United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 23, 1999 Decided January 7, 2000
No. 99-1018
Heidi Damsky,
Appellant
v.
Federal Communications Commission,
Appellee
Homewood Radio Co. LLC,
Intervenor
Appeal of an Order of the
Federal Communications Commission
Lauren A. Colby argued the cause and filed the briefs for
appellant.
Pamela L. Smith, Counsel, Federal Communications Com-
mission, argued the cause for appellee. On the brief were
Christopher J. Wright, General Counsel, Daniel M. Arm-
strong, Associate General Counsel, and Gregory M. Christo-
pher, Counsel.
Stephen Diaz Gavin and Janet Fitzpatrick were on the
brief for intervenor.
Before: Williams, Sentelle and Randolph, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge: Appellant Heidi Damsky appeals
from an order of the Federal Communications Commission
("FCC" or "Commission") finding her financially unqualified
to receive an FM station construction permit and finding that
an applicant that subsequently obtained the permit as part of
a settlement agreement did not make disqualifying misrepre-
sentations to the Commission. Damsky also argues that an
intervening change in law entitled her to participate in an
auction for the already-issued permit. Upon review of the
relevant law and the record, we hold that the Commission did
not err in affirming the Administrative Law Judge's financial
qualification findings. We also hold that Damsky is not
entitled to an auction because the Commission adequately
explained why the statutory settlement provisions and Com-
mission policy permitted the negotiated outcome obtained
here. Therefore, we affirm the Commission's decision based
on the aforementioned considerations and do not need to
reach the misrepresentation issue raised by Damsky.
I. Background
In 1988, Heidi Damsky, the appellant, and twelve other
applicants filed mutually exclusive applications for a permit to
construct a new FM broadcast station in Homewood, Ala-
bama. The Mass Media Bureau designated all applications
for comparative hearing. As a result of a 1992 hearing, an
Administrative Law Judge found that Damsky failed to estab-
lish her financial qualifications and dismissed her application.
See In re Heidi Damsky, 7 F.C.C.R. 5244 pp 180-83 (1992)
("Initial Decision"). The Commission affirmed the ALJ's
determination. See In re Heidi Damsky, 13 F.C.C.R. 11688
pp 24-32 (1998) ("Memorandum Opinion and Order").
By the time of the 1992 hearing, the applicant pool had
narrowed to include Damsky and two others. The two re-
maining applicants, WEDA, Ltd. ("WEDA") and Homewood
Partners, Inc. ("HPI"), entered into a settlement agreement
contingent on Damsky's disqualification. Upon affirming
Damsky's disqualification, the Commission granted the per-
mit to the resulting entity, intervenor Homewood Radio Com-
pany ("Homewood Radio"). See Memorandum Opinion and
Order, 13 F.C.C.R. 11688 pp 4, 7, 24-32. In addition to
affirming the ALJ's financial disqualification findings, the
Commission addressed two other challenges now properly
raised and argued by Damsky on appeal. First, the Commis-
sion rejected Damsky's claim that HPI had made disqualify-
ing misrepresentations to the Commission. See id.pp 12-23.
Second, the Commission rejected Damsky's claim that a
recent Commission order required it to award the permit
through a competitive auction in which Damsky could partici-
pate. See In re Heidi Damsky, 14 F.C.C.R. 370 pp 9-14
(1999) ("Further Petition for Reconsideration"); see also In
re Heidi Damsky, 13 F.C.C.R. 16352 (1998) ("Petition for
Reconsideration").
A. Background on Financial Qualifications
At the time the parties filed their applications, the Commis-
sion resolved competing applications though an evidentiary
hearing process that assessed applicants' basic and compara-
tive qualifications. Each broadcast applicant had to establish,
among other things, that it was financially qualified to cover
certain construction and operating costs. See 47 U.S.C.
s 308(b) (1994); CHM Broad. Ltd. Partnership v. FCC, 24
F.3d 1453, 1455 (D.C. Cir. 1994). The financial qualification
form in effect when the parties here made their filings
required each applicant to certify with "reasonable assurance"
that it had net liquid assets on hand or had funding obtain-
able from committed sources sufficient to construct and oper-
ate the requested facilities for three months without reve-
nues. See In re Revision of Application for Construction
Permit for Commercial Broadcast Station (FCC Form 301),
50 Rad. Reg. 2d 381 (P & F) (1981) ("Form 301"). The form
clearly indicated that an applicant had to be prepared to
document certification compliance upon request. See id. If
the Commission questioned an applicant's financial qualifica-
tions, the applicant had to demonstrate its "reasonable assur-
ance" by showing that, "prior to certification, it engaged in
serious and reasonable efforts to ascertain predictable con-
struction and operation costs" and that it confirmed the
availability of net liquid assets, either on hand or from
committed sources, sufficient to construct and operate the
station for three months without revenue. In re Northamp-
ton Media Assocs., 4 F.C.C.R. 5517 pp 13-15 (1989), aff'd sub
nom. Northampton Media Assocs. v. FCC, 941 F.2d 1214,
1217 (D.C. Cir. 1991). After questioning and investigating
Damsky's financial qualifications, the ALJ found that Damsky
failed to make either of the two showings required to estab-
lish a "reasonable assurance."
Specifically, the ALJ found that Damsky failed to show
prior to the certification that she engaged in "serious and
reasonable efforts" to formulate cost figures because she only
offered a general $300,000 "ballpark" cost estimate based on a
conversation with her consulting engineer. See Initial Deci-
sion, 7 F.C.C.R. 5244 pp 6-9, 181. The Commission affirmed
the ALJ's findings and conclusions. See Memorandum Opin-
ion and Order, 13 F.C.C.R. 11688 pp 1, 30. Likewise, the
ALJ and Commission both agreed that Damsky failed to
show that she had sufficient committed funding available
since she based her financial backing on a casual assurance
from her husband that the couple had the assets to cover the
$300,000 project. See Initial Decision, 7 F.C.C.R. 5244
pp 10-24, 182-83; Memorandum Opinion and Order, 13
F.C.C.R. 11688 p 31. The ALJ and Commission found that
while the record showed that Damsky's husband preferred to
obtain a loan rather than liquidate, neither Damsky nor her
husband provided any assurance about the availability of such
a loan contemporaneous with the certification. See Initial
Decision, 7 F.C.C.R. 5244 pp 182-83; Memorandum Opinion
and Order, 13 F.C.C.R. 11688 p 32.
B. Challenge with Regard to HPI
In the order affirming Damsky's disqualification, the Com-
mission also accepted the Homewood Radio settlement agree-
ment. Throughout the permit application process, Damsky
challenged the corporate structure of HPI, one of the settling
parties, as violating FCC rules and alleged that HPI had
made various disqualifying misrepresentations to the FCC.
The resulting inquiry primarily focused on whether two of the
five HPI principals impermissibly acquired their ownership
interests prior to the filing of HPI's amended application.
Two checks formed the heart of the debate. Apparently, two
"investors" gave the three original partners two $1200 checks
marked respectively "20% Interest Radio" and "Ownership
20% of Homewood Partners." The agency inquiry focused on
whether the checks constituted an ownership interest or a
loan. Although conflicting documentary evidence existed, the
ALJ evaluated all of the evidence and resolved the issue in
HPI's favor by deeming the payments loans. See In re Heidi
Damsky, 9 F.C.C.R. 4011 pp 61-68 (1994) ("Supplementary
Initial Decision"). The Commission affirmed the ALJ's find-
ings. See Memorandum Opinion and Order, 13 F.C.C.R.
11688 pp 13-23.
C. Background on Auction Provisions
While exceptions to the ALJ's decision were pending, this
court held in Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993),
that the "integration of ownership with management" criteria
used in FCC comparative hearings was arbitrary and capri-
cious and therefore unlawful. See id. at 878. In response to
Bechtel, the Commission froze all ongoing comparative cases,
including this case, pending the development of a new regula-
tory structure. See Memorandum Opinion and Order, 13
F.C.C.R. 11688 p 3. However, the Commission also created
an exception to the freeze policy. The exception allowed a
frozen case to be adjudicated to completion if the parties to
the comparative proceeding reached a settlement agreement
even if the settlement were contingent on the resolution of
specific basic qualifying issues. See Modification of FCC
Comparative Proceedings Freeze Policy, 9 F.C.C.R. 6689
(1994). The agreement resulting in Homewood Radio's re-
ceipt of the construction permit constituted such a settlement.
However, while the parties here were negotiating for settle-
ment, Congress amended s 309(j) of the Communications Act
to require the Commission to grant construction permits
through a competitive bidding system. See 47 U.S.C. s 309(j)
(Supp. III 1997). Since the mandatory competitive bidding
system applied to applications filed after July 1, 1997, newly-
enacted s 309(l) covered the applications filed in this case
because the filings occurred before July 1, 1997. Subsection
309(l)(1) states that the Commission "shall ... have the
authority" to resolve the pre-July 1, 1997 filings through
competitive bidding. In addition, subsection 309(l)(3) re-
quired the Commission to "waive any provisions of its regula-
tions necessary to permit such persons to enter an agreement
to procure the removal of a conflict between their applications
during the 180-day period beginning on the date of August
15, 1997." Here, the settlement agreement fell within the
180-day window.
Subsequent to the Commission's approval of the Homewood
Radio settlement agreement but prior to the Commission's
denial of Damsky's Petition for Reconsideration, the Commis-
sion adopted rules to implement its new auction authority. In
an order, the Commission announced its decision to resolve
the pre-July 1, 1997 filings by auction because "auctions will
generally be fairer and more expeditious than deciding [the
pre-July 1, 1997 filings] through the comparative hearing
process." In re Implementation of Section 309(j) of the
Communications Act, 13 F.C.C.R. 15920 p 34 (1998) ("Auc-
tion Order"). In response to the Auction Order, Damsky
sought further administrative remedy and asserted that the
Auction Order required the Commission to hold an auction
for the Homewood Radio permit. Specifically, Damsky relied
upon paragraph 89 of the Auction Order which stated:
Where the Commission has denied or dismissed an appli-
cation and such denial or dismissal has become final (e.g.,
when an applicant failed to seek further administrative or
judicial review of that ruling), such an entity is not
entitled to participate in the auction. Among those
remaining in the proceeding, we will permit all pending
applicants to participate in the auction, without regard to
any unresolved hearing issues ... as to the basic qualifi-
cations of a particular applicant.
Id. p 89. Thus, Damsky argued that the intervening Auction
Order entitled her to participate in an auction for the permit
because the original order disqualifying her was still under
review and the "new" auction system allowed her to partici-
pate despite any unresolved qualification issues. The Com-
mission rejected her claim because the settling parties
reached an agreement in accordance with s 309(l) of the
amended statute, the provision ordering the Commission to
waive its rules and policies when necessary to permit 180-day
window applicants to enter into settlement agreements, and
because paragraph 89 did not address cases involving settle-
ments filed within the 180-day waiver period which were
thereafter approved contingent upon the Commission resolv-
ing specified basic qualification issues. See Further Petition
for Reconsideration, 14 F.C.C.R. 370 pp 9-13; see also In re
Implementation of Section 309(j) of the Communications Act,
14 F.C.C.R. 8724 p 18 (1999).
On appeal, Damsky challenges the Commission's adverse
financial qualification determination resulting in the dismissal
of her application, the Commission's determination that HPI
did not make disqualifying misrepresentations, and the Com-
mission's approval of the Homewood Radio settlement agree-
ment in lieu of an auction.
II. Discussion
A. Scope of Review
As an initial matter, we must establish the extent of our
review since the FCC challenges the sufficiency of Damsky's
notice concerning the issues she currently argues on appeal.
With regard to the auction issue, we hold that Damsky
properly raised that issue in her Notice of Appeal ("Notice")
by expressly appealing the order denying further reconsider-
ation in which the Commission first addressed the auction
provisions in dispute. See Further Petition for Reconsidera-
tion, 14 F.C.C.R. 370 pp 9-13. Although "a petition seeking
review of an agency's decision not to reopen a proceeding is
not reviewable unless the petition is based upon new evidence
or changed circumstances," Southwestern Bell Telephone Co.
v. FCC, 180 F.3d 307, 311 (D.C. Cir. 1999), the FCC concedes
and we agree that the auction issue pertains to changed
circumstances in the law and is therefore reviewable by this
court.
The sufficiency of notice concerning the financial qualifica-
tion and misrepresentation issues requires a more extended
discussion. In Southwestern Bell, we held that when an
agency has denied the reconsideration of a substantive under-
lying decision and a party appeals only the order denying
reconsideration, the appeal does not suffice to bring the
earlier substantive decision's merits before the court. See
Southwestern Bell, 180 F.3d at 309. The FCC argues that
Damsky sought review only of the Commission orders deny-
ing her reconsideration and further reconsideration. There-
fore, the FCC asserts, Damsky cannot raise the financial
qualification or misrepresentation issues on appeal since the
Commission only substantively addressed those issues in the
unchallenged underlying Memorandum Opinion and Order.
However, for the reasons set forth below, we reject the
FCC's argument and hold that Damsky made sufficient refer-
ences to the underlying substantive Memorandum Opinion
and Order in her Notice of Appeal and accompanying Concise
Statement of Reasons to put the Commission on notice that
she intended to challenge the financial qualification and mis-
representation issues in addition to the auction issue.
On the face of her Notice of Appeal, Damsky clearly states
that she is appealing the Commission order denying further
reconsideration. However, the Notice also references the
order denying reconsideration and the underlying Memoran-
dum Opinion and Order. Moreover, Damsky briefly ad-
dresses the merits of the Memorandum Opinion and Order
in the Concise Statement of Reasons attached to the Notice.
Given the ambiguity surrounding the existence of actual
notice, we analyze Damsky's notice predicament under the
"test for determining whether a filing that names one order
suffices to bring a different order before the court" set out in
Southwestern Bell, 180 F.3d at 313.
To determine whether an applicant sufficiently raised an
order or an issue contained in a particular order, we first
examine the notice to see whether it contains "the specifica-
tion of [other] orders and hearing dates [or] fail[ed] to
mention the [disputed] order in either the notice of appeal or
the docketing statement" and also review other relevant filing
information. Brookens v. White, 795 F.2d 178, 181 (D.C. Cir.
1986) (per curiam). We then use the results of this examina-
tion to infer the petitioner's intent and decide if the respon-
dent has been misled by the filings. See Brookens, 795 F.2d
at 181; see also Southwestern Bell, 180 F.3d at 313. Here,
Damsky, in passing, cited to the order dealing with her
disqualification and the HPI misrepresentation issues in her
Notice of Appeal. However, she also substantively chal-
lenged the Commission's denial of her application on financial
qualification grounds and its dismissal of the misrepresenta-
tion issue in the Concise Statement of Reasons attached to
her Notice of Appeal. Thus, the Commission cannot claim
that any notice defects surprised or misled it with regard to
the issues Damsky intended to raise on appeal. Given the
circumstances, we conclude that Damsky adequately brought
the Memorandum Opinion and Order before this court for
review. Therefore, we will address both the financial qualifi-
cation issue analyzed in the Memorandum Opinion and
Order and the auction issue analyzed in the order denying
further reconsideration. For the reasons set forth below, we
do not reach the misrepresentation issue.
B. Financial Qualifications
We review FCC orders "under the deferential standard
mandated by section 706 of the Administrative Procedure Act,
which provides that a court must uphold the Commission's
decision unless it is 'arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law.' " Achernar
Broad. Co. v. FCC, 62 F.3d 1441, 1445 (D.C. Cir. 1995)
(quoting 5 U.S.C. s 706(2)(A)). In this task, we "do not
'substitute [our] judgment for that of the agency' [but] [r]ath-
er we look to see 'whether the decision was based on a
consideration of the relevant factors and whether there has
been a clear error of judgment.' " Freeman Eng'g Assocs.,
Inc. v. FCC, 103 F.3d 169, 178 (D.C. Cir. 1997) (quoting Motor
Vehicle Mfrs. Ass'n, Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983)). We also review the FCC's factual
findings for support by substantial evidence. See, e.g., Millar
v. FCC, 707 F.2d 1530, 1540 (D.C. Cir. 1983). Given the
relevant standards of review, we hold that the Commission
did not act arbitrarily in affirming the ALJ's finding Damsky
financially disqualified since the law and substantial evidence
in the record support the ALJ and Commission's decisions
regarding Damsky's failure to substantiate her financial quali-
fication. More specifically, we hold that the Commission's
conclusion that Damsky did not certify funding with a "rea-
sonable assurance" because she did not engage in "serious
and reasonable efforts" to obtain construction and operating
cost figures is not arbitrary or capricious.
In In re Northampton Media Assocs., 4 F.C.C.R. 5517
(1989), aff'd sub nom. Northampton Media Assocs. v. FCC,
941 F.2d 1214 (D.C. Cir. 1991), the Commission provided
some guidance regarding "reasonable assurance" in the certi-
fication context:
[T]he certification procedure was designed "to spare[ ]
[applicants] the time and effort necessary to prepare and
submit the documentation previously required to demon-
strate their qualifications." ... [R]easonable assurance
does not necessarily require that an applicant have the
written documentation [previously required] when it cer-
tifies its financial qualifications. Although the support-
ing documentation must be produced upon the Commis-
sion's request, the applicant may prepare and submit it
after certification, provided that the applicant actually
had a reasonable assurance of adequate funds at the time
of certification.
Id. p 14 (quoting In re Certification of Financial Qualifica-
tions by Applicants for Broadcast Station Construction Per-
mits, 2 F.C.C.R. 2122 (1987) (emphasis added)). Specifically,
the law required Damsky to establish, upon request, two pre-
certification inquiries in order to demonstrate "reasonable
assurance." First, she had to "adduce probative evidence
that, prior to certification, [she] engaged in serious and
reasonable efforts to ascertain predictable construction and
operation costs." Id. p 15; see also Mission Broad. Corp. v.
FCC, 113 F.3d 254, 260 (D.C. Cir. 1997) (noting that applicant
must first determine how much money is required). Second,
she had "[t]o establish the availability of funds to meet these
estimated expenses, [by] provid[ing] substantial and reliable
evidence showing 'sufficient net liquid assets on hand, or
committed sources of funds to construct and operate for three
months without revenue.' " Northampton, 4 F.C.C.R. 5517
p 15 (quoting Form 301, 50 Rad. Reg. 2d at 388); see also
CHM Broad., 24 F.3d at 1458. Here, Damsky's reliance on a
vague "ballpark" cost estimate does not get her over the
initial "serious and reasonable efforts" hurdle. Cf. In re
Victorson Group, Inc., 6 F.C.C.R. 1697 pp 18-19 (Rev. Bd.
1991) (finding "general sense" of estimated costs insufficient
for financial qualification purposes); In re Sunbelt Ltd. Part-
nership, 7 F.C.C.R. 4394 pp 7-10 (Rev. Bd. 1992) (finding
"bits of information" on costs insufficient for financial qualifi-
cation purposes), aff'd, 8 F.C.C.R. 753 (1993), rev'd and
remanded on other grounds sub nom. Sunbelt v. FCC, Nos.
93-1184 & 93-1708, 1994 WL 191656 (D.C. Cir. May 9, 1994).
Damsky incorrectly relies on Northampton as support for
her position. In Northampton, the Commission found finan-
cially qualified an applicant--a three-person corporation in-
cluding a principal with experience in radio--that had relied
on an oral cost estimate which included an itemization of
equipment, construction, and salary and other operating costs
necessary to cover a low-cost "mom and pop" operation
($38,800). See In re Northampton Media Associates, 3
F.C.C.R. 570 pp 31, 51-56, 63, 68 (1988); Northampton, 4
F.C.C.R. 5517 pp 5, 17. The applicant had relied on a consult-
ing engineer to prepare the technical portion of the applica-
tion and to give advice regarding potential construction and
operation costs. See 3 F.C.C.R. 570 p 53. Here, unlike in
Northampton, Damsky, a person relatively unfamiliar with
the radio industry, relied on a consultant's "ballpark" esti-
mate indicating that the relevant costs would be around
$300,000. While Damsky's figure came from an engineer,
perhaps even an engineer with experience in radio station
management, Damsky could not verify that the figure took
into account basic and fundamental expenses. Given the
potential magnitude of construction and operation costs at
stake, the Commission reasonably concluded that Damsky did
not have enough supporting detail at the time of her certifica-
tion to make her reliance on the $300,000 figure reasonable.
The evidence offered by Damsky did not establish that she
had made "serious and reasonable efforts" to secure a cost
figure at the time of certification. Thus, the Commission
legitimately rejected Damsky's application due to her lacka-
daisical cost inquiry efforts.
C. The Auction
In reviewing the interpretation and application of the FCC
auction rules challenged here, we afford the deference due
the FCC's interpretation of its own rules and policies, and will
uphold the FCC's interpretation unless it is "plainly errone-
ous or inconsistent with the regulation." E.g., Freeman
Eng'g, 103 F.3d at 178 (citations and quotations omitted).
Considering the ambiguity surrounding the interaction be-
tween the s 309(l) auction and settlement provisions as de-
scribed by the Commission in the Auction Order, we conclude
that the Commission adequately explained why it did not
regard paragraph 89 of the Auction Order as requiring that
Damsky be allowed to participate in an auction for the
construction permit.
In addition to giving the Commission the ability to resolve
transitional competing comparative permit applications
though a competitive auction mechanism, Congress required
the Commission to "waive any provisions of its regulations
necessary to permit such persons to enter an agreement to
procure the removal of a conflict between their applications"
during a 180-day window. 47 U.S.C. s 309(l). Here, two
applicants, not including Damsky, filed a settlement agree-
ment within the 180-day period. The agreement was contin-
gent upon the Commission's affirming the ALJ's finding that
Damsky was disqualified on financial qualification grounds.
Since the auction issue involves, in part, the Commission's
interpretation of a statute committed to its administration, we
employ the Chevron analysis in reviewing the agency's inter-
pretation. Pursuant to Chevron, we will give effect to any
unambiguously expressed intent of Congress as contained in
the statutory provision under review. See Nuclear Info.
Resource Serv. v. Nuclear Regulatory Comm'n, 969 F.2d
1169, 1173 (D.C. Cir. 1992) (en banc). However, if the
statutory provision is silent or ambiguous, we will defer to the
agency's interpretation assuming its interpretation is reason-
able and consistent with the statute's purpose. See id. Giv-
en the statutory language in issue, we hold that the Commis-
sion reasonably interpreted s 309(l) as affording applicants
falling in the window period, upon the resolution of any basic
qualification disputes, the opportunity to settle instead of
participating in an auction. See Further Petition for Recon-
sideration, 14 F.C.C.R. 370 pp 11-12; In re Implementation
of Section 309(j) of the Communications Act, 14 F.C.C.R.
8724 p 18. The Commission's use of Damsky's financial quali-
fication as a condition to approving the settlement agreement
is consistent with the statute. See also 47 U.S.C.
s 309(j)(6)(E) (1994) (indicating that the grant of auction
authority not "be construed to relieve the Commission of the
obligation in the public interest to continue to use ... thresh-
old qualifications ... in order to avoid mutual exclusivity in
application and licensing proceedings").
In reaching our decision, we reject Damsky's contention
that s 309(l)(3) only governs global settlements. The Com-
mission reasonably interpreted the statute when it deter-
mined that partial settlements could be approved under
s 309(l)(3). See Auction Order, 13 F.C.C.R. 15920 pp 73, 93;
In re Implementation of Section 309(j) of the Communica-
tions Act, 14 F.C.C.R. 8724 p 18. Nothing in the statute
dictates that s 309(l)(3) only permits universal settlement.
Since settlements are private contractual arrangements, an
applicant such as Damsky has no general legal right to be
included in a settlement. See In re Anax Broad. Inc., 88
F.C.C.2d 607 p 10 (1981). Thus, nothing in the statute or
other law appears to preclude the Commission from approv-
ing a settlement that includes only qualified parties. The
Commission has acted consistent with this interpretation.
See In re Global Information Tech., Inc., 12 F.C.C.R. 11808
pp 1, 3, 6 (1997), aff'd on other grounds sub nom. Frontier
Broad., Inc. v. FCC, No. 97-1530, 1998 WL 704510 (D.C. Cir.
Sept. 4, 1998); In re Gonzales Broad., Inc., 12 F.C.C.R. 12253
pp 4, 19 (1997), aff'd on other grounds sub nom. Jelks v. FCC,
146 F.3d 878 (D.C. Cir. 1998), cert. denied, 199 S. Ct. 1045
(1999); In re Pensacola Radio Partners, 13 F.C.C.R. 11681
p 1 (1998), aff'd on other grounds sub nom. Floyd v. FCC, No.
98-1269, 1999 WL 236879 (D.C. Cir. Mar. 29, 1999).
The Commission's interpretation of paragraph 89 of the
Auction Order comports with its interpretation of the statute
and its prior practice. The Commission reasonably interprets
paragraph 89 as only applying to cases "where an auction
would otherwise be held because no settlements were
reached." Memorandum Opinion and Order, 14 F.C.C.R.
370 p 12. As the Commission points out, the Auction Order
and supporting notices separate out s 309(l)(3) settlement
from auction rules and guidelines. See id. p 13. Moreover,
the Commission adequately established on the record that a
proper s 309(l)(3) settlement would obviate the need for an
auction. See id.; In re Implementation of Section 309(j) of
the Communications Act, 14 F.C.C.R. 8724 p 18. The Com-
mission's reading of paragraph 89 makes sense when the
provision is analyzed in context. Thus, paragraph 89 does not
undo the Commission's approval of the settlement agreement
in this case since the Commission reasonably interpreted
paragraph 89 as not pertaining to permissible settlement
agreements reached pursuant to s 309(l)(3).
To recap, we hold that Damsky provided sufficient notice to
entitle her to review of her claims stemming from the Memo-
randum Opinion and Order in addition to review of the
auction issue. However, we uphold the Commission's deter-
mination that Damsky was financially disqualified from re-
ceiving the Homewood FM station construction permit. We
also hold that the Commission reasonably interpreted s 309(l)
and its Auction Order as not providing Damsky with the
opportunity to participate in an auction.
III. Conclusion
We conclude that the Commission did not err in finding
Damsky financially disqualified from receiving a construction
permit and in interpreting the auction provisions as being
inapplicable to her. Thus, the Commission correctly dis-
missed Damsky's application. Since Damsky has no claim to
the construction permit, we need not reach her challenge
concerning the alleged misrepresentations made by HPI.
Because the law and record support the Commission's find-
ings regarding Damsky's financial qualifications and the Com-
mission's interpretation and application of the relevant settle-
ment and auction provisions are reasonable, we affirm the
Commission's determinations challenged on appeal.