United States Telecom Ass'n v. Federal Communications Commission

400 F.3d 29, 365 U.S. App. D.C. 149, 35 Communications Reg. (P&F) 492, 2005 U.S. App. LEXIS 4058
CourtCourt of Appeals for the D.C. Circuit
DecidedMarch 11, 2005
DocketNo. 03-1414
StatusPublished
Cited by47 cases

This text of 400 F.3d 29 (United States Telecom Ass'n v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Telecom Ass'n v. Federal Communications Commission, 400 F.3d 29, 365 U.S. App. D.C. 149, 35 Communications Reg. (P&F) 492, 2005 U.S. App. LEXIS 4058 (D.C. Cir. 2005).

Opinion

GARLAND, Circuit Judge.

The petitioners in these consolidated petitions for review challenge an order of the Federal Communications Commission (FCC) that sets forth the conditions under which wireline telecommunications carriers must transfer telephone numbei*s to wireless carriers. The petitioners argue that the FCC’s order is a legislative rule that requires notice and comment under the Administrative Procedure Act (APA), 5 U.S.C. § 553, and a regulatory flexibility analysis under the Regulatory Flexibility Act (RFA), 5 U.S.C. § 604. The FCC contends that its order is an interpretative; rule — a rule that merely interprets one of the FCC’s previous legislative rales — and hence is exempt from APA and RFA requirements.

We conclude that the order is a legislative rule because it constitutes a substantive change in a prior rule. Although this rendered the order subject to the APA’s notice-and-comment requirements, we find that the FCC effectively complied with those requirements (notwithstanding its view that it was not required to do so), and that any deviations were at most harmless error. There is no dispute, however, that the FCC failed to comply with the RFA’s requirement to prepare a final regulatory flexibility analysis regarding the order’s impact.on small entities.

In light of these conclusions, we grant, the petitions in part and deny them in part, remanding the order to the FCC to prepare a final regulatory flexibility analysis. Until that analysis is complete, we stay the effect of the order solely as it applies to those carriers that qualify as small entities under the RFA.

I

The Telecommunications Act of 1996 imposes numerous duties on local exchange carriers (LECs), which, for purposes of this case, are wireline carriers — companies that provide telephone service over telephone wires. See 47 U.S.C. § 153(26) (defining LECs); see also FCC Br. at 2. The duty at issue here is the obligation “to provide, to the extent technically feasible, [151]*151number portability in accordance with requirements prescribed by the Commission.” 47 U.S.C. § 251(b)(2). The Act defines “number portability” as “the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another.” Id. § 158(30). The Act further directs the FCC “to establish regulations to implement” the statutory requirements. Id. § 251(d)(1).

On July 2, 1996, shortly after the 1996 Telecommunications Act became law, the FCC released its first order regarding number portability. See First Report and Order and Further Notice of Proposed Rulemaking, Telephone Number Portability, 11 F.C.C.R. 8352 (1996) (First Order). The First Order was issued pursuant to APA notice-and-comment procedures, and contained the regulatory flexibility analysis required by the RFA. Id. ¶ 1, at 8353-54, app. C, at 8486. In the First Order, the FCC recognized two kinds of portability that are relevant to this case: “service provider portability” and “location portability.” Id. ¶¶ 172, 174, at 8443.

The First Order required all carriers to provide service provider portability, which it made “synonymous with” the statutory definition of number portability: “the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers ... when switching from one telecommunications carrier to another.” Id. ¶ 27, at 8366-67. Compare 47 C.F.R. § 52.21(q), with 47 U.S.C. § 153(30). In addition, the First Order clarified that the portability obligation included not only porting between wireline carriers, but also “intermodal portability”: the porting of numbers from wireline carriers to wireless providers, and vice versa. First Order 11152, 11 F.C.C.R. at 8431, ¶ 155, at 8433, ¶ 166, at 8440; see 47 C.F.R. §§ 52.23(b), 52.31(a).1

Although the First Order mandated service provider portability, it expressly declined to require “location portability,” which it defined as “the ability of users of telecommunications services to retain existing telecommunications numbers ... when moving from one physical location to another.” First Order ¶ 174, 11 F.C.C.R. at 8443; see id. ¶6, at 8356; 47 C.F.R. § 52.21(j). But the First Order left many issues unresolved. In particular, while it required porting “at the same location,” and expressly declined to require porting when moving from “one physical location to another,” it did not define the word “location.”

The FCC enlisted a federal advisory-committee, the North American Numbering Council (NANC), to make recommendations regarding the implementation of number portability. See First Order ¶¶ 94-95, 11 F.C.C.R. at 8401-02. The FCC also established a phased schedule requiring LECs to complete implementation of number portability in the 100 largest metropolitan areas by December 31, 1998. See id. ¶ 77, at 8393. As a result of subsequent postponements, the carriers’ intermodal porting duty did not commence until November 24, 2003 in large metropolitan areas, and until six months later in other areas. See Verizon Wireless’ Petition for Partial Forbearance from the [152]*152Commercial Mobile Radio Services Number Portability Obligation ¶ 31, 17 F.C.C.R. 14,972, 14,985-86, ¶ 34, at 14,986-87 (2002).

In 1997, the FCC received the NANC’s recommendations regarding wireline-towireline service provider portability and issued a second order that adopted those recommendations. See Second Report and Order, Telephone Number Portability, 12 F.C.C.R. 12,281 (1997) (Second Order); 47 C.F.R. § 52.26(a) (codifying the NANC Working Group Report). Like the First Order; the Second Order was issued pursuant to notice and comment and included a regulatory flexibility analysis. Second Order ¶ 2, 12 F.C.C.R. at 12,283, app. C, at 12,358. Under the Second Order, wirelineto-wireline number portability was “limited to carriers with facilities or numbering resources in the same rate center ....” See Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, Telephone Number Portability; CTIA Petitions for Declaratory Ruling on Wire-line-Wireless Porting Issues ¶ 7, 18 F.C.C.R. 23,697, 23,700 (2003) {Intermodal Order) (citing the Second Order’s adoption of the NANC recommendations).

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400 F.3d 29, 365 U.S. App. D.C. 149, 35 Communications Reg. (P&F) 492, 2005 U.S. App. LEXIS 4058, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-telecom-assn-v-federal-communications-commission-cadc-2005.