Section 503(b) of the Communications Act authorizes D to impose fines on licensees for violations of the Act or regulations. The statute provides a maximum fine schedule in accordance with classification of licensee. D did this but did it for each violation on a case-by-case basis. The FCC decided in 1991 to abandon the case-by-case approach to implementing section 503(b) and issued an order to 'adopt more specific standards for assessing forfeitures.' The forfeiture standards were now determined by a schedule appended to D's order. D asserted that setting the base amounts as a percentage of the maximum fines permitted by Congress for each category of licensee best furthered the goals of the statute. There were also adjustments to the base amount depending on various aggravating or mitigating factors. Some classes of violators would pay heavier finds than others for the same violations. D did this all without following APA notice and comment procedures. P claims that D violated the APA. P also contests the substantive validity of the prescribed base forfeiture amounts, asserting that D's percentage-of-maxima approach arbitrarily discriminates against common carriers by subjecting them to greater fines than other licensees for the exact same conduct. D denied P's petition. P appealed to the Court of Appeals.