dissenting in part and concurring in part:
I agree with the majority that the Federal Communications Commission (“FCC” or “Commission”) failed to engage in reasoned decision-making in reaching a determination to require Mobile Telecommunications Technologies Corporation (“Mtel”) to pay over $33 million for a license to operate a narrowband personal communications service. As the majority correctly holds, the FCC’s “back-of-the-hand treatment” of Mtel surely cannot survive judicial review. However, the FCC’s flippant and unreasoned treatment of Mtel is the least of its sins. On the record before us, *1411it is clear that the Commission lacked statutory authority to require Mtel to pay for the license at issue, so there was no legal basis for the action taken. Accordingly, I believe that we must reverse the Commission’s action and grant the relief sought by Mtel. In all other respects, I concur in the judgment of the majority.
This case involves a small corporation, Mtel, and its efforts to develop and market a two-way data communications service that promised to improve existing data transmission rates by a factor of ten. Mtel invested approximately $50 million in developing this service; its reward was a “pioneer’s preference” grant from the FCC that, in the words of the agency, was to be the equivalent of a guarantee of a license to operate its new service.1 In granting Mtel a pioneer’s preference, the FCC applauded Mtel for “solving] significant technical engineering problems” that had stumped its competitors, and described the company’s work as “a significant communications innovation of the sort the Commission established the pioneer’s preference rules to recognize.” 2 On February 3, 1994, after consideration of comments regarding Mtel’s receipt of a pioneer’s preference, the FCC invited Mtel to apply for a license based on its pioneer’s preference.3
At all times during consideration of Mtel’s pioneer’s preference (a process that spanned more than two years), the FCC repeatedly assured Mtel that the license it needed to operate its pioneer’s preference technology would be issued for no charge other than the nominal statutory fee due from all licensees. However, at the last stage of the pioneer’s preference licensing process, when all that remained was for the FCC to issue a license to Mtel, the Commission suddenly reversed course and made an entirely unprecedented determination that Mtel should be required to pay a fee of over $33 million for its license. Because the FCC has no basis for demanding this payment from Mtel, I must dissent.
There is no dispute that, while Mtel’s pioneer’s preference and licensing proceedings were underway, dramatic changes were being made in the FCC’s operations; however, none of these changes gave the FCC the authority to extort a multi-million-dollar payment from Mtel. Mtel filed for a pioneer’s preference in November 1991; the FCC adopted a tentative finding that Mtel’s application was successful in July 1992, and affirmed this decision in an order adopted in June 1993. Then, in August 1993, while reconsideration of Mtel’s pioneer’s preference was underway, the FCC for the first time received permission from Congress to auction spectrum licenses at market value.4 This right was a major development for an agency that, for almost sixty years, had been confined by statute to charging nominal license fees.
Even though pioneer’s preference licenses were not affected by the 1993 change in the law,5 the FCC sought to evaluate its pioneer’s preference program under the auction framework. Part of this evaluation involved consideration of whether the auction process would be adversely affected if pioneer’s preference licenses were awarded for nominal fees. Throughout this process, the FCC re*1412peatedly confirmed that Mtel would not be subjected to auction-based fees. The FCC noted that, because Mtel’s pioneer’s preference had already been granted at the time that Congress gave the Commission auction authority, it would be inequitable to charge Mtel an- auction-based fee.6 Thus, before Mtel applied for the license to operate its pioneer’s preference technology in February 1994, the FCC had assured the company on several occasions that, not only would it not be charged a market-value fee for its license, but also that the FCC recognized that the imposition of any such fee would be inequitable.
The FCC got weak-kneed and turned tail on Mtel when a member of Congress cried “wolf.” In May of 1994, Congressman John D. Dingell sent a letter to the FCC’s General Counsel intimating that pioneer’s preference recipients should pay for their licenses;7 he also proposed legislation to that effect, which would have subjected pioneer’s preference licensees to a charge equal to 90% of the highest auction price of similar licenses.8 This legislation was never enacted, but Congressman Dingell’s threats apparently succeeded: in July 1994, when the FCC issued Mtel’s final licensing order, the Commission suddenly reversed course and essentially adopted Congressman Dingell’s suggestion by requiring Mtel to pay 90% of the lowest auction price of similar licenses. The results of an auction conducted shortly thereafter set this amount at $33.3 million.9
Recognizing that it had repeatedly promised Mtel a “free” license, and that it had on numerous occasions expounded on the inequity of charging Mtel an auction-based license fee, the Commission was forced to explain its about-face. Not surprisingly, no good explanation was forthcoming. The best the Commission could offer was an obtuse discussion regarding its evolving understanding of the auction process accompanied by an unsupported suggestion that Mtel’s “free” license might possibly harm the auction market.10 The FCC summarized its changed position by declaring that “previously we overvalued ... equities [favoring Mtel] and undervalued the countervailing competitive concerns.”11 At the end of the FCC’s new “valuation,” Mtel was the party that ended up short, by over $33 million.
*1413Not only did the FCC fail to justify the inequitable action taken against Mtel, it also failed to locate a statutory basis for the fee Mtel was to pay. It is undisputed that the FCC has never before in its history imposed a licensing fee absent explicit authorization from Congress. It is also conceded that there is no such authorization in this case. Obviously, the FCC could not rely on Representative Dingell’s proposed but unenacted legislation as authority for its sudden decision to charge Mtel. In the absence of statutory authorization for the fee it sought to impose, the FCC concocted an argument to support its action by bridging together its general authority to administer the Communications Act, found in 47 U.S.C. § 154(i) (“section 4(i)”), and the auction framework that Congress established in 1993 to govern non-pioneer’s preference licensees in 47 U.S.C. § 309© (“section 309©”). Charitably speaking, the argument is something akin to the FCC saying that it “has the power to do whatever it pleases merely by virtue of its existence,” a suggestion that this court normally would view as “incredible.” Railway Labor Executives’ Ass’n v. National Mediation Bd., 29 F.3d 655, 659 (D.C.Cir.1994) (en banc), cert. denied, - U.S.-, 115 S.Ct. 1392, 131 L.Ed.2d 243 (1995).
Congress apparently did not share such an expansive view of the FCC’s authority under the existing law, because, in late 1994, it decided to pass a statute specifically authorizing the FCC to collect fees from pioneer’s preference license recipients.12 Under any other circumstances, Mtel would likely have celebrated this legislation, because the effective date of the provision served to exclude Mtel’s pioneer’s preference license from the new fees.13 However, the FCC’s decision to charge Mtel a fee a few months earlier, irrespective of whether Congress had authorized such a payment, deprived Mtel of the exemption Congress provided.
Counsel for the FCC conceded at oral argument that neither of the sections upon which the FCC relies permit it to charge Mtel a fee: section 4(i), which speaks in general terms, does not alone authorize the imposition of such a fee, and it is clear that section 309© does not permit a fee in Mtel’s case. Thus, the FCC claims that, because it has general authority over the communications industry and because it can assess fees to parties other than Mtel, it is therefore free to charge Mtel as well. As noted above, this kind of argument was rejected in Railway Labor Executives’ Association where the en banc court categorically dismissed the idea that an agency “possesses plenary authority to act within a given area .simply because Congress has endowed it with some authority to act in that area.” 29 F.3d at 670. Under the FCC’s logic, as soon as Congress grants the agency permission to engage in certain conduct, such as charging market-value license fees, on an explicitly-defined basis, section 4(i) automatically confers .the right to apply that power across the board. If this reading were correct, it would completely eviscerate the power of Congress to determine the scope of the statutes it passes. As this court has held, “it is beyond cavil that ‘an agency’s power is no greater than that delegated to it by Congress,’ ” Id. (quoting Lyng v. Payne, 476 U.S. 926, 937, 106 S.Ct. 2333, 2341, 90 L.Ed.2d 921 (1986)), and “[t]he duty to act under certain carefully defined circumstances does not subsume the discretion to act under other, wholly different, circumstances, unless the statute bears such a reading,” id. at 671.
Even if I were to assume the fallacious premise that section 4(i) could bestow upon the FCC the authority to charge Mtel for its license, there is no indication that the charge is “necessary” to the FCC’s functions. The Commission’s justification for the charge is that granting Mtel a free license could harm the public interest by jeopardizing competition in the communications industry. This justification is belied by the fact that the *1414FCC is presently awarding licenses to competitors of Mtel with no such fee attached.14
Further, Mtel and other pioneer’s preference applicants made large investments in research and development of new products in reliance on the pioneer’s preference framework as it existed before the FCC’s auction authority. Mtel asserts that it continued to invest in improving the capabilities of its system after the pioneer’s preference was granted.15 Only an extraordinarily naive person could believe that the FCC’s repeated promises that Mtel would not be charged an auction-based license fee did not affect Mtel’s allocation of its resources to this endeavor.
At oral argument, counsel for the FCC was disinclined to address the agency’s various guarantees that Mtel would not be charged an auction-based fee.16 There was nothing of substance for him to offer by way of explanation, so counsel’s reluctance was savvy. Nonetheless, counsel’s inability to respond in no way obscures the obvious: in addition to being lawless, the FCC’s action in this case borders on outrageous. I dissent.
. See Establishment of Procedures to Provide a Preference to Applicants Proposing an Allocation for New Services, 6 F.C.C.R. 3488, 3492 ¶ 32 (1991) (report and order).
. Amendment of the Commission’s Rules to Establish New Narrowband Personal Communications Seivices, 8 F.C.C.R. 7162, 7174 ¶¶ 72-73 (1993) (first report and order).
. See Commission Invites Filing of Narrowband Personal Communications Seivice Pioneer's Preference Application, FCC Public Notice (Feb. 3, 1994), reprinted in Joint Appendix ("J.A.”) 672.
. See 47 U.S.C. § 309(j) (Supp. V 1993).
. See 47 U.S.C. § 309(j)(6)(G) (Supp. V 1993) ("Nothing ... in the use of competitive bidding, shall ... be construed to prevent the Commission from awarding licenses to those persons who make significant contributions to the development of a new telecommunications service or technology....”); H.R.Rep. No. Ill, 103d Cong., 1st Sess. 257 (1993) U.S.Codc Cong. & Admin.News 1993, pp. 378, 584. ("The provisions of section 309(j) are ... expressly neutral with respect to [pioneer's preference] policies.”).
.See Review of the Pioneer’s Preference Rules, 8 F.C.C.R. 7692, 7694-95 ¶ 18 & n. 19 (1993) (notice of proposed rulemaking) (”[I]t would be inequitable to apply any change in our rules in [Mtcl's] pioneer’s preference proceeding.”); Review of the Pioneer’s Preference Rules, 9 F.C.C.R. 605, 610 ¶9 & n. 21 (1993) (first report and order) ("We previously determined that, as a matter of equity, nothing in our pioneer's preference review will affect [Mtcl's] proceeding, and we adhere to that decision.”); Amendment of the Commission's Rules to Establish New Narrow-band Personal Communications Seivices, 9 F.C.C.R. 1309, 1316 ¶ 45 (1994) (memorandum opinion and order) ("We continue to believe that as a matter of equity we should not apply any new pioneer's preference rules in this proceeding, because a final order addressed the preference prior to enactment of the 1993 Budget Reconciliation Act. Accordingly, except for our normal established fees, we will not charge Mtel for the license that it may receive pursuant to its preference grant.”)
Although the FCC did not specifically address whether Mtel had relied on the existing pioneer’s preference framework in pursuing its application, the FCC did observe that other, similarly situated pioneer's preference recipients submitted pioneer's preference requests and "publicly disclosed substantial detail of their system designs in reliance on the continued applicability of the pioneer’s preference rules." Review of the Pioneer’s Preference Rules, 9 F.C.C.R. 605, 610 ¶ 9 (1993) (first report and order). The FCC also noted dial, "[h]ad the rules been different, these applicants might have structured their requests differently; or conducted research, development, and experimentation differently; or elected not to disclose detailed information about their systems.” Id.
. See Letter from John D. Dingell, Chairman, House Subcomm. on Oversight and Investigations of the Comm, on Energy and Commerce, to William Kenard, General Counsel, FCC (May 3, 1994), reprinted in I.A. 902-08.
. See H.R. 4700, 103d Cong., 2d Sess. (1994).
. The FCC's licensing order required Mtel to pay 90% of the lowest winning bid for a narrowband personal communications service license, or $3,000,000 less than the lowest winning bid for such a license, whichever was less. See Nationwide Wireless Network Corp., 9 F.C.C.R. 3635, 3646 ¶ 50(4) (1994) (memorandum opinion and order). As it turned out, the lesser of these options was for Mtel to pay 90% of the lowest auction bid, or $33.3 million.
. See id. at 3640 ¶¶ 17-19.
. Id. at 3640 ¶ 19.
. See 47 U.S.C.A. § 309(j)(13)(B) (Supp.1995). This provision sets forth a very detailed formula by which the FCC is to compute the fee that pioneer's preference license recipients are to pay.
. As the FCC has acknowledged, the pioneer’s preference payment statute does " 'not apply to applications that have been accepted for filing on or before September 1, 1994.' ” Brief for Appel-lee at 18 (quoting 47 U.S.C. § 309(j)(13)(D)(iv)). Mtcl’s license was issued in July 1994, subject to the disputed fee.
. As the majority concedes, Mtel has submitted information indicating that the FCC has recently issued paging licenses without subjecting the recipients to auction-based Ices.
. See, e.g., Letter from R. Michael Scnkowski & Eric W. DcSilva, counsel for Mtel to William Catón, Acting Secretary, FCC 3 (Apr. 26, 1994), reprinted in J.A. 879 ("Miel has kept its commitments to the Commission by strengthening its financing and improving the service's technological capabilities since the award was made.”)
.Transcript of Oral Argument at 28.