COURT UPHOLDS FCC'S SEC. 271 ORDER FOR VERIZON IN PA.
The U.S. Appeals Court, D.C., upheld Tues. an FCC order that permitted Verizon to offer long distance service in Pa. Z-Tel had challenged the order, contending that the Commission had erred in finding that Verizon offered nondiscriminatory access to its wholesale billing services. The Telecom Act requires that Bell companies offer access to their local facilities, including billing functions, before being allowed to enter long distance.
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Z-Tel and other CLECs had complained to the FCC that Verizon hadn’t demonstrated it could deliver an accurate computer-readable bill. The Pa. PUC had recommended Verizon’s Sec. 271 application conditioned on the carrier’s being able to provide such electronic bills to competitors. Verizon implemented an electronic billing process in April 2001, shortly before filing its Sec. 271 application with the FCC in June 2001, but competitors said it was inadequate. However, the agency said the billing process had been improved, basing its decision on studies by outside consultants, software fixes and a review process.
The court panel of Chief Judge Douglas Ginsburg and Judges Raymond Randolph and David Sentelle considered and rejected several Z-Tel arguments, concluding in Z-Tel v. FCC (01-1461) that the agency had followed the law in approving the Verizon application in Sept. 2001.
For example, the court rejected Z-Tel’s complaint that the FCC had violated its own “complete when filed” rule when it considered an Aug. 17 submission from Verizon offering data on improvements in the billing procedure. The submission was made 2 months after the original application. The FCC has a statutory requirement to consider Sec. 271 applications within 90 days of their filing. The agency has its own rule that such applications should be complete when they are filed and applicants shouldn’t add additional information during the 90 days. However, the court said the FCC’s rules gave the agency discretion to consider such late- filed information if deemed necessary. The court decision, written by Ginsburg, explained: “The Commission indicated that it would waive the aspect of the complete when filed rule providing that late-filed information can be used only for the purpose of rebuttal. We find this approach eminently reasonable. It is neither arbitrary nor capricious for the Commission to consider any evidence that is properly before it for any purpose as to which it is probative.”
On another issue, Z-Tel had questioned whether the FCC gave enough weight to a Dept. of Justice evaluation raising concerns about the billing problems and whether it was appropriate for the FCC to take a differing stance based on later-filed Verizon information that DoJ didn’t have access to. The court noted that DoJ’s report specifically acknowledged that new billing information might be filed that could cause the FCC to approve the application. Ginsburg wrote: “To hold that the Commission’s consideration of such evidence deprived [DoJ] of a meaningful opportunity to comment upon the application would be to elevate the status of its report from advisory to controlling, contrary to the expressed intention of the Congress.”