FCC Questioned by Judges on Handling of IP Forbearance Case

The FCC argues the relief SBC, now AT&T, sought, was “not sufficiently specific,” a regulatory call on a set of services it was unable to clearly define. AT&T “simply made a strategic decision to see what it could get and it failed,” Joshi told the court Tues.: “The Commission didn’t buy it… At the end of the day there was simply no way to make a reasonable forbearance decision based on the record.”

But judges with the court peppered Joshi with questions, showing at least some inclination on the part of these judges to order the FCC to at least take up the petition on its merits, rather than reject it out of hand. The D.C. court historically hasn’t been shy to remand these types of cases to the FCC for further consideration. Jonathan Nuechterlein, attorney for AT&T, on the other hand, faced relatively few questions from the 3-judge panel.

Judges David Tatel and Stephen Williams were the most aggressive in questioning the FCC’s decision to deny the petition without looking more closely at its merits. Tatel said the FCC essentially rejected SBC’s request as too broad. “I couldn’t understand how broadness itself would be grounds for denial,” he said: “The Commission hasn’t looked at the petition and decided it doesn’t meet the public interest.” Williams said there’s “bound to be uncertainty on the margins” of all requests like the petition filed by SBC.

The case presented to the court stems from a Feb. 2004 petition filed by SBC seeking relief from common carrier regulation of “IP platform services,” saying it wanted to “eliminate any doubt” on the regulated status of these services. The petition was in keeping with a broader move by the Bells to persuade the FCC not to regulate a new generation of offerings that ride on the Internet in the same way it has traditionally regulated phone service.

The petition fell flat. After 15 months and thousands of pages of filings for and against, the Commission rejected the petition saying FCC rules don’t allow a grant of forbearance on obligations that “may or may not apply to the telecommunications service at issue.” The FCC also saw the request as overly broad: The Commission said the petition didn’t “identify with sufficient precision that facilities and services” that fall under the category of IP platform services.

In asking the court to force the FCC to take up its petition on its merits, SBC said the FCC’s approach would preclude forbearance “precisely when it is most needed: when, because of regulatory inertia, the industry faces investment-deterring uncertainty about whether old requirements burden new technologies.” SBC also disputed claims its petition wasn’t sufficiently precise: “The request was clear when filed and became even clearer as SBC explained and supported it in subsequent filings.”

In its response to SBC, the FCC it acted on the belief it couldn’t logically forbear from applying legal requirements that “do not apply” and that SBC wanted action on obligations “that apply only hypothetically or uncertainly.” If it had granted the petition, the FCC said it would have had to first determine whether IP platform services even fall under Title II common carrier regulations and then whether to grant forbearance, which it wasn’t prepared to do.

The FCC also said that, despite pressure from the Commission, SBC refused to spell out with any certainty what it means by IP platform services. “In response to repeated informal requests for greater clarification, SBC has supplemented the description with ex parte filings containing diagrams of yet to be deployed ‘fiber-to the node’ and ‘fiber to the home’ IP networks,” the Commission said. Some of the services appeared to be separate from the PSTN, whiles others can “ride over legacy networks.”