Just days before the FCC kicked off the forward phase of the incentive auction on Tuesday, two low power television (LPTV) entities asked the DC Circuit Court of Appeals last Friday to conduct an en banc rehearing of the June 28 decision of a three-judge DC Circuit panel to deny the entities’ legal standing to challenge incentive auction rules that effectively bar LPTV licensees from participating in the auction process.
The petition, submitted to the DC Circuit by Free Access & Broadcast Media (FABM) and by Word of God Fellowship, Inc., seeks to revive the entities’ appeal of FCC rules denying secondary-status LPTV licensees protection from interference during the post-incentive auction channel repacking process. FABM and Word of God had argued that the FCC rules violate Section 6403(b)(5) of the 2012 Middle Class Tax Relief and Job Creation Act, which states that “nothing in this subsection shall be construed to alter the spectrum usage rights” of LPTV stations. The DC Circuit panel, however, declined to consider this claim on grounds that FABM—an investor and option holder in LPTV licensees—and Word of God, an LPTV licensee that did not participate in the incentive auction rulemaking proceeding, lacked standing to challenge the FCC’s rules.
In requesting rehearing by the DC Circuit’s full roster of nine judges, FABM and Word of God asserted that their petition “presents questions of exceptional importance,” including whether “the prudential shareholder standing doctrine, which generally forecloses creditor and shareholder standing in lawsuits alleging corporate harms . . . appl[ies] beyond shareholders and creditors to option holders.” Noting that Word of God participated indirectly in the incentive auction proceeding by virtue of its membership in the National Association of Broadcasters, the petitioners also asked the en banc panel to consider whether “the Hobbs Act’s limitation on standing in challenges of agency action to ‘parties aggrieved’ bars the courthouse doors to entities that participate in agency proceedings through trade associations.” Arguing that the June 28 ruling ignores the intention of Congress that any aggrieved party can petition for review of an FCC decision, FABM and Word of God lamented that the three judge panel “[foreclosed] option holders’ only avenue for protecting their interests against unlawful agency action, with destabilizing consequences for options markets which are essential financial tools in the communications sector."