NARUC Appeals 10th Circuit's Ruling on FCC USF/Intercarrier Compensation Order to Supreme Court
NARUC filed an appeal with the Supreme Court Monday of the 10th U.S. Circuit Court of Appeals’ decision upholding the FCC’s USF/intercarrier compensation order (see report in the May 27 issue). NARUC's petition for writ of certiorari sought review of the lower court decision, which the group said upheld the FCC’s “radical interpretations of the Communications Act that fundamentally restructure” the telecom sector. NARUC said it's seeking court clarification of whether statutory construction rules in the Communications Act and the 1996 Telecom Act “place any limits on either the FCC’s or a reviewing Court’s interpretation of agency authority.” The group is also seeking a decision on whether Chevron deference allows the 10th Circuit to confirm a change in the definition of “reciprocal compensation” that directly conflicts with the 1996 Telecom Act.
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States should file amicus briefs with the Supreme Court on NARUC’s appeal, General Counsel Brad Ramsay said during a teleconference Monday on states’ responses to likely FCC pre-emption of state municipal broadband laws in North Carolina and Tennessee. The FCC is considering pre-emption petitions from the Electric Power Board of Chattanooga and the town of Wilson, North Carolina. The FCC has misused Chevron deference “to completely ignore” explicit rules of statutory construction that Congress placed in the 1996 Telecom Act at the urging of NARUC, the National Conference of State Legislatures (NCSL), the National Governors Association (NGA) and others, Ramsay said. Chevron gives agencies broad deference to interpret ambiguous statutes. State utility commissions and others opposing the 10th Circuit’s decision have been exploring options for an appeal or 10th Circuit en banc review of the ruling since May, with panelists at a July NARUC conference saying the decision eroded states’ authority under Communications Act Sections 251 and 254 (see report in the July 15 issue). The FCC didn’t comment.
Ramsay said he's concerned about further FCC pre-emption efforts that rely on the Supreme Court’s current interpretation of Chevron deference because the FCC “has gotten away with bloody murder across the board on pre-emption” since the 1996 Telecom Act went into effect. The FCC “rarely uses its pre-emption laws on a case-by-case basis,” he said. But the FCC is likely to face significant problems defending a decision in favor of the Chattanooga and Wilson petitions because of the Supreme Court’s precedent in Nixon v. Missouri Municipal League, which struck down the FCC’s strongest pre-emption provision, Ramsay said. NARUC opposes FCC pre-emption of the municipal broadband laws but hasn’t taken a position on the merits of municipal broadband.
Successful FCC pre-emption of the North Carolina and Tennessee municipal broadband laws “is an issue of great concern for state legislatures,” said Neal Osten, director of NCSL’s Washington office. NCSL has actively opposed FCC pre-emption but doesn’t take a position on whether states should restrict municipal broadband deployment. NCSL is “disappointed” by President Barack Obama’s support earlier this month for FCC pre-emption and will continue to oppose the Chattanooga and Wilson petitions, Osten said. The NGA continues to believe pre-emption should be the exception to the rule and that states’ sovereign rights need to be preserved, said General Counsel David Parkhurst.
State legislators on the teleconference said they were concerned that FCC pre-emption could be a slippery slope on other state-based telecom issues and would call into question who would be responsible for financial issues that municipal broadband projects might face. “We’re responsible for our subdivisions,” said Minnesota state Rep. Joe Atkins, a member of the state’s Democratic-Farmer-Labor Party. “If they suffer financially, we suffer with them” or in some cases for them. “If they start going down this path, I’m just curious where it leads,” he said. South Carolina state Senate Commerce Committee Chairman Thomas Alexander, a Republican, said he believes FCC pre-emption would “undo” successful restrictions at the state level that he believes protect competition. He said he questioned how federal government involvement “can add any value.”