Porting Order ‘Ignored’ Burden on Small ILECs, Appeals Circuit Told
The FCC defended its regulatory-flexibility analysis, in an order about local number portability between wireline and wireless carriers, to the U.S. Court of Appeals for the District of Columbia Circuit. The National Telecommunications Cooperative Association, representing small rural incumbent local exchange carriers, wants the court to stay the intermodal order and send it back to the commission. But in oral argument Monday judges appeared hesitant to rebuke the FCC.
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The court must decide whether the analysis in the 2003 order on intermodal local-number porting complied with the Regulatory Flexibility Act. The appeals court has already remanded the intermodal order once, after deciding that the FCC hadn’t done the analysis that the act required. The commission then did the analysis, but now the NTCA contends that it isn’t adequate.
“It seems to me [NTCA’s] real objection” is to the order’s “substantive outcome,” said Judge Brett Kavanaugh. But the act doesn’t appear to set a substantive standard, he said: It just requires analysis. Regardless, it’s tough for a court to determine qualitatively whether an agency has considered something, he said.
The FCC began on the “wrong course” when it issued the intermodal order without doing a regulatory-flexibility analysis, Marie Guillory, the NTCA’s attorney, said during oral argument. The commission “stuck to its wrong course” when it produced analysis that merely explained its initial decision, she said. The FCC “ignored” relevant information in the public record, including burdens imposed on small carriers, and alternatives pitched by those companies, she said. Instead, the FCC relied upon “mischaracterizations” by Verizon Wireless and the CTIA, Guillory said.
Judge Merrick Garland asked whether the public good of number portability outweighs possible costs to NTCA carriers. He said the original 1996 portability rule -- not contested in this case -- exempts carriers from number porting only when it’s not “technically feasible.” Transport and other costs make providing portability prohibitively expensive for small carriers, Guillory replied. In its analysis, the FCC put aside the matter of transport cost, deferring it to the commission’s intercarrier compensation proceeding. But the regulator was obligated to consider the expenses in this proceeding, she said.
Imposing intermodal number porting rules on all LECs creates a “larger benefit” for consumers, said FCC attorney Joel Marcus. Portability makes it easier for consumers to switch carriers, and thus enhances competition, he said. An incumbent carrier facing competition is likely to improve its own service to keep customers, Marcus said. But Guillory said the record doesn’t support the commission’s position on benefits to competition. Few consumers in rural areas want porting, but one porting request could mean higher costs for all, she said.
The FCC considered all comments in the record and made a proper public-policy decision, Marcus said. The NTCA is trying to “have a second bite of the apple,” he said. Small carriers should be able to recover porting costs over a five- year period, he said. If the carriers find costs to be unreasonable, they may petition the FCC for a waiver, he said. It was appropriate to put off the transport-cost issue because high transport costs result more directly from the current intercarrier compensation system than from the FCC’s portability rules, he said.