses among a wide

variety of applicants, including” small businesses. 47 U.S.C.

§ 309(j)(3)(B); see also id. § 309(j)(4)(D). At the same time,

Congress directed the agency to avoid “unjust enrichment” and

to allow for the “rapid deployment of new technologies,

products, and services for the benefit of the public[.]” Id.

§ 309(j)(3)(C), (A).

5

Commission regulations encourage small businesses to

participate in spectrum auctions by offering qualifying

businesses “bidding credits[,]” which are discounts applied

after an auction to reduce the cost of the acquired licenses. See

47 C.F.R. § 1.2110(a), (f) (2014).1 To qualify for bidding

credits, a business must show that its average revenues fall

below threshold amounts set by the Commission. Id.

§ 1.2110(b)(1)(i), (f)(2).

Because acquiring and using wireless spectrum is

expensive, small companies often rely on investments from

larger, more established companies. SNR Wireless, 868 F.3d

at 1044. To ensure that “bidding credits can only be used by

genuinely small businesses—not by small sham companies that

are managed by or affiliated with big businesses”—the

Commission attributes to an applicant the revenues of any

entity that de facto or de jure controls it. Id. at 1026; see also

47 C.F.R. § 1.2110(b)(1)(i), (c). Nonetheless, to allow small

companies to participate in auctions, the Commission’s

Wireless Telecommunications Bureau (“Wireless Bureau”) has

granted some small businesses bidding credits even when they

were subject to “extensive supervision” by their established

investors. SNR Wireless, 868 F.3d at 1044.

Auction participants apply for bidding credits in a two-step

process. See United States ex rel. Vermont Nat’l Tel. Co. v.

Northstar Wireless, LLC, 34 F.4th 29, 31–32 (D.C. Cir. 2022).

Before the auction begins, a business seeking bidding credits

must file a short-form application certifying that it qualifies for

such credits. See 47 C.F.R. § 1.2105(a); id. § 1.2110(b). The

Commission does not determine bidding credit eligibility

before the auction. So a bidding credit applicant that chooses

1

All regulatory citations are to the 2014 edition of the Code of

Federal Regulations, which was in effect at the time of the auction at

issue in this case.

6

to bid at auction “assumes a binding obligation to pay its full

bid amount upon acceptance of the winning bid at the close of

an auction.” Id. § 1.2104(g)(2); see also Auction of Advanced

Wireless Servs. (Aws-3) Licenses Scheduled for Nov. 13, 2014,

29 FCC Rcd. 8386, 8417 ¶ 101 n.180 (2014) (“2014 Auction

Notice”).

An applicant that wins a license in the auction and wishes

to obtain bidding credits must then submit a more detailed,

long-form application that the agency uses to assess whether

the applicant is eligible for bidding credits. See 47 C.F.R.

§ 1.2110(j); SNR Wireless, 868 F.3d at 1027. If the

Commission finds that a business does not qualify for bidding

credits, the company must pay the full winning price on its

licenses or face default penalties. See 47 C.F.R.

§§ 1.2104(g)(2), 1.2109(c); 2014 Auction Notice, 29 FCC Rcd.

at 8417 ¶ 101 n.180, 8450–8451 ¶¶ 239–240. While the

Commission uses bright-line rules to determine de jure control

of the applicant companies, it assesses whether they are subject

to de facto control by another entity “on a case-by-case basis.”

47 C.F.R. § 1.2110(c)(2)(i). The Commission has established

several guidelines to analyze this “highly contextual” question.

SNR Wireless, 868 F.3d at 1026.

First, under a test announced in the agency’s

Intermountain Microwave decision, the Commission considers

six factors, such as another entity’s control over the small

businesses’ daily operations and major policy decisions, to

determine whether the applicant is de facto controlled by that

other entity. See Intermountain Microwave, 12 F.C.C. 2d 559,

559–560 (1963); SNR Wireless, 868 F.3d at 1030–1031.

Second, the Commission has said that an entity may still

be considered independent even if a passive investor retains

certain veto powers over the business’s decisionmaking. See

7

In the Matter of Implementation of Section 309(j) of the

Commc’ns Act—Competitive Bidding, 10 FCC Rcd. 403, 447–

448 ¶¶ 80–81 (1994) (referred to as the “Fifth Memorandum

Opinion & Order” or “Fifth MO&O”); see also Baker Creek

Communications, L.P., 13 FCC Rcd. 18709, 18714–18715 ¶ 9

(1998); see also In re Stratos Glob. Corp., 22 FCC Rcd. 21328,

21343 ¶ 36 n.107 (2007) (full Commission adopting Baker

Creek). A passive investor can “generally” play a role in a

small business’s major corporate decisions, such as the

assumption of “significant corporate debt” and the sale of

“major corporate assets[,]” without the Commission

automatically deeming the investor to be in de facto control.

Fifth MO&O, 10 FCC Rcd. at 448 ¶ 81. Still, the Commission

has been explicit that “the aggregate effect of multiple”

investor protections could be sufficient to find a small business

under the de facto control of the investor. Id. at 449 ¶ 82.

Third, the Commission advised, in its Fifth Memorandum

Opinion & Order, that it will closely scrutinize applicants’ “put

options”—that is, their right to sell themselves to investors.

Fifth MO&O, 10 FCC Rcd. at 455–456 ¶¶ 95–96. Although

such rights may appear to give small businesses control over

future mergers, the Commission has explained that put options

may be combined with other terms to “financially * * * force

the [small business] into a sale (or major refinancing)[.]” Id. at

¶ 96. In such a case, the Commission will deem the small

business de facto controlled from the time of the auction. Id.;

see also 47 C.F.R. § 1.2110(c)(2)(ii)(A)(2).

B

1

In 2014, the Wireless Bureau announced an upcoming

auction for companies to bid on more than 1,600 spectrum

licenses. See 2014 Auction Notice, 29 FCC Rcd. 8386. The

8

agency offered bidding credits covering 25% of the cost of

licenses to those winning bidders that had “attributed average

annual gross revenues” of $15 million or less over the prior

three years. Id. at 8412 ¶ 82. The Bureau then referred

interested bidders to Commission regulations, as well as the

Intermountain Microwave and Baker Creek orders, for

guidance on the agency’s de facto control standards for

bidding-credit applications. Id. at 8412–8413 ¶¶ 84–86 &

n.151.

Seventy entities qualified to compete in the auction, which

ran between late 2014 and early 2015. See Auction 97:

Advanced Wireless Services (AWS-3), FCC (2020),

https://www.fcc.gov/auction/97 (last accessed June 13, 2022).

The winning bids totaled more than $41 billion. Id.

Among the biggest winners were SNR and Northstar, two

“small companies that were formed just in time to file short-

form applications” to participate in the auction as very small

businesses. SNR Wireless, 868 F.3d at 1027. At the time they

filed their short-form applications, both companies “lacked

officers, directors,” and virtually any revenue. Id.; see also In

re Northstar Wireless, LLC, 30 FCC Rcd. 8887, 8910–8911

¶ 53 (2015) (“2015 Order”). Northstar and SNR did, though,

have one very large investor: DISH, which held an 85% stake

in each company. See 2015 Order, 30 FCC Rcd. at 8893–8894

¶¶ 14, 17; see also id. (noting that DISH holds its shares in the

Companies through wholly owned subsidiaries). DISH (i)

managed the Companies’ businesses, (ii) was their principal

investor and creditor, (iii) retained the power to veto important

corporate decisions, and (iv) coordinated its own bidding

strategy in the auction with the Companies. Id. at 8896–8897

¶¶ 21, 23; SNR Wireless, 868 F.3d at 1027. Northstar and SNR

9

both described DISH as holding “non-controlling interests” in

the Companies.2

Together, the newly formed and effectively revenue-less

Northstar and SNR won 43.5% of all the licenses in the auction,

and their winning bids collectively added up to $13.3 billion.

2015 Order, 30 FCC Rcd. at 8888 ¶ 3. Collectively, the

licenses would together give the Companies spectrum rights

“cover[ing] the entire United States.” Northstar Wireless,

LLC, 35 FCC Rcd. 13317, 13345 ¶ 84 n.191 (2020) (“2020

Order”). DISH financed approximately 98% of the

Companies’ winning bids. 2015 Order, 30 FCC Rcd. at 8924

¶ 84.

2

Shortly after the auction, Northstar and SNR each filed

long-form applications seeking to obtain very-small-business

bidding credits worth approximately $3.3 billion. SNR

Wireless, 868 F.3d at 1027–1028; 2015 Order, 30 FCC Rcd. at

8891 ¶ 10 nn.15–16. Over the next three months, SNR and

Northstar repeatedly amended their filings in response to

requests from Commission staff for more information. 2015

Order, 30 FCC Rcd. at 8891 ¶ 10 nn.15–16, 8949 ¶ 151 n.431.

Several parties petitioned the Wireless Bureau to deny the

Companies bidding credits. See 2015 Order, 30 FCC Rcd. at

8889 ¶ 4 & n.7, 8900 ¶ 30. In July 2015, officials from the

Wireless Bureau, the Office of General Counsel, and the

offices of all five Commissioners met with SNR, Northstar, and

2

SNR Wireless LicenseCo, LCC, FCC Form 175 Exhibit A,

Auction File No. 0006458318 (Sept. 12, 2014), at 6; accord

Northstar Wireless, LLC, FCC Form 601 Exhibit A, ULS File No.

0006670613 (Feb. 13, 2015), at 13 (referring to DISH’s

“noncontrolling interest”).

10

other interested parties to lay out the Commission’s concerns

with the applications.3

In August 2015, the Commission issued an order finding

that DISH de facto controlled Northstar and SNR. See 2015

Order, 30 FCC Rcd. at 8889 ¶ 4. And because DISH had more

than $13 billion in average annual revenue in the three years

prior to the auction, the agency denied the Companies’ request

for very-small-business bidding credits. Id.

The Commission rested its decision on several findings

relevant here. First, the agency concluded that DISH’s investor

protections swept more broadly than the “typical” protections

outlined in Baker Creek. 2015 Order, 30 FCC Rcd. at 8913

¶¶ 60–61. Particularly concerning to the agency was the fact

that DISH held several levers to tightly constrain the

Companies’ spending. Id. at 8916 ¶ 64, 8918 ¶ 67. Because

the Companies would need to expend large sums to roll out the

nationwide wireless network needed to support the acquired

licenses, those spending controls placed DISH firmly in the

driver’s seat. Id. at 8918 ¶ 67.

Second, the agency found that DISH controlled the

Companies in all six ways identified in Intermountain

Microwave. See 2015 Order, 30 FCC Rcd. at 8918–8928

¶¶ 69–99. Not only did DISH possess strong contractual rights

to control Northstar and SNR’s decisions, but it had also agreed

3

See Letter from Jean L. Kiddoo, Deputy Bureau Chief,

Wireless Telecomm. Bureau, to Marlene H. Dortch, Sec’y, FCC

(July 22, 2015), https://wireless2.fcc.gov/UlsEntry/attachments/

attachmentViewRD.jsp;ATTACHMENTS=BhrpvT1PbTmyhR53D

RfGLDpJs0hZ21zkr6xC4kFmZns1cC0KPMwS!1071318750!5601

30442?applType=search&fileKey=1174580406&attachmentKey=1

9721827&attachmentInd=applAttach (“2015 Kiddoo Letter”) (last

accessed June 13, 2022).

11

in its Management Services Agreements with the Companies

to “build out, manage, and operate [the Companies’ wireless]

network[s.]” Id. at 8919 ¶ 71; see also id. at 8935–8936 ¶ 117.

Additionally, the Companies were barred from paying any of

their employees more than $200,000 a year without DISH’s

permission, and DISH could hire and fire a wide range of

workers in its capacity as manager. Id. at 8915 ¶ 61, 8922

¶¶ 80–81. DISH also could channel most of the Companies’

profits to itself and so ensure that SNR and Northstar depended

on it for future funding. Id. at 8924–8925 ¶¶ 85, 89. The

Commission was further concerned about DISH’s power to

dictate the Companies’ “use of their licenses” and the

“fundamental choice of whether to remain in operation.” Id. at

8927 ¶ 94. The Companies’ failure to compete with one

another at the auction—instead operating in tandem to make

bids that advanced DISH’s interests—underscored their

subordinate relationship to DISH. Id. at 8931–8934 ¶¶ 109–

114.

Third, the Commission found that SNR and Northstar’s

put options were designed to force the Companies to sell

themselves to DISH. 2015 Order, 30 FCC Rcd. at 8928–8931

¶¶ 100–105. The agency observed that DISH could prevent the

Companies’ managers from selling their interests to anyone

else for 10 years. Id. at 8928–8929 ¶ 101. With the Companies

hemmed in, DISH made them offers they could hardly refuse.

In particular, the agreements with DISH gave SNR and

Northstar a single 30-day window each to exercise their put

options, be bought out by DISH at a guaranteed rate of return,

and walk away debt free. Id. at 8929–8930 ¶ 103. If they

turned that deal down, the Companies would face billions of

dollars of debt due within two years with far too little revenue

to pay it. Id. at 8930 ¶ 104. That framework closely mirrored

a scenario the Commission had previously indicated could well

12

constitute a de facto transfer of control. Id. at 8930–8931 ¶ 105

(quoting Fifth MO&O, 10 FCC Rcd at 456 ¶ 96).

Having found the Companies ineligible for bidding

credits, the Commission applied its written policies to require

the Companies to pay the full price for their licenses or face

default penalties. 2015 Order, 30 FCC Rcd. at 8951 ¶ 156,

8949–8951 ¶¶ 152–155. The Commission did not give the

Companies an opportunity to fix the control issues the agency

had identified. See SNR Wireless, 868 F.3d at 1028.

Northstar and SNR agreed to buy some of the licenses they

had won and defaulted on others. See 2020 Order, 35 FCC

Rcd. at 13324 ¶ 23 & n.43. As to the defaulted licenses, the

Commission ordered the Companies to pay any shortfall

between their winning bids and the price the agency obtained

for those licenses in future auctions, as well as a penalty of 15%

of either the winning bid in the original auction or a subsequent

winning bid by a new purchaser, whichever is less. SNR

Wireless, 868 F.3d at 1029; see also 47 C.F.R.

§ 1.2104(g)(2)(ii); 2014 Auction Notice, 29 FCC Rcd. at 8451

¶ 240. While the final amount they owe in penalties has not yet

been determined, the Companies already have paid the

Commission hundreds of millions of dollars in interim fees.

See SNR Wireless, 868 F.3d at 1029.

3

Northstar and SNR sought review of the Commission’s

order in this court. See SNR Wireless, 868 F.3d at 1029. We

upheld the agency’s finding that DISH exercised de facto

control over both companies, explaining that the Commission’s

“pragmatic application of Intermountain Microwave”

comported with its precedent and supported denying the

Companies bidding credits. Id. at 1033–1034.

13

We also upheld the Commission’s determination that the

Companies’ put options, in combination with their debt

obligations, gave them no practical choice but to sell

themselves to DISH just five years after acquiring their

licenses. See SNR Wireless, 868 F.3d at 1034–1035. Because

DISH could prevent Northstar and SNR from borrowing

enough money to build a wireless network, or from selling their

businesses to a third party, neither company could hope to pay

off its multi-billion-dollar debt. Id. That left the Companies

with “only one path to avoiding certain financial failure:” sell

themselves to DISH in the contractually provided single time

frame before their immense loans came due. Id. The Fifth

Memorandum Opinion & Order had warned applicants that

such an arrangement could result in a finding of de facto

control. Id. at 1035.

This court also rejected the Companies’ argument that the

Commission arbitrarily departed from previous de facto control

decisions by its Wireless Bureau, because the Bureau’s

unexplained rulings did not bind the agency as a matter of law.

See SNR Wireless, 868 F.3d at 1035–1042.

But we agreed with SNR and Northstar that they lacked

fair notice that the agency would deny them a chance to cure

the control issues it had identified. See SNR Wireless, 868 F.3d

at 1043–1046. While Commission precedent had given the

Companies fair notice of the control standards it applied in

denying them bidding credits, we held that the agency failed to

warn them that they would be denied an “opportunity to cure”

any control problems before being subjected to the

Commission’s remedies. Id. at 1025. We then ordered the

Commission to provide “an opportunity for [the Companies] to

renegotiate their agreements with DISH[,]” but added that

“[n]othing in our decision requires the [Commission] to permit

a cure.” Id. at 1046.

14

4

Following this court’s decision, Northstar and SNR wrote

to Commission staff seeking to negotiate an agreement that

would allow them to receive the very-small-business bidding

credits. The agency did not respond. Instead, in January 2018,

the Wireless Bureau issued an order laying out its procedures

for the remand. See In re Northstar Wireless, LLC, 33 FCC

Rcd. 231 (2018). Under that plan, the Bureau gave the

Companies time to revise their agreements with DISH and re-

file a request for very-small-business bidding credits. Id. at

232–233 ¶¶ 5–6. Interested third parties could then comment

on the filings, and SNR and Northstar would have another

chance to revise their agreements in response. Id. at 233–234

¶¶ 7–8.

The Companies appealed the Bureau’s order to the

Commission. They argued, as relevant here, that this court’s

decision and agency precedent required the Commission on

remand to engage in “iterative, responsive negotiation[s]” with

SNR and Northstar to “cure the [Commission’s] de facto

control concerns.” Joint Appendix (“J.A.”) 377.

The Commission affirmed the Bureau’s order in relevant

part. See In re Northstar Wireless, LLC, 33 FCC Rcd. 7248

(2018) (“Remand Procedures Order”). The agency ruled that

our decision did not require it to work directly with the

Companies to formulate a cure. Instead, all the agency had to

do was give Northstar and SNR the opportunity to renegotiate

their agreements with DISH to come into compliance with

Commission standards. Id. at 7251–7252 ¶¶ 10–12. That, the

Commission said, was exactly what the Bureau’s procedure

allowed. Id. at 7254 ¶ 16.

15

In August 2018, the Companies timely sought our review

and, at the request of the parties, we held the case in abeyance

pending further action by the Commission.

Meanwhile, by June 2018, SNR and Northstar had revised

their agreements with DISH and submitted new applications

for very-small-business bidding credits. Three parties opposed

the Companies’ application, all of whom have since intervened

in this case. See 2020 Order, 35 FCC Rcd. at 13327–13328

¶ 34. The Companies responded and filed an expert report

arguing that “SNR and Northstar each have viable potential

business options regarding the use of their respective

[spectrum] licenses.” J.A. 1548 (Declaration of Carlyn R.

Taylor).

In November 2020, SNR and Northstar made their case for

bidding credits during virtual meetings with Commissioners

Carr, Rosenworcel, Starks, and members of their staff, a

member of Commissioner O’Rielly’s staff, and an attorney

advisor from the agency’s Office of General Counsel.4 At

those meetings, the Companies answered questions about the

nature of their new agreements, and they then supplemented

their responses in letters filed with the Commission.5

4

See Letter from Ari Q. Fitzgerald, Counsel to SNR Wireless

LicenseCo, LLC, and Mark F. Dever, Counsel to Northstar Wireless,

LLC, to Marlene H. Dortch, Sec’y, FCC (Nov. 4, 2020) (“November

4 Meeting Letter”), J.A. 1592; Letter from Ari Q. Fitzgerald, Counsel

to SNR Wireless LicenseCo, LLC, and Mark F. Dever, Counsel to

Northstar Wireless, LLC, to Marlene H. Dortch, Sec’y, FCC (Nov.

17, 2020), J.A. 1616 (“November 17 Meeting Letter”).

5

See November 4 Meeting Letter, at J.A. 1592–1599;

November 17 Meeting Letter, at J.A. 1616–1627.

16

Later that month, the Commission found that the attempted

cure had not taken: DISH remained in de facto control of SNR

and Northstar. See 2020 Order, 35 FCC Rcd. at 13318 ¶ 5.

In reaching that conclusion, the Commission

acknowledged that the Companies and DISH had changed their

agreements in several ways. See 2020 Order, 35 FCC Rcd. at

13326–13327 ¶ 32. For example, the amendments generally

diminished DISH’s ability to veto outright some of the

Companies’ major business decisions. Id. at 13339 ¶ 66. The

parties also eliminated the Management Services Agreements,

gave the Companies the authority to pay employees as they saw

fit, and expanded the number of decisions SNR and Northstar

could make without consulting DISH. Id. at 13326–13327

¶ 32, 13342 ¶ 79. Finally, the new agreements reduced SNR

and Northstar’s debt obligations and gave them a second

opening in which to sell themselves to DISH for a guaranteed

profit. Id. at 13326–13327 ¶ 32.

The Commission nevertheless held that DISH was still in

de facto control of both Companies for two independent

reasons.

First, applying Intermountain Microwave and Baker

Creek, the Commission found that DISH retained its power to

dominate SNR and Northstar by controlling their access to

capital and revenue. 2020 Order, 35 FCC Rcd. at 13318–

13319 ¶¶ 6–7. The fact that the Companies negotiated

substantially identical agreements on remand bolstered this

conclusion. Id. at 13319 ¶ 8.

Second, under the Fifth Memorandum Opinion & Order

the Commission found that Northstar and SNR’s put options,

considered alongside their financial obligations and DISH’s

investor protections, remained “virtually certain to entice” the

Companies to sell themselves to DISH. 2020 Order, 35 FCC

17

Rcd. at 13319–13320 ¶ 11 (quoting SNR Wireless, 868 F.3d at

1035).

Northstar and SNR filed timely notices of appeal and

petitions for review.

While the petitions and notices of appeal were pending, the

parties advised the court that non-DISH investors in SNR and

Northstar began selling their shares. In late 2020, DISH

acquired all but three percent of Northstar’s outstanding

common shares from Northstar’s managing shareholders.6 The

following year, SNR shareholders exercised their right to sell

the company to DISH.7 And shortly after oral argument, DISH

agreed to extend Northstar’s right to sell itself—which was set

to expire on January 25, 2022—to July 24, 2022.8

6

See AT&T et al. Br. 10–11; DISH Network Corporation Form

10-Q, SEC (Nov. 4, 2021),

https://www.sec.gov/ix?doc=/Archives/edgar/data/0001001082/000

155837021014419/dish-20210930x10q.htm, at 10 (last accessed

June 13, 2022).

7

See DISH Network Corporation Form 8-K, SEC (Nov. 19,

2021), https://www.sec.gov/ix?doc=/Archives/edgar/data/0001001

082/000100108221000023/dish-20211115x8k.htm, at 2 (last

accessed June 13, 2022); Letter from Maureen K. Flood, Counsel,

FCC, to Mark Langer, Clerk, U.S. Court of Appeals for the District

of Columbia Circuit (March 22, 2022); Oral Arg. Tr. 6:12–17.

8

See Letter from Maureen K. Flood, Counsel, FCC, to Mark

Langer, Clerk, U.S. Court of Appeals for the District of Columbia

Circuit (March 1, 2022). Compare also Third Amended and

Restated Limited Liability Company Agreement of Northstar

Spectrum, LLC by and Between Northstar Manager, LLC and

American AWS-3 Wireless II L.L.C. (June 7, 2018), § 8(a), J.A. 679,

18

II

Northstar and SNR filed timely notices of appeal under 47

U.S.C § 402(b) and petitions for review under 47 U.S.C.

§ 402(a). “Because we plainly have jurisdiction by the one

procedural route or the other, we need not decide which is the

more appropriate vehicle for our review.” Verizon v. FCC, 740

F.3d 623, 634 (D.C. Cir. 2014) (internal quotation marks and

citation omitted) (finding jurisdiction without deciding

whether it vested through a petition for review under 47 U.S.C.

§ 402(a) or a notice of appeal under 47 U.S.C. § 402(b)).

We must affirm the Commission’s decision unless it was

“arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law[.]” 5 U.S.C. § 706(2)(A). Our

approach is “deferential,” and our task is “simply [to] ensure[]

that the agency has acted within a zone of reasonableness”—

that is, to determine whether the agency “reasonably

considered the relevant issues and reasonably explained [its]

decision.” FCC v. Prometheus Radio Project, 141 S. Ct. 1150,

1158 (2021).

with First Amendment to the Third Amended and Restated Limited

Liability Company Agreement of Northstar Spectrum, LLC, FCC

(Jan. 24, 2022),

https://wireless2.fcc.gov/UlsEntry/attachments/attachmentViewRD.

jsp?applType=search&fileKey=1843738938&attachmentKey=2141

8597&attachmentInd=applAttach (last accessed June 13, 2022).

19

III

A

1

Northstar and SNR argue that the Commission violated

our remand order by declining to negotiate iteratively with the

companies over how to secure their de facto independence

from DISH. We disagree. The agency was under no such

obligation.

As we explained in SNR Wireless, because the

Commission’s guidelines for de facto control are fact intensive

and weigh multiple criteria, the Commission has sometimes

provided applicants “a chance to cure” control problems

identified by the agency. SNR Wireless, 868 F.3d at 1045

(citing In re Application of ClearComm, L.P., 16 FCC Rcd.

18627 (2001)). It is that same “chance to cure” that we ordered

the Commission to provide the Companies on remand.

Nothing more and nothing less.

The Commission followed that directive. The

Commission gave the Companies an “opportunity * * * to

renegotiate their agreements with DISH” and then apply again

for the very-small-business bidding credits they sought. SNR

Wireless, 868 F.3d at 1046; see Remand Procedures Order, 33

FCC Rcd. at 7253 ¶ 13. Northstar and SNR had the chance to

revise their contracts with DISH in light of the detailed

guidance they had received from not only prior agency

precedent, but also a unanimous Commission decision in their

own case, and this court’s lengthy analysis of the concerns with

their prior agreements. See Remand Procedures Order, 33

FCC Rcd. at 7255 ¶ 20; see also 2015 Order, 30 FCC Rcd. at

8887–8953; SNR Wireless, 868 F.3d at 1029–1042. Together,

20

that afforded the Companies adequate guidance for eliminating

DISH’s de facto control.

Contrary to the Companies’ argument, neither the

Commission’s decision in In re Application of ClearComm,

L.P., 16 FCC Rcd. 18627 (2001), nor our discussion of it, see

SNR Wireless, 868 F.3d at 1045–1046, required more of the

Commission. In ClearComm, a small business transferred its

licenses to NewComm, a corporation created with funding

from a large telecommunications company. 16 FCC Rcd. at

18627–18630 ¶¶ 1–5. Commission staff asked the parties

questions about their agreements and, after receiving

responses, “raised further questions regarding whether certain”

elements of the contracts gave the investor control over

NewComm. Id. at 18631 ¶ 7. The parties submitted proposed

revised agreements “to explicitly address the control

concerns[,]” and followed up with executed contracts. Id.

Likewise, the Commission here explained its control

concerns to the Companies in detail and gave them a chance to

establish their independence consistent with that guidance and

this court’s analysis. Compare Remand Procedures Order, 33

FCC Rcd. at 7255 ¶ 20, with ClearComm, 16 FCC Rcd. at

18631 ¶ 7. The main difference between the two cases is that

the agency here also gave the Companies a lengthy opinion

issued by the Commission itself to guide its renegotiations,

rather than just interactions with agency staff, and Northstar

and SNR had the benefit of additional guidance from a federal

court of appeals. On top of that, the Companies had engaged

in a back-and-forth with agency staff before the Commission

accepted their initial long-form applications, see Remand

Procedures Order, 33 FCC Rcd. at 7256 ¶ 22, and on remand

met with the majority of Commissioners to defend their

21

amended agreements.9 Rather than a “second shot in the

dark[,]” Companies Opening Br. 26, the Companies enjoyed a

well-lit path to a cure.

The Companies contend that we ordered both that they be

permitted to renegotiate with DISH and that Commission staff

engage directly in back-and-forth discussions with them. That

is not what we said. Our prior ruling gave the Companies “an

opportunity to negotiate a cure[,]” which was to consist of “an

opportunity to renegotiate their agreements with DISH[.]”

SNR Wireless, 868 F.3d at 1046. That was “the appropriate

remedy” ordered. Id. (emphasis added). Counsel for the

Companies even acknowledged at oral argument that “precise

language [requiring] negotiating with staff, of course, isn’t in

the opinion[.]” Oral Arg. Tr. 29:4–6. In other words, our

remand order required only that the Companies be allowed the

opportunity for a cure, not that Commission staff prescribe the

cure.

2

It is black-letter law that agencies must treat like parties

alike. The Companies argue that the Commission failed to do

so by denying them the kind of repeated staff negotiations the

agency had provided to address control problems in the past.

The record does not bear out that claim.

First, the Companies are comparing apples to oranges.

That is because, “prior to any cure opportunity, [SNR and

Northstar] had extensive information about the Commission’s

views on the ways in which their initial Applications were

defective” right from the Commission’s mouth, along with this

court’s “point-by-point elaboration of the Commission’s

9

See November 4 Meeting Letter, supra, and November 17

Meeting Letter, supra.

22

analysis[.]” Remand Procedures Order, 33 FCC Rcd. at 7255

¶ 20; see also id. at 7255–7256 ¶ 21. The Companies identify

no other entity that has been given that same amount of

individualized and on-point guidance about the basis for the

Commission’s de facto control finding.

For the same reason, the Companies get no help from the

Commission’s observation that agency “staff has usually

undertaken discussions” with bidding credit applicants “in

order to obtain revisions to agreements” and ensure their

independence. In re Implementation of the Commercial

Spectrum Enhancement Act and Modernization of the

Commission’s Competitive Bidding Rules and Procedures, 21

FCC Rcd. 4753, 4769 ¶ 43 (2006). The Companies did better

by getting guidance directly from the Commissioners

themselves.

Anyhow, the Companies have had extensive interactions

with agency staff. In 2015, Commission staff reached out to

the Companies to obtain additional information and allowed

them to update their applications repeatedly in response, much

as SNR and Northstar say the agency has done with prior

applicants. Compare 2015 Order, 30 FCC Rcd. at 8949 ¶ 151

n.431, with Companies Opening Br. 31–32 & nn.11–13 (citing

instances in which Commission staff asked applicants

questions about their bidding-credit eligibility). Top-level

Commission officials, including representatives from the

offices of all five Commissioners, also met with SNR and

Northstar to explain the agency’s view of their initial

agreements with DISH.10 Not only did the Companies

interchange their submissions with agency staff, but on remand

they were given the opportunity to field live questions about

their amended agreements from the majority of sitting

10

See 2015 Kiddoo Letter, supra.

23

Commissioners.11 The Companies were hardly shortchanged

in Commission attention and advice.

At bottom, the Companies’ argument presupposes an

obligation on the part of the Commission to map out the precise

details of an arrangement with DISH that would pass muster.

That is not how the process works. The Companies bid at the

auction only after first agreeing to pay the full price for

acquired spectrum licenses even if they were ultimately denied

very-small-business bidding credits. See 47 C.F.R.

§§ 1.2104(g)(2), 1.2109(c); 2014 Auction Notice, 29 FCC Rcd.

at 8417 ¶ 101 n.180; Oral Arg. Tr. 32:19–22. They then bore

the burden of proving their status as genuinely independent

very small businesses to obtain bidding credits. Having failed

in that task, SNR Wireless, 868 F.3d at 1025, they were entitled

on remand only to a second opportunity to themselves cure the

problems identified. Nothing in the regulatory scheme, past

agency practice with other parties, or this court’s prior opinion

obligated the Commission to work hand in glove with the

Companies to draft their blueprint for independence.

B

On the merits, the Commission reasonably found that

DISH continues to exercise de facto control over the

Companies. The agency grounded its decision on three settled

agency rulings. First, under Baker Creek, DISH’s veto powers,

though trimmed from the prior agreements, continued to

materially dominate the Companies’ business decisions. See

2020 Order, 35 FCC Rcd. at 13340 ¶¶ 70–71. Second, under

the Commission’s Fifth Memorandum Opinion & Order, SNR

and Northstar were still financially compelled to sell

11

Compare November 4 Meeting Letter, supra, and November

17 Meeting Letter, supra, with Companies Opening Br. 31–32 &

nn.11–13.

24

themselves to DISH. Id. at 13357–13362 ¶¶ 124–146. Third,

the Intermountain Microwave factors again pointed to DISH’s

de facto control. Id. at 13341–13357 ¶¶ 72–123. Those

conclusions by the Commission were reasoned, supported by

substantial evidence, and consistent with agency precedent.

1

The Commission’s conclusion that DISH’s revised

investor protections “reinforce[d]” its control over the

Companies was sound. 2020 Order, 35 FCC Rcd. at 13340

¶ 69. The Commission acknowledged that SNR and

Northstar’s new agreements had whittled down the number of

DISH’s veto powers over the Companies’ business

decisionmaking. Id. at 13338–13339 ¶ 65. But focusing on

quality rather than quantity, the Commission concluded that

DISH retained—and, in one critical respect, expanded—its

power to control vital business decisions going to the

Companies’ raison d’etre: developing and using the wireless

spectrum they had purchased. Id. at 13340–13341 ¶¶ 69–71.

Under Baker Creek, the agency may deem a small

company independent even if an investor retains “a decision-

making role * * * in major corporate decisions that

fundamentally affect[s] [the investor’s] interests.” 13 FCC

Rcd. at 18714–18715 ¶ 9. Baker Creek identified six business

decisions in which investors in small businesses typically

“may” participate without being found in de facto control:

(1) [the] issuance or reclassification of stock; (2) setting

compensation for senior management; (3) expenditures

that significantly affect market capitalization; (4) incurring

significant corporate debt or otherwise encumbering

corporate assets; (5) sale of major corporate assets; [and]

(6) fundamental changes in corporate structure.

25

Baker Creek, 13 FCC Rcd. at 18715 ¶ 9; see also 2015 Order,

30 FCC Rcd. at 8913 ¶ 60.

The Baker Creek decision cautioned, though, that

“[i]nvestment protection provisions may confer actual control

upon [an investor] where they give it the power to dominate the

management of corporate affairs.” 13 FCC Rcd. at 18714 ¶ 9.

The Commission acknowledged that many of DISH’s veto

powers under the amended agreements mirror the six identified

in Baker Creek. See 2020 Order, 35 FCC Rcd. at 13339 ¶ 66.

And the agency noted that the contracts purported to limit

DISH’s authority to veto the Companies’ decisions only as

“consistent with * * * Baker Creek[.]” Id. at 13339 ¶ 68

(citation omitted).

But the Commission found that DISH’s protections, when

paired with other restrictions, went too far, in two respects. See

2020 Order, 35 FCC Rcd. at 13340–13341 ¶¶ 69–71.

First, under the new agreements, DISH had the authority

to block the Companies from “incurring any significant

indebtedness[.]” 2020 Order, 35 FCC Rcd. at 13340 ¶ 70

(internal quotation marks and citation omitted). That power

“could operate to restrict the [Companies] from obtaining

additional funding that is necessary for their business plans.”

Id. Constructing a nationwide wireless network is expensive,

so the Commission reasonably found that these provisions

empowered DISH to roadblock any of the Companies’ buildout

plans for the spectrum acquired at auction, unless they met with

DISH’s approval. See id. That left the Companies dependent

on DISH if they wanted to use a wireless network to survive as

independent businesses.

Second, the Commission found that the amendments gave

DISH a whole new power—the ability to prevent the

26

Companies from leasing their licenses. See 2020 Order, 35

FCC Rcd. at 13340–13341 ¶ 71. Under the old agreements, the

Companies were permitted to lease their “property or assets

* * * in the ordinary course of business” without DISH’s

consent, as long as they did not lease “all or substantially all”

of their “business or property[.]” J.A. 183, 180 (Northstar 2014

Credit Agreement §§ 6.18, 6.11(c)).12

Under the new amendments, by contrast, the Companies

need DISH’s written permission to lease any “major asset[,]”

including spectrum licenses, and DISH is free to deny a request

“for any reason or no reason[.]” J.A. 644, 670 (Northstar 2018

LLC Agreement §§ 6.3, 1.1); accord J.A. 1158, 1109 (SNR

parallels). That, the Commission said, is “a critical new index

of DISH’s de facto control over the [Companies’] business

opportunities.” 2020 Order, 35 FCC Rcd. at 13340 ¶ 71. Not

only is this investor protection beyond the scope of the

provisions listed in Baker Creek, but it also allows DISH to

foreclose a critical route for the Companies to raise money:

spectrum leasing. Notably, spectrum leasing is one of the

approaches that the Companies’ own economic expert

highlighted as a pathway for SNR and Northstar to achieve

their independence. See id. Yet that path is closed without

DISH’s approval.

12

Accord First Amended and Restated Credit Agreement By

and Among American AWS-3 Wireless III L.L.C. (as Lender) and

SNR Wireless LicenseCo, LLC (as Borrower) and SNR Wireless

HoldCo, LLC (as Guarantor), §§ 6.18, 6.11(c), FCC (Oct. 13, 2014),

https://wireless2.fcc.gov/UlsEntry/attachments/attachmentViewRD.

jsp?applType=search&fileKey=919232078&attachmentKey=19626

515&attachmentInd=applAttach, at 33, 30 (last accessed June 13,

2022) (“SNR 2014 Credit Agreement”).

27

The Companies have three main responses, none of which

succeeds.

First, the Companies contend that the amended investor

protections comport with Baker Creek. The Commission,

though, adequately explained why the agreements actually

cemented DISH’s de facto control over SNR and Northstar. In

its initial 2015 decision finding de facto control, the

Commission was concerned about limitations on the

Companies’ ability to borrow from third parties. See 2015

Order, 30 FCC Rcd. at 8924 ¶ 85. While some restrictions on

raising debt “have been considered acceptable investor

protections in some circumstances,” the Commission

reasonably found that general rule inapplicable here because

the Companies’ original agreements allowed them to borrow

only “trivial” amounts “in comparison to the value of the[ir]

spectrum[.]” Id.; see also SNR Wireless, 868 F.3d at 1033.

True, under the agreements at issue here, the parties

removed the hard limit on the Companies’ unsecured debt. See

2020 Order, 35 FCC Rcd. at 13340 ¶ 70, 13347–13348 ¶ 91.

But the Commission sensibly concluded that DISH’s new veto

over significant debt—the lifeblood of wireless network

development—“blunt[ed] the impact” of that change. Id. at

13340 ¶ 70.

In addition, the new leasing provisions went “beyond those

identified as typical in Baker Creek[.]” 2020 Order, 35 FCC

Rcd. at 13340 ¶ 71. To be sure, Baker Creek held that it is

generally permissible for non-controlling investors to be

involved in a small business’s decisions to sell “major

corporate assets[.]” Baker Creek, 13 FCC Rcd. at 18715 ¶ 9.

But the Commission reasonably found that DISH imposed even

broader restrictions on the Companies’ power to lease or assign

licenses, which went too far. When combined with other

28

contractual conditions, DISH’s new control over spectrum

leasing gave it “the ability to frustrate or prevent the

[Companies] from building out their networks[] [or] leasing

their spectrum in any significant amount[.]” 2020 Order, 35

FCC Rcd. at 13340 ¶ 71.

The Companies’ argument that the amended agreements

did not expand DISH’s power to nix their leasing decisions

fares no better. The prior agreements had allowed the

Companies independently to lease “property or assets * * * in

the ordinary course of business,” though SNR and Northstar

could not lease “all or substantially all” of their “business or

property” without DISH’s approval. J.A. 183, 180 (Northstar

2014 Credit Agreement §§ 6.18, 6.11(c)).13 Under the

amendments, the parties have materially narrowed the

“ordinary course of business” exception by giving DISH a

unilateral veto over the lease or transfer of any “major asset”—

including spectrum licenses. J.A. 644, 670 (Northstar 2018

LLC Agreement §§ 1.1, 6.3); accord J.A. 1109, 1158 (SNR

parallels).

The Companies contend that the 2018 agreements did not

substantively change their ability to lease licenses without

DISH’s consent. They point to the fact that the new agreements

retained the “ordinary course of business” exception and just

added on the new restriction on leasing “major asset[s.]” See

Companies Reply Br. 16–17; J.A. 644, 670 (Northstar 2018

LLC Agreement §§ 1.1, 6.3); accord J.A. 1109, 1158 (SNR

parallels). This, the Companies argue, shows that leasing a

major asset such as a spectrum license was unlikely ever to be

within the ordinary course of business.

13

Accord SNR 2014 Credit Agreement §§ 6.18, 6.11(c), at 33,

30.

29

But DISH’s right hand took away what the left hand gave:

Its sweeping new veto power over the lease of any major asset

extinguished the force of the previously viable “ordinary

course of business” exception. So the Commission reasonably

concluded that the leasing restriction was a new and material

form of control. See 2020 Order, 35 FCC Rcd. at 13340–13341

¶ 71.14

Finally, the Companies are not saved by the clauses in their

agreements limiting DISH’s investor protections to those

“consistent with the [agency’s] decision in Baker Creek[.]”

J.A. 641 (Northstar 2018 LLC Agreement § 1.1); accord J.A.

1107 (SNR parallel). What matters in the Commission’s de

facto control analysis is “the substance of the terms of DISH’s

control”—where the rubber meets the road in DISH’s actual

reserved authority—not “formal recitations of compliance”

with the generic language of Commission orders. SNR

14

The Companies’ own expert declarant undermines their

argument that leasing licenses would “almost certainly” have been

outside of the ordinary course of business. Companies Reply Br. 17.

She averred that leasing spectrum was a leading business option for

SNR and Northstar, see J.A. 1550 (Taylor Decl.), as did the

Companies’ agreements with DISH, see J.A. 632 (Northstar 2018

LLC Agreement § 1.1, defining “Business”); J.A. 1093 (SNR

parallel). As the Companies’ own statements indicate, such basic

business opportunities are part of the “ordinary course of business”

of spectrum license holders. Or so the Commission could reasonably

conclude. See U.C.C. § 1-201(b)(9) (American Law Inst. & Uniform

Law Comm’n 2021) (Uniform Commercial Code stating that “[a]

person buys goods in the ordinary course” when a purchase

“comports with the usual or customary practices in the kind of

business in which the seller is engaged or with the seller’s own usual

or customary practices”); BLACK’S LAW DICTIONARY 404 (9th ed.

2009) (defining “course of business” as the “normal routine in

managing a trade or business”); 3 COLLIER ON BANKRUPTCY

¶ 364.02 (16th ed. 2022).

30

Wireless, 868 F.3d at 1033; see also 2020 Order, 35 FCC Rcd.

at 13339 ¶ 68. Tellingly, the Companies’ counsel conceded at

argument that, even with this clause in place, they expected the

Commission, in its bidding credits decision, to do the enforcing

for them by bringing the contracts into compliance with Baker

Creek. See Oral Arg. Tr. 34–38. Because the Commission was

not required “to permit a cure[,]” let alone to craft it for them,

the Companies could not reasonably expect the agency to

devote its energies to securing their independence through an

ongoing process of superintending DISH through piecemeal

enforcement actions. SNR Wireless, 868 F.3d at 1046.

2

The Commission also reasonably grounded its finding of

de facto control in its Fifth Memorandum Opinion & Order. In

that Order, the Commission explained that when a company is

“financially * * * forced” to sell itself to an investor, the

investor has de facto control. See SNR Wireless, 868 F.3d at

1034–1035, 1040 (formatting modified) (quoting Fifth

MO&O, 10 FCC Rcd. at 456 ¶ 96). The record supports the

Commission’s conclusion that the revised agreements, while

moderated in some respects, nevertheless continued to apply

unrelenting financial pressure on SNR and Northstar to sell

themselves to DISH.

Under the new agreements, the Companies each had two

90-day windows—one starting in 2020 and the second in

2021—during which they could require DISH to buy them for

handsome profits. See 2020 Order, 35 FCC Rcd. at 13358–

13359 ¶¶ 128–130. After that, the Companies only had a right

to request that DISH buy them at their fair market value. And

DISH could refuse.

Those two purchase windows were keyed to the point in

time when Commission rules would require the Companies to

31

make use of their spectrum licenses or face weighty and

escalating financial consequences. As the Commission

explained, its regulations require that licensees in relevant

bands provide “reliable signal coverage” to at least 40% of the

population in their regions within six years of receiving their

licenses. 47 C.F.R. § 27.14(s)(1); see also 2020 Order, 35 FCC

Rcd. at 13347 ¶ 90 & n.207. That means that the Companies

had to offer extensive wireless coverage in many of their

license areas by 2021, right at the start of their second put

window. If they failed to meet that deadline, the Companies’

timeline for providing service to 75% of the population in their

coverage area would accelerate by two years, to 2025. See

2020 Order, 35 FCC Rcd. at 13347 ¶ 90 & n.207; see also 47

C.F.R. § 27.14(s)(2)–(3). If the Companies missed that target,

their licenses would be revoked. See 47 C.F.R. § 27.14(s)(2)–

(4); cf. 2015 Order, 30 FCC Rcd. at 8930 ¶ 104 n.313

(Commission citing this rule in its 2015 put-option analysis).

Each of the Companies’ $500 million in debt plus accrued

interest was also to come due in 2025. See 2020 Order, 35 FCC

Rcd. at 13349–13350 ¶ 99. And throughout, the Companies

have owed DISH at least 8% annual dividends on billions of

dollars in preferred equity, which they either had to pay in cash

or add to their already sizable final tab due immediately upon

a merger with any party other than DISH. Id. at 13350 ¶¶ 99–

100, 13354–13355 ¶ 114.

Through the amended agreements, DISH presented both

Companies a financial lifeline in the face of acute financial

pressure: A “generous” price offered in both windows of time

for exercising their puts that guaranteed investors “healthy,

above-market returns even if they have not constructed

networks or repaid their loans (i.e., with virtually zero risk).”

2020 Order, 35 FCC Rcd. at 13358–13359 ¶ 130.

32

And DISH threw that lifeline out right when a flood of

operational obligations would arise, with accumulating debt

hard on their heels. If they declined the rescue, the Companies

faced a formidable stick in the form of massive financial and

regulatory obligations that DISH could prevent them from

meeting by blocking both Companies’ ability to build a

wireless network or lease spectrum. In other words, DISH’s

powers set the Companies up to be financially stranded with no

viable route to pay off their debts other than selling out to

DISH. See 2020 Order, 35 FCC Rcd. at 13359 ¶¶ 131, 133–

134.

Nor could the Companies realistically sell themselves to

anyone else. The agreements empowered DISH to veto sales

to the most likely buyers—its own competitors. See 2020

Order, 35 FCC Rcd. at 13359–13360 ¶ 135. Further shrinking

the prospects of a non-DISH merger, the agreements also

provided that if either SNR or Northstar sold itself to anyone

but DISH, it would immediately owe DISH the full multi-

billion-dollar value of its outstanding debt and preferred equity.

See id.; see also id. at 13354–13355 ¶ 114.

As the Commission adequately explained, the Companies’

slightly longer windows to obtain a DISH buyout under the

revised agreements did not change the fundamental economics

of the pressure to sell, and to sell to DISH alone. See 2020

Order, 35 FCC Rcd. at 13360 ¶ 136. The agreements left the

Companies with the Hobson’s choice of making a riskless sale

with above-market returns, or else attempting a risky, debt-

laden venture over which DISH had essential veto powers. See

id. at 13358–13360 ¶¶ 130–136.

The amended contracts’ new option for DISH to buy the

Companies starting in 2022 at fair market value did nothing to

lessen the pressure. By that point, the Commission reasoned,

33

DISH would have no obligation to buy the Companies—it

could simply walk away. So that provision hardly reduced the

financial pressure on the Companies to take one of the earlier-

expiring, generous, and risk-free buyouts. See 2020 Order, 35

FCC Rcd. at 13360 ¶ 137. The Commission sensibly found

that the contractual provisions once more gave SNR and

Northstar “every incentive simply to sell their interests * * * to

DISH in exchange for complete forgiveness of th[eir] loans

plus a guaranteed cash payment.” SNR Wireless, 868 F.3d at

1040.

The Companies respond that the Commission gave scant

heed to their ability to become successful independent

businesses, and so to avoid the temptation to sell themselves.

Not so. The Commission fully explained its contrary

judgment. 2020 Order, 35 FCC Rcd. at 13360–13362 ¶¶ 138–

146.

The Companies’ argument relies heavily on the analysis of

their expert, Carlyn Taylor. She posited that SNR and

Northstar had three “viable potential business options” to

pursue other than selling themselves to DISH. J.A. 1548.

Those were (i) “deploying a wireless network”; (ii) “offering

access to the[ir] spectrum * * * via a spectrum sharing model,

including spectrum leasing”; and (iii) “offering wireless

network capacity or roaming on a wholesale basis[.]” J.A.

1550. Taylor concluded that if the value of the Companies’

spectrum licenses grew faster than their financial obligations to

DISH, they could reasonably decide not to exercise their put

options. J.A. 1549–1550. Taylor added that about half of the

Companies’ licenses were in bands that had grown in value and

could fruitfully be paired with spectrum controlled by DISH.

J.A. 1552.

34

The Commission was unpersuaded, and for good reason.

It explained that Taylor had not considered the Companies’

failure to monetize their assets even as their financial

obligations had piled up. See 2020 Order, 35 FCC Rcd. at

13361 ¶ 141. If the Companies believed they could rationally

pay their dues to DISH, they would presumably be looking for

money to do so. But there was no evidence they had taken any

steps to generate income. Id. Instead, both firms had left their

valuable spectrum “lying fallow[.]” Id. at 13361–13362 ¶ 144

n.294 (citation omitted).

The Commission also pointed out that Taylor underplayed

DISH’s power to hobble the Companies’ business prospects,

and, in that way, coerce them into selling. 2020 Order, 35 FCC

Rcd. at 13361–13362 ¶¶ 142, 146. If SNR or Northstar tried to

construct a network or lease their spectrum to other carriers—

as all three of Taylor’s options assumed they could do—DISH

could cut them off, either by starving them of buildout funds or

vetoing their leasing decisions. Id. at 13361–13362 ¶¶ 143–

145; see also id. at 13353 ¶ 109.

Lastly, the Commission pointed out that Taylor’s finding

that the Companies’ licenses paired particularly well with

DISH’s spectrum hardly suggested that they had the capacity

to go it alone. 2020 Order, 35 FCC Rcd. at 13361–13362

¶ 144.

SNR and Northstar object that the Commission ignored a

path to profitability that did not involve leasing their spectrum.

But the Commission sufficiently examined the Companies’

business options. One possibility the Companies raise in their

briefing—making money by pairing their licenses with

broadcasters’ spectrum—was mentioned by their expert only

in a cursory footnote. And the agency adequately explained

that if either SNR or Northstar tried this approach, DISH could

35

veto it too. See 2020 Order, 35 FCC Rcd. at 13362 ¶ 144

n.297.

Neither did the Commission need to say more about the

Companies’ claim that they could pursue a “spectrum sharing

model” without leasing. Companies Opening Br. 47 (quoting

J.A. 1550). The only mechanism Taylor mentioned for sharing

spectrum was leasing, which DISH could quash. And the

Companies’ attempt to supplement Taylor’s report in their

briefing is too little too late as our review is confined to the

record before the agency at the time of its decision. See

EarthReports, Inc. v. FERC, 828 F.3d 949, 959 (D.C. Cir.

2016).

In any event, the only question before us is whether the

Commission’s decision fell within the realm of reason, not

whether other judgments could have been made. See

EarthLink, Inc. v. FCC, 462 F.3d 1, 12 (D.C. Cir. 2006). The

Commission’s conclusions meet that mark.15

3

The Commission’s conclusion that, taken together, the six

Intermountain Microwave factors indicated de facto control

was likewise proper. Those factors are:

(1) who controls the daily operations of the small business;

(2) who employs, supervises, and dismisses the small

15

The Companies argue that the Commission arbitrarily

foreclosed consideration of Taylor’s testimony. While the

Commission initially found the arguments in Taylor’s put-option

analysis precluded by SNR Wireless, it went on to explain over eight

paragraphs why it found Taylor’s report “both speculative and

conclusory—and ultimately unpersuasive.” 2020 Order, 35 FCC

Rcd. at 13360–13362 ¶¶ 139–146. That is sufficient consideration.

36

business’s employees; (3) whether the small business has

“unfettered” use of all its facilities and equipment; (4) who

covers the small business’s expenses, including its

operating costs; (5) who receives the small business’s

revenues and profits; and (6) who makes and carries out

the policy decisions of the small business.

SNR Wireless, 868 F.3d at 1031.

a

On the first factor, the Commission held that the

Companies had not “fully resolved” its concern that DISH

controlled their daily operations. 2020 Order, 35 FCC Rcd. at

13341 ¶ 75. The revised contracts did eliminate some of the

Commission’s earlier concerns by ending the Management

Services Agreements, scrapping the mandatory business plan

consultations with DISH, and “clarif[ying]” that the

management fee provisions did not limit employee

compensation. Id. at 13341 ¶ 74.

The problem is, as the Commission explained, that the

revised agreements perpetuated five-year business plans that

had been crafted under DISH’s supervision and which were

still in force at the time of the amendments. See 2020 Order,

35 FCC Rcd. at 13342 ¶ 75. Because the parties could only

modify the five-year plans if a “material change[] affecting”

the Companies occurred, the Commission concluded that SNR

and Northstar remained “locked in to the business plans

prepared during DISH’s de facto control.” Id. at 13341–13342

¶ 75.

The Companies counter that by the time the agency issued

its decision in 2020, those business plans had lapsed. That is

true. The Companies further argue that the prior business plans

did not predetermine future plans because the revised

37

agreements deleted a provision requiring that new plans “be as

consistent as practicable with the prior” document. J.A. 671–

672 (Northstar 2018 LLC Agreement § 6.5(a)); accord J.A.

1162 (SNR parallel). Also true. We agree with the Companies

that the agency was mistaken when it said that they were

“locked in” to business plans prepared under the old regime.

2020 Order, 35 FCC Rcd. at 13342 ¶ 75.

Still, it was reasonable for the Commission to find that

DISH continued to materially influence the Companies’ daily

operations in the period between the 2018 amendments and the

termination of the old business plans. And we cannot say that

it was arbitrary for the agency to find it significant that the

Companies had chosen not to unwind those old plans.

In any event, the Commission did not lean on this daily-

control prong when finding de facto control. It said instead that

this factor did not “support[] the [Companies’] position.” 2020

Order, 35 FCC Rcd. at 13342 ¶ 77; see also id. at 13338 ¶ 63

(recognizing that the Companies’ amendments “eliminate

some of the prior identified concerns regarding DISH’s control

over * * * aspects of the [Companies’] daily operations”). So

the agency’s “relatively thin” reasoning here does not render

its entire Intermountain Microwave analysis unreasonable, as

its consideration and balancing of the other factors shows. SNR

Wireless, 868 F.3d at 1032; see also 5 U.S.C. § 706 (in

Administrative Procedure Act review, the court shall take “due

account * * * of the rule of prejudicial error”).

b

On the second and third factors, the Commission agreed

with the Companies that the revised agreements had addressed

its prior concerns by ending the management agreements and

deleting provisions giving DISH authority over employment

38

decisions and technology choices. See 2020 Order, 35 FCC

Rcd. at 13342–13343 ¶¶ 77–78, 13357 ¶¶ 121–123.

c

The Commission found that, under the fourth

Intermountain Microwave factor, DISH continued to dominate

the Companies’ finances. See 2020 Order, 35 FCC Rcd. at

13343–13348 ¶¶ 80–92. Even though the amendments

eliminated some of the problems in the original agreements, the

Commission reasonably concluded that the Companies remain

fundamentally dependent on DISH for financing because DISH

controls whether the Companies can access sufficient funds to

build a national network and from whom they can seek that

funding. Id. at 13344 ¶¶ 82–83.

To start, DISH committed to lending the Companies

“reasonable” sums to build a telecommunications system, but

then capped its financing obligations at an amount that the

Commission found grossly unequal to the task. See 2020

Order, 35 FCC Rcd. at 13345–13346 ¶¶ 84, 86–89. To be sure,

for Northstar—but not for SNR—DISH also agreed to lend the

company enough money to meet its “Working Capital

requirements.” Id. at 13346 ¶ 88 (quoting Northstar 2018

Credit Agreement § 2.2(b)(i)). The Commission explained that

such support was not enough because working capital loans are

typically used for short-term needs, not to finance long-term

investments like a wireless network. See id. Those provisions

left the Companies unable to rely on DISH to fund the

construction of the national networks that provided a critical

path to paying off their debt and making profitable use of their

spectrum licenses. Id. at 13346 ¶¶ 88–89.

The Commission also sensibly found that DISH’s new

power to block the Companies from incurring “significant”

indebtedness financially tethered SNR and Northstar to DISH.

39

2020 Order, 35 FCC Rcd. at 13347–13348 ¶¶ 91–92 (citation

omitted).

The Commission also found that the funding framework

adopted by the Companies mirrored that in Baker Creek. See

2020 Order, 35 FCC Rcd. at 13348 ¶ 92. There, the agency

found that an investor exercised de facto control over a small

company’s finances because it was the source of almost all the

small business’s capital, and it could control both who funded

it and in what amounts. See Baker Creek, 13 FCC Rcd. at

18721–18723 ¶¶ 23–25. So too here: Under the revised

agreements, DISH can block the Companies from most outside

borrowing and need not lend to the Companies in adequate

amounts itself. See 2020 Order, 35 FCC Rcd. at 13348 ¶ 92.

d

Turning to the fifth Intermountain Microwave factor, the

Commission’s finding that DISH was likely to vacuum up the

Companies’ revenues and profits was well-supported in the

record. See 2020 Order, 35 FCC Rcd. at 13348–13351 ¶¶ 93–

103. In looking at the changes made by the amended contracts,

the Commission “conclude[d] that the parties [had] changed

the form but not the controlling nature of DISH’s financial

interests[.]” Id. at ¶ 98.

Critically, in 2020, the Companies still faced massive debt

obligations to DISH. 2020 Order, 35 FCC Rcd. at 13349–

13350 ¶¶ 97–100. And DISH held the ability to prevent the

Companies from “generat[ing] revenues to pay down their debt

and make their required dividend payments.” Id. at 13351

¶ 102. If the Companies could not make their payments, any

profits they generated would likely benefit only DISH, which

could force SNR and Northstar to sell themselves to it. Id. at

¶¶ 102–103 & n.237.

40

The Companies contend that the Commission ignored the

relative modesty of their debts compared to the value of their

licenses, and so exaggerated DISH’s ability to seize their

profits. But the Commission adequately considered the value

of those licenses, explaining that (i) DISH can prevent the

Companies from profiting from, or significantly borrowing

based on, their spectrum, making the $500 million loans

difficult or impossible to pay back, and (ii) if either firm wishes

to merge with a party other than DISH, it will immediately have

to repay DISH billions of dollars. See 2020 Order, 35 FCC

Rcd. at 13340 ¶ 70, 13350–13351 ¶¶ 100–103, 13354–13355

¶ 114.

e

As to the last Intermountain Microwave factor, the

Commission found that DISH continued to dominate the

Companies’ decisionmaking. See 2020 Order, 35 FCC Rcd. at

13351–13357 ¶¶ 104–120. While the amended agreements

addressed some of the Commission’s prior concerns about

DISH’s control, the agency concluded that SNR and

Northstar’s new “rights [were] mere fig leaves” because DISH

could, by blocking their credit lines and leasing revenue,

prevent them from making money. Id. at 13353–13354

¶¶ 109–110. The Commission also found that DISH could still

“influence if, how, [and] when * * * [the Companies and their

managing investors] exit the business” because the Companies

would have little choice but to take the generous guaranteed

buyouts offered under the agreements. 2020 Order, 35 FCC

Rcd. at 13354 ¶¶ 111–112 (emphasis omitted).

Finally, the Commission determined that the Companies

were still “functioning as arms of DISH, rather than as

independent small companies[.]” 2020 Order, 35 FCC Rcd. at

13355 ¶ 115 (formatting modified; quoting SNR Wireless, 868

41

F.3d at 1025). In 2015, the Commission was troubled by the

Companies’ joint bidding behavior in the spectrum auction.

SNR Wireless, 868 F.3d at 1042. Yet nothing seemed to change

on remand. SNR and Northstar continued to act in concert by

amending their agreements with DISH in “virtually identical”

fashion. 2020 Order, 35 FCC Rcd. at 13355–13356 ¶¶ 115–

119. Though Northstar had borrowed almost $2 billion more

from DISH than SNR had, both reduced their DISH debts to

exactly $500 million apiece in exchange for preferred equity.

Id. at 13356 ¶ 118.

On top of that, despite Northstar’s more valuable spectrum

holdings, the Companies agreed to similar limits on their ability

to borrow from DISH to finance network construction. See

2020 Order, 35 FCC Rcd. at 13356 ¶ 118. The Companies’ put

rights were also virtually identical, and both firms gave DISH

the same expanded veto over spectrum leasing. See id. at ¶ 119

& n.264. On this record, the Commission reasonably found

that SNR and Northstar, rather than acting like individual

businesses with their own interests and identities, only

pantomimed independence, while functionally operating at

DISH’s beck and call.

The Companies argue that it was natural to amend their

agreements with DISH in similar ways. That is because the

Commission and this court found their previous agreements

wanting for identical reasons, so a common response was

appropriate.

While that could explain the Companies’ similar structural

changes to their agreements, it does not address their

acquiescence in identical numerical amendments, such as

converting all but $500 million in debt into preferred equity.

See 2020 Order, 35 FCC Rcd. at 13356 ¶ 118. That entailed

converting approximately $1.8 billion more of Northstar’s debt

42

to equity than SNR’s. Yet the Companies offer no reason for

slashing their differing debts to the exact same dollar amount.

The Companies’ second explanation for proceeding in

lockstep—that they could jointly “deploy a nationwide

network”—also falls flat. Companies Opening Br. 53 (citation

omitted). Even if the Companies were planning such a joint

venture—and they point to no evidence that they were—they

fail to explain why that would motivate them to craft nearly

mirror-image agreements with DISH.

f

SNR and Northstar mount two more general attacks on the

Commission’s Intermountain Microwave analysis. Neither is

persuasive.

First, the Companies complain that the Commission’s

decision was arbitrary because it did not find that all six

Intermountain Microwave factors favored its ultimate control

finding. The Commission, though, has not required “a finding

of control with regard to all Intermountain Microwave factors”

to conclude that a small company is de facto controlled by

another entity. 2015 Order, 30 FCC Rcd. at 8911 ¶ 56 n.202.

Instead, the agency “carefully examines the totality of the facts

and circumstances of each case” and “view[s] [the

Intermountain Microwave factors] together[.]” Id. at 8909–

8910 ¶ 50, 8911 ¶ 56 n.202.

Second, SNR and Northstar contend that the

Commission’s Intermountain Microwave analysis rested on the

false premise that DISH’s right to veto leases was materially

different from the initial contracts. As already explained, the

record fully supports the Commission’s conclusion that the

constraints on leasing were newly and consequentially

expanded. See Section III.B.1, supra.

43

*****

As we held in the Companies’ prior appeal, so too here the

Commission closely examined the Companies’ agreements,

applied settled agency precedent, and, after weighing the

prescribed factors, reasonably explained its conclusion that

DISH continues to “control and benefit from virtually all

critical aspects of SNR and Northstar’s businesses.” SNR

Wireless, 868 F.3d at 1033. To put the point more simply, the

Commission’s finding that the Companies are not entitled to

very-small-business bidding credits was reasoned and squarely

grounded in the record.

C

1

The Companies separately argue that they lacked fair

notice of the standards that the Commission applied in finding

DISH’s de facto control, and so they should not be subject to

the agency’s denial of their bidding credits and default

penalties. They point out that they removed the contractual

provisions of greatest concern to the Commission in 2015, and

so could not have reasonably predicted the agency’s adverse

decision.

For the record, the Companies did not just subtract

provisions of concern. They also added new ones, some of

which the Commission reasonably found to substantially

solidify DISH’s control. See 2020 Order, 35 FCC Rcd. at

13340–13341 ¶ 71, 13355 ¶ 115.

In any case, a party has fair notice when, “by reviewing

the regulations and other public statements issued by the

agency,” it can “identify, with ascertainable certainty, the

standards with which the agency expects parties to conform.”

44

General Elec. Co. v. Environmental Protection Agency, 53

F.3d 1324, 1329 (D.C. Cir. 1995) (internal quotation marks and

citation omitted); see also Otis Elevator Co. v. Secretary of

Lab., 762 F.3d 116, 125 (D.C. Cir. 2014). The record in this

case establishes that the Companies had fair notice of the legal

rules and factors that led to the Commission’s finding of de

facto control.16

First, as we previously held, the Commission’s decision

was “clearly presaged” by the Fifth Memorandum Opinion &

Order issued in 1994. SNR Wireless, 868 F.3d at 1035. In that

Order, the Commission was direct and explicit that

“agreements between [small businesses] and strategic investors

that involve terms * * * that cumulatively are designed

financially to force the [small business] into a sale * * * will

constitute a transfer of control under our rules.” Fifth MO&O,

10 FCC Rcd. at 456 ¶ 96 (emphasis added). The Commission’s

paradigm example of such ensnaring conditions was a contract

that offered the small business a temporary right to sell itself

debt-free to its large investor around the time it would

otherwise have to start paying back its loans. Id. at 455–456

¶ 95; see also 47 C.F.R. § 1.2110(c)(2)(ii)(A)(2) (providing

that the Commission will analyze put options as if already

exercised when “such ownership interests, in combination with

other terms * * * deprive an otherwise qualified applicant * * *

of de facto control” over its own operations). The agreements

at issue here parallel that model by combining brief windows

for the Companies to take guaranteed payouts from their

16

We need not decide whether the Commission’s denial of

bidding credits alone was a punishment because the default

penalties—which the Commission has not rescinded—were. See

SNR Wireless, 868 F.3d at 1045. So the agency was required to give

the Companies fair notice before applying its remedy here. See id.

at 1043.

45

dominant investor or face looming—and overwhelming—

financial obligations.

Second, the Commission doubled down on that point in its

2015 Order. The agency stated directly that because the

Companies were “committed to repayment terms that [would]

be difficult, if not impossible to manage unless they exercise[d]

their put option[s,]” the contracts placed undue pressure on

Northstar and SNR “to refinance or exit the[ir] business[es],”

and “thereby exhibit[ed] an unacceptable degree of control on

DISH’s part.” 2015 Order, 30 FCC Rcd. at 8930 ¶ 105. Also

in 2015, as in 2020, the Commission cited the Companies’

license-deployment deadlines—timed closely to the relevant

put options—as adding pressure on SNR and Northstar to sell

themselves to DISH. Compare 2015 Order, 30 FCC Rcd. at

8930 ¶ 104 n.313, with 2020 Order, 35 FCC Rcd. at 13347 ¶ 90

& n.207. So the Companies had ample notice that the

agreements’ pairing of an approaching and seemingly

insurmountable financial commitment with irresistible get-out-

of-debt-free cards from DISH would lead to a finding of de

facto control.

The Companies also had the benefit of our 2017 decision

reinforcing that warning. We sustained the Commission’s

finding of de facto control there because DISH gave the

Companies a non-choice between undertaking “the quixotic

mission of generating enough revenue to pay back their

multibillion dollar loans” within five to seven years—well

before they could realistically earn sufficient sums by building

out their networks—or selling themselves to DISH “in

exchange for complete forgiveness of those loans plus a

guaranteed cash payment.” SNR Wireless, 868 F.3d at 1040.

Under Commission precedent, those conditions “financially

* * * forced” the Companies to exercise their put options. Id.

(formatting modified and citation omitted).

46

Notably, the Commission’s finding of control in 2020

turned on veto powers very similar to those that led the

Commission to find de facto control by DISH just five years

earlier. In its prior order, the Commission was concerned that

DISH (i) could prevent the Companies from selling out to

another buyer, (ii) had no obligation to lend them adequate

financing, and (iii) could seize the Companies’ licenses. 2015

Order, 30 FCC Rcd. at 8930–8931 ¶ 105. Under the amended

agreements, the Commission found that DISH still could

thwart the Companies’ ability to sell their interests to third

parties, to access sufficient financing, or to profit from their

spectrum rights. See 2020 Order, 35 FCC Rcd. at 13359–

13360 ¶¶ 131–137. So while the Companies and DISH had

modified their contracts’ bells and whistles, they retained the

same essential structure that the Commission had long said—

and had just told them, with our affirmation—is a signature

form of de facto control. See Fifth MO&O, 10 FCC Rcd. at

455–456 ¶¶ 95–96.

Third, the Commission’s Baker Creek and Intermountain

Microwave decisions provided further notice that the

Companies’ overwhelming financial and decisionmaking

dependence on DISH, coupled with its restrictive investor

protections, would support a finding that DISH is in de facto

control.

Baker Creek said that when investor protections provide

“the power to dominate the management of corporate

affairs[,]” such provisions “may confer actual control upon”

the purportedly passive investor. Baker Creek, 13 FCC Rcd. at

18714–18715 ¶ 9. That decision expressed particular concern

that the investor at issue, which was “the source of all but a

negligible amount of [the small business’s] capital[,]” could

control how much the small business borrowed, and from

whom. Id. at 18721–18722 ¶¶ 23–24. Baker Creek held that

47

terms barring the small business from taking out secured debt

and giving the investor a right of first refusal over outside loans

went “beyond permissible investment protections” when

considered alongside other provisions. Id. at ¶ 24.

That gave fair notice of the Commission’s similar finding

here that the investor protection provisions in the Companies’

agreements with DISH “reinforce[d]” its control over SNR and

Northstar. 2020 Order, 35 FCC Rcd. at 13340–13341 ¶¶ 69–

71. DISH’s power to veto significant loans ensured that DISH,

as the undisputed source of almost all the Companies’ capital,

kept their borrowing under its thumb. Id. at 13340 ¶ 70. And

DISH’s ability to prevent the Companies from leasing

spectrum, which substantially increased their financial

dependence and went “beyond [provisions] identified as

typical in Baker Creek[,]” veered outside of the control lines

drawn in Commission precedent. Id. at ¶ 71; see also Fifth

MO&O, 10 FCC Rcd. at 449 ¶ 82 (“[W]hile certain provisions

benefitting [purportedly passive] investors may not give rise to

a transfer of control when considered individually, the

aggregate effect of multiple provisions could be sufficient to

[transfer] de facto control, particularly if the terms of such

provisions vary from recognized standards.”).

Likewise, the Commission’s 2015 Order in this case

foreshadowed its application of the Intermountain Microwave

factors in its decision here. The 2015 Order told SNR and

Northstar that their abject financial dependence on DISH,

paired with DISH’s ability to dictate how they borrow money,

use their licenses, build their networks, and sell their

businesses, provided powerful evidence that they were not

freestanding small companies. See 30 FCC Rcd. at 8911 ¶ 54,

8923–8925 ¶¶ 84–86, 8925–8926 ¶¶ 87–90, 8927–8929 ¶¶ 94–

101.

48

On remand, the Commission found no material loosening

of the Companies’ financial handcuffs. See 2020 Order, 35

FCC Rcd. at 13343–13348 ¶¶ 80–92, 13349–13351 ¶¶ 98–103

& n.237, 13353 ¶ 108. The Commission had also warned the

Companies in 2015 that if they furthered DISH’s interest at

their own expense, the natural inference was that they were its

creatures. See 2015 Order, 30 FCC Rcd. at 8931–8932 ¶¶ 109–

114. Despite that advice, the Companies again marched to

DISH’s beat on remand, rewriting their contracts in

preternaturally parallel fashion. See 2020 Order, 35 FCC Rcd.

at 13355–13356 ¶¶ 115–119.

In short, the Commission gave the Companies

comprehensible and actionable guidance about the standards it

would apply to determine if they were independent, very small

businesses or were instead under the de facto control of DISH.

Fair notice requires no more. See Maxcell Telecom Plus, Inc.

v. FCC, 815 F.2d 1551, 1558 (D.C. Cir. 1987) (“If a [regulated

party] ignores or fails to understand reasonably

comprehensible requirements, [it] cannot be heard to complain

about lack of notice.”) (citation omitted); see also Abhe &

Svoboda, Inc. v. Chao, 508 F.3d 1052, 1060 (D.C. Cir. 2007).17

To be clear, because the Commission’s order

independently rested on two grounds—the put-option analysis

under the Fifth Memorandum Opinion & Order and the

multifaceted considerations prescribed by Intermountain

Microwave and Baker Creek—the Commission’s decision

would stand as long as the Companies were “able to identify,

with ascertainable certainty” how either standard worked.

General Elec. Co., 53 F.3d at 1329 (internal quotation marks

17

Cf. November 4 Meeting Letter, at J.A. 1596 n.17

(Companies’ counsel citing Maxcell Telecom for this court’s fair

notice standard); accord November 17 Meeting Letter, at J.A. 1621

n.27.

49

and citation omitted); see 2020 Order, 35 FCC Rcd. at 13357

¶ 124. That they had fair notice of both is icing on the cake.

2

The Companies press two more fair-notice arguments.

Neither has merit.

a

To start, SNR and Northstar contend that, because the

Commission has never before denied bidding credits to an

entity lacking a management agreement with its large investor,

they were not given fair notice that the agency would do so

here. But no Commission precedent said that such an

agreement was a necessary precondition to finding de facto

control. To the contrary, in the Fifth Memorandum Opinion &

Order, the Commission illustrated its concern about put

options with an example that did not involve management

contracts at all. See Fifth MO&O, 10 FCC Rcd. at 455–456

¶ 95.

More to the point, in the prior decisions as to these very

parties, both the Commission and this court found that the

Companies’ put options, in combination with other terms,

demonstrated DISH’s de facto control—all without relying on

the (now-defunct) Management Services Agreements. See

2015 Order, 30 FCC Rcd. at 8929–8931 ¶¶ 102–105; SNR

Wireless, 868 F.3d at 1034–1035, 1040.

b

The Companies separately argue that a contradictory

decision by the Wireless Bureau left them without fair notice.

They point to the Bureau’s decision to grant bidding credits to

Advantage Spectrum, L.P., an entity bound by restrictive

50

agreements with a large investor, in an unexplained decision

issued after the 2015 Order. See Wireless Telecommunications

Bureau Grants AWS-3 Licenses in the 1695-1710 MHz, 1755-

1780 MHz and 2155-2180 MHz Bands, 31 FCC Rcd. 7129

(2016); J.A. 1637–1642 (SNR and Northstar presentation to

Commissioners comparing their agreements with those of other

bidders). While they acknowledge that the Bureau’s actions

are not binding on the Commission, SNR and Northstar argue

that the Advantage Spectrum decision shows the type of

“confusion at the ground level” sometimes present when fair

notice is lacking. SNR Wireless, 868 F.3d at 1045 (internal

quotation marks and citation omitted).

The Commission responds that it is not bound by staff

decisions, and parties should not count on it to follow the

Wireless Bureau’s lead. See 2020 Order, 35 FCC Rcd. at

13364–13365 ¶¶ 152–157.

On this record, that wholly unexplicated ruling by the

Bureau does not change the fair notice calculus. The clarity of

the Commission’s precedent, as applied here, the concrete

guidance in the 2015 Order and SNR Wireless, and the absence

of any contrary analysis in the Advantage Spectrum decision

provided ample notice. In fact, because the Companies were

afforded a chance to cure, the 2015 Order (at the least)

amounted to the type of “pre-enforcement effort[] to bring

about compliance” that we have said typically “provide[s]

adequate notice.” General Elec. Co., 53 F.3d at 1329; accord

SNR Wireless, 868 F.3d at 1046.18

18

Remember, the Wireless Bureau granted bidding credits to

Advantage Spectrum before our court decided SNR Wireless, which

provided the Companies with yet more analysis of the relevant de

facto control standard.

51

The Companies rely on SNR Wireless, which found that

internal inconsistency within an agency could signal a lack of

fair notice. But in that case, the agency’s decision to deny the

Companies a chance to cure was directly undercut by a prior

“Commission-level position[.]” 868 F.3d at 1046.

Here, by contrast, the agency’s decision was supported,

rather than undermined, by prior Commission actions and a

ruling of this court. Those binding “administrative and judicial

decisions”—including those directed at these very parties—

“put the Compan[ies] on fair notice of what was required.”

Abhe & Svoboda, Inc., 508 F.3d at 1060. There is “no grave

injustice in holding parties to a reasonable knowledge of the

law[.]” Id. (citation omitted).19

IV

For all of those reasons, we reject the Companies’

challenges to the Commission’s orders.

So ordered.

19

The Companies’ argument that the Commission unlawfully

discriminated between Advantage Spectrum and them is foreclosed

by precedent, as is DISH’s similar argument regarding both

Advantage Spectrum and another bidder in the same spectrum

auction. See SNR Wireless, 868 F.3d at 1039; accord Amor Fam.

Broad. Grp. v. FCC, 918 F.2d 960, 962 (D.C. Cir. 1990)

(Commission does not act inconsistently by failing to comport with

actions of its “subordinate bod[ies]”).