Council Tree Loses Challenge to FCC Incentive Auction Rules
The 3rd U.S. Circuit Court of Appeals rejected Council Tree’s challenge of an FCC decision to impose a $150 million bidding cap on designated entities (DEs) in the TV incentive auction. The Philadelphia-based court heard argument in March (see 1703070041).…
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“The question presented here is whether the FCC acted legally when it limited the bidding credits available to DEs,” said Thursday's opinion. “It did.” The DE argued the FCC acted arbitrarily and capriciously in imposing the bidding caps. “According to Council Tree, the FCC was chasing a phantom because its Order provides no evidence that DEs are ‘gaming the rules’ or that DE investors are ‘unjustly enriched,’” the 3rd Circuit said. “The FCC’s Order did little to assess the scope and substantiality of the harm posed by large companies abusing the DE process.” But there's at least “general agreement that the DE program can be abused,” it said: The FCC “identified a threat (abuse of the DE designation) to one of its statutory objectives (preventing unjust enrichment), and adopted a prophylactic measure.” Judge Thomas Hardiman wrote the unanimous decision. Chief Judge Brooks Smith and Judge Smith Cheryl Ann Krause also heard the case. Council Tree didn't comment.