Last gasp appeal comes up big, possibly saving 689 24 GHz and 39 GHz licenses.

If you took the long odds and bet against the FCC in FiberTower’s last gasp effort to keep its 689 licenses alive, lucky you! The D.C. Circuit appears to have given FiberTower at least a chance.

FiberTower’s saga goes back several years. Check out our blog posts on that saga for a more complete history. In sum, FiberTower had 689 licenses in the 24 GHz and 39 GHz bands that the FCC cancelled for failure to construct sufficient facilities. FiberTower appealed.

At first glimpse, the Court’s opinion looked like bad news for FiberTower. A statutory argument it presented to the Court got tossed immediamente because it hadn’t been presented to the FCC below, as required by Section 405 of the Communications Act. And FiberTower’s arguments about the FCC’s interpretation of its substantial service renewal standards – i.e., that that interpretation is bad policy – didn’t get very far either (thanks to the deference to which the FCC is ordinarily entitled).

But in the renewal applications relative to 42 of its licenses, FiberTower had indicated that it had in fact completed some link construction and initiated some service. The FCC’s orders had not addressed those showings at all. In fact, the Commission had even gone as far as saying that there had been “no construction of any facilities whatsoever” and “FiberTower was seeking a finding of substantial service without any construction of facilities.” Since (in FiberTower’s view) its showings had demonstrated construction of at least 42 licenses (and satisfied the Commission’s “substantial service” standard), the Commission’s failure to address those showings was fatal error, at least as far as those 42 applications were concerned.

Before the Court, the FCC countered that FiberTower hadn’t raised that particular argument before the agency. (This was the same Section 405 approach that the Commission won on with respect to one of FiberTower’s statutory arguments.) But, wouldn’t you know it, FiberTower had raised it – albeit somewhat obliquely and with virtually no detail – in an application for review it had filed with the Commission. That being the case, the FCC had been given an “opportunity to pass” on the issue, which is all FiberTower needed to do in order to allow it to make the argument to the Court.

In response, the Commission appears to have argued that it didn’t really need to look at each and every substantial service showing before tossing them all. The Court disagreed: “[I]t ill behooves the Commission to imply that it can cancel licenses for failure to show any construction without reviewing each substantial service showing.” Since the agency record relative to the 42 licenses was silent, the Court remanded those 42 licenses back to the Commission for further consideration.

So FiberTower ends up with 42 and loses the other 647, right? NOT. As it turns out, all the licenses were set to expire in June, 2012. FiberTower had requested a waiver of that deadline, which the FCC denied. But in so doing, the Commission had “acknowledged that the proportion of licenses that have been built out may be relevant to its extension analysis.” In other words, if some of the licenses had been built out, an extension of all of them might be warranted. Since 42 of the licenses might indeed have been built out, the possibility exists that, upon consideration of that fact, an extension with respect to all FiberTower’s licenses might be in order. Accordingly, it appears that the Court has left open the prospect for renewal/extension of all 689 licenses.

So FiberTower’s 689 licenses appear to live on. The likelihood that the FCC will eventually relent and leave them all in place is impossible to gauge at this point, but at least FiberTower’s prospects are better now than they were before the Court’s opinion.