FCC Cites 'Broad' Authority, Discretion to Defend 'Balanced' Tech Transitions Order
The FCC said its 2015 tech-transitions order on discontinuances of legacy telecom services was a reasonable exercise of its statutory authority and agency discretion under deferential court precedent. The "task requires a delicate balancing of different policy goals" as the commission seeks to promote innovative IP-based, broadband offerings while ensuring continued consumer access to affordable and dependable service, said the FCC and DOJ in responding to arguments by USTelecom, which is challenging the order. "The FCC decisions at issue here, strike the appropriate balance," said an FCC/DOJ brief (in Pacer) Monday to the U.S. Court of Appeals for the D.C. Circuit. (United States Telecom Association v. FCC, No. 15-1414.)
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The commission interpreted the "broad and ambiguous language of section 214" of the Communications Act to devise a framework for reviewing telecom service discontinuance proposals as industry moves away from traditional circuit-switched services over copper networks. The framework "will enable the agency to ensure that no discontinuance of a carrier's service will deprive the public of access to reliable service at affordable prices," said the FCC/DOJ brief, which cited the Supreme Court's Chevron framework as the standard for review. Under that precedent, courts generally defer to expert agency interpretations of ambiguous statutes as long as they're reasonable, but critics believe such deference has gone too far, including in the D.C. Circuit's recent ruling upholding the FCC's net neutrality order (see 1607290052 and 1606200054).
USTelecom said the FCC unlawfully imposed a new "functional test" for discontinuing a carrier's service despite a statutory mandate that the service was defined by the terms of the carrier's tariffs or contracts. The functional test is impermissibly vague, depriving carriers' of fair notice and due process, USTelecom said in its brief June 14 (the same day a D.C. Circuit panel upheld the net neutrality order). USTelecom also contested an FCC requirement that carriers file discontinuance applications when they change or eliminate a service used by carrier-customers as a wholesale input even when their retail customers can obtain the service elsewhere. And it said the agency's "reasonably comparable wholesale access" condition violated both the statute and court precedent that ILECs don't have to offer CLECs discounted "unbundled" access to their broadband network elements or platform services.
"The FCC has extended its authority beyond what the Communications Act’s text, history, and structure will bear," said the USTelecom brief. "Its overreach is unlawful and should be set aside. If it is not, these new rules will needlessly delay and add considerable costs to the transition to modern networks that the agency recognizes is in the public interest to accelerate and facilitate."
The FCC and DOJ said USTelecom's arguments lack merit. They said the commission "reasonably" applied the functional test to determine whether a service is discontinued, reduced or impaired. By "evaluating the totality of the circumstances," including "community" views, the agency was creating a "consumer-oriented" test that "reflects a reasonable reading of the ambiguous phrase 'service to a community or part of a community' in Section 214(a)," said the FCC/DOJ, citing Chevron. "Section 214 does not even mention tariffs or contracts." They also said the commission provided fair notice to carriers by clarifying that a tariff or contract isn't the end of a discontinuance inquiry and by noting further considerations.
"The Commission reasonably construed section 214 to require FCC approval of any discontinuance, reduction or impairment of wholesale service that would result in discontinuance, reduction or impairment of a carrier-customer's retail service," FCC/DOJ said regarding USTelecom's second line of attack. "The statute's expansive language supports this interpretation," which the agency also "reasonably found" will "protect consumers and preserve competition in the enterprise market."
The FCC and DOJ said Section 214(c) "grants the FCC broad discretion to 'attach to the issuance of [any discontinuance] certificate such terms and conditions as in its judgment the public convenience and necessity may require.'" The agency "reasonably exercised this discretion when it adopted an interim rule under which" ILECs "that obtain FCC approval to discontinue high-speed special access or commercial wholesale platform services must comply with a 'reasonably comparable wholesale access' condition pending completion of the FCC's special access proceeding," FCC/DOJ said. They said the rule didn't require discounted unbundling of facilities, just "reasonably comparable" wholesale access services as replacements. Without the interim rule, CLEC competition -- the "primary source of competition in the enterprise market -- could be irrevocably lost," they said, quoting the order.