In another development related to the upcoming incentive auctions, on Tuesday, the FCC filed a brief urging the D.C. Circuit Court to reject legal challenges filed by the National Association of Broadcasters (NAB) and Sinclair Broadcast Group against the FCC’s May 2014 incentive auction order. The FCC defended that order as “a reasonable exercise of the agency’s authority” under the spectrum-related portions of the 2012 Middle Tax Relief and Job Creation Act.
Filed in late August and in early September, the NAB and Sinclair appeals target the methodology the FCC will use in predicting coverage areas of television stations that choose not to surrender their spectrum to commercial wireless carriers. Principally, the NAB petition contends that the FCC’s decision to use the new “TVStudy” software in implementing the coverage preservation methodologies required by “OET Bulletin 69” will cause “many broadcast licensees . . . [to] lose coverage area and population served during the auction’s repacking and reassignment process.” Arguing that the use of TVStudy alters the OET-69 methodology, NAB asked the D.C. Circuit to strike down relevant provisions of the Incentive Auction order on grounds that they violate the 2012 Act and are otherwise “arbitrary, capricious, and an abuse of discretion.”
The FCC advised the court, however, that “petitioners’ claims . . . fail to overcome the agency’s broad discretion to interpret and apply its statutory authority, and to draw upon its technical expertise in resolving technical and complex issues of auction design.” Addressing the petitioners’ contention that the 2012 Act requires the FCC to use “a fixed suite of software and procedures that existed on February 22, 2012,” the FCC stressed that the Act “does not specify precisely how the OET-69 methodology must be employed.” As such, the FCC described its implementation of the OET-69 mandate as “a permissible interpretation of the statute’s ambiguous language that is entitled to deference.” Adding that the 2012 Act “does not require the Commission to make . . . broadcasters better off,” the FCC thus maintained that it had “acted reasonably in carrying out the Spectrum Act’s requirement that it use ‘all reasonable efforts’ to preserve the ‘coverage area and population served’ by stations that will continue to broadcast after the auction.”