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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554


In the Matter of                )
                                )
Implementation of Section 309(j))  MM Docket No. 97-234
of the Communications Act       )
-- Competitive Bidding for Commercial)
Broadcast and Instructional Television Fixed )
Service Licenses                )
                                )
Reexamination of the Policy     )  GC Docket No. 92-52
Statement on Comparative        )
Broadcast Hearings              )
                                )
Proposals to Reform             )  GEN Docket No. 90-264
Comparative Hearing Process to  )
Expedite the Resolution of Cases ) 


                           O R D E R


   Adopted:  June 30, 1999              Released:  July 2, 1999

By the Commission:    Chairman Kennard not participating and issuing a statement.



     1.   By this order, we deny the requests filed May 5, 1999 and May 10, 1999, respectively,
by Orion Communications Limited (Orion) and jointly by Jerome Thomas Lamprecht (Lamprecht),
Susan M. Bechtel (Bechtel) and Lindsay Television, Inc. (Lindsay) (joint movants) for a limited stay
pending judicial review of the Commission's First Report and Order, 13 FCC Rcd 15920 (1998),
recon. denied, FCC 99-74 (rel. April 20, 1999).  The moving parties are pending applicants in
comparative broadcast cases, who prosecuted their applications through a Commission decision and
at least one court appeal before Congress enacted legislation authorizing the Commission to decide
such cases by auction instead of by comparative hearings.  For the reasons set forth below, we find
that the parties have not shown that proceeding with the auction scheduled for September 28, 1999
will result in irreparable harm or that they have otherwise satisfied the requirements for a stay under
Virginia Petroleum Jobbers Association v. FPC, 259 F.2d 291 (D.C. Cir. 1958) (Virginia Jobbers),
as revised by Washington Metropolitan Area Transit System v. Holiday Tours, Inc., 559 F.2d 841
(D.C. Cir. 1977) (WMATA).    We also dismiss the procedurally deficient request to recuse FCC
Commissioners filed by Willsyr Communications, Limited Partnership (Willsyr).     


                            BACKGROUND

     2.   The Commission has traditionally resolved mutually exclusive applications for new full
service commercial radio and television stations by comparative hearings pursuant to the comparative
criteria set forth in the Policy Statement on Comparative Broadcast Hearings, 1 FCC 2d 393 (1965). 
 In recent years, however, most cases focused on the integration criterion, which presumed that an
owner integrated into the day-to-day management of the proposed station would provide better
service. This central criterion was held to be arbitrary and capricious and therefore unlawful by the
D.C. Circuit in Bechtel v. FCC, 10 F.3d 875, 878 (D.C. Cir. 1994).  Thereafter, the Commission
stayed the adjudication of comparative broadcast cases pending the resolution of the questions raised
by Bechtel.  

     3.   Congress in the Balanced Budget Act of 1997 amended the Communications Act to
permit the Commission to use either auctions or the comparative hearing process to resolve the
frozen Bechtel cases.   Specifically, Section 309(l) provides that the Commission "shall have the
authority to conduct a competitive bidding proceeding pursuant to subsection [309](j)" in
comparative broadcast cases involving competing applications filed before July 1, 1997, and that if
the Commission does conduct a competitive bidding proceeding, it "shall treat the persons filing such
applications as the only persons eligible to be qualified bidders for purposes of such proceeding."  
In implementing the statute, the Commission determined in the First Report and Order and reaffirmed
on reconsideration that auctions will be fairer and speedier for all pending comparative broadcast
cases even for those cases that were designated for hearing and were litigated at least through an
Initial Decision by an Administrative Law Judge. It cited the lengthy delays experienced with the
comparative process and particularly its tendency to produce time-consuming litigation over matters
of questionable public interest significance. The first commercial broadcast auctions are scheduled
to begin September 28, 1999.  

                          STAY REQUESTS

     4.   Each of the parties is a pending applicant in a frozen hearing case that, with one
exception, has been scheduled to be included in the September 28 auctions.  Each filed comments
in this rulemaking proceeding and, instead of seeking reconsideration, filed a notice of appeal with
the D.C. Circuit immediately following the Commission's adoption of the First Report and Order. 
Resolution of the pending court appeals was delayed pending Commission consideration of petitions
for reconsideration of the auction rules.  By its order of April 15, 1999, the Commission disposed of
the petitions for reconsideration.   Orion is a pending applicant for a new FM station on Channel
243A in Biltmore Forest, North Carolina, and, by virtue of the D.C. Circuit's decision in Orion
Communications Ltd. v. FCC, it is the interim operator on that station pending resolution of the
permanent licensing proceeding for Biltmore Forest.  The joint movants, Bechtel, Lindsay, and
Lamprecht, are pending applicants for broadcast stations in Selbyville, Delaware, Charlottesville,
Virginia and Middletown, Maryland, respectively. 

     5.    Orion requests that, pending judicial review, the Commission stay the auctions for
the Biltmore Forest proceeding and other similarly situated comparative broadcast proceedings in
which an Initial Decision was issued by June 30, 1997.  A second motion, filed by Bechtel, Lindsay
and Lamprecht, seeks a stay pending judicial review of the auction rules as they pertain to their
particular applications, Orion's Biltmore Forest application, and the applications of other similarly
situated parties.  The motion notes that Commission approval of the universal settlement proposed
in the Charlottesville, Virginia proceeding would moot Lindsay's concern. 

     6.   Orion and the joint movants submit that a stay is warranted under Virginia Jobbers
and WMATA. A stay, they urge, will not result in substantial harm to any competing applicant or to
the public, particularly since an interim operator is already on the air in three of the proceedings.  The
joint movants in particular are unaware of any competing applicant in any of these cases that is willing
and prepared to go to auction immediately and proceed with the construction of the station while the
lawfulness of the auction procedures is pending before the court. Orion, having expended over
$500,000 in prosecuting its application through the comparative hearing process and several court
appeals, states that it lacks the funds to participate seriously in the auction.  The loss of this entire
investment, as well as the termination of its interim operating authority, is alleged to constitute
irreparable harm.  Orion and the joint movants also base their claim of irreparable harm on the lack
of any mechanism under the statute or the auction rules to compensate pending applicants in hearing
cases for their substantial prosecution expenses under the comparative process that are assertedly
wiped out now that the applicants must purchase the frequency at fair market value. According to
the joint movants, there are serious questions as to the constitutionality of the statute and the
lawfulness of the Commission's implementation of that statute, and a stay is therefore appropriate
under WMATA, given the allegedly strong showing of irreparable harm and the absence of any harm
to the public interest or other interested parties if a stay is granted.   

     7.   A strong likelihood of prevailing on the merits is also claimed by Orion. The abrupt
shift in regulatory scheme cannot withstand a hard look, Orion asserts, particularly given the
Commission's disparate treatment of comparative renewal proceedings. The decision to proceed with
comparative hearings in the renewal cases assertedly belies the Commission's claims regarding the
difficulty of deciding the few hearing cases through the comparative hearing process after Bechtel. 
Stressing that the court invalidated only one comparative factor, Orion challenges the prediction that
auctions will be speedier than comparative hearings and asserts that these cases can be expeditiously
resolved based on the existing hearing records.  As to the fairness of using auctions in these cases,
Orion disputes the Commission's finding that auctions are not particularly unfair because the auction
price is likely to reflect the similar, past expenses incurred by all eligible auction participants. Citing
Fresno Mobile Radio v. FCC, 165 F.3d 965 (D.C. Cir. 1999), Orion asserts that this analysis is
flawed because an auction bid will reflect expected future gains, rather than previous costs. To
support this claim, Orion also relies on the May 5, 1999 declaration under penalty of perjury of
economist Chera L. Sayers. 
  
     8.   Oppositions were filed by two competing applicants for Biltmore Forest, Biltmore Forest
FM, Inc. (BFBFM) and Willsyr Communications, Limited Partnership (Willsyr).  BFBFM and
Willsyr, joined by Skyland Broadcasting (also a Biltmore Forest applicant), oppose both motions,
urging that the Commission's auction rules are consistent with the statute and that, in any event, Orion
and the joint movants have not demonstrated irreparable harm absent a stay or a strong likelihood of
prevailing on the merits.  And, given that Orion's temporary operating authority will terminate only
upon the grant of a permanent FM license for Biltmore Forest, BFBFM and Willsyr urge that staying
the auction rules would harm the other competing applicants for the permanent license.  In reply,
Orion and the joint movants dispute the contention that they have not met the requirements for a stay. 
Orion in particular asserts that, by virtue of its interim operation, it faces greater harm than the other
applicants for Biltmore Forest.  

                            DISCUSSION

     9.   We will deny both motions for stay.   To warrant a stay of an administrative action,
the parties must make a convincing showing that:  (1) they will suffer irreparable harm if a stay is not
granted; (2) they are likely to prevail on the merits of their court appeal; (3) a stay would not harm
other interested parties; and (4) a stay would serve the public interest.   The most significant of these
factors is irreparable harm.  Under any formulation of the test, the stay motions must be denied
because they are not supported by a convincing showing on any of the four prongs.  
  
     10.  The parties' allegations of harm are deficient in several respects.   To justify a stay, the
alleged harm must be great, imminent, and certain to occur unless the stay is granted; the harm must
also be irreparable.  Instead the parties rely on past injury, in the form of nonreimbursable expenses
incurred in prosecuting their applications through the comparative hearing process.  That injury --
whatever its relevance to the merits of the underlying court appeals --  would not be alleviated by
postponing the auction until after the court has reviewed the lawfulness of our auction procedures
for these hearing cases.  Thus, contrary to the parties' assertions, the absence of a mechanism for
recouping these past expenditures does not constitute irreparable harm or otherwise support staying
the auctions pending judicial review.    

     11.  Additionally, the parties allege future harm which is certain to occur only if the court
upholds the use of auctions to resolve these cases and if the auction in a particular proceeding results
in another applicant securing the license or in the applicant making significant additional payments
to secure the license.  The allegation that the switch to auctions wipes out their considerable
investment of time and money in prosecuting their applications through the comparative hearing
process is purely hypothetical, however.  For the reasons set forth in the First Report and Order, it
is uncertain that an applicant who formulated its comparative proposal based on the pre-Bechtel
criteria would have a better chance of prevailing in a comparative hearing than in an auction, or that
the winning bidder would end up paying more for the license if it were awarded by auction than it
would pay in additional litigation costs if the Commission proceeded with comparative hearings in
these cases.  And, as in the case of the past expenditures, the parties have not explained how the
extent of the potential loss would by affected by postponing the auction until after the lawfulness of
the auction procedures are considered by the court.  

     12.  The parties have also failed to show that any harm resulting from conducting the
scheduled auctions before the completion of judicial review would be irreparable.  In the event that
the court overturns our auction rules, as Orion and the joint movants confidently predict, the
Commission would, of course, take appropriate steps to effectuate the court's decision.  The movants
assert that an auction prior to judicial review would require significant changes in their positions
which could not be undone if they prevailed in court. But they do not specify what changes would
be required or explain why the hearing applicants could not be returned to the status quo ante if the
auction procedures were invalidated by the court. 

     13.  To the extent that cash outlays are required to participate in the auction, all such funds
would be refunded to unsuccessful bidders upon the close of the auction, and to winning bidders if
the court ultimately determined that these cases should not have been resolved by auction. Such
refunds are appropriate as a matter of fairness and are consistent with our practice in prior auctions.
And, while the movants theorize that a decision to forego auction participation would jeopardize an
applicant's right to participate in post-auction proceedings involving the auction winner, the First
Report and Order, 13 FCC Rcd at 15956  98, is clear that an applicant is entitled to participate
unless it has requested the dismissal of its application, or its application has been finally denied or
dismissed by the Commission. The parties are also concerned that applicants electing not to bid in the
auction must forego various settlement opportunities. Our anti-collusion rules, however, generally
preclude settlements among applicants for full service broadcast facilities after the date for filing
short-form applications in any event, and if the auction results were overturned by a later court
decision, applicants who did not participate in the auction would have the same rights as other
competing applicants to enter into settlements/mergers with other applicants. Only if the court agreed
with our decision to resolve such cases by auction would such opportunities be irretrievably lost. In
that event, however, the movants, having had their day in court (and having failed to convince the
court that auctions are improper in the hearing cases), will have no cause to complain further. 

     14.  Finally, we agree with Willsyr that Orion is not entitled to claim irreparable harm,
absent a stay, because it faces the loss of its ongoing business as the interim operator for Biltmore
Forest.  Whether the permit for Biltmore Forest is awarded by auction or by comparative hearing,
Orion's current operating authority "will expire upon notification to the Commission that the
successful applicant for permanent authority for that frequency is ready to commence operations." 
That notification, however, will not occur until another applicant for Biltmore Forest has won the
auction and is prepared to commence station operations.  Significantly, the Commission's rules accord
three years for the construction of an FM station and provide that the construction period may be
extended where the construction permit is subject to further judicial or administrative appeal. As
a result, the court may complete its review of the pending court appeals before Orion's interim
authority expires. And, in any event, the Commission would again reinstate Orion's interim operating
authority if the court ultimately ruled that the use of an auction to select the licensee for Biltmore
Forest was unlawful. If the underlying court appeal is unsuccessful, of course, potential harm to
Orion in terms of a shorter interim operation is not a basis to grant the requested stay. 

     15.   Having concluded that the parties have not made a convincing showing that they will be
irreparably harmed, we turn briefly to the remaining prongs of the Virginia Jobbers test for grant of
a stay. The second prong is the likelihood of the moving parties prevailing on the merits of the
underlying court appeal. To justify a stay, the parties rely principally on arguments already considered
by the Commission.  For all of the reasons stated in the First Report and Order and the Order on
Reconsideration, we believe that the Commission properly implemented the statute, and that the use
of auctions to resolve all pending comparative broadcast cases neither involves a deprivation of due
process nor is impermissibly retroactive. The moving parties are, therefore, unlikely to prevail on the
merits.  

     16.  The third prong involves an assessment of the likely harm to other interested parties if
the stay is granted.  Whether a stay would harm any competing applicant in these cases is disputed. 
The joint movants claim any harm to interested parties is purely hypothetical, since they are unaware
of any applicant in the four proceedings that is prepared to proceed immediately with the auction and
construction of the station. This falls far short of the affirmative demonstration of no harm to others
required to justify a stay.  And, in any event, the motions for stay are opposed by three competing
applicants for Biltmore Forest urging that a stay would unnecessarily prolong Orion's interim
operation to their detriment.  Whatever the impact of a stay on the competing applicants in those
cases in which an interim operator is already providing service to the public, we agree with BFBFM
and Willsyr that the public interest would be best served by resolving all the hearing cases as quickly
as possible.  Allowing the auctions and the court appeals to proceed along parallel tracts would, in
our view, be the most expeditious approach here.  Accordingly, we find that Orion and the joint
movants have also failed to demonstrate, as required under the fourth prong of Virginia Jobbers, that
staying the auction pending judicial review would serve the public interest.  Consistent with our
representation to the court in Orion Communications Ltd. v. FCC that we would expedite the
resolution of the permanent licensing proceeding so as to avoid any prejudice to the other applicants
and to promote the public interest generally, we will deny the stay requests.   

     17.  Finally, we dismiss as procedurally deficient Willsyr's request to recuse FCC
commissioners.  In its Opposition to the stay requests, Willsyr contends that Orion now seeks the
same relief that Senator Helms assertedly requested during the confirmation hearings of Chairman
Kennard and Commissioners Tristani, Powell and Furchtgott-Roth (that is, that the Biltmore Forest
proceeding be decided by a comparative hearing).  Based on that circumstance, Willsyr has requested
that the Chairman and the three Commissioners recuse themselves from consideration of Orion's
Motion for Stay. Additionally, Willsyr seeks to renew its February 28, 1998 Motion To Recuse FCC
Commissioners, which had requested the Chairman's recusal from the rulemaking proceeding and the
other commissioners' recusal from both the rulemaking and the Biltmore Forest proceeding.  To
support both requests, however, Willsyr relies upon the same contentions that were rejected earlier.
To the extent that Willsyr thus renews its earlier recusal motion, Willsyr effectively seeks
reconsideration of the Commission's August 6, 1998 denial of the earlier recusal motion, and its
request must be dismissed because it was filed beyond the 30-day period specified in 47 U.S.C.  405
for petitions for reconsideration. Moreover, Willsyr's request for recusal concerning Orion's motion
for stay is also procedurally deficient in that it is an affirmative request for relief that is improperly
set forth in a responsive pleading.  In any event, since Willsyr's latest recusal request relies on
essentially the same material previously presented to the Commission, the reasons that warranted
denial of Willsyr's February 28, 1998 Motion To Recuse FCC Commissioners would likewise warrant
denial of any relief here.  


                         ORDERING CLAUSES


     18.  ACCORDINGLY, IT IS ORDERED, That the Motions For Leave To File Reply, filed
May 25, 1999, by Orion Communications Limited and the Motion For Leave To File Reply To
Oppositions To Motion For Stay, filed May 25, 1999, by by Jerome Thomas Lamprecht, Susan M.
Bechtel and Lindsay Television ARE GRANTED, and that the following pleadings ARE
ACCEPTED: (1) Reply to Biltmore Forest Broadcasting FM's Opposition To Orion's Motion for
Stay Pendente Lite, filed May 25, 1999, by Orion Communications Limited; (2) Reply To Willsyr
Communications Limited Partnership's Opposition to Orion's Motion For Stay Pendente Lite And To
Willsyr Communications Limited Partnership's Motion To Recuse FCC Commissioners, filed May
25, 1999, by Orion Communications Limited; and (3) Reply To Oppositions To Motion For Stay,
filed May 25, 1999, by Jerome Thomas Lamprecht, Susan M. Bechtel and Lindsay Television.

     19.  IT IS FURTHER ORDERED, That the Motion For Stay Pendente Lite, filed May 5,
1999, by Orion Communications Limited and the Motion For Stay, May 10, 1999, by Jerome Thomas
Lamprecht, Susan M. Bechtel and Lindsay Television ARE DENIED.

     20.  IT IS FURTHER ORDERED, That the Consolidated Opposition To Motions To Stay
And Motion To Recuse FCC Commissioners, filed May 14, 1999, by Willsyr Communications,
Limited Partnership IS DISMISSED as set forth in paragraph 17, above.



                         FEDERAL COMMUNICATIONS COMMISSION




                              Magalie Roman Salas
                              Secretary

            STATEMENT OF CHAIRMAN WILLIAM E. KENNARD 


     I earlier recused myself from participating in an adjudicatory licensing proceeding involving
the license for a new FM station in Biltmore Forest, North Carolina.  However, I declined a request
to recuse myself from participating in the general rulemaking proceeding that developed the auction
rules that are the subject of the motions for stay addressed in this order.  One of the motions before
us was filed by one of the applicants for the Biltmore Forest license. Out of an abundance of caution,
and although recusal is not mandated in these circumstances, I have recused myself from
consideration of this order.