National Ass'n of Motor Bus Owners v. Federal Communications Commission

460 F.2d 561
CourtCourt of Appeals for the Second Circuit
DecidedMay 24, 1972
DocketNos. 666, 667, Dockets 71-2119, 71-2120
StatusPublished
Cited by13 cases

This text of 460 F.2d 561 (National Ass'n of Motor Bus Owners v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Ass'n of Motor Bus Owners v. Federal Communications Commission, 460 F.2d 561 (2d Cir. 1972).

Opinion

MANSFIELD, Circuit Judge:

The principal question raised by these petitions for review is whether the Federal Communications Commission (“FCC”) has complied with the mandate issued by this Court pursuant to our decision in American Telephone & Telegraph Co. v. FCC, 449 F.2d 439 (2d Cir. 1971), reversing an FCC order which had directed the carriers (American Telephone and Telegraph Company, Associated Bell System Companies and Western Union Telegraph Company) to offer a type of lower-rate, private-line bulk communications service known as “Telpak” on terms that would permit customers without limitation to share the service by combining their needs to meet the minimum bulk use level. We hold that the FCC’s order on remand was not in conflict with our mandate and was within the Commission’s administrative discretion. Accordingly we affirm the Commission’s orders.

Since the essential facts are fully set forth in our earlier decision, supra, we here confine ourselves to the highlights. Beginning in 1961, AT&T initiated Telpak service, which “provides a customer with a means of continuous communication between specified locations without the carrier having to establish connections for each call or message, that is to say, without having to go through the usual call-and-hook-up process. Such service is not limited to conventional telephone apparatus; it also includes, at long or short distances, reproduction of documents and photographs, data transmission, remote metering, signaling and other highly sophisticated communica[563]*563tions services.” 449 F.2d at 442. In an effort to meet competition from point-to-point microwave communications systems, AT&T “allowed certain private-line users, whose communications requirements were not large enough to qualify them for Telpak on their own, to combine their needs and thus to become eligible to receive the benefit of the Telpak rates.” 449 F.2d at 443. “Telpak sharing,” however, was limited to those users — common carriers, pipeline companies, other public utilities, and federal, state and local governmental units — who were permitted by the FCC to share private microwave communications systems and were thus most likely to use such facilities unless they were offered a more economical alternative.

In July, 1966, the FCC amended its private microwave rules to allow greater sharing of private microwave systems. Acting on an informal complaint filed by businesses which were excluded from Telpak sharing, the Commission inquired whether AT&T intended to revise its Telpak sharing rules to take into account the new private microwave sharing regulations. When AT&T responded that it had no intention of adopting any changes, the Commission began proceedings under §§ 201(b) and 202(a) of the Communications Act of 1934, 48 Stat. 1070, 47 U.S.C. §§ 201(b), 202(a) (the “Act”), to determine whether limited Telpak sharing was unjust or unreasonable or whether it was unduly discriminatory.1 After protracted hearings, the Chief of the Common Carrier Bureau of the FCC issued a recommended decision in which he concluded that the limited Telpak sharing provisions were unreasonably discriminatory but recommended that no prescription be made under 47 U.S.C. § 205(a) and that AT&T instead be ordered merely to remove the discrimination. 23 F.C.C.2d 639, 658 (1969).

On review the FCC agreed with its Bureau Chief that limited Telpak sharing was unlawfully discriminatory, but rejected his recommendation that no prescription be made. Instead, the Commission ordered the carriers (AT&T and WU) to file new tariffs providing for unlimited Telpak sharing. 23 F.C.C.2d 606, 624 (1970). The carriers then sought review in this Court. On the discrimination issue, we agreed with the FCC that AT&T's limited Telpak sharing rules were unlawful, since the discrimination was not justified as a response to private microwave competition. However, we also held that the Commission had improperly ordered the carriers to provide unlimited Telpak sharing, since § 205(a) only allows the FCC, after full opportunity for a hearing, to prescribe carrier rates or practices upon a finding that such rates will be “just and reasonable” and practices will be “just, fair and reasonable,” and no such hearing had been held nor had findings been made.2 Since the prescription order [564]*564failed to comply with § 205(a), we remanded “the case to the F.C.C. for further proceedings to determine what remedy for the existing discriminatory sharing practices would be just, fair, and reasonable and as to what rates resulting therefrom would be just and reasonable.” 449 F.2d at 453. Speaking for the Court, Judge Lumbard emphasized that it was passing no judgment on what would be a proper remedy, but was merely remanding because of the Commission’s failure to comply with the procedural requirements of § 205(a).

In September, 1971, the Commission issued its decision and order on remand, in which it construed our mandate, as was its duty, Epstein v. Goldstein, 110 F.2d 747, 748 (2d Cir. 1940); Sherwin v. Welch, 115 U.S.App.D.C. 328, 319 F.2d 729 (1963). It stated:

“We construe the Court’s decision to mean that, if, under the circumstances of this case, the Commission desires to prescribe the specific course of action that the carriers must take in eliminating the unlawful discrimination, the Commission shall conduct further proceedings to develop a fuller evidentiary record upon which to base such prescription. On the other hand, if the Commission should decide that the carriers ought to be required to eliminate the unlawful discrimination without being subjected to an order by the Commission prescribing the specific measures to be followed, no further proceedings are necessary.” 31 F.C.C.2d 674, 675 (1971).

The Commission was faced with the prospect that if it continued to employ the first of the alternatives available (prescription) there would be a long delay occasioned by the necessity of holding' evidentiary hearings and making findings pursuant to § 205(a) before a final order could be entered, during which period the limited Telpak sharing provisions, already found to be unlawfully discriminatory, would continue in effect. Use of the second alternative, on the other hand, would promptly eliminate the discriminatory limited sharing arrangements but would also allow the carriers to eliminate sharing altogether, as they had often indicated they would do. Prior to our decision, supra, the Commission had expressed the view that elimination of sharing would only serve to increase the existing discrimination by giving certain classes of single large users (e. g., conglomerates, stock exchanges, electric power companies, and the Federal Government) substantial rate discounts that would not be available to smaller users of identical services, see 23 F.C.C.2d 606, 621-622 (1970), with the result that existing sharers would be harmed without any offsetting benefit to non-sharers in the absence of a rate decrease.

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460 F.2d 561, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-assn-of-motor-bus-owners-v-federal-communications-commission-ca2-1972.