JUDGES QUESTION DBS COMPANY, FCC ON APPEAL PAPERS
Vigorous questioning in an oral argument pointed to the relevance of affidavits in an appeal brought by Advanced Communications Corp. (ACC) against the FCC. In a new phase of a case that spans nearly a decade, ACC asked the U.S. Appeals Court, D.C. to reverse a decision by the FCC not to reconsider a previous decision revoking the company’s DBS licenses in light of sworn affidavits from ex-commissioners. Judges Merrick Garland, Judith Rogers and Stephen Williams heard oral arguments Fri. Attorneys for EchoStar participated as intervenors on behalf of the FCC.
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In briefs to the court, ACC said its case against the FCC began in 1995 after the Commission, citing ACC’s lack of diligence, denied the company’s 2nd request for an extension to finish construction, and said it would auction ACC’s spectrum. ACC claimed the FCC revoked the auction for the express purpose of generating revenue. The company cited published statements by then-Chmn. Reed Hundt about how profitable the DBS auction was for the Commission. ACC’s most recent request to reopen the record based on new affidavits was denied last year (CD Feb 25 p12).
Identical affidavits acquired in 2001 from former commissioners Quello and Barrett said one member of the majority had based the decision on the expectation of revenue the auction could generate and that had violated the Act, ACC said. In his oral argument, ACC attorney Robert Corn-Revere said the affidavits provided the “missing link” between MCI’s ex parte filing and Hundt statements. Judge Garland challenged the assertion, saying if the affidavits were consistent with what had already been said in public, the Commission would have considered the information in their decision not to reopen the case.
Several judges noted the affidavits’ ambiguity. Williams said the situation would likely be different if the affidavits from dissenters had named a specific commissioner and quoted the reasoning as solely economic, or if “the affidavit had come from a commissioner in the majority.” Williams asked whether “such weak evidence” had ever been used to mandate reopening of a proceeding. Corn-Revere defended the affidavits and said “the conclusions they reach… are strong.”
Responding to a question from Rogers about the 6-year delay in acquiring the affidavits, Corn-Revere said there had been no “delay in Advanced trying to raise the issue.” He added that it would have been unprecedented for a litigant to acquire affidavits from Commissioners.
During arguments from FCC attorney Stewart Block, Rogers characterized the acquisition of such an affidavit from 2 Commissioners as “unusual.” While Block agreed, he said the commissioners could have mentioned the alleged conversations in their dissents: “If they had these conversations… they made no mention of them, no hint at the time.” He pointed out that Barrett had mentioned in a footnote that a colleague had asked whether MCI’s proposed $175 million opening bid would affect his decision on authorizing the licenses. Briefs from the FCC quoted Barrett as saying: “Clearly, based on my position in the Advanced Order, my response was a resounding ‘no.'” Based on that footnote, Block said the FCC didn’t believe there was anything new about the affidavit, and the FCC would “need more than a conclusion” to reopen the case.
Responding to questions about confidentiality agreements, Block said a commissioner could force those rules “if [the commissioner] believed there had been a violation of law.” Block also referred to FCC briefs when discussing the recall of the mandate made by an order. No record can be reopened without recalling the mandate of the final order, the briefs said, a process which is initiated by the FCC requesting the court for the recall: “ACC’s proffered evidence did not meet its extraordinarily high burden of establishing a reason to seek recall of the mandate, in view of the time that has passed since the 1995 Order, and the use that has been made by others of the satellite orbital locations and channels.”
EchoStar attorney Pantelis Michalopoulos told the court reversal of the Commission’s decision would cast doubt on his client’s service. According to ACC briefs, EchoStar won a bid for a single license with a $52.3 million bid. The company later bought the remaining ACC license from MCI. Though the transaction price was unspecified, MCI won the license with a high bid of $682.5 million. “Reopening the record would be meaningful [to ACC] only if it resulted in the reinstatement of licenses” to the company, Michalopoulos said. EchoStar’s existing customers could decide to leave and subscribe to another DBS service or cable, and potential customers would likely decide against subscribing, he said.