Court Upholds FCC in Case Brought by MRA, Skitronics
The U.S. Appeals Court, D.C. on Fri. rejected arguments by wireless licensees Mobile Relay Assoc. (MRA) and Skitronics that the FCC treated them in an “arbitrary and capricious” way by not letting them transfer operations to what they view as superior spectrum, in the 800 MHz rebanding. While narrow, the ruling that includes language written by Judge Karen Henderson with implications that may worry carriers challenging FCC rules in other case.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
When MRA and Skitronics presented their case in Feb. the judges seemed skeptical, so the decision wasn’t a surprise (CD Feb 6 p4). “We were fully expecting an adverse decision based on the attitude of the judges,” MRA Founder Mark Abrams told us: “It’s another sad day where the courts have demonstrated their total lack of concern for the law in favor of political might.”
MRA and Skitronics, which offer specialized mobile radio (SMR) using small, site-based licenses, are characteristic of many smaller companies that operate at 800 MHz. In its 2004 800 MHz rebanding order, the FCC categorized 800 MHz licensees - separating commercial from public safety use. Skitronics and MRA, which run noncellular systems, hoped to move to spectrum reserved for Sprint Nextel and other high- density carriers. The band was preserved by the FCC for enhanced SMR, or ESMR, services. The companies said the FCC could allow all SMR licensees planning high-density cellular systems to use the ESMR band without imperiling public safety.
The court disagreed with the charge that the FCC decision was arbitrary and capricious. The FCC divided companies based on whether they provide “cellular” service, the court said. Nextel does; MRA and Skitronics don’t. “This distinction alone is a sufficiently reasonable basis for the FCC’s different treatment of the SMR and the ESMR licensees,” the court said.
Two aspects of the opinion may have broader implications for FCC license holders such as wireless carriers. The 3 judges dismissed claims that by depriving the companies of flexibility for using their licenses the FCC deprived them of property unconstitutionally. “Broadly defined, the licenses MRA and Skitronics hold confer the right to use the spectrum for a duration expressly limited by statute subject to the Commission’s considerable regulatory power and authority,” the court held: “This right does not constitute a property interest protected by the 5th Amendment.”
Wireless carriers have been advancing constitutional “takings” arguments more often in recent years, when FCC decisions to degrade spectrum held by licensees, a source said: “It basically is a signal, subtle or otherwise, that advancing the taking kinds of argument is not going to be particularly persuasive.”
The court also rejected MRA and Skitronics arguments that the FCC engaged in a retroactive rulemaking because Skitronics bought the 800 MHz SMR licenses at auction expecting to use them for a number of operations. The court said the FCC acted reasonably. “This is again a rebuttal to arguments that licensees have been making about their expectations of being able to fully use spectrum,” the source said. - Howard Buskirk