JUDGES WARN REMAND IS POSSIBLE ON FCC RECIPROCAL COMPENSATION ORDER
U.S. Appeals Court, D.C., judges hammered FCC Tues. on whether agency’s latest reciprocal compensation order (CD April 20/01 p1) was properly grounded in Telecom Act. D.C. Circuit is same court that remanded FCC’s earlier attempt to set limits on reciprocal compensation for ISP-bound dial-up traffic. In challenge brought by WorldCom and other CLECs, 3-judge panel questioned Commission’s reliance on what Judge David Sentelle called “grandfathering provision” of Act to justify decision that ISP-bound traffic wasn’t subject to Act’s reciprocal compensation requirements. If court determines FCC can’t rely on Sec. 251(g), “don’t we have to remand again?” Sentelle asked. FCC attorney John Rogovin said that was “unappealing” result. Judges said they read Sec. 251(g) as attempt by Congress to make sure preexisting policies weren’t affected adversely by Telecom Act’s changes. They questioned how that type of holding clause could be used to make forward-looking changes in law, as FCC did in crafting its latest reciprocal compensation regime.
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Judges didn’t limit their scrutiny to FCC, however, and questioned whether WorldCom and other CLECs had standing to appeal Commission’s order. They said it would matter whether CLECs were raising objections to end result of FCC’s order or to route agency took to get to end result. They said series of court decisions had determined that when parties challenged path taken rather than end result, they had no standing. Decision has to directly affect CLECs to have standing, Judge Stephen Williams told WorldCom attorney Darryl Bradford. Bradford responded that CLECs’ challenge wasn’t limited to route FCC took but also to end result.
Case involved challenges to FCC’s April 27, 2001, order that put into place new reciprocal compensation policy to replace earlier one that D.C. Circuit had remanded. New policy concluded that Congress intended under Sec. 251(g) to exclude ISP-bound local traffic from being subject to reciprocal compensation. Rogovin said that after court remanded first reciprocal compensation order, FCC decided to “rethink” issue, which is why 2nd order was based on different interpretations. He said WorldCom’s appeal indicated it thought FCC should be “punished” for taking thoughtful approach.
Attorney Mark Evans, representing ILECs, defended FCC order, saying decision to rethink issue was “something rare” for govt. agency. FCC said “let’s step back and start over, thinking out assumptions,” Evans said. As result, Commission came up with “perfectly sensible” basis for order, he said. Nonetheless, judges struggled with FCC’s reasoning for deciding it had jurisdiction over ISP-bound traffic as well as its ultimate decision that such traffic wasn’t subject to reciprocal compensation. Order had said ISP-bound traffic was “interstate access traffic” or, more specifically, “information access,” rather than “telecommunications” traffic, definitions that judges appeared to find vexing. Other judge on panel was David Tatel.