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Globalstar, Inc. v. Federal Communications Commission

May 1, 2009

GLOBALSTAR, INC., PETITIONER
v.
FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS
IRIDIUM SATELLITE LLC, INTERVENOR



On Petition for Review of an Order of the Federal Communications Commission.

The opinion of the court was delivered by: Edwards, Senior Circuit Judge

Argued February 17, 2009

Before: SENTELLE, Chief Judge, GARLAND, Circuit Judge, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge EDWARDS.

In 2003, the Federal Communications Commission ("FCC" or "the Commission") issued a Notice of Proposed Rulemaking that sought proposals to reassign a portion of the 33 MHz of spectrum used by mobile satellite services ("MSS"). See Review of the Spectrum Sharing Plan Among Non-Geostationary Satellite Orbit Mobile Satellite Service Systems in the 1.6/2.4 GHz Bands, Notice of Proposed Rulemaking, 18 F.C.C.R. 1962, 2087-92 (2003) ("2003 NPRM"). In 2004, in the context of this same rulemaking proceeding, the Commission initially ordered petitioner Globalstar, Inc. ("Globalstar") and intervenor Iridium Satellite LLC ("Iridium"), companies that use different technologies to provide satellite-based voice and data communications, to share a block of spectrum that was previously reserved for Globalstar's use. See Review of the Spectrum Sharing Plan Among Non-Geostationary Satellite Orbit Mobile Satellite Service Systems in the 1.6/2.4 GHz Bands, Report and Order and Further Notice of Proposed Rulemaking, 19 F.C.C.R. 13,356, 13,357 (2004) ("2004 Order"). Globalstar sought reconsideration of the 2004 Order, claiming that sharing the spectrum would generate harmful interference between the two communications systems. The Commission then revisited the rulemaking and, following reconsideration, agreed with Globalstar that spectrum sharing was technologically infeasible.

In 2007, the Commission issued an order that reassigned a block of electromagnetic spectrum to Iridium. See Review of the Spectrum Sharing Plan Among Non-Geostationary Satellite Orbit Mobile Satellite Service Systems in the 1.6/2.4 GHz Bands, Second Order on Reconsideration and Second Report and Order, 22 F.C.C.R. 19,733, 19,734 (2007) ("2007 Reconsideration Order"). Globalstar now seeks review of the 2007 Reconsideration Order, claiming that it was promulgated in violation of the notice-and-comment requirements of the Administrative Procedure Act ("APA"), see 5 U.S.C. § 553, and is also arbitrary and capricious, see id. § 706(2)(A).

We deny the petition for review. First, we hold that Globalstar waived its inadequate notice claim by failing to raise it with the Commission. Globalstar's late-filed ex parte letter did not give the Commission an "opportunity to pass" on this issue as required by 47 U.S.C. § 405(a). Therefore, Globalstar's inadequate notice claim is not properly before us. Second, we reject Globalstar's argument that the Commission's reassignment of the disputed spectrum to Iridium was arbitrary and capricious. The Commission properly revisited the rulemaking pursuant to Globalstar's petition for reconsideration of the 2004 Order. The 2007 Reconsideration Order was an outgrowth of the ongoing rulemaking that began with a notice of proposed rulemaking in 2003. We find that the Commission's final order is based on the extensive record compiled during this lengthy rulemaking and that the record supports the Commission's decision. We also find that the 2007 Reconsideration Order is a product of reasoned decisionmaking that survives the narrow scope of review under the arbitrary and capricious standard.

I. BACKGROUND

Among its many duties, the Commission licenses commercial entities to use the electromagnetic spectrum. See 47 U.S.C. §§ 301, 303. The Commission has designated 33 MHz of spectrum for use by mobile satellite services, a satellite-powered technology that provides email and cellular-like phone services to remote locations across the globe and is often used by military and public safety officials during wars and national disasters. See Amendment of the Commission's Rules to Establish Rules and Policies Pertaining to a Mobile Satellite Service in the 1610-1626.5/2483.5-2500 MHz Frequency Bands, Report and Order, 9 F.C.C.R. 5936, 5939-41 (1994) ("1994 Order"). This spectrum, the Big Low Earth Orbit band ("Big LEO" band), consists of two segments that are commonly referred to as the "L band" (1610 MHz through 1626.5 MHz) and the "S band" (2483.5 MHz through 2500 MHz). See 2004 Order, 19 F.C.C.R. at 13,357. MSS providers employ one of two technologies: code division multiple access ("CDMA") or time division multiple access ("TDMA"). See id. at 13,359 & nn.7-9. CDMA and TDMA systems differ in at least one critical respect. In CDMA systems, the L band is used for "uplink" operations from an earth terminal (i.e., a user's phone handset) to a satellite, while space-to-earth "downlink" operations are carried on the S band. In TDMA systems, both uplink and downlink operations are carried on the L band. See id. This case concerns the Commission's assignment and reassignment of blocks of the Big LEO band to competing providers of CDMA and TDMA satellite services.

In the early 1990s, as MSS technology was first emerging, several companies seeking to deploy MSS systems applied to the FCC for licenses to use the Big LEO band. All but one proposed a CDMA system. See 1994 Order, 9 F.C.C.R. at 5942, 5955. In 1994, the FCC adopted an initial licensing scheme for MSS providers in the Big LEO band. Id. at 5955-59. Because the CDMA applicants outnumbered the lone TDMA applicant, the Commission divided the 33 MHz of Big LEO spectrum into two unequal but roughly proportionate parts. The Commission assigned the TDMA provider exclusive access to 5.15 MHz of spectrum in the L band and assigned the CDMA providers shared access to 27.85 MHz of spectrum (11.35 MHz in the L band and the entire S band). Id. The Commission also considered the possibility that only one of the CDMA systems would be launched, but it rejected a proposal that would have automatically reassigned 3.1 MHz of spectrum in the L band to the TDMA provider "upon a showing of need or, if this demonstration could not be made, to a new entrant." Id. at 5960. Instead, the Commission stated that it would "make the decision with respect to the 3.1 MHz, if necessary, in the context of a rulemaking, based upon the circumstances that have developed at that time." Id.

By 2002, only two MSS providers had begun commercial operations: the CDMA system now run by Globalstar and the TDMA system now run by Iridium. In light of this development, Iridium petitioned the FCC to undertake the reassignment rulemaking contemplated in the 1994 Order. Petition for Rulemaking at i (July 26, 2002), reprinted in Joint Appendix ("J.A.") 329. Iridium advised the agency that it was experiencing "significant spectrum constraints" from operating in the 5.15 MHz block of L band spectrum and that it required additional spectrum to meet the current and future needs of its customers. Id. at 4, J.A. 333. Iridium urged the FCC to reassign it 5.85 MHz of spectrum currently allocated to CDMA systems. Id. at 5, J.A. 334.

The Commission responded with a notice of proposed rulemaking in 2003 that sought proposals to reassign a portion of the Big LEO spectrum. 2003 NPRM, 18 F.C.C.R. at 2087-92. The Commission recognized that because "only one CDMA Big LEO system has deployed, it is now appropriate to consider making at least 3.1 megahertz of additional spectrum available to Iridium." Id. at 2089. Though the Commission "tentatively conclude[d]" that the new developments in the MSS market necessitated a reallocation of the Big LEO spectrum, it noted that it would "base [its] final judgment on the record established in this proceeding." Id. To this end, the Commission directed both Globalstar and Iridium to submit detailed data on their current and projected spectrum needs. Id. at 2089-90.

The FCC received extensive comments from both Globalstar and Iridium, among other industry players. Iridium explained that it was experiencing a "spectrum shortage" and recounted how recent strains on its network due to the use of its services by the U.S. military in the Middle East had caused the Commission to grant it temporary access to a portion of Globalstar's spectrum. Comments of Iridium Satellite, LLC at i, 12-15 (July 11, 2003), J.A. 344, 360-63. To relieve these strains and to meet the growing demand for its services, Iridium proposed a "spectrum parity" plan that would divide the 33 MHz of Big LEO spectrum into three roughly equal blocks, with just over 11 MHz for Iridium in the L band, just over 11 MHz for Globalstar in the L and S bands, and 10 MHz in the S band reclaimed for other uses. Id. at 30-34, J.A. 378-82. Globalstar strongly opposed any change to the existing spectrum plan because it was "using its entire spectrum assignment." Joint Comments of L/Q Licensee, Inc., Globalstar, L.P. and Globalstar USA, L.L.C. at i (July 11, 2003), J.A. 464. Globalstar also urged that if the FCC was inclined to reallocate spectrum in the Big LEO band, it should give the two companies an opportunity to devise a joint band plan. Joint Reply Comments of L/Q Licensee, Inc., Globalstar, L.P. and Globalstar USA, L.L.C. at 35-37 (July 25, 2003), J.A. 681-83.

In 2004, the FCC issued a report and order directing Globalstar and Iridium to share 3.1 MHz of spectrum in the L band between 1618.25 MHz and 1621.35 MHz. 2004 Order, 19 F.C.C.R. at 13,357. The Commission began by explaining that the deployment of only one CDMA system "justif[ied] a reassessment of the existing band plan." Id. at 13,370. Though the Commission found that both Globalstar and Iridium had "set forth compelling arguments for utilizing the spectrum," it determined that sharing the spectrum would be "the most equitable solution at this time" because Iridium's need for spectrum "appears to be more sporadic and geographic-specific." Id. at 13,377. The Commission further rejected Iridium's "spectrum parity" proposal because dividing the spectrum on a "pure megahertz-per-party basis . . . would ignore the significant encumbrances that exist in the lower portion of the L-band" from other non-MSS satellite systems in that band and in adjacent bandwidths. Id. at 13,378. Finally, the Commission explained that it had limited the amount of shared L band spectrum to 3.1 MHz because of these same encumbrances and in order to remain consistent with the spectrum reallotment originally ...


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