M2z Networks , Incorporated v. Federal Communications Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 5, 2009 Decided March 10, 2009
No. 07-1360
M2Z NETWORKS , I NCORPORATED ,
APPELLANT
v.
FEDERAL COMMUNICATIONS COMMISSION ,
APPELLEE
NETFREE US, LLC, ET AL .,
I NTERVENORS
Consolidated with 07-1441
On Appeal and Petition for Review of an
Order of the Federal Communications Commission
Viet D. Dinh argued the cause for appellant/petitioner. With
him on the briefs was Perry O. Barber.
Stephen G. Kraskin and David Honig were on the brief for
amici curiae Minority Media and Telecommunications Council
and Broadband Wireless Partners in support of petitioner.

-- 1 of 17 --

2
Darius B. Withers, Michael R. Gardner, and John T.
Delacourt were on the brief for amici curiae College Parents of
America, et al. in support of petitioner.
Joel Marcus, Counsel, Federal Communications
Commission, argued the cause for appellee/respondents. On the
brief were Thomas O. Barnett, Assistant Attorney General,
United States of America, Robert B. Nicholson and Robert J.
Wiggers, Attorneys, Matthew B. Berry, General Counsel,
Federal Communications Commission, Joseph R. Palmore,
Deputy General Counsel, Daniel M. Armstrong, Associate
General Counsel, and James M. Carr, Counsel. Laurence N.
Bourne, Counsel, Federal Communications Commission,
entered an appearance.
Jonathan E. Allen, Joe D. Edge, Jeffrey J. Lopez, and
Christopher C. Sabis were on the brief for intervenors
NetfreeUS, LLC and Open Range Communications, Inc.
Michael F. Altschul, Ian Heath Gershengorn, and Elaine J.
Goldenberg were on the brief for intervenor for appellee CTIA
- The Wireless Association. Donald B. Verrilli Jr. entered an
appearance.
Before: SENTELLE , Chief Judge, and ROGERS and GRIFFITH,
Circuit Judges.
Opinion for the Court filed by Chief Judge SENTELLE .
SENTELLE , Chief Judge: In this consolidated proceeding,
M2Z Networks, Inc. (M2Z) challenges two related decisions of
the Federal Communications Commission (FCC or
Commission). First, it appeals the dismissal of its application
for a nationwide, 15-year exclusive license to the 2155-2175
megahertz (MHz) spectrum to provide wireless broadband

-- 2 of 17 --

3
Internet access. Second, it petitions for review of the denial of
its petition for forbearance on that application. Despite the
ingenious arguments of petitioner, we affirm the order of the
FCC in all respects, dismissing M2Z’s application without
prejudice and denying its expansive petition for forbearance.
I. Background
The FCC has designated 130 MHz of spectrum for
advanced wireless services, to provide wireless Internet access
and other voice and high-speed data services. In re Service
Rules for Advanced Wireless Services in the 2155-2175 MHz
Band (NPRM), 22 F.C.C.R. 17,035, 17,039-41 (¶¶ 6-7) (2007).
Service rules have been adopted for one 90 MHz range, now
called AWS-1. In re Service Rules for Advanced Wireless
Services in the 1.7 GHz and 2.1 GHz Bands, 18 F.C.C.R. 25,162,
25,163 (¶ 1) (2003). Service rules for a second, 20 MHz, band
called AWS-2 have been proposed but not approved. See In re
Service Rules for Advanced Wireless Services in the 1915-1920
MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz
Bands, 19 F.C.C.R. 19,263 (2004). In September 2005, the FCC
“designat[ed]” the 2155-2175 MHz band “for AWS use,” in
what came to be called AWS-3. In re Amendment of Part 2 of
the Commission’s Rules to Allocate Spectrum Below 3 GHz for
Mobile and Fixed Services to Support the Introduction of New
Advanced Wireless Services, Including Third Generation
Wireless Systems, 20 F.C.C.R. 15,866, 15,872 (¶ 9) (2005).
Service rules were not proposed for this AWS-3 band until
September 2007. See NPRM, at ¶ 1.
On May 2, 2006, M2Z Networks filed an application with
the FCC for a license to the entire AWS-3 band. Before us,
M2Z claims that the band had lain largely fallow since it was
first identified by the Commission in 1992 to provide for
emerging telecommunications technologies. See In re

-- 3 of 17 --

4
Redevelopment of Spectrum to Encourage Innovation in the Use
of New Telecommunications Technologies (1992 Notice), 7
F.C.C.R. 1542, ¶ 19 (1992). This characterization may not be
entirely accurate, as there were 1800 active licenses in the 2155-
2175 MHz band in September 2007. NPRM, at ¶ 9. “These
incumbents consist[ed] primarily of Fixed Microwave Service
(FS) and Broadband Radio Services (BRS) licensees, who are
subject to relocation by emerging technology (ET) licensees
(including future AWS-3 licensees).” Id. Though M2Z may
imply that the Commission has dragged its feet, the Commission
counters that it has long “recognize[d]” the difficulty of
replacing old licensees with emerging technology licensees.
1992 Notice, at ¶ 19. Because the incumbents “provide
important and essential services,” the Commission proposed to
“pursue this reallocation in a manner that w[ould] minimize
disruption of the existing . . . operations.” Id.
M2Z’s plan was to deliver basic wireless broadband access
to most of the country free of charge, ultimately making money
by charging for premium service. According to the petitioner,
for the plan to work, it needed an exclusive, nationwide license
to the entire segment for 15 years. In September 2006, M2Z
amended its application with a petition for forbearance under 47
U.S.C. § 160(c) and 47 C.F.R. § 1.53. M2Z asked the
Commission to forbear from applying 47 C.F.R. §§ 1.945(b),
(c), and “any other rule, provision of the Act, or Commission
policy . . . to the extent such rules, statutory provisions, or
policies [would] impede the acceptance and grant” of its
application.
In January 2007, the FCC found M2Z’s application
acceptable for filing, without assessing the merits. Typically,
applications for broadcast licenses are processed according to
preexisting service rules. But, because there were no service
rules for the proposed AWS-3 band, the Commission accepted

-- 4 of 17 --

5
the application “pursuant to [its] general statutory authority”
under 47 U.S.C. § 309(a). Upon accepting the application for
filing, the FCC invited petitions to deny the application, and
additional applications for the same band of spectrum. The
Commission received voluminous comments, and six new
applicants sought licenses for the spectrum.
On August 31, 2007, the Commission dismissed without
prejudice all applications for access to the 2155-2175 MHz
band, denied M2Z’s petition for forbearance, and found “that the
public interest is best served by first seeking public comment on
how the band should be used and licensed.” In re Applications
for License and Authority to Operate in the 2155-2175 MHz
Band (Order), 22 F.C.C.R. 16,563, 16,564 (¶ 1) (2007).
II. Analysis
In this case, we review the FCC’s application of its own
procedures when granting licenses and its interpretation of
related statutory provisions. In particular, we ask whether the
Commission was reasonable in denying M2Z certain procedural
advantages in its quest for a bandwidth license.
Before proceeding to the merits, we will briefly address the
Commission’s contention regarding administrative exhaustion.
The FCC claims that we lack jurisdiction over seven distinct
arguments advanced by M2Z. The Administrative Procedure
Act (APA) does not pose a barrier to jurisdiction because
judicial exhaustion requirements under the APA are prudential
only. See Darby v. Cisneros, 509 U.S. 137, 146 (1993). But the
FCC contends that 47 U.S.C. § 405 bars our consideration of
any “question[] of fact or law upon which the Commission . . .
has been afforded no opportunity to pass.” 47 U.S.C. § 405(a).
“Ordinarily,” however, “disgruntled parties are not required to
seek administrative reconsideration before challenging a

-- 5 of 17 --

6
Commission order in this court, and exceptions to this general
rule are to be construed narrowly.” Nat’l Ass’n for Better
Broad. v. FCC (NABB), 830 F.2d 270, 274 (D.C. Cir. 1987).
Most importantly, governing precedent dictates that section
405(a) constitutes “an exhaustion requirement, rather than . . . a
jurisdictional prerequisite.” Petroleum Commc’ns, Inc. v. FCC,
22 F.3d 1164, 1170 (D.C. Cir. 1994). Additionally, in Freeman
Engineering Associates, Inc. v. FCC, we recognized that section
405 “contains the traditionally recognized exceptions to the
exhaustion doctrine,” like futility. 103 F.3d 169, 183 (D.C. Cir.
1997) (quoting Omnipoint Corp. v. FCC, 78 F.3d 620, 635 (D.C.
Cir. 1996)). The exhaustion requirement ensures that the
Commission has the opportunity to pass on all issues in the case
before the issues are presented for review by the court.
Importantly, we construe each of M2Z’s objections to address
the substantive content of the FCC’s legal conclusions that
would necessarily have been implicated in their application and
petition, rather than merely to protest procedural imperfections.
Ordinarily petitioners must give agencies an opportunity to cure
“technical defect[s]” before seeking review by this court.
NABB, 830 F.2d at 274. Because we conclude that the
Commission has “had an opportunity to pass” on each of M2Z’s
arguments that we discuss today, we may proceed to the merits.
A. Forbearance Under 47 U.S.C. § 160
We review the FCC’s interpretation of its statute with
deference under the familiar framework of Chevron, U.S.A., Inc.
v. Natural Resources Defense Council, Inc., 467 U.S. 837
(1984). See EarthLink, Inc. v. FCC, 462 F.3d 1, 7 (D.C. Cir.
2006). In addition, the Commission’s judgments on the public
interest are “entitled to substantial judicial deference.” FCC v.
WNCN Listeners Guild, 450 U.S. 582, 596 (1981).

-- 6 of 17 --

7
In 47 U.S.C. § 160, Congress provided that “the
Commission shall forbear from applying any regulation or any
provision” of the relevant statute “if the Commission determines
that . . . forbearance from applying such provision or regulation
is consistent with the public interest.” 47 U.S.C. § 160(a)(3).
M2Z petitioned the Commission to forbear from applying 47
C.F.R. §§ 1.945(b) and (c). Section 1.945(b) requires the
Commission to wait 31 days before acting on applications for
licenses not subject to competitive bidding. 47 C.F.R. §
1.945(b). Section 1.945(c) requires, among other things, that all
license applications granted without a hearing must be from
applicants who are “legally, technically, financially, and
otherwise qualified.” 47 C.F.R. § 1.945(c)(2). Therefore, M2Z
argues that the Commission should have granted its petition to
for forbear from two provisions. The first provision would have
required the FCC to wait 31 days after it accepted M2Z’s
application for filing; this was mooted months before the Order
issued. The second would have required the FCC to hold a
hearing unless it could officially notice M2Z’s qualifications.
1. Forbearance and the Public Interest
M2Z also petitioned the Commission, in a strikingly broad
and inclusive request, to forbear from applying “any other rule,
provision of the Act, or Commission policy . . . to the extent such
rules, statutory provisions, or policies [would] impede the
acceptance and grant” of its application. (Emphasis added.)
Under the statute, the Commission should forbear from applying
those rules if it determines that forbearance “is consistent with
the public interest.” 47 U.S.C. § 160(a)(3). M2Z, however,
makes the startling assertion that the Commission should forbear
from applying those rules if M2Z’s application “is consistent
with the public interest.” It argues that, because both statutory
provisions discuss “the public interest,” the FCC may only make
one inquiry to answer the independent questions posed by the

-- 7 of 17 --

8
two sections. Section 309(a) announces the standard under
which the Commission is to consider applications—“whether
the public interest, convenience, and necessity will be served by
the granting of such application.” 47 U.S.C. § 309(a). Section
160(a)(3) announces the standard under which the Commission
is to consider forbearing from applying its rules—whether
“forbearance from applying such provision or regulation [would
be] consistent with the public interest.” 47 U.S.C. § 160(a)(3).
As M2Z frames the issue, “[s]ince M2Z requested forbearance
from any laws or rules that stood in the way of granting its
application, the questions presented to the Commission merged
into one: Would it be in the public interest to grant M2Z’s
application?” This argument obscures the difference between
the questions. The first asks whether granting an application is
in the public interest; the second asks whether forbearing from
subjecting applications to certain regulations is in the public
interest. They might both be true, but the truth of the first does
not imply the truth of the second.
Because M2Z misconstrues the issue, it is naturally
dissatisfied with the resolution. It claims that the FCC was
required to walk through its application, and answer each of its
proposed public interest claims on the merits. It therefore
accuses the Commission of “deciding not to decide,” an
approach we rejected in AT&T, Inc. v. FCC, 452 F.3d 830 (D.C.
Cir. 2006). In AT&T, the FCC denied a forbearance request
asking it to “forbear from applying Title II common carrier
regulation to IP platform services.” Id. at 832. The Commission
reasoned that it could not rule on the forbearance request
because it “had yet to determine whether common carrier
regulations even applied to IP platform services.” Id. Although
there are some factual parallels to this case, the law is not
parallel. We observed in AT&T that the statute “gives the
Commission authority to decide only whether ‘forbearance . . .
is consistent with the public interest,’ not to decide whether

-- 8 of 17 --

9
deciding whether to forbear is in the public interest.” Id. at 836
(quoting 47 U.S.C. § 160(a)(3)). Although the Commission here
ultimately chose to undertake a rulemaking, it first decided
whether forbearance was in the public interest. It weighed the
costs and benefits in the following manner:
While [M2Z’s] proposed approach[] may result in the
issuance of a license sooner than conforming to established
processes, such licensing would come at the expense of
establishing a complete record that enables the Commission
to consider all of the relevant factors in determining
whether to grant a license without a hearing. In short, a
potentially speedy but ill-considered licensing process does
not serve the public interest. Moreover, as set out in detail
below, the various filings made in this proceeding that
oppose M2Z’s . . . application[] or propose competing uses
of the band support our conclusion that a grant of . . . th[is]
. . . application[] without adhering to the requirements of
Section 1.945 would disserve the public interest.
Order, at ¶ 9. The Commission did not refuse to rule on the
forbearance request. It ruled, just not the way M2Z wanted it to.
2. Forbearance and Considering Competitive Market
Conditions
M2Z also contends that the FCC failed to address whether
forbearance would promote competitive market conditions, as
required by 47 U.S.C. § 160(b). M2Z says both that the
Commission’s treatment was cursory and that it defined the
wrong market in its analysis. The Commission wrote the
following: “We observe that the grant of any of the pending
applications, by cutting off consideration of a competitive
bidding licensing framework and precluding consideration of
other potential applicants for this spectrum, would appear to

-- 9 of 17 --

10
compromise the development of competitive market
conditions.” Order, at ¶ 10 n.34. M2Z sought a 15-year
monopoly on valuable bandwidth; it should not be surprised that
the FCC was terse in its analysis of this proposal’s effect on
competitive market conditions.
M2Z tries to analogize to the reversibly brief treatment
given by administrative agencies in Getty v. FSLIC, 805 F.2d
1050 (D.C. Cir. 1986), and Missouri Public Service Commission
v. FERC, 234 F.3d 36 (D.C. Cir. 2000). The petitioner in Getty
was able to show that despite “two fleeting references” in the
administrative record to a statutorily required factor, there was
“no evidence that [the agency] paid any attention” to that factor.
Getty, 805 F.2d at 1055, 1056. The agency’s order only
“contained a boilerplate recitation of the language” required. Id.
at 1055. In Missouri Public Service Commission, the agency
merely named the factors, and we held that “[a] passing
reference . . . is not sufficient to satisfy the [agency’s] obligation
to carry out ‘reasoned’ . . . decisionmaking.” Mo. Pub. Serv.
Comm’n, 234 F.3d at 41. Though not lengthy, the
Commission’s order in this case was neither a boilerplate
recitation of the required language nor a passing reference
without any reasoning. The FCC named the factor
(“competitive market conditions”), and gave two reasons why
the application “would appear to compromise” that
factor—namely, by “cutting off consideration of a competitive
bidding licensing framework and precluding consideration of
other potential applicants for this spectrum.” Order, at ¶ 10
n.34. And, though the Order referred directly to the provider
market, rather than the consumer market, it seems clear what the
Commission meant. Without scrutinizing and comparing
applications from various companies, the Commission feared
that it would not choose the most efficient provider for this
bandwidth. An auction would help it find this ideal provider, so
it was not in the public interest to forbear from an auction.

-- 10 of 17 --

11
In short, the FCC’s analysis of the effects of M2Z’s
breathtakingly broad petition on competitive market conditions
was so plainly unobjectionable that it didn’t warrant any further
discussion by the Commission.
B. Considering the Public Interest Under 47 U.S.C. § 157
M2Z next argues that the nature of its project should have
earned it preferential treatment under 47 U.S.C. § 157. That
section says that “[a]ny person or party (other than the
Commission) who opposes a new technology or service
proposed to be permitted under this chapter shall have the
burden to demonstrate that such proposal is inconsistent with the
public interest.” 47 U.S.C. § 157(a). M2Z argues that its
proposal falls within this language because it uses new
technologies, combines them in an innovative way, and provides
a new service, and that no party has met the burden to show that
its proposal is inconsistent with the public interest.
In its Order, the Commission said that M2Z proposes
“us[ing] technologies that other service providers are already
using” and that these technologies “are all proven technologies
that have been deployed in other bands.” Order, at ¶ 13. It
supported this conclusion by noting the “relatively slow speed”
of the technologies proposed by M2Z. Id. at ¶ 14. Therefore,
the Commission reasoned, it should not be considered a new
technology or service. The Commission further noted that,
under the statute, it is “expressly exclude[d]” from having to
demonstrate that a proposal is not in the public interest. Id. at
¶ 16; see also id. at ¶ 16 n.55. Finally, the Commission held
that, because of the slow speed and less-than-aggressive
expansion schedule, M2Z’s proposal was inconsistent with the
public interest. Id. at ¶ 15.

-- 11 of 17 --

12
1 47 U.S.C. § 157(b) reads as follows: “The Commission shall
determine whether any new technology or service proposed in a
petition or application is in the public interest within one year after
such petition or application is filed. If the Commission initiates its
own proceeding for a new technology or service, such proceeding
shall be completed within 12 months after it is initiated.”
We begin by accepting the Commission’s interpretation
regarding the burden-shifting portion of the statute, which,
again, reads that “[a]ny person or party (other than the
Commission) . . . shall have the burden.” 47 U.S.C. § 157(a)
(emphasis added). It is certainly a reasonable interpretation of
this statute to say that the Commission does not have to meet
any burden. M2Z’s only response is to say that the FCC’s
interpretation removes shifting of the burden from the statute
entirely. It argues that 47 U.S.C. § 157(b) 1 calls for the
Commission to be a “neutral arbiter” assessing whether a plan’s
“opponents carry their burden.” Therefore, M2Z reasons, the
phrase “other than the Commission” prevents the Commission
from being a party that could even opine, independently, on
whether the proposal is inconsistent with the public interest.
Though M2Z’s interpretation might be reasonable, that
question is not presented in this case. We only need to decide
whether the Commission’s interpretation was reasonable. See
Chevron, U.S.A., Inc., 467 U.S. at 843-45. M2Z argues that the
Commission’s interpretation could not be reasonable: because
the Commission must always decide in the end, and it may never
have the burden shifted against it, the burden may never be
shifted, and therefore that portion of the statute is surplusage.
But this reasoning is flawed. The statute obviously governs
when the Commission is weighing evidence presented by third
parties—when, for example, such parties make petitions to deny
an application for spectrum. When the Commission evaluates
these parties’ petitions, the burden is applied against them. And

-- 12 of 17 --

13
when the Commission is undecided or in equipoise, the burden
is never removed, making every word of the statute count. We
therefore hold that it was reasonable for the FCC to conclude
that 47 U.S.C. § 157 does not give the Commission the burden
of proving that M2Z’s proposal was not in the public interest.
With this established, the rest of the issue becomes more
straightforward. In particular, the parties’ technical dispute over
whether M2Z’s proposal was a new technology or service
becomes less important. We need not decide whether the
Commission confused orthogonal frequency-division multiple
access (OFDMA) with orthogonal frequency-division
multiplexing (OFDM) technologies. We also need not decide
whether M2Z waived this argument when it wrote that it sought
a license “on the basis of the broad range of public interest and
consumer welfare benefits . . . , rather than on the basis of
technological innovations alone.” And, finally, we need not
decide whether M2Z’s application is better considered as a new
service, because it would be uniquely free and nationwide, or as
an old service, because it would offer wireless broadband
Internet access like many other providers.
Even assuming that M2Z proposed a new technology or
service, we must affirm the Commission’s public-interest
decision as long as it is not “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A). This we find easy to do. The Commission found
that “the transmission speeds proposed by M2Z [we]re
unremarkable compared to other broadband services currently
being deployed.” Order, at ¶ 14. It further found that “in light
of the relatively slow speed proposed and the evolving nature of
broadband internet access service, the grant of such an
application would not serve the public interest.” Id. Noting that
“the construction benchmarks proposed by M2Z [we]re not
particularly aggressive,” and that they “f[e]ll[] short of the build

-- 13 of 17 --

14
2 M2Z’s insistence that the Commission’s Order came after
the end of 47 U.S.C. § 157(b)’s one-year statute of limitations is
unavailing. Although M2Z filed its original application on May 5,
2006, it first mentioned 47 U.S.C. § 157 in its forbearance petition of
September 1, 2006. The Commission’s Order was released August 31,
2007. By piggy-backing a petition on its application, M2Z cannot
force the FCC to act in less time than the statute permits.
out standards that [the FCC] ha[s] imposed in other contexts
such as 700 MHz band,” the FCC found that “granting [M2Z’s]
application would prevent, rather than facilitate, widespread
broadband deployment.” Id. at ¶ 15. We hold that, the
Commission having given sufficient reasons, nothing in 47
U.S.C. § 157 prevents the Commission from deciding that
M2Z’s proposal was not in the public interest. 2
C. Competitive Bidding Under 47 U.S.C. § 309(j)
Under 47 U.S.C. § 309(j), the FCC must generally process
“mutually exclusive applications . . . through a system of
competitive bidding.” 47 U.S.C. § 309(j)(1). The statute,
however, makes an exception to this general call for auctions.
Specifically, nothing in section 309(j) shall “be construed to
relieve the Commission of the obligation in the public interest
to continue to use engineering solutions, negotiation, threshold
qualifications, service regulations, and other means in order to
avoid mutual exclusivity in application and licensing
proceedings.” 47 U.S.C. § 309(j)(6)(E). M2Z uses this
provision to repeat its argument that the Commission failed to
assess all of its public interest evidence. It claims that the
Commission must make a public interest finding to determine
whether holding an auction is appropriate. Because the
Commission did not expressly evaluate all of M2Z’s comments,
M2Z argues that the Commission failed to live up to its statutory
duties and should be reversed for acting arbitrarily and

-- 14 of 17 --

15
capriciously.
This argument fails for many of the reasons mentioned
before: M2Z again misconstrues the question presented to the
agency. Nothing in the statute requires the Commission to
specifically address every piece of evidence presented by M2Z.
The Commission was required only to respond to the petition for
forbearance (which it denied) and possibly to determine under
47 U.S.C. § 157 whether M2Z proposed any new technology or
service that was in the public interest (which it decided M2Z had
not). The words “public interest” appearing in 47 U.S.C.
§ 309(j)(6)(E) do not require additional explicit action by the
FCC, except to address them in its response for M2Z’s petition
for forbearance under 47 U.S.C. § 160 “from Section 309(j)(1).”
Furthermore, the Commission did assess the public interest
when considering whether to dispense with an auction. It
explained that
before authorizing spectrum uses, [the FCC] typically first
conduct[s] a rulemaking proceeding to obtain public
comment on how the band should be used and licensed.
Beginning with the promulgation of Section 309(j), we have
most commonly determined, after consideration of the
public comment filed in the applicable rule making, that a
licensing framework that permits the filing and acceptance
of mutually exclusive applications, which are then required
by statute to be resolved through competitive bidding,
would best serve the public interest for the types of
spectrum use proposed by M2Z . . . . [T]his type of
framework best serves the public interest because it is the
one most likely to result in the selection of licensees that
will value the spectrum the most and put it to its highest and
most efficient use.

-- 15 of 17 --

16
Order, at ¶ 10 (footnote omitted). The Commission decided that
“even given the potentially longer timeline to the provision of
actual service,” it would rather auction the space than “give
[M2Z] spectrum for free.” Id. at ¶ 11. Leaving open the
possibility of “an alternative licensing framework” (i.e.,
something other than an auction), the Commission refused
forbearance because it “would be inconsistent with the public
interest.” Id. “[A]t this point,” the Commission explained, “the
record does not justify” deviation from the normal process of
competitive bidding. Id.
M2Z is correct that the Commission had to consider the
public interest in deciding whether to forgo an auction. Whether
this is characterized as an analysis under section 309 or a section
160 forbearance analysis matters little. And, as we have noted,
the Commission considered the public interest when deciding
whether to forgo an auction. It is not required to perform that
analysis exactly the way M2Z would have performed it. As
FCC precedent in support of its position, M2Z cites In re
Improving Public Safety Communications in the 800 MHz Band,
19 F.C.C.R. 14,969 (2004). That case noted only that the
Commission “ha[d] the authority” to forgo auctions—a point
which is not disputed. Id. at ¶ 72 n.236. It is worth noting,
however, that the Commission did discuss forgoing auctions by
“impos[ing] threshold qualifications” on the applicants, id.;
M2Z’s forbearance petition asks the Commission to put aside
just such qualifications screening. M2Z also cites In re
Flexibility for Delivery of Communications by Mobile Satellite
Service Providers in the 2 GHz Band, the L-Band, and the
1.6/2.4 GHz Bands, 18 F.C.C.R. 1962 (2003), but that case
specifically held that section 309(j)(1) did not apply at all,
because the licenses were not “initial.” See id. at ¶¶ 219-29.
Because the Commission reasonably performed every statutory
duty at issue, its Order was not arbitrary or capricious, and was
not contrary to 47 U.S.C. § 309(j).

-- 16 of 17 --

17
III. Conclusion
Although M2Z presents a number of creative arguments,
none of them has serious legal merit. The FCC Order should
therefore be affirmed in all respects.
So ordered.

-- 17 of 17 --