Court green lights FCC use of updated software for OET-69 calculations

A seemingly small but crucial element of the FCC’s incentive auction preparations has survived a broadside attack in the U.S. Court of Appeals for the D.C. Circuit. As a result, TVStudy lives on and the auction’s approach continues unimpeded.

At issue was the fact the FCC decided, in connection with the auction, to tweak the way it calculates TV station coverage areas and interference. Of course, what looks like a useful tweak to a regulator may look like a major – and harmful – overhaul to a regulatee. Luckily for the Commission, the court saw tweak rather than overhaul.

The story starts, as all incentive auction stories do, with the Middle Class Tax Relief and Job Creation Act of 2012, a/k/a the Spectrum Act. That’s where Congress officially set the wheels in motion for the upcoming auction. In Section 1452(b)(2), Congress told the FCC to

make all reasonable efforts to preserve, as of February 22, 2012, the coverage area and population served of each broadcast television licensee, as determined using the methodology described in OET Bulletin 69 of the Office of Engineering and Technology of the Commission

That may look pretty specific. In the eyes of some – most notably the NAB and Sinclair – it wasn’t.

The first sign of trouble was the Commission’s announcement, in early 2013, that it was planning to use new computer software, dubbed TVStudy, in running OET-69 calculations. (For those of you just joining us, OET-69 – real name: “OET Bulletin No. 69 Longley-Rice Methodology for Evaluating TV Coverage and Interference” – is the how-to guide developed by OET over the years for predicting, through use of the Longley-Rice propagation model, local television coverage areas and population served, as well as the likelihood of interference. OET-69 is more precise in predicting the effect of terrain obstacles on signal propagation than older methods.)

According to the Commission, TVStudy “runs much faster, provides greater accuracy in modeling and analysis, and is easier to use and more versatile”.  Plus, it’s based on more current population data and more precise terrain data that were previously used. While all that sounds swell, lurking in the notion of “greater accuracy in modeling and analysis” was an ominous thought: a change in accuracy and analysis could result in reductions in the areas and populations to be calculated – and in fact it does for some stations. Think of TVStudy as the digital equivalent of sharpening your pencil before you draw contours in order to make them as compact as possible. (You can read more about TVStudy in our previous posts.)

The NAB and Sinclair Broadcast Group, concerned about potential loss of coverage areas and audience thanks to the greater accuracy of TVStudy, objected. They argued both to the Commission and the court that when Congress ordered the FCC to use “the methodology described in OET Bulletin 69”, Congress meant the methodology in place on February 22, 2012, the day the Spectrum Act became law. Notwithstanding its supposed upsides, TVStudy was not part of that methodology and therefore could not be used consistently with the mandate of the Spectrum Act.

Hold on there, countered the Commission, we’re not changing the methodology; rather, we’re using new software to implement the existing OET-69 methodology using some new data sources (such as updated 2010 Census figures and antenna beam tilt data). As the Commission saw it, the Spectrum Act did not bar the use of such software. In effect, the FCC said that the auction statute does not require protecting station coverage as it would have been calculated in 2012. It requires using only the basic OET-69 framework from 2012, with no restriction on changing input data or the software that implements the framework, even if the outcome reduces protection for individual station.

When parties are arguing about whether an agency has strayed from the direction Congress has given it, the court’s first stop is what is known as a “Chevron analysis”. The first question: Did Congress speak directly “to the precise question at issue” – that is, in this case, did Congress unambiguously foreclose the Commission’s use of TVStudy along with updated data inputs when applying OET-69? Reviewing the statutory language, the court concluded that there was no such unambiguous direction there. To the contrary, the Spectrum Act directs the FCC to get the auction done successfully, and reliance on outdated data could threaten the auction’s ultimate success. (The court seems to have been put off by the appellant’s argument that Congress must have wanted the FCC to rely on old data and slower software. In the court’s view, that notion was “counterintuitive”.)

In this kind of appellate litigation, once the court is satisfied that it’s not looking at a Chevron Step 1 case – that is, that Congress has not spoken directly to the particular issue being raised – it’s usually easy sledding for the agency from there on out. If Congress hasn’t addressed the specific issue, then the reviewing court will accord the agency a boatload of deference. Pretty much as long as what the agency has done is not totally crazy, the court will affirm it. In this case, the FCC was able to convince the court that TVStudy made all the sense in the world: it’s faster and more accurate than the former software and, therefore, likely to lead to a successful auction, which is something Congress definitely wants. The court agreed.

Over and above their attack on TVStudy, the appellants raised a procedural challenge and a couple of other substantive points, to no avail. The procedural point – that the planned use of TVStudy was announced by OET, not the full Commission – didn’t stop the court, which was satisfied that OET’s announcement constituted substantial compliance with the relevant rules (it was published in the Federal Register, after all, so everybody had an opportunity to comment on it). Similarly, the court had no problem with the FCC’s decisions (a) not to protect digital replacement translators – they operate on different channels from their primary station and protecting them might jeopardize the auction’s success and (b) to require completion of the repacking process within 39 months because, again, a longer time could depress values and thereby threaten the auction.

The result here probably shouldn’t surprise us. After all, the subject matter – the operation of OET-69, a process which even savvy communications lawyers may not be familiar with – is highly technical. Often, judges seem uncomfortable wading into deep technical weeds, especially when, under Chevron, the agency is supposed to be accorded mucho deference. Whether TVStudy was indeed the innocent and inspired innovation that the FCC claimed or a bit of high tech high jinks, as some feared, it makes little difference now. The court has blessed TVStudy, and we will have to look forward to its implementation as the auction plays out.