First, the Spectrum Act prohibits the FCC from reassigning

channels or reallocating broadcast spectrum in a manner that would

"alter the spectrum usage rights of low-power television stations." 47

U.S.C. § 1452(b)(5). Yet the FCC's orders will, by the Commission's own  admission, completely extinguish many LPTV stations, see, e.g., JA  [Report & Order ¶ 237], while simultaneously giving priority for use of

"vacant" television spectrum to unlicensed communications devices and

uses that are, by statute and regulation, "secondary" to licensed LPTV

services. The FCC's mistreatment of LPTV stations in its spectrum

auction is based on the false premise that LPTV is not "protected" by

the Spectrum Act; it is inconsistent with the statute's plain language

and with the long history of Congress's and the FCC's efforts to promote

significant investment in LPTV broadcasting.

The FCC's policy contradicts the Spectrum Act's explicit,

unambiguous language ensuring LPTV licensees' spectrum usage

rights, statutory terms whose meaning is reinforced by the Act's

structure and legislative history. Even if the Spectrum Act's terms were

ambiguous, the FCC's interpretation would still be unreasonable,

because that interpretation renders the provision devoid of substantive

meaning and because it raises significant constitutional concerns by  depriving LPTV station owners and investors of all economically

beneficial or productive use of their licenses.

Second, the Commission unlawfully disregarded its obligations

under the Regulatory Flexibility Act of 1980, which obliges all federal

agencies to assess the impact of their regulations on small businesses.

Here, the FCC acknowledges that "many" LPTV stations will be left

without broadcast channels. The RFA provides agencies with two

options: either (i) certify that proposed rules "will not, if promulgated,

have a significant economic impact on a substantial number of small

entities," or (ii) describe "the steps the agency has taken to minimize

the significant economic impact on small entities consistent with the

stated objectives of applicable statutes." 5 U.S.C. §§ 604, 605.

Having recognized that many LPTV stations will lose their  channels under its auction and spectrum reallocation decisions, the  FCC could not provide the requisite certification that small businesses  will not suffer significant economic harms; yet the agency failed to  satisfy the alternative standard by neither quantifying the adverse  economic impact on LPTV owners as small entities nor describing the  steps that it "has taken" to minimize those harm. An agency's nominal  promise of future steps to ameliorate such harms cannot satisfy its legal  obligation under the RFA to explain the actions it has already taken to  compensate for that statutorily prohibited injury. Consequently, under  the terms of the RFA and precedent, this Court must reverse or remand  the FCC's spectrum auction rules or defer their implementation.

Third, the Commission's orders violate traditional APA prohibitions

against arbitrary and capricious rulemaking. 5 U.S.C. § 706(2)(A). The FCC exceeded its administrative discretion by proposing to wipe out LPTV service in many major markets in order to achieve policy goals rooted not in Congress's enabling legislation but,  rather, in the agency's own National Broadband Plan proposals. The  Commission's decision to sell more spectrum in the forward auction  than the reverse auction reclaims does not even display awareness that  the agency is in fact changing policies as to LPTV stations' superior  rights relative to unlicensed services. That unilateral FCC policy choice  also lacks any reasonable explanation tied to the record because the  decision to "repack" LPTV out of existence says literally nothing of the  broader legal balance between the rights of licensed broadcasters and  those of unlicensed spectrum usage."