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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 16, 2003 Decided October 28, 2003
No. 02-1312
CONSUMER ELECTRONICS ASSOCIATION,
PETITIONER,
v.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.
NATIONAL ASSOCIATION OF BROADCASTERS AND
ASSOCIATION FOR MAXIMUM SERVICE TELEVISION, INC.,
INTERVENORS.
On Petition for Review of an Order of the
Federal Communications Commission
Jonathan Jacob Nadler argued the cause for petitioner.
With him on the briefs were Joseph P. Markoski, David A.
Nall, Angela M. Simpson, and David R. Siddall.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Joel Marcus, Counsel, Federal Communications Commis-
sion (FCC), argued the cause for respondents. With him on
the brief were John A. Rogovin, General Counsel, FCC, and
Daniel M. Armstrong, Associate General Counsel, FCC, R.
Hewitt Pate, Acting Assistant Attorney General, U.S. Depart-
ment of Justice, and Catherine G. O’Sullivan and Andrea
Limmer, Attorneys, Department of Justice.
Donald B. Verrilli, Jr., argued the cause for intervenors.
With him on the brief were Ian Heath Gershengorn and
Robin M. Meriweather, Henry L. Baumann, National Associ-
ation of Broadcasters (NAB), Jack N. Goodman, NAB, and
Valerie Schulte, NAB, and David Donovan, Association for
Maximum Service Television, Inc.
Before: GINSBURG, Chief Circuit Judge, ROBERTS, Circuit
Judge, and WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge ROBERTS.
ROBERTS, Circuit Judge: The Consumer Electronics Associ-
ation (CEA) is a trade association representing businesses in
the consumer technology industry, including designers and
manufacturers of televisions, DVD players, and VCRs. CEA
seeks review of a final order of the Federal Communications
Commission (FCC or Commission) requiring that all televi-
sions with a display of 13 inches or greater and certain other
devices capable of receiving over-the-air television signals
(such as certain DVD players and VCRs) include a tuner
capable of receiving and decoding digital television (DTV)
signals. See In re Review of the Commission’s Rules and
Policies Affecting the Conversion to Digital Television, 17
F.C.C.R. 15,978 (2002) (Digital Tuner Order or Order). CEA
contends that the FCC lacks statutory authority to enact the
Digital Tuner Order, and that, even if the FCC has such
authority, the Order is an arbitrary and capricious abuse of it.
Finding the Digital Tuner Order to be a reasonable exercise
of the Commission’s authority under the All Channel Receiver
3
Act (ACRA), 47 U.S.C. § 303(s), we deny the petition for
review.
I.
Since the 1940s, television stations have broadcast their
programs over the air using an analog transmission standard
adopted by the National Television System Committee
(NTSC), and for almost all that time every television sold in
the United States has contained an analog tuner designed to
receive those NTSC signals and convert them into pictures
and sound. Today, digital technology permits television con-
tent to be broadcast as streams of binary data bits, allowing
broadcasters to transmit more information over a channel of
electromagnetic spectrum than is possible through analog
broadcasting. For example, an analog broadcaster can fit
only one video and two or three audio signals into a 6 MHz
broadcast channel; a DTV station can transmit up to four
such programs simultaneously (along with CD-quality audio
signals) across the same 6 MHz swath of spectrum. See In re
Advanced Television Systems and Their Impact upon the
Existing Television Broadcast Service, 10 F.C.C.R. 10,540,
10,541 ¶ 4 (1995) (Fourth Further Notice). Alternatively, a
digital broadcaster can transmit the television program in
high definition (HDTV) format — a wide-screen, ultra-high
resolution picture with movie theater-quality surround
sound — along with data such as program listings, sports
scores, and stock prices. See id. Moreover, reception of
over-the-air DTV broadcasts is less dependent on relative
signal strength and more resistant to interference than ana-
log broadcasts, yielding dramatically enhanced picture and
sound quality. See In re Review of the Commission’s Rules
and Policies Affecting the Conversion to Digital Television,
15 F.C.C.R. 5257, 5266 ¶ 28 (2000) (Notice of Proposed Rule
Making).
DTV also promises more efficient use of scarce electromag-
netic spectrum. Currently, while over 400 MHz of spectrum
is devoted to analog television broadcasting (enough for sixty-
eight 6 MHz channels), the vulnerability of analog broadcasts
to interference means that only a few channels actually can
be used in any geographic area. See Fourth Further Notice,
4
10 F.C.C.R. at 10,549 ¶ 58. Particularly in the UHF band,
channels must be spaced far apart to avoid interference. See
In re Advanced Television Systems and Their Impact upon
the Existing Television Broadcast Service, 2 F.C.C.R. 5125,
5132 ¶¶ 59–60 (1987) (Notice of Inquiry). DTV does not have
this problem. Once television broadcasters have switched to
DTV, the FCC will be able to stack broadcast channels right
beside one another along the spectrum, and ultimately utilize
significantly less than the 400 MHz of spectrum the analog
system absorbs today. See In re Review of the Commission’s
Rules and Policies Affecting the Conversion to Digital Tele-
vision, 16 F.C.C.R. 5946, 5951 ¶ 12 (2001) (Further Notice of
Proposed Rulemaking). The FCC can then reallocate the
spectrum no longer needed by broadcasters for other uses,
such as emergency and wireless communications.
In 1987, at the request of a coalition of television broadcast-
ers, the FCC began to explore the possibility of using then-
nascent digital technology to broadcast television program-
ming. See Notice of Inquiry, 2 F.C.C.R. at 5125 ¶ 2. By
1997, the Commission had adopted a standard for DTV
transmissions and had committed itself to the goal of aban-
doning analog broadcasting and switching all television broad-
casts to DTV by the end of 2006. See In re Advanced
Television Systems and Their Impact upon the Existing
Television Broadcast Service, 12 F.C.C.R. 12,809, 12,850 ¶ 99
(1997) (Fifth Report and Order). Shortly thereafter, Con-
gress adopted the Commission’s goal as its own, stating that
‘‘[a] television broadcast license that authorizes analog televi-
sion service may not be renewed TTT for a period that extends
beyond December 31, 2006.’’ 47 U.S.C. § 309(j)(14)(A). Con-
gress, however, also directed the FCC to grant extensions to
a television station if 15 percent or more of the television
households in its market cannot receive DTV programming
either from a cable or satellite service carrying such program-
ming, or through a television or set-top box with a digital
tuner capable of processing over-the-air DTV signals. Id.
§ 309(j)(14)(B)(iii).
The FCC originally anticipated that market forces would
drive consumers to want and manufacturers to provide tuners
5
capable of receiving DTV signals, see, e.g., Fifth Report and
Order, 12 F.C.C.R. at 12,855–56 ¶ 113, but by 2001, the
Commission found that ‘‘DTV receivers are not yet available
in the market in large quantities, and certainly not in suffi-
cient volume to support a rapid transition to an all-digital
broadcast television service.’’ Further Notice of Proposed
Rulemaking, 16 F.C.C.R. at 5985 ¶ 107. The FCC thus
requested comment on ‘‘whether a requirement to include
DTV reception capability in certain new television sets could
help to develop the production volumes needed to bring DTV
prices down to where they are more attractive to consumers
and thereby promote more rapid development of high DTV
set penetration.’’ Id. After receiving comments from nu-
merous parties (including CEA, which opposed any digital
tuner requirement) the FCC issued its Digital Tuner Order
in August 2002. The FCC directed that, on a phased-in basis
starting in July 2004, all televisions sold in the United States
contain a digital tuner.1
The Commission found statutory authority for the Order in
the All Channel Receiver Act, 47 U.S.C. § 303(s). Digital
Tuner Order, 17 F.C.C.R. at 15,989–92 ¶¶ 24–31. ACRA
grants the FCC authority to require that televisions shipped
in interstate commerce for sale ‘‘be capable of adequately
receiving all frequencies allocated by the Commission to
television broadcasting.’’ 47 U.S.C. § 303(s). The FCC ac-
knowledged that when ACRA was enacted in 1962, Congress
was addressing the ‘‘specific problem’’ of the ‘‘lack of TV sets
that could receive UHF channels.’’ Digital Tuner Order, 17
F.C.C.R. at 15,990 ¶ 26. The Commission nevertheless re-
jected the argument of CEA and others that ACRA’s grant of
1 The digital tuner mandate is phased in as follows: by July 1,
2004, 50 percent of televisions with screens sized 36 inches or
larger; by July 1, 2005, 100 percent of televisions 36 inches or
larger, and 50 percent of televisions with screens between 25 inches
and 36 inches; by July 1, 2006, 100 percent of televisions with
screens between 25 inches and 36 inches; and by July 1, 2007, 100
percent of televisions with screens between 13 inches and 24 inches,
and 100 percent of other devices (DVD players, VCRs, etc.) that
receive broadcast television signals. See Digital Tuner Order, 17
F.C.C.R. at 15,996 ¶ 40; 47 C.F.R. § 15.117(i)(1) (2003).
6
authority was so limited, concluding that ‘‘[w]hile Congress
discussed the need for a statutory remedy in [the UHF]
context, it crafted the statutory language more generally —
to address analogous situations that might arise in the fu-
ture.’’ Id. And the Commission found that the problems it
faced in the transition to DTV, in fact, strongly resembled the
logjam of conflicting forces that stifled the development of
UHF broadcasting in the early 1960s.
Here, the Commission is faced with a similar problem —
that is, the reluctance of the public to buy DTV receivers
until there are DTV stations offering attractive DTV
programs, and the lack of incentive for broadcasters to
provide good attractive DTV programming in the ab-
sence of an audience which will attract advertisers. As
Congress and the Commission found in the UHF context,
requiring the manufacture of DTV receivers will address
the root cause of the problem, namely the lack of televi-
sion receivers capable of receiving DTV signals.
Id. at 15,990 ¶ 27.
The Commission acknowledged that it had, in earlier ad-
ministrative proceedings, rejected calls for a digital tuner
mandate, believing that market forces were sufficient to carry
out the DTV transition. Id. at 15,993 ¶ 32; see also Fifth
Report and Order, 12 F.C.C.R. at 12,855–56 ¶ 113. By 2002,
however, with the statutory 2006 deadline fast approaching,
the Commission had concluded that ‘‘insufficient progress is
being made towards bringing to market the equipment con-
sumers need to receive broadcasters[’] DTV signals over-the-
air.’’ Digital Tuner Order, 17 F.C.C.R. at 15,993 ¶ 33. The
Commission decided that requiring digital tuners in all new
televisions on a phased-in basis would ‘‘provide the best
means for rapidly providing consumers with the means to
receive the DTV signals that are now being transmitted by
broadcasters while minimizing the impact of this requirement
on equipment manufacturers and consumers.’’ Id. at 15,995
¶ 39.
7
The Digital Tuner Order was published in the Federal
Register on October 11, 2002, and CEA filed its petition for
review that same day.
II.
A. Jurisdiction.
We are met at the outset with a suggestion that we lack
jurisdiction to consider CEA’s challenge. CEA — apparently
not wanting the sun to set on the Digital Tuner Order
unchallenged — filed its petition for review the very day the
Order was published in the Federal Register. Shortly before
oral argument, the FCC filed a letter noting that its rules
provide that ‘‘the time for seeking review of documents in
rulemaking proceedings begins the day after publication in
the Federal Register.’’ Letter of FCC, Sept. 11, 2003 (em-
phasis added). Citing our decision in Adams Telcom, Inc. v.
FCC, 997 F.2d 955 (D.C. Cir. 1993) and an unpublished order
in Time Warner Entm’t Co. v. FCC, No. 99–1500, 2000 WL
274211 (D.C. Cir. Feb. 8, 2000), the FCC surmised that its
rules, as construed by our cases, ‘‘can be read to suggest that
the Court lacks jurisdiction over a petition for review filed the
day of Federal Register publication.’’ Letter of FCC, Sept.
11, 2003 (emphasis added).
As a court of limited jurisdiction, we take seriously any
suggestion that we lack the authority to act — even one
raised at the eleventh hour and not embraced as an argument
but instead meekly noted. We begin our inquiry with the
text. The rule cited by the Commission provides that ‘‘the
first day to be counted when a period of time begins with an
action taken by the Commission TTT is the day after the day
on which public notice of that action is given.’’ 47 C.F.R.
§ 1.4(b). The rule further states that for all documents in
notice and comment rulemaking proceedings, the date of
public notice is the date of publication in the Federal Regis-
ter. Id. § 1.4(b)(1). In Adams Telcom, we interpreted Rule
1.4(b)(1) to mean that, in notice and comment rulemaking
proceedings, ‘‘the time for seeking judicial review begins on
the day after the document is published in the Federal
Register.’’ 997 F.2d at 956. And in the unpublished order in
8
Time Warner, we relied on Adams Telcom to dismiss two
Time Warner petitions for review because they had been filed
on the same day as the publication of the order under review,
see Time Warner, 2000 WL 274211 — although, as a practical
matter, it made no difference because Time Warner, fearing
exactly this jurisdictional defect, had filed identical petitions
on the following day, see Time Warner Entm’t Co. v. FCC,
240 F.3d 1126 (D.C. Cir. 2001) (addressing merits of Time
Warner’s petition for review). Judge Williams dissented
from the order of dismissal, stating that he did not believe
that Rule 1.4(b) ‘‘is intended to foreclose filing a petition for
review on the day public notice is given, which petitioner
refers to as day 0.’’ Time Warner, 2000 WL 274211. The
majority of the panel, however, evidently believed itself bound
by Adams Telcom’s prior interpretation of Rule 1.4(b).
Certainly this court lacks jurisdiction to entertain a prema-
turely filed petition. See Western Union Tel. Co. v. FCC, 773
F.2d 375, 378 (D.C. Cir. 1985); 28 U.S.C. § 2344 (parties
aggrieved by final agency order ‘‘may, within 60 days after its
entry, file a petition to review the order’’) (emphasis added).
We believe, however, that the panel in Adams Telcom incor-
rectly paraphrased Rule 1.4(b) when it stated that ‘‘the time
for seeking judicial review begins on the day after the docu-
ment is published in the Federal Register.’’ 997 F.2d at 956.
That is not what the rule says. See 47 C.F.R. § 1.4(b) (‘‘the
first day to be counted when a period of time begins with an
action taken by the Commission TTT is the day after the day
on which public notice of that action is given’’). Rather than
establishing a waiting period for seeking judicial review, Rule
1.4(b) operates as a rounding rule for the computation of
deadlines. The purpose of the rule is ‘‘to detail the method
for computing the amount of time within which per-
sonsTTTmust act in response to deadlines established by the
Commission’’; the rule specifies the method for ‘‘computing a
terminal date’’ for seeking judicial review — not a starting
date. 47 C.F.R. § 1.4(a), (d) example 9 (emphases added).
An interpretation of Rule 1.4(b) that interposes a jurisdic-
tional waiting period before one may seek judicial review is
thus contrary not only to common sense, but to the text of
9
Rule 1.4 as well. We accordingly disavow the interpretation
of Rule 1.4(b) stated in Adams Telcom and the unpublished
order in Time Warner. We hold that a petition for review
filed after public notice, but still on the same day, is not
premature under 28 U.S.C. § 2344.2
B. Statutory Authority.
Satisfied that CEA was not guilty of a false start, we turn
now to its argument that the FCC had no authority under the
All Channel Receiver Act, 47 U.S.C. § 303(s), to issue the
Digital Tuner Order.
When a litigant challenges the Commission’s interpretation
of a statute that it administers, our review is governed by the
familiar dictates of Chevron, U.S.A., Inc. v. Natural Re-
sources Defense Council, Inc., 467 U.S. 837, 842–43 (1984).
‘‘We start our analysis, as always, by asking whether Con-
gress has spoken to ‘the precise question at issue.’ ’’ Wells
Fargo Bank, N.A. v. FDIC, 310 F.3d 202, 205 (D.C. Cir. 2002)
(quoting Chevron, 467 U.S. at 842). To determine whether
Congress has so spoken, we apply ‘‘traditional tools of statu-
tory interpretation — text, structure, purpose, and legislative
history.’’ Pharmaceutical Research & Mfrs. of Am. v.
Thompson, 251 F.3d 219, 224 (D.C. Cir. 2001). If it has, ‘‘the
inquiry is at an end; the court ‘must give effect to the
unambiguously expressed intent of Congress.’ ’’ FDA v.
Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000)
(quoting Chevron, 467 U.S. at 843). When the statute is
silent or ambiguous on the precise question in dispute, we
move to Chevron’s second step, and defer to the agency’s
interpretation if it offers a ‘‘permissible construction of the
statute.’’ Chevron, 467 U.S. at 843.
2 The problematic language in Adams Telcom is dicta — the case
involved calculating the filing deadline and not a petition for review
filed on the same day as the order sought to be reviewed — and
Time Warner is a nonbinding unpublished order. Nevertheless,
because this part of our decision rejects a prior statement of law, it
has been considered separately and approved by the full court. See
Irons v. Diamond, 670 F.2d 265, 268 n.11 (D.C. Cir. 1981).
10
‘‘We begin, as always, with the plain language of the statute
in question.’’ Citizens Coal Council v. Norton, 330 F.3d 478,
482 (D.C. Cir. 2003). Enacted in 1962, ACRA includes among
the ‘‘[p]owers and duties of [the] Commission,’’ 47 U.S.C.
§ 303 (title), the ‘‘authority to require that apparatus de-
signed to receive television pictures broadcast simultaneously
with sound be capable of adequately receiving all frequencies
allocated by the Commission to television broadcasting.’’ Id.
§ 303(s). CEA concedes that ‘‘[o]n its face, ACRA appears to
authorize the Commission to take any action necessary to
ensure that television sets can adequately receive all over-the-
air broadcast signals.’’ Pet. Br. at 21. CEA’s objection is
that the Commission ‘‘relies almost entirely on a literal
reading of the statutory language,’’ id. — not the most
damning criticism when it comes to statutory interpretation.
Nevertheless, CEA contends that it should prevail under step
one of Chevron, because the legislative history of ACRA
unambiguously demonstrates that Congress limited the Com-
mission’s power under the statute to ensuring only that
reception of UHF frequencies (channels 14–69) be compara-
ble to that of VHF frequencies (channels 2–13). This argu-
ment is meritless.
It is true, as CEA argues, that we ‘‘may examine the
statute’s legislative history in order to ‘shed new light on
congressional intent, notwithstanding statutory language that
appears superficially clear.’ ’’ National Rifle Ass’n v. Reno,
216 F.3d 122, 127 (D.C. Cir. 2000) (quoting Natural Re-
sources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1127
(D.C. Cir. 1995)). On the other hand, only rarely have we
relied on legislative history to constrict the otherwise broad
application of a statute indicated by its text, see, e.g., Ameri-
can Scholastic TV Programming Foundation v. FCC, 46 F.3d
1173, 1180 (D.C. Cir. 1995), and just recently we reiterated
that ‘‘[w]hile such history can be used to clarify congressional
intent even when a statute is superficially unambiguous, the
bar is high.’’ The Williams Cos. v. FERC, No. 02–5056, slip.
op. at 8 (D.C. Cir. Oct. 10, 2003). There is good reason for
this; the Supreme Court has consistently instructed that
statutes written in broad, sweeping language should be given
11
broad, sweeping application. See New York v. FERC, 122
S. Ct. 1012, 1025 (2002) (where Congress uses broad lan-
guage, evidence of a specific ‘‘catalyz[ing]’’ force for the
enactment ‘‘does not define the outer limits of the statute’s
coverage’’); PGA Tour, Inc. v. Martin, 532 U.S. 661, 689
(2001) (‘‘[T]he fact that a statute can be applied in situations
not expressly anticipated by Congress does not demon-
strate ambiguity. It demonstrates breadth.’’ (internal quota-
tion marks omitted)).
This case does not present the very rare situation where
the legislative history of a statute is more probative of
congressional intent than the plain text. CEA’s lone exam-
ple, American Scholastic TV, is inapposite. There we re-
viewed the Commission’s interpretation of a now-repealed
provision of the 1984 Cable Act. The provision in question
stated that ‘‘[i]t shall be unlawful for any common carrier TTT
to provide video programming directly to subscribers in
its telephone service areaTTTT’’ 47 U.S.C. § 533(b)(1) (re-
pealed). The Commission found that the provision did not
extend to video programming delivered via wireless transmis-
sion. See American Scholastic TV, 46 F.3d at 1177. In
upholding the Commission’s interpretation, we found that
although the particular provision appeared, on its face, to
enact a flat ban on the transmission of all video programming,
other provisions of the same section created an ambiguity as
to whether the subsection at issue was intended to apply
outside of the cable context. Id. at 1179. We also relied on
Congress’s ‘‘singular focus’’ on cable programming through-
out its consideration of the eponymous Cable Act. Id. at
1179–82. Finding the statutory provision ambiguous, we
upheld the Commission’s interpretation under step two of
Chevron as a permissible construction of the statute. Id. at
1182.
American Scholastic TV is thus distinguishable for two
separate and equally compelling reasons. First, in that case
we relied on more than just legislative history; we also relied
on the text of subsections neighboring the provision in dis-
pute. Id. at 1179. CEA does not point to any similar
provision in the Telecommunications Act indicating that
ACRA is meant to apply only to analog broadcasting. Sec-
ond, in American Scholastic TV, we found only that the
12
provision at issue was ambiguous and that the agency’s
construction was permissible. Id. at 1181–82. CEA asks for
much more — a finding that the legislative history and
structure of ACRA unambiguously foreclose the plain mean-
ing of the text of the statute.3
In any event, the legislative history invoked by CEA does
not demonstrate that Congress meant to limit ACRA’s appli-
cation to the analog context. That history does show that
Congress was most immediately concerned with empowering
the FCC to address the problem of UHF reception. See, e.g.,
S. Rep. No. 1526, 87th Cong., 2d Sess. 2–4 (1962); H.R. Rep.
No. 1559, 87th Cong., 2d. Sess. 2–5 (1962). But, as the
Commission found in the Digital Tuner Order, nothing in the
legislative history compels (or even suggests) the conclusion
that Congress intended to limit the statute to that specific
application. Digital Tuner Order, 17 F.C.C.R. at 15,989–90
¶ 25.4 The use of broad language in ACRA — speaking only
of ‘‘receiving all frequencies allocated by the Commission to
television broadcasting,’’ 47 U.S.C. § 303(s) (emphasis add-
3 In support of its more limited reading of ACRA, CEA also
invokes our decision in Electronic Industries Ass’n v. FCC, 636
F.2d 689 (D.C. Cir. 1980) (EIA), but its reliance on that case is
similarly misplaced. In EIA we struck down an FCC order, issued
under ACRA, that required televisions to provide enhanced UHF
reception. We held that ACRA’s term ‘‘adequately receiving’’
indicated that the FCC’s authority under the statute was limited to
ensuring ‘‘adequate’’ reception of channels, and did not extend to
providing for enhanced reception. Id. at 698. We did not, in EIA,
confront the issue of whether the FCC’s authority in ACRA was
limited to analog broadcasting or the VHF and UHF frequency
bands.
4 We also find unpersuasive CEA’s references to two recent
episodes of congressional inaction on the question of whether to
mandate the inclusion of digital tuners in televisions. ‘‘Congres-
sional inaction lacks persuasive significance because several equally
tenable inferences may be drawn from such inaction, including the
inference that the existing legislation already incorporated the
offered change.’’ Pension Benefit Guaranty Corp. v. LTV Corp.,
496 U.S. 633, 650 (1990) (internal quotation marks omitted).
13
ed) — to solve the relatively specific problem of UHF recep-
tion, militates strongly in favor of giving ACRA broad appli-
cation. See Lousiana Pub. Serv. Comm’n v. FCC, 476 U.S.
355, 373 (1986) (when narrow language will suffice to solve
the particular problem at issue, Congress’s choice of broad
language demonstrates the statute’s intended breadth of ap-
plication). We should ‘‘not resort to legislative history to
cloud a statutory text that is clear.’’ Ratzlaf v. United States,
510 U.S. 135, 147–48 (1994); accord Air Transport Ass’n of
Canada v. FAA, 323 F.3d 1093, 1096 (D.C. Cir. 2003) (‘‘ordi-
narily, we do not read legislative history to create otherwise
non-existent ambiguities’’). We decline CEA’s invitation to
do so here.
Because the FCC’s interpretation is not foreclosed by
Chevron step one, we proceed to the Chevron step two
inquiry — whether the FCC’s interpretation of the statute is
reasonable. Here, however, CEA advances no additional
argument beyond those already discussed as part of step one,
and so we have no basis for finding the Commission’s inter-
pretation unreasonable. In any event, the language of ACRA
plainly admits of the Commission’s interpretation, and it
therefore is a permissible construction of the statute.
C. APA Review.
We turn to CEA’s arguments that the Digital Tuner Order
runs afoul of the Administrative Procedure Act’s require-
ments of reasoned decisionmaking. Under the APA, we may
vacate the Commission’s Digital Tuner Order only if it is
‘‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.’’ 5 U.S.C. § 706(2)(A). Our review is
thus necessarily deferential; we presume the validity of the
Commission’s action and will not intervene unless the Com-
mission failed to consider relevant factors or made a manifest
error in judgment. Office of Communication, Inc. of the
United Church of Christ v. FCC, 327 F.3d 1222, 1224 (D.C.
Cir. 2003).
CEA contends that in the Order the FCC: (1) addressed a
problem that does not exist; (2) chose an irrational means to
ensure that households can access DTV; and (3) failed to
14
assess reasonably the costs of its mandate to consumers. We
find each of these arguments unpersuasive.
1. CEA first argues that digital tuners are presently
commercially available in a quantity sufficient to meet the
congressional timetable and that, therefore, the Digital Tuner
Order, by ordering the manufacture of more digital tuners,
seeks to solve a problem that does not exist. While it is true
that the FCC must ‘‘do more than ‘simply posit the existence
of the disease sought to be cured,’ ’’ the Commission is
entitled to ‘‘appropriate deference to predictive judgments
that necessarily involve the expertise and experience of the
agency.’’ Time Warner Entm’t Co., 240 F.3d at 1133 (quot-
ing Turner Broadcasting Sys. v. FCC, 512 U.S. 622, 664
(1994)).
The Commission is not crying wolf. Widespread ability
among consumers to receive DTV signals is a prerequisite to
meeting Congress’s 2006 target date for the completion of the
DTV conversion and the cessation of analog broadcasting.
See 47 U.S.C. § 309(j)(14)(A). Congress has decreed that, its
target date notwithstanding, analog broadcasting must contin-
ue in markets where at least 15 percent of households are
unable to receive DTV. Id. § 309(j)(14)(B). Seizing upon the
FCC’s statement that, at the time of the Order, there were
‘‘17 models of set-top DTV tuners and 23 models of television
receivers with integrated DTV tuners currently on the mar-
ket,’’ Digital Tuner Order, 17 F.C.C.R. at 15,994 ¶ 35, CEA
argues there is ample availability of over-the-air DTV digital
tuners in the marketplace. CEA here fundamentally miscon-
strues the nature of the problem: it is not the lack of digital
tuners for sale that is stifling the growth of DTV and
jeopardizing the congressional target date; it is ‘‘the reluc-
tance of the public to buy’’ them. Id. at 15,990 ¶ 27; see also
id. at 15,993 ¶ 34 (‘‘While TTT DTV services reach more than
86% of the nation, the number of consumers with DTV
capable receivers is still very low.’’).
The FCC found that a logjam was blocking the develop-
ment of DTV: broadcasters are unwilling to provide more
DTV programming because most viewers do not own DTV
equipment, and the lack of attractive DTV programming
15
makes consumers reluctant to invest more in DTV equipment,
which, in turn, reinforces the broadcasters’ decision not to
invest more in DTV programming. See id. at 15,990 ¶ 27.5
As evidence of this diagnosis, the FCC referred to CEA sales
data revealing that, in 2001, approximately 200,000 DTV
tuners were sold nationwide. See id. at 15,993 ¶ 34. Only 0.2
percent of the 105 million television-viewing households in the
nation gained over-the-air DTV capability in 2001. See id. at
15,994 ¶ 35. The FCC also observed that cable and satellite
television subscription services were not filling the gap, not-
ing that the set-top boxes necessary to decode the digital
signals transmitted over a cable or satellite system ‘‘are not
yet widely-deployed.’’ Id. at 15,996 ¶ 36. Consequently,
‘‘[m]ost cable and [satellite] systems are currently carrying
few, if any, digital broadcast signals.’’ Id. at 15,998 ¶ 44.
The Commission’s conclusion that the nation was making
‘‘insufficient progress’’ in the conversion to DTV, id. at 15,993
¶ 33, was thus based on substantial evidence.
2. Pointing out that 85 percent of households receive
television service from a cable or satellite provider, CEA next
argues that a requirement that all televisions include an over-
the-air tuner is not a rational means to promote DTV conver-
sion. CEA argues that the Digital Tuner Order forces cable
and satellite households to purchase a digital tuner they do
not want and will not use. This argument fails. First, as a
general matter, the very nature of the authority conferred by
ACRA assumes that the Commission may impose costs on
consumers for features they do not want. For some consum-
ers, that is doubtless the consequence of the transition from
analog to DTV itself. That transition is not a market-driven
migration to a new technology, but rather the unambiguous
command of an Act of Congress. See 47 U.S.C.
§ 309(j)(14)(A). Given Congress’s instruction to end analog
5 As previously noted, the Commission explained that this logjam
was similar in nature to that which blocked development of UHF
channels in the early days of television — a logjam that led to the
enactment of ACRA and the mandate that tuners be capable of
receiving UHF signals. Digital Tuner Order, 17 F.C.C.R. at 15,990
¶ 27.
16
broadcasts by 2007 and the Commission’s finding that there
was no ‘‘trend developing that [would] rapidly provide U.S.
households with the ability to receive DTV signals and bring
the DTV transition to completion,’’ Digital Tuner Order, 17
F.C.C.R. at 15,994 ¶ 35, the Commission reasonably deter-
mined to take action to bring digital tuners to ‘‘the market in
quantity and at reasonable prices,’’ id. at 15,993 ¶ 33, so that
the DTV transition may move at the pace required by Con-
gress.
The Commission reasonably determined that a phased-in
requirement that all televisions contain a digital tuner would
necessarily increase production volumes and, through econo-
mies of scale, lower the price of digital tuners for all television
purchasers. See id. at 15,995 ¶ 39 (‘‘prices are declining and
will decline even faster as economies of scale are achieved
with increasing volumes of production and production efficien-
cies are introduced over time’’). This will make the purchase
of DTV equipment more attractive to consumers generally,
and help break the logjam discerned by the Commission.
CEA objects that this is requiring cable and satellite viewers
who do not need over-the-air DTV tuners to saddle some of
the cost of making the tuners more affordable for those who
do, but such a shifting of the benefits and burdens of a
regulation is well within the authority of the responsible
agency.6
6 Additionally we note that subscribers to cable and satellite
television services may avoid any additional costs associated with
the purchase of an over-the-air digital tuner by purchasing a
monitor — essentially a display screen without the capability to
tune over-the-air broadcasts — instead of a television set. The
FCC noted in the Order that monitors used to view cable or
satellite television (but incapable of viewing over-the-air broadcasts)
‘‘would be permissible under our rules.’’ 17 F.C.C.R. at 16,003 ¶ 56;
see also id. at 16,003 n.86 (‘‘The all-channel reception provisions of
Section 15.117(b) of the rules, and indeed the ACRA authority
underlying those provisions, would not apply to receivers that did
not have any capability for receiving broadcast signals over-the-
air.’’).
17
In addition, because cable and satellite services are carry-
ing few DTV signals, ‘‘a digital tuner may be the only access
a[ ] [cable or satellite] household has to many digital broad-
cast services during the transitionTTTT [A] tuner require-
ment would at least provide [cable and satellite] consumers
access to the digital broadcast signals in their market.’’
Digital Tuner Order, 17 F.C.C.R. at 15,998 ¶ 44. Applying
the digital tuner mandate to all televisions not only promotes
the DTV transition, but does so in a manner consistent with
what the FCC found to be consumer expectations that ‘‘the
television they purchase TTT be able to receive over-the-air
broadcast signals.’’ Id. And cable and satellite viewers also
benefit from the breaking of the DTV logjam — as DTV
programming becomes more attractive due to the greater
penetration of DTV equipment, cable and satellite services
can be expected to provide more of that programming to their
customers. See id. at 15,990 ¶ 27.7
3. Finally, CEA argues that the Commission unreason-
ably assessed the costs of the digital tuner requirement to
consumers. CEA maintains that when the Commission was
faced with broadly differing estimates of the unit cost of a
digital tuner, it failed to make any independent assessment of
7 Shortly before argument in this case, the FCC announced the
adoption of ‘‘plug and play’’ rules governing the compatibility be-
tween cable television and digital television sets. See FCC Press
Release, FCC Eases Digital TV Transition for Consumers, 2003
WL 22097536 (Sept. 10, 2003). Under the new ‘‘plug and play’’
rules, televisions labeled as ‘‘DTV Ready’’ must include circuitry
that decodes a DTV signal from any cable provider, eliminating the
need for any set-top ‘‘cable box.’’ Id. Televisions labeled ‘‘Digital
Cable Ready’’ must also include an over-the-air digital tuner, id.,
apparently a relatively noncontroversial requirement since the addi-
tional cost is minimal once the circuitry for decoding the cable-
provided DTV signal is embedded. See id., statement of Commis-
sioner Kevin J. Martin (stating that it is the expectation of the
Commission that ‘‘manufacturers can now incorporate digital broad-
cast and cable reception capabilities for approximately the same
cost as the digital broadcast tuner alone’’). These new rules,
however, remain subject to reconsideration by the Commission and
to judicial review, and, indeed, have not yet been published in the
Federal Register. The ‘‘plug and play’’ rules therefore do not affect
our analysis or otherwise influence our decision in this case.
18
the varying estimates, but rather concluded, without any
analysis, that the costs were ‘‘within an acceptable range.’’
Id. at 15,998 ¶ 42. The Commission’s analysis of the varying
cost estimates was hardly a model of thorough consideration.
Nevertheless, our review of the record convinces us that,
given the uncertainty of cost projections and the inherent
unreliability of all available information, the Commission’s
assessment meets the minimum standard for reasoned deci-
sionmaking.
For as long as the Commission has managed the DTV
transition, it has gathered information concerning economies
of scale. See In re Advanced Television Systems and Their
Impact upon the Existing Television Broadcast Service, 7
F.C.C.R. 3340, 3354 ¶ 53 & n.154 (1992) (citing comments
from electronics manufacturers for the proposition that by
the conversion date ‘‘the cost of [advanced] receivers should
have declined from the level of initial prices, as a result of
increased consumer acceptance and higher volume sales’’);
Advanced Television Systems and Their Impact upon Exist-
ing Television Broadcast Service, 7 F.C.C.R. 6924, 6958 ¶ 45
& n.161 (1992) (citing broadcast industry studies to state
‘‘equipment costs [will] decline as a result of production scale
and learning curve economies’’); Fourth Further Notice, 10
F.C.C.R. at 10,548 ¶ 51 (‘‘Given the degree of competition that
exists between suppliers of electronic equipment, and expect-
ed economies of scale resulting from the proliferation of
digitally based media, we anticipate that declining costs will
translate into reduced prices and increased sales of digital
receivers and converters to consumers.’’).
It was against this backdrop that the Commission, in the
Further Notice of Proposed Rulemaking that immediately
preceded the Digital Tuner Order, sought comments on ‘‘the
initial projected costs of [the digital tuner] requirement as
well as realistic estimates of those costs over time.’’ Further
Notice of Proposed Rulemaking, 16 F.C.C.R. at 5985 ¶ 107.
As to the initial cost of including digital tuning capability in
television sets, the Commission received comments from man-
ufacturers and broadcasters with estimates ranging from
$169 to $250. See Digital Tuner Order, 17 F.C.C.R. at
19
15,983–85, ¶¶ 12, 13, 16. CEA estimated the initial incremen-
tal cost at $200. Id. at 15,985 ¶ 16. As to the estimated cost
in 2007 (after completion of the conversion), consultants hired
by the broadcast industry submitted a $16 estimate, while
three manufacturers predicted costs from $50–$75. Id. at
15,997–98 ¶ 42. CEA, by contrast, insisted there would be no
cost reduction ‘‘for the foreseeable future.’’ Id. at 15,985 ¶ 16.
CEA’s grim prediction was inconsistent with the Commis-
sion’s long experience with economies of scale, and the Com-
mission was justified in dismissing it as ‘‘unsupported.’’ See
id. at 15,998 n.73. The Commission similarly discounted the
outlying $16 estimate, noting its ‘‘methodological shortcom-
ings.’’ Id. at 15,998 ¶ 42.
The Commission was thus left with long-term estimates of
the incremental cost of a digital tuner ranging from $50 to
$75, each offered up by an entity involved in the manufacture
of digital tuners. The Commission did not subject these
estimates to much in the way of rigorous analysis. But given
the history of rapidly declining prices in other consumer
electronic markets, and because CEA never pointed out possi-
ble biases of the commenting firms or presented affirmative
evidence supporting its own $200 estimate, we cannot say that
it was unreasonable for the FCC to conclude — on the basis
of admittedly imperfect evidence and inherent uncertainty —
that the costs of a digital tuner would likely fall to $50–$75 by
2007. See AT&T v. FCC, 832 F.2d 1285, 1291 (D.C. Cir. 1987)
(‘‘When TTT an agency is obliged to make policy judgments
where no factual certainties exist TTT we require only that the
agency so state and go on to identify the considerations it
found persuasive.’’ (internal quotation marks omitted)). We
therefore defer to the Commission’s predictive judgment.
See Melcher v. FCC, 134 F.3d 1143, 1151, 1152 (D.C. Cir.
1998) (‘‘our review of the FCC’s exercise of its predictive
judgment is particularly deferential’’ because where ‘‘the
FCC must make judgments about future market behavior
with respect to a brand-new technology, certainty is impossi-
ble’’).
Having adequately estimated the long-range costs of the
digital tuner mandate within a range sufficient for the task at
hand, the Commission assessed the benefits of the Order —
20
principally speeding the congressionally-mandated conversion
to DTV and reclaiming the analog spectrum, see Digital
Tuner Order, 17 F.C.C.R. at 15,994 ¶ 35 — and found the
estimated costs to consumers to be ‘‘within an acceptable
range.’’ Id. at 15,998 ¶ 42. The Supreme Court has empha-
sized that ‘‘a court is not to substitute its judgment for that of
the agency,’’ Motor Vehicle Mfrs. Ass’n of Am. v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), a point we have
taken to be ‘‘especially true when the agency is called upon to
weigh the costs and benefits of alternative polices.’’ Center
for Auto Safety v. Peck, 751 F.2d 1336, 1342 (D.C. Cir. 1985)
(Scalia, J.); see also Office of Communication of United
Church of Christ v. FCC, 707 F.2d 1413, 1440 (D.C. Cir. 1983)
(‘‘cost-benefit analyses epitomize the types of decisions that
are most appropriately entrusted to the expertise of an
agency’’). We will not here second-guess the Commission’s
weighing of costs and benefits.
The petition for review is denied.