July 16, 2019

Tenth Circuit: Multiple Consolidated Petitions to Review FCC Rulemaking Order Denied

The Tenth Circuit Court of Appeals issued its opinion in In re FCC: 11-161 on Friday, May 23, 2014.

In late 2011, the Federal Communications Commission (FCC or Commission) issued a Report and Order and Further Notice of Proposed Rulemaking (Order) comprehensively reforming and modernizing its universal service and intercarrier compensation systems. Petitioners, each of whom were parties to the FCC’s rulemaking proceeding below, filed petitions for judicial review of the FCC’s Order. The Judicial Panel on Multidistrict Litigation consolidated the petitions in this court.

In the Joint Universal Service Fund Principal Brief, Additional Universal Service Fund Issues Principal Brief, Wireless Carrier Universal Service Fund Principal Brief, and Tribal Carriers Principal Brief, petitioners assert a host of challenges to the portions of the Order revising how universal service funds are to be allocated to and employed by recipients. After carefully considering those claims, [the Tenth Circuit finds] them either unpersuasive or barred from judicial review. Consequently, [the Tenth Circuit denies] the petitions to the extent they are based upon those claims.

Full case available here.

Tenth Circuit: FCC’s Actions Not Abuse of Discretion

The Tenth Circuit Court of Appeals published its opinion in Council Tree Investors, Inc. v. Federal Communications Commission on Friday, January 3, 2013.

Petitioners Council Tree Investors, Inc., a communications investment firm, and Bethel Native Corporation, a small wireless carrier (collectively, “Council Tree”), sought review of two orders issued by the Federal Communications Commission (“FCC” or “the Commission”) — the D Block Waiver Order (the “Waiver Order”) issued in 2007 and a Waiver Reconsideration Order issued in 2012.  Council Tree specifically requested nullification of Auction 73, the FCC’s auction of the 700-MHz wireless spectrum conducted in early 2008 pursuant to the Waiver Order.

Council Tree filed a Petition for Reconsideration of the Waiver Order (the “Waiver Reconsideration Petition”) with the FCC in 2007, as well as a Supplement to the Waiver Reconsideration Petition (the “Supplement”) in 2011. In its Waiver Reconsideration Order, the FCC dismissed the Waiver Reconsideration Petition as moot and dismissed the Supplement as untimely.

The Tenth Circuit held the FCC’s actions were not arbitrary, capricious, or an abuse of discretion and dismissed Council Tree’s petition, as it pertained to the Waiver Order, and denied its petition, as it related to the Waiver Reconsideration Order.

Tenth Circuit: FCC Denial of Petition for Regulatory Forbearance Pertaining to Telecommunications Services Was Reasoned and Reasonable

The Tenth Circuit Court of Appeals published its opinion in Qwest Corp. v. FCC on Monday, August 6, 2012.

The Tenth Circuit denied the petition for review. Petitioner  sought “review of an order of the Federal Communications Commission (FCC) denying Petitioner’s petition for regulatory forbearance pursuant to 47 U.S.C. § 160(a). Petitioner filed a petition with the FCC in March 2009 seeking relief from certain regulations pertaining to telecommunications services that it provides in the Phoenix, Arizona, metropolitan statistical area (MSA). The FCC denied the petition, citing insufficient evidence of sufficiently robust competition that would preclude Petitioner from raising prices, unreasonably discriminating, and harming consumers. Petitioner challenges the FCC’s decision only as it pertains to Petitioner’s mass-market retail services in the Phoenix MSA. The Court denied the petition, finding that the Phoenix Order was a reasoned and reasonable decision.

Tenth Circuit: Relay Service Rates Set by FCC Not in Violation of Statute and Not Arbitrary and Capricious

The Tenth Circuit Court of Appeals issued its opinion in Sorenson Commc’ns, Inc. v. FCC on Tuesday, October 18, 2011.

The Tenth Circuit denied the petition for review. Petitioner challenges the 2010-2011 rates set by the Federal Communication Commission (FCC) to compensate Video Relay Service providers, including Petitioner. Petitioner claims that the rates are in violation of 47 U.S.C. § 225 and are also  arbitrary and capricious in violation of the Administrative Procedure Act (APA).

Section 225 directs the FCC to ensure the availability of nationwide access to “functionally equivalent” relay service, “to the extent possible and in the most efficient manner, to hearing-impaired and speech-impaired individuals in the United States.” Petitioner alleges that the reimbursement rates set by the FCC’s rates are so low that the result violates these statutory requirements. However, Petitioner has failed to show the FCC’s interpretation of “functionally equivalent” is impermissible under the statute. “Consequently, it has not established that the interim rates violate the functional equivalence requirement of § 225.” In terms of the APA argument, the Court acknowledged its deference when reviewing ratemaking orders because “agency ratemaking is far from an exact science and involves policy determinations in which the agency is acknowledged to have expertise.” As such, the FCC is entitled to substantial deference when adopting interim rates. The Commission provided a sufficient explanation for the action it chose to establish the rates and, under the Court’s deferential review, that is all that is required. The rates were therefore not arbitrary and capricious.

Tenth Circuit: All Unbundled Network Element Loops Count Toward Number of Business Lines in Wire Center

The Tenth Circuit Court of Appeals issued its opinion in Qwest Corp. v. Colorado Public Utilities Comm’n on Friday, August 26, 2011.

The Tenth Circuit affirmed in part and reversed in part the district court’s decision. “In order to facilitate competition in the local telephone service market, federal law requires incumbent local exchange carriers (ILECs), such as Qwest, to lease certain parts of their telecommunications networks to competitive local exchange carriers (CLECs), such as Cbeyond. ILECs are relieved of this obligation if, among other circumstances, the number of ‘business lines’ in a local exchange reaches a certain threshold because, in the FCC’s view, a sufficient number of business lines shows that it would be economic for CLECs to invest in their own infrastructure. The term ‘business line’ and the method of counting business lines are defined in 47 C.F.R. § 51.5. The parties disagree as to which types of a particular network element—UNE loops—are included in the business line count. The district court held that UNE loops serving non-business customers are included in the business line count and that non-switched UNE loops are not included in the business line count.” The parties cross-appealed the decision.

The Court affirmed the district court and held that 47 C.F.R. § 51.5 plainly states that all UNE loops count towards the number of business lines in a wire center, regardless of whether it is used to serve a business or non-business customer. However, the Court also found that “the FCC’s interpretation of § 51.5 is consistent with existing reporting requirements, whereas the defendants’ interpretation would require state utility commissions to obtain data relating to CLECs’ use of UNEs in order to determine whether a UNE was connected to a switch or not.” The district court was reversed in part because “the FCC’s interpretation is not plainly erroneous or inconsistent with the language of the regulation, [and the Court had to] defer to the FCC’s position and hold that the business line count includes UNE loops that are not connected to switches.”