VERIZON WIRELESS, CTIA CHALLENGE LNP ORDER IN APPEALS COURT

CTIA Senior Vp-Gen. Counsel Michael Altschul said petition marked first time that court had been asked to re- examine how forbearance standard was applied since D.C. Circuit backed off ruling in Fox TV Stations v. FCC earlier this year. Court said it was better to leave unresolved interpretation of “necessary in the public interest” under Sec. 11 biennial review requirements of Communications Act that were used to ascertain whether rules on media ownership caps should be retained (CD June 24 p1). Martin’s partial dissent on LNP focused on how forbearance should be applied under Sec. 10 of Act, which requires that forbearance be granted if enforcement of challenged regulation isn’t “necessary” to ensure practices are just and reasonable and to protect consumers. Martin contended that how term “necessary” was applied in LNP order was at odds with how FCC argued term should be used in pending petition for rehearing of Fox decision. Outcome of CTIA petition could have broader implications for standard FCC uses when vetting forbearance requests in terms of whether burden of proof lies with agency or petitioning companies, several sources said.

FCC’s July LNP order had turned down original request by Verizon Wireless for complete forbearance on LNP requirements, instead granting industry extra year until Nov. 24, 2003, to implement number portability in 100 largest Metropolitan Statistical Areas. Commission left intact thousand-number block pooling deadline of Nov. 24, 2002. Altschul said CTIA didn’t plan to file petition for reconsideration at FCC over order. Instead, group and Verizon asked D.C. Circuit to review grounds on which FCC turned down Verizon’s forbearance petition from wireless local number portability obligation. Petition, filed Aug. 19 and released by CTIA Fri., said FCC decision violated Sec. 10 of Communications Act, which covers scenarios under which forbearance should be granted. Petition said FCC order was arbitrary, capricious and not supported by substantial evidence.

Focus of petition, for which briefing schedule hasn’t yet been set, is legal standard that FCC applies in reviewing forbearance requests, Altschul said. “The significance goes beyond local number portability, because it speaks to who has the burden of showing that a rule is necessary or not necessary for consumer protection,” he said. Filing asks court whether entity that’s petitioning FCC on particular rule has burden of showing that rule is or isn’t necessary for consumer protection or whether Commission has “burden of demonstrating that a rule is not just nice but necessary,” he said. “All of this is triggered by the Court of Appeals decision in Feb. in Fox, which they [court] then withdrew.”

NARUC Gen. Counsel Bradford Ramsay said group was likely to intervene on CTIA petition, but primarily out of concern that underlying decision on LNP not be changed. If NARUC became involved in litigation, it would be to make point that whatever forbearance standard would be used by court if LNP order were remanded back to FCC, order shouldn’t be vacated because forbearance wasn’t warranted, Ramsay said. “I don’t know if we will take a stance on forbearance,” he said. In wireless LNP proceeding at FCC, NARUC and consumer groups argued that little if any additional extension was warranted for wireless carriers to implement LNP. Large wireless carriers had contended that if FCC didn’t apply forbearance, substantial delay was warranted, in part because of complications involved in implementing thousand-block number pooling and LNP by same deadline. “Under any forbearance standard, this doesn’t qualify.”

One source said language of Sec. 10, which deals with forbearance, and Sec. 11, which addresses biennial review, were added as part of Telecom Act of 1996 and use “similar but slightly different language.” Sec. 10, for example, directs FCC to forbear from applying any regulation to telecom carrier if enforcement isn’t necessary to ensure that practices “are just and reasonable” and that enforcement isn’t necessary for protection of consumers. Sec. 11 requires FCC to review its regulations every 2 years to ascertain whether any regulation is “no longer necessary in the public interest.” D.C. Circuit isn’t expected to rule on CTIA petition before next spring.

Martin dissent had said order failed to “give sufficient content” to term “necessary” under Sec. 10. He said he was troubled by item’s failure to clarify that “the burden of rejecting a forbearance petition rests with the Commission.” How agency gave meaning to term “necessary” under Sec. 11 biennial review obligations also was raised by Martin in recent order that lifted requirement for cellular carriers to continue to provide analog service in 5 years. Martin voted for that item but said he was concerned that it didn’t discuss meaning of term “necessary” under agency’s biennial review obligations. In its petition for rehearing on Fox, FCC had said “necessary” should be read as meaning useful or appropriate, Martin said. While he said in separate statement on analog decision that he favored definition that was closer to “essential,” he said that at minimum agency should clarify it meant something more than useful or appropriate. FCC Comr. Copps had said majority interpreted FCC’s biennial review standard in way that was contrary to law because part of that assessment must include whether there was meaningful competition in particular market and then whether existence of such competition meant regulation no longer was needed in “public interest.”