At&T Corp. v. Federal Communications Commission

369 F.3d 554, 361 U.S. App. D.C. 354, 32 Communications Reg. (P&F) 827, 2004 U.S. App. LEXIS 10633
Court of Appeals for the D.C. Circuit·Decided June 1, 2004·No. 03-1035·Published·Cited by 6 cases

Opinion

Opinion for the Court filed PER CURIAM.

PER CURIAM:

Under § 271 of the Telecommunications Act of 1996 (the “Act”), a Bell Operating Company (“BOC”) or its affiliate may apply to the Federal Communications Commission (“FCC” or “Commission”) for authorization to provide interLATA (long-distance) telephone service originating in any in-region State. 47 U.S.C. § 271(d)(1). The FCC may grant such authorization if: (1) the BOC demonstrates that it provides competitors access and interconnection to its local network pursuant to the “competitive checklist” under 47 U.S.C. § 271(c)(2)(B), (2) the Commission finds that the requested authorization is consistent with the public interest, and (3) the requested authorization “will be carried *556 out in accordance with the requirements of section 272.” 47 U.S.C. § 271(d)(3). Section 272 adopts regulatory “safeguards,” including structural and transactional requirements, nondiscrimination provisions, and enforcement mechanisms to deter a BOC from leveraging its local market power into longdistance markets. 47 U.S.C. § 272. The Act makes it clear, however, that the § 272 safeguards “shall cease to apply ... 3 years after the date [when a BOC] is authorized to provide interLATA telecommunications services under section 271(d) ..., unless the Commission extends such 3-year period by rule or order.” 47 U.S.C. § 272(f)(1). On December 22,1999, Verizon in New York was the first BOC to obtain FCC approval to provide long-distance service under § 271.

On December 23, 2002, Verizon reached the automatic sunset date under § 272(f)(1) with respect to its long-distance operations in New York. The Commission issued a public notice on this date stating that “[t]he provisions of section 272 ... sunset for Verizon’s operations in New York by operation of law.” Public Notice, Section 272 Sunsets for Verizon in New York State by Operation of Law on December 23, 2002 Pursuant to Section 272(f)(1), 17 F.C.C.R. 26,864, 2002 WL 31863789 (2002) (“Public Notice”). On this same date, the Commission issued a Memorandum Opinion and Order, holding that the § 272' safeguards sunset on a state-by-state (not on a BOC-by-BOC) basis. In the Matter of Section 272 (f)(1) Sunset of the BOC Separate Affiliate and Related Requirements, 17 F.C.C.R. 26,869, 26,871, 2002 WL 31863799 (2002) (“Memorandum Opinion and Order”). The Commission also noted that, pursuant to prior Notice of Proposed Rulemaking, In the Matter of Section 272(f)(1) Sunset of the BOC Separate Affiliate and Related Requirements, 17 F.C.C.R. 9916, 2002 WL 1041122 (2002) (“NPRM”), the agency still had under consideration “possible alternative safeguards for BOC provision of in-region, interLATA services after sunset of the 272 structural and related requirements.” Memorandum Opinion and Order, 17 F.C.C.R. at 26,869. “Moreover,” the FCC stated, “we plan to issue a [further] Notice of Proposed Rulemaking in the coming months to seek comment on whether there is a continued need for dominant carrier regulation of BOC in-region, interLATA, domestic, interexchange telecommunications services provided outside of a section 272 affiliate. We will take further action to address these issues in the future as appropriate.” Id. at 26,869-70.

In this action, petitioner AT&T Corporation contends that the FCC acted arbitrarily and violated its duty of reasoned decisionmaking when it issued a public notice stating that the § 272 safeguards sunset for Verizon’s operations in New York “by operation of law.” AT&T argues that the record here demonstrates that Verizon retains significant market power, justifying the need for continued application of the § 272 safeguards in New York. Thus, according to AT&T, the FCC was obligated to provide a reasoned explanation for its failure to extend the § 272 safeguards. We reject these claims.

As the Commission indicated in its public notice, the § 272 safeguards sunset “by operation of law,” not by Commission action. The FCC’s public notice did not purport to be an order or rule addressing the continued need for § 272 safeguards, and the Act does not require any decision from the Commission in order for the sunset provision under § 272(f)(1) to take effect. Therefore, the Commission was not obligated to engage in “reasoned decision-making” when it issued the public notice. Finally, AT&T’s claims regarding the need for alternative safeguards, covering BOC provision of interLATA services after sun *557 set of the § 272 structural and related requirements, remain under consideration by the FCC. Therefore, those claims are not ripe for review. Accordingly, we dismiss AT&T’s petition for review.

I. Background

The regional Bell Operating Companies are incumbent local exchange carriers (“LECs”). They control the local telephone networks in several regions throughout the country. The BOCs came into existence pursuant to the consent decree resolving the United States’ antitrust suit against AT&T. See United States v. Am. Tel. & Tel. Co., 552 F.Supp. 131, 165 (D.D.C.1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983). The consent decree found that AT&T had engaged in anti-competitive behavior by using its control of local networks to impede long-distance competitors’ access to the local networks. Id. at 162. Long-distance carriers need such access in order to connect calls from different regions. The consent decree not only required AT&T to divest from the BOCs, but also barred BOCs from providing long-distance telephone services. See id. at 165. See also United States v. Western Elec. Co., 569 F.Supp. 990, 993-94 (D.D.C.1983) (stating that a “LATA” marks boundaries beyond which a BOC may not carry telephone calls).

The Telecommunications Act of 1996 changed this landscape by permitting a BOC to apply to the Commission for authorization to provide interLATA services originating in any in-region state. 47 U.S.C. § 271(d)(1). As noted above, the FCC may grant such authorization if: (1) the BOC demonstrates that it provides competitors access and interconnection to its local network pursuant to the “competitive checklist” under 47 U.S.C. § 271(c)(2)(B), (2) the Commission finds that the requested authorization is consistent with the public interest, and (3) the requested authorization “will be carried out in accordance with the requirements of section 272.” 47 U.S.C.

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At&T Corp. v. Federal Communications Commission, 369 F.3d 554, 361 U.S. App. D.C. 354, 32 Communications Reg. (P&F) 827, 2004 U.S. App. LEXIS 10633 (D.C. Cir. 2004).

369 F.3d 554 (At&T Corp. v. Federal Communications Commission) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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