 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued January 9, 2019                 Decided July 16, 2019

                         No. 18-1176

               GLH COMMUNICATIONS, INC.,
                     APPELLANT

                             v.

         FEDERAL COMMUNICATIONS COMMISSION,
                     APPELLEE


    On Appeal of Orders of the Federal Communications
                      Commission


     Donald J. Evans argued the cause for appellant. With him
on the briefs was Keenan P. Adamchak.

    David M. Gossett, Deputy General Counsel, Federal
Communications Commission, argued the cause for appellee.
With him on the brief were Thomas M. Johnson Jr., General
Counsel, Jacob M. Lewis, Associate General Counsel, and
Pamela L. Smith, Counsel. Richard K. Welch, Deputy
Associate General Counsel, entered an appearance.

    Before: ROGERS, SRINIVASAN, and PILLARD, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge SRINIVASAN.
                                2
     SRINIVASAN, Circuit Judge:             In 2001, GLH
Communications, Inc., a cellular telephone company, acquired
a number of radio spectrum licenses from Leap Wireless
International, another cellular telephone company. Leap had
originally purchased a handful of those licenses from the
Federal Communications Commission under an installment
payment program. When GLH acquired the licenses, it
assumed the obligation to make the installment payments.
GLH, though, failed to make the payments for some of the
licenses, prompting the Commission to cancel those licenses
and reauction the underlying spectrum to new providers.

     In administrative proceedings before the Commission,
GLH challenged both the Commission’s decision to cancel the
licenses and its refusal to give GLH a credit against its debt for
the proceeds of the reauction. The Commission rejected
GLH’s arguments, and GLH now appeals. We conclude that
the Commission acted appropriately in cancelling GLH’s
licenses for failure to make the installment payments and in
refusing to apply the reauction proceeds against GLH’s debt.

                                I.

    The Federal Communications Commission has exclusive
authority to grant licenses to use radio spectrum, and must, as
a general matter, employ an auction system to assign licenses.
See 47 U.S.C. §§ 307(a), 309(j). Congress identified various
purposes that the Commission must seek to promote when
designing an auction system. See id. § 309(j)(3). One of those
purposes is ensuring that licenses are disseminated “among a
wide variety of applicants, including small businesses.” Id.
§ 309(j)(3)(B).

    To that end, the Commission developed an installment
plan program, under which qualifying small businesses can pay
                                3
winning auction bids in installment payments made over the
term of the license. Such a program, the Commission reasoned,
would enhance the ability of small businesses to participate in
spectrum auctions by reducing the up-front costs of a license.
The structure, however, comes with a condition: any licenses
won with an installment bid “shall be conditioned upon the full
and timely performance of the licensee’s payment obligations
under the installment plan.” 47 C.F.R. § 1.2110(g)(4). If an
installment-payment licensee misses a payment (and does not
make up the payment within two quarter-long grace periods),
the licensee “shall be in default, its license shall automatically
cancel, and it will be subject to debt collection procedures.” Id.
§ 1.2110(g)(4)(iv).

      In 1996, the Commission auctioned off a number of
licenses covering radio spectrum to be used for cellular
telephone service. Two of the winning bidders in that auction
were (i) NTCH, the parent company of GLH at the time, and
(ii) a subsidiary of Leap Wireless International.

     Three years later, NTCH and Leap agreed to trade some of
the licenses each had won in the auction. Although the NTCH
licenses included in the deal had been fully paid at the time of
the auction, six of the Leap licenses had been purchased using
the installment program. In order to secure Commission
approval of the assignment of those licenses, GLH assumed
both the security agreements executed by the Leap subsidiary
when it won the licenses and also the obligation to make all
remaining installment payments. At the same time, Leap
agreed to pay GLH the funds necessary to make the installment
payments each quarter.

     The arrangement evidently worked without complication
for a couple of years. But in January 2003, Leap failed to make
its payment to GLH, and GLH then failed to make the next
                               4
installment payment to the Commission, due on January 31,
2003. Under the Commission’s two-grace-period rule, GLH
had until July 31, 2003 to cure the payment delinquency. But
instead of curing the delinquency, GLH filed a waiver request,
in which it explained the circumstances of the missed payment
and asked the Commission for a two-year waiver of its debt
collection rules and payment deadlines to “allow GLH
additional time to try to satisfy its obligations.” Request of
GLH Communications, Inc. for Temporary Waivers of
Installment Payment Deadlines (47 C.F.R. § 1.2110(g)(4)) and
Debt Collection Rules (47 C.F.R. § 1.1901 et seq.), at 6 (Apr.
16, 2003), J.A. 42.

     On July 18—approximately two weeks before the end of
GLH’s grace period—the Commission’s Auctions and
Industry Analysis Division released an order denying GLH’s
request for a waiver of the payment deadlines. See In re
Request of GLH Commc’ns, Inc. for Temporary Waivers of
Installment Payment Deadlines, 18 FCC Rcd. 14,695 (2003),
J.A. 76. The Division explained that “strict enforcement of the
installment payment rules enhances the integrity of the auction
and licensing process,” and determined that GLH had not
shown any unique circumstances rendering enforcement of the
deadline inequitable. Id. ¶ 11; see id. ¶¶ 7–18.

     When the deadline arrived, GLH had paid its outstanding
obligations on only two of the six licenses. The remaining four
licenses automatically cancelled under the governing
regulation. 47 C.F.R. § 1.2110(g)(4). After the cancellation,
GLH filed a petition for reconsideration of the Division’s Order
denying a waiver. In addition to the arguments made in its
waiver request, GLH contended that the Commission had been
required by a statute, 47 U.S.C. § 312(c), to provide a hearing
before cancelling the licenses, and further argued that, if the
                              5
Commission decided to proceed with cancellation, it should
return the payments GLH had previously made.

     While GLH’s rehearing petition was pending, the
Commission reauctioned the spectrum covered by GLH’s
cancelled licenses to new buyers. The Commission’s Wireless
Telecommunications Bureau then released an order denying
the petition for rehearing. See In re GLH Commc’ns, Inc., 22
FCC Rcd. 2411 (2007), J.A. 104. With respect to GLH’s
waiver request, the Bureau’s Order largely repeated the
reasoning of the Division. See id. ¶¶ 12–22. With respect to
GLH’s new arguments, the Bureau determined that § 312(c)’s
hearing requirement does not apply to automatic cancellations
for defaults under 47 C.F.R. § 1.2110(g)(4)(iv) and that GLH
was not entitled to any refund of its previous payments. Id.
¶¶ 23–25.

     GLH then filed an application for review with the full
Commission, in which it repeated the arguments it had
previously made before the Division and the Bureau. Because
the spectrum had since been reauctioned, GLH also argued that
it was entitled to remission of any reauction proceeds
exceeding GLH’s debt.

     The Commission denied GLH’s application for review. In
re Alpine PCS, Inc., 255 FCC Rcd. 469 (2010), J.A. 163. It
largely repeated the reasoning contained in the previous orders
and additionally concluded that GLH was not entitled to have
the reauction proceeds set off against its debt. Id. ¶¶ 18–38,
47–50, 58–66, 83–85. GLH unsuccessfully sought rehearing
before the Commission, see In re GLH Commc’ns, Inc., 33
FCC Rcd. 5926 (2018), J.A. 220, and then brought this appeal.
                               6
                               II.

     GLH raises two groups of challenges to the Commission’s
decision. It initially argues that the Commission erred in
cancelling its licenses, both because the decision to reject its
waiver request was arbitrary and capricious and because it was
entitled to a pre-cancellation hearing. Then, GLH argues that
even if the Commission validly cancelled its licenses, the
Commission should have granted it a credit for the reauction
proceeds or forgiven its debt.

     “We review the FCC’s decision only to determine whether
it was ‘arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.’ Our review is ‘very
deferential.’” Press Commc’ns LLC v. FCC, 875 F.3d 1117,
1121 (D.C. Cir. 2017) (first quoting 5 U.S.C. § 706(2)(A); then
quoting Rural Cellular Ass’n v. FCC, 588 F.3d 1095, 1105
(D.C. Cir. 2009)) (citation omitted). A Commission decision
is arbitrary and capricious if the Commission “has relied on
factors which Congress has not intended it to consider, entirely
failed to consider an important aspect of the problem, offered
an explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency
expertise.” Id. (quoting Motor Vehicles Mfrs. Ass’n v. State
Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

                               A.

      We first address GLH’s arguments that the Commission
erred in denying GLH’s waiver request and failing to provide
it a hearing before cancelling its licenses.
                                7
                                1.

     GLH contends that the Commission’s denial of its request
for a waiver of the installment-payment deadline was arbitrary
and capricious. The Commission’s regulations allow it to grant
a request to waive the installment payment rules if a licensee
shows either (i) that “[t]he underlying purpose of the rule(s)
would not be served or would be frustrated by application to
the instant case, and that a grant of the requested waiver would
be in the public interest,” or (ii) that “[i]n view of unique or
unusual factual circumstances of the instant case, application
of the rule(s) would be inequitable, unduly burdensome or
contrary to the public interest, or the applicant has no
reasonable alternative.” 47 C.F.R. § 1.925(b)(3).

     In rejecting GLH’s waiver request, the Commission
explained that the auction system is designed to award each
license “to the party that placed the highest value on the
spectrum.” In re Alpine PCS, Inc., 255 FCC Rcd. 469, at
¶¶ 20–21. But “allow[ing] licensees to keep their licenses after
they had failed to comply with the Commission’s payment
rules” would interfere with that goal by “increas[ing] the
incentive for bidders to make bids they could not pay and
reduc[ing] opportunities for other bidders to win licenses.” Id.
¶ 21. As a result, the Commission explained, “strict
enforcement of the installment payment rules preserves a fair
and efficient licensing process and promotes the rapid
deployment of services for the benefit of the public,” and the
rationale for strict enforcement applies “whether the licensee
acquired the license directly through competitive bidding or
through assignment in the secondary market.” Id. The
Commission thus had previously granted a waiver request
“only after finding that there was no serious question regarding
the defaulting licensee’s ongoing ability and willingness to
fulfill its payment obligations despite the default and, therefore,
                              8
no question regarding the presumption that it remained best
suited to utilize the spectrum.” Id. ¶ 22.

     Applying that approach to GLH’s waiver request, the
Commission determined that GLH had not demonstrated an
“ongoing financial ability and willingness to fulfill [its]
payment obligations post-default.” Id. ¶ 29. The Commission
concluded that granting GLH’s request therefore would serve
neither the purposes of the automatic-cancellation rule nor the
public interest. See id. ¶ 31. Additionally, the Commission
found that GLH had not demonstrated any “unique factual
circumstances” entitling it to a waiver. Id. ¶ 32. The
Commission explained that “claims regarding financial
difficulties resulting from a licensee’s business decisions and
commercial dealings, including those in which a third party has
withdrawn its financial support, do not amount to unique facts
or circumstances that make application of the automatic
cancellation rule inequitable, burdensome, or contrary to the
public interest,” because the Commission “cannot take into
account the private business arrangements that an applicant has
made to finance its successful auction bid.” Id. (citation and
alteration omitted).

     The Commission’s explanation of its decision, at least on
its face, is more than adequate to survive
arbitrary-and-capricious review.         The Commission
appropriately explained the legal standard, examined the
particular facts of GLH’s case, and reasonably applied that
standard to those facts. GLH advances three arguments as to
why the Commission’s decision nonetheless is arbitrary and
capricious, none of which we find persuasive.

    First, GLH contends that the public interest favored
granting its waiver request because it had already built the
necessary infrastructure and begun providing cellular service
                               9
before its default. Although avoiding a discontinuation of
ongoing service weighed in GLH’s favor, the Commission
considered that factor and determined that the “broader public
interest in preserving the integrity and efficiency of the
Commission’s auction process, as well as the Commission’s
obligation to fairly and consistently enforce its installment
payment rules,” outweighed the public “interest in a particular
licensee’s provision of service.” Id. ¶ 37. That determination
was reasonable and fell squarely within the Commission’s
technical competence.

     Second, GLH asserts that the Commission’s desire to
preserve the integrity of the auction process should not have
carried the day because GLH acquired its licenses by
assignment rather than in an auction. That argument, too, was
considered and rejected by the Commission. See id. ¶ 21 &
n.111 (citing In re GLH Commc’ns, Inc., 22 FCC Rcd. 2411, at
¶ 15). As the underlying Bureau Order explained, a winning
bidder “demonstrat[es] the integrity of its valuation by paying
the amount of the winning bids,” and that demonstration
continues past assignment when an assignee “assume[s] the
winning bidder’s obligation to fully and timely pay the amount
of the winning bids.” In re GLH Commc’ns, Inc., 22 FCC Rcd.
2411, at ¶ 15. Allowing an original purchaser who is unable to
meet its obligations simply to assign the license with the
understanding that the Commission will treat the assignee more
leniently could compromise the Commission’s ability to ensure
the integrity of the underlying valuation. The Commission thus
reasonably concluded that an assignee’s timely payment “is
important to the integrity of the auctions program.” In re
Alpine PCS, Inc., 255 FCC Rcd. 469, at ¶ 21 n.111.

    Third, GLH argues that the Commission’s rejection of its
waiver request was inconsistent with the Commission’s 1997
decision to provide a suite of debt-relief options to distressed
                                10
installment payers. See In re Amendment of the Comm’n’s
Rules Regarding Installment Payment Fin. for Personal
Commc’ns Servs. (PCS) Licenses, Second Report and Order
and Further Notice of Proposed Rulemaking, 12 FCC Rcd.
16,436 (1997). We are unable to consider that argument
because GLH did not appropriately raise it before the
Commission. See 47 U.S.C. § 405(a). GLH advanced the
argument only in a single oblique reference in its petition for
reconsideration before the Bureau. See GLH Pet. for Recons.
2 & n.3, J.A. 90. That single reference, however, was
insufficient to provide the Commission “a fair opportunity to
pass on” GLH’s argument, Time Warner Ent’mt Co. v. FCC,
144 F.3d 75, 79 (D.C. Cir. 1998), both because it was only a
passing reference and also because GLH failed to renew the
argument in its application for review before the Commission
itself, see Coal. for Noncommercial Media v. FCC, 249 F.3d
1005, 1009 (D.C. Cir. 2001).

    For those reasons, we conclude that the Commission’s
denial of GLH’s waiver request was not arbitrary or capricious.

                                2.

     GLH also contends that 47 U.S.C. § 312(c) required the
Commission to hold a hearing before cancelling GLH’s
licenses. That provision requires the Commission to hold a
hearing “[b]efore revoking a license . . . pursuant to subsection
(a).” 47 U.S.C. § 312(c). Subsection (a), in turn, grants the
Commission authority to revoke a station license for seven
specific reasons, such as “false statements knowingly made . . .
in the application,” “willful or repeated failure to operate
substantially as set forth in the license,” and “willful or
repeated violation of, or willful or repeated failure to observe[,]
any provision of this chapter or any rule or regulation of the”
Commission. Id. § 312(a).
                               11
     As the Commission concluded in its Order, see In re
Alpine PCS, Inc., 255 FCC Rcd. 469, at ¶¶ 84–85, GLH’s
licenses were not revoked for any of the reasons enumerated in
§ 312(a). Instead, they were automatically cancelled under the
applicable regulation, 47 C.F.R. § 1.2110(g)(4)(iv), when GLH
defaulted on its installment payments. See 47 C.F.R.
§ 1.2110(g)(4)(iv) (“If an eligible entity obligated to make
installment payments fails to pay the total Required Installment
Payment, interest and any late payment fees associated with the
Required Installment Payment within two quarters (6 months)
of the Required Installment Payment due date, it shall be in
default, its license shall automatically cancel, and it will be
subject to debt collection procedures.”). The terms of § 312(c)
thus do not afford GLH a right to a pre-cancellation hearing:
§ 312(c) provides a hearing right for revocations “pursuant to”
§ 312(a), and GLH’s licenses were not cancelled pursuant to
§ 312(a).

     GLH argues that, under that reading, the Commission
could regulate its way around § 312(c) by simply repeating
§ 312(a)’s statutory grounds for revocation in a regulation,
conditioning licenses on compliance with the regulation, and
then cancelling licenses upon a failure to comply without
affording any hearing. GLH’s argument might have some
force if the Commission had in fact parroted § 312(a) in
regulations and then relied on those regulations to cancel
GLH’s licenses. In such a situation, it might fairly be said that
the licenses were cancelled “pursuant to” both § 312(a) and the
regulations. But that is not what happened here. Rather, the
underlying reason for cancellation—that GLH defaulted on its
installment payments—does not appear in § 312(a) at all. The
cancellation of GLH’s licenses then cannot have taken place
under § 312(a), and § 312(c) did not afford GLH a right to a
pre-cancellation hearing.
                              12
                              B.

    In addition to arguing that the Commission erred in
cancelling GLH’s licenses, GLH also argues that, now that the
underlying auction spectrum has been resold, it is entitled to
compensation from the reauction or a forgiveness of its debt.

                               1.

     GLH first contends that the Uniform Commercial Code
governs its relationship with the Commission and that the UCC
entitles GLH to receive any reauction proceeds exceeding the
amount of its debt to the Commission. With respect to that
argument, GLH and the Commission initially agree that, in the
absence of any on-point statute, a commercial transaction
between the United States and a private party is governed by
federal common law. See GLH Br. 39–40; FCC Br. 29 (citing
Leonard J. Kennedy, Esq., & Richard S. Denning, Esq., 11
FCC Rcd. 21,572, 21,577 (1996)); cf. United States v. Kimbell
Foods, Inc., 440 U.S. 715, 728–29 (1979); Clearfield Trust Co.
v. United States, 318 U.S. 363, 366–67 (1943). The content of
that common law turns on a variety of factors, such as whether
there is a need for a uniform federal standard or whether
“application of a federal rule would disrupt commercial
relationships predicated on state law.” Kimbell Foods, 440
U.S. at 728–29. GLH argues, and the Commission has
previously stated, that consideration of those factors should
lead a federal court to “apply the basic principles of Article 9
of the UCC” to secured transactions between the Commission
and licensees, modifying them “as necessary to produce a
uniform national result consistent with Congressional intent
and FCC policies set forth in the Communications Act and
applicable FCC rules and orders.” Leonard J. Kennedy, Esq.,
& Richard S. Denning, Esq., 11 FCC Rcd. at 21,578; see also
GLH Br. 39–40.
                               13
     Assuming for the sake of argument that consideration of
the appropriate factors would lead us to adopt the principles of
the UCC to the extent they do not conflict with federal interests
or policies, we cannot accept GLH’s argument that the UCC
governs the Commission’s actions in this case. “Article 9 of
the UCC sets forth a secured creditor’s lien-enforcement
remedies,” which means it would support GLH’s “claim of
entitlement to proceeds from the FCC’s sale of new licenses
only if the FCC’s cancellation of the licenses was a lien-
enforcement remedy under the UCC.” In re Magnacom
Wireless, LLC, 503 F.3d 984, 993 (9th Cir. 2007). But unlike
a private party, the Commission does not act only as a creditor,
even when dealing with installment payers owing it a debt.
Instead, the Commission also acts as a regulator. And while
the Security Agreement assumed by GLH acknowledges that a
default will trigger automatic cancellation pursuant to 47
C.F.R. § 1.2110, see Security Agreement ¶ 8(a), J.A. 11, the
authority to cancel the licenses comes not from the Security
Agreement but from the referenced regulation.

     Consequently, the Commission “had a regulatory . . . right
to cancel [GLH’s] licenses” when GLH defaulted, and that
“right was separate and independent from the FCC’s rights as
a secured creditor.” Magnacom, 503 F.3d at 994; cf. Security
Agreement ¶ 2, J.A. 8 (acknowledging that the FCC’s security
interest in the licenses is “not in derogation of any of the
Commission’s regulatory authority over the License[s]”).
“Because the FCC’s license cancellation is not a UCC lien-
enforcement remedy, the UCC’s requirements are simply
inapplicable” to the cancellation. Magnacom, 503 F.3d at 994.
And because GLH held an interest only in the licenses and not
in the underlying spectrum, see Security Agreement ¶ 2, J.A.
8; 47 U.S.C. § 301, once the licenses were cancelled pursuant
to the Commission’s regulatory authority, GLH had no claim
                              14
under the UCC to the proceeds of the reauction of the
underlying spectrum.

                               2.

     Next, GLH argues that the Commission’s refusal to offset
its debt with the proceeds of the auction constituted an
impermissible retroactive reinterpretation of 47 C.F.R.
§ 1.2104(g)(2). That regulation establishes a specified penalty
for high bidders who default or are disqualified “after the
close” of a license auction. In GLH’s view, the penalty set
forth in that regulation should cap its exposure, such that it
should effectively be entitled to a set-off (from the reauction
proceeds) of any additional exposure.

     GLH’s argument derives from the history of the
Commission’s interpretation of the regulation—concerning, in
particular, the applicability of the regulation to installment
payers. Under the version of the regulation in effect in 1996, a
bidder who defaulted “after the close” of an auction was
“subject to a penalty equal to the difference between the
amount bid and the amount of the winning bid the next time the
license is offered by the” Commission “plus an additional
penalty equal to 3 percent of the subsequent winning bid” or
the defaulter’s bid (whichever was lower). GLH Br. SA-7
(quoting 47 C.F.R. § 1.2104(g) (1996)).

     In 1997, the Commission released an order explaining that,
when an installment payer defaults, its license “will be
cancelled automatically and the Commission will initiate debt
collection procedures” pursuant to 47 C.F.R. § 1.2110, but that
§ 1.2110 did “not clearly indicate . . . whether under these
circumstances the licensee will be liable for the default
payment set forth in Section 1.2104(g).” In re Amendment of
Part I of the Comm’n’s Rules – Competitive Bidding
                               15
Procedures, 13 FCC Rcd. 374, 442 (1997) (1997 Order). In
determining that such defaulters should not be liable for the
payment described in § 1.2104(g), the Commission concluded
that “an additional payment requirement for licensees
defaulting on installments is not necessary” because the
Commission’s “current rules and installment payment terms
are adequate to discourage defaults,” and “the conditions on the
face of each license and the terms of the notes and security
agreements executed by licensees provide the Commission
appropriate remedies that will ensure that defaulted licenses are
returned to the Commission for reauction and that all
outstanding debts, as well as the Commission’s costs, are
recoverable.” Id. at 443.

     The Commission thereby explained in the 1997 Order that
installment payment defaulters would not be liable for the
§ 1.2104(g) penalty payment (and explained why the
Commission adopted that interpretation of § 1.2104(g)). But
two later statements in the Order appeared to suggest that
defaulters in fact would be liable for the payments. First, the
Order stated that, “by making licensees who default on an
installment payment subject to the default payment set forth in
Section 1.2104(g)(2), we create an additional deterrent to
licensees considering default as a solution to financing
shortfalls.” Id. at 446. Second, the Order stated that, “upon
default on an installment payment, a license will automatically
cancel without further action by the Commission, the licensee
will become subject to the default payment set forth in Section
1.2104(g) of our rules . . . , and the Commission will initiate
debt collection procedures against the licensee.” Id. at 446–47.

    In an attempt to rectify any confusion created by the
apparent contradictions in the Order, the Commission amended
the Order the following year to remove the language in the
second sentence quoted above saying that “the licensee will
                               16
become subject to the default payment set forth in Section
1.2104(g) of our rules”; but the amendment erroneously failed
to remove the first sentence. See id. at Erratum ¶ 8. In two
subsequent orders in 2000 and 2004, the Commission
eliminated any remaining confusion about the applicability of
the § 1.2014(g) penalty provision to installment-payment
defaulters by reaffirming that the penalty provision does not in
fact apply to such defaulters. See In re Amendment of Part I of
the Comm’n’s Rules – Competitive Bidding Procedures, 15
FCC Rcd. 15,293 (2000) (2000 Order); In re Amendment of
Part I of the Comm’n’s Rules – Competitive Bidding
Procedures, 19 FCC Rcd. 2551 (2004) (2004 Order).

     Under GLH’s view of that history, it did not become clear
until the 2004 Order (after GLH had defaulted) that
§ 1.2104(g)(2) does not apply to installment-payment debtors.
And under GLH’s reading, applying § 1.2104(g)(2) to GLH’s
default would effectively entitle it to a set-off of the reauction
proceeds against its debt. Refusing to grant it a set-off, GLH
argues, violates the principle against retroactivity embedded in
the Administrative Procedure Act, see 5 U.S.C. § 551(4), by
imposing the higher penalties mandated by the 2004 Order
(rather than the lower penalties mandated by the 1997 Order)
on its default.

     We are unpersuaded by GLH’s argument. First, GLH
misunderstands the question considered by the Commission in
the 1997 Order. GLH appears to believe that, if the
Commission had concluded that § 1.2104(g) applies to
installment payers, GLH then would have been entitled to the
effective set-off it reads into that provision. But in actuality,
the Commission indicated at every step of the way that
installment payers were always subject to the cancellation and
debt-collection penalties described in the separate regulation
specifically addressing installment-payment defaults, 47
                              17
C.F.R. § 1.2110, including full liability for the purchase price
of the licenses. The only question the Commission considered
with respect to installment payers and § 1.2104(g)(2) was
whether defaulting payers would also be subject to the 3%
penalty and deficiency payment described in § 1.2104(g). E.g.,
1997 Order, 13 FCC Rcd. at 446 (“[B]y making licensees who
default on an installment payment subject to the default
payment set forth in Section 1.2104(g)(2), we create an
additional deterrent to licensees considering default as a
solution to financing shortfalls.” (emphasis added)). In short,
even if GLH were correct that it did not become clear until
2004 that § 1.2104(g) does not apply to its default, it was
helped—not hurt—by that clarification.

     Second, even assuming GLH were correct about the
question under consideration in the 1997 Order, the
Commission had made sufficiently clear, at least by the time of
GLH’s assumption of the installment-payment obligations, that
§ 1.2104(g) did not apply to installment payers who defaulted
after the award of a license. The 1997 Order engaged in a
detailed discussion of the Commission’s rationale for finding
that § 1.2104(g) does not apply to installment payers. Although
GLH identifies some seemingly contradictory language in a
later portion of the Order, no reasonable licensee reading the
Order as a whole would have concluded that § 1.2104(g)
applies to installment payers. And one of the contradictory
statements was removed in an erratum issued the following
year, which would have reinforced the recognition that the
Commission believed § 1.2104(g) does not apply to installment
payers and that those contradictory statements were simply an
error. The 2000 and 2004 Orders merely clarified, rather than
changed, the Commission’s position. As a result, the
Commission’s refusal to grant GLH a set-off of its debt with
the reauction proceeds did not involve any impermissible
                              18
retroactive change in the Commission’s interpretation of
§ 1.2104(g).

                              3.

     Finally, GLH argues that because the proceeds of the
spectrum reauction exceeded the amount of GLH’s outstanding
debt, the Commission has been made whole and GLH is
entitled to a forgiveness of its debt. GLH’s argument stems
from an opinion letter released by the Commission responding
to concerns about the note and security agreement that the
Commission required installment payers to execute. See
Leonard J. Kennedy, Esq., & Richard S. Denning, Esq., 11
FCC Rcd. 21,572. One of those concerns was that, in the event
of a default, the Commission could both reauction the spectrum
and collect on the note, resulting in a double recovery. Id. at
21,576. According to the Commission, that concern was
misplaced because “the equity principles established” in the
Debt Collection Act, 31 U.S.C. ch. 37, and Federal Claims
Collection Standards, 31 C.F.R. ch. IX, “should allow the
federal government to forgive any outstanding debt so long as
it has been made whole (penalties and costs included) in a
subsequent auction.” Leonard J. Kennedy, Esq., & Richard S.
Denning, Esq., 11 FCC Rcd. at 21,576. Therefore, GLH
argues, because the Commission has been made whole through
the reauctions in this case, it must forgive GLH’s outstanding
debt.

     Although GLH is correct that, based on the opinion letter,
the Commission may agree that GLH’s debt should be forgiven
if the Commission has been made whole, GLH has raised its
argument in the wrong proceeding. The Debt Collection Act
and Federal Claims Collection Standards provide a mechanism
for (and a set of standards governing) debt compromise
requests, and place the ultimate authority to compromise debts
                              19
as large as GLH’s in the Department of Justice rather than in
the Commission. See 31 C.F.R. § 902.1(b). GLH thus can raise
its debt-forgiveness argument in a petition for debt compromise
that it can submit to the Commission, see 47 C.F.R. § 1.1915,
or as a defense in any future debt-collection action (the
Commission has not initiated any collection action), rather than
as a subsidiary argument in this license-cancellation
proceeding.     (And, if GLH’s argument persuades the
Commission that a compromise is appropriate, the
Commission can seek compromise approval from the
Department of Justice.)

     That understanding is confirmed both by the 2004 Order,
see 2004 Order, 19 FCC Rcd. at 2558 (explaining that the
opinion letter “makes clear that any forgiveness of a debt
arising from an installment payment default would occur only
in the course of federal debt collection proceedings”), and also
by Commission counsel in oral argument, see Oral Argument
23:16–27:43. We thus affirm the Commission’s decision not
to consider the argument or forgive GLH’s debt in this
proceeding, understanding that GLH may initiate consideration
of its equitable argument for debt forgiveness by filing a
petition for debt compromise.

                      *   *    *   *    *

    For the foregoing reasons, we affirm the decision of the
Federal Communications Commission.

                                                    So ordered.
