Alvin Lou Media, Inc. v. Federal Communications Commission (571 F.3d 1, 2009)

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

This appeal involves the Federal Communications Commission’s competitive auction procedures for granting construction permits and licenses for AM radio broadcast stations. In contrast to the procedures for comparative hearings, the Commission determined in 1998 to defer full technical reviews of applications until after the auction among mutually exclusive applications is conducted, and then to review only the winning bidder’s application. Pre-auction review of engineering data would be limited to determining mutual exclusivity and geographic preferences under 47 U.S.C. § 307(b). Alvin Lou Media (“ALM”) appeals the denial of its requests for reconsideration of the mutually exclusive designation of the application filed by Powell Meredith Communications Company (“PMCC”) for a radio station in the Las Vegas, Nevada area, and for a stay of the auction. ALM argued to the Commission that because PMCC’s application proposed a station that could not be constructed or operated without violating non-interference rules, spectrum protection restrictions, and a treaty with Mexico, the application should have been dismissed. On appeal, ALM contends that the Commission’s refusal to consider patent and disqualifying application defects prior to making a § 307(b) determination, 47 U.S.C. § 307(b), was contrary to the mandate in § 309(j)(5) of the Communications Act, 47 U.S.C. § 309(j)(5), and arbitrary and capricious under the Administrative Procedure Act (“APA”), 5 U.S.C. § 551 et seq.

Although ALM refused to participate in the auction, we hold it has standing to appeal the denial of its requests for reconsideration. ALM’s refusal was based on its view that the Commission’s failure to dismiss a technically infeasible application was an error of law. Absent the alleged error, ALM’s application would have been entitled to consideration as a “singleton” and there would have been no auction. The right of a disappointed bidder in a government auction to a legally valid procurement process, see U.S. Airwaves, Inc. v. FCC, 232 F.3d 227, 232 (D.C.Cir.2000), applies no less to a disappointed participant in an auction process challenging rules as placing it at a competitive disadvantage, DIRECTV, Inc. v. FCC, 110 F.3d 816, 829-30 (D.C.Cir.1997).

However, ALM’s contentions fail on the merits. Section 309(j)(5), 47 U.S.C. § 309