Carrier Intervenors Buttress FCC’s Claims to Legality of USF/ICC Reforms

Courts have already considered and rejected petitioners’ claims that the FCC lacked authority to transition intrastate access charges to zero, wrote AT&T, Cox, NCTA, MetroPCS, T-Mobile, Verizon Communications, Verizon Wireless and Vonage. The Supreme Court has ruled that Section 251 of the Communications Act “clearly” applies to intrastate services, they wrote. The D.C. Circuit has already upheld the FCC’s “general rulemaking authority” under Section 201(b) to regulate ICC charges for interstate traffic, they said. If the court does decide to vacate the ICC rules, they are “severable” from the FCC’s USF reforms, the intervenors said.

The commission also has “unquestioned, plenary authority” over ICC for all LEC-CMRS traffic, wrote AT&T, MetroPCS, NCTA, Sprint Nextel, T-Mobile, Verizon Communications and Verizon Wireless. “The Commission’s reliance on its Section 332 authority to establish and oversee the intercarrier compensation regime for all wireless traffic is well founded.” They also disputed the “jumble of arguments” presented by some petitions arguing that the FCC’s bill-and-keep implementation schedule for wireless traffic is arbitrary and capricious because it’s different than the schedule for landline traffic. The agency’s order “appropriately treats LEC-CMRS traffic differently because of an irrefutable record of new, growing arbitrage problems, and because the Commission is not ’transitioning’ from an existing regime at all, but rather filling a void as to which CLECs had no detrimental reliance interests,” the carriers wrote.

VON Coalition’s argument that the FCC failed to afford VoIP providers an opportunity to comment on its proposed anti-blocking rule “misreads the [Administrative Procedure Act’s] standard,” wrote NCTA. A final rule need only be “a logical outgrowth” of an NPRM, and “need not specify every precise proposal” that an agency may ultimately adopt as a rule as long as it “fairly apprises” parties of the issues involved, NCTA said.

The FCC “clearly” had legal authority to adopt the Access Recovery Charge, wrote AT&T, Verizon Communications and Verizon Wireless. The order explained that the ARC is an “interim measure” as part of the transition to bill-and-keep, and contained a subsection setting forth the FCC’s authority to adopt such mechanisms. “Nothing more was required,” said the carriers. They also disputed NASUCA’s argument that permitting carriers to allocate the ARC at a holding-company level violates the prohibition of unreasonable discrimination in Section 202(a). That section only applies to common carriers, they said. “Holding companies are not common carriers."

The FCC also had authority to “reorient the focus” of the USF from narrowband to broadband technologies, wrote AT&T, Verizon Communications, Verizon Wireless, CenturyLink, NCTA and Vonage. The commission is authorized to condition funding on the deployment of broadband-capable facilities, and any complaints about “hypothesized future support” for non-telecom carriers is “both nonjusticiable and without merit,” they wrote. They also defended the FCC’s authority to use a reverse-auction mechanism to allocate Connect America Fund Phase II funding in price-cap areas.