WPC* D$=+qԐs +r(2zʸ' -Jq#Vd~|[-#Ǥ,"`!/ћ;xzh) :Y sn[@)EzҬrD!_1-la]ڡ+PzB@vTf$X}dfNw7 ,q|g#eƏFuPvK-Ɩ%yPekXr?jlMTkp~TiRH\af'cPe ٬²}hs ީ2߫1Cv̎4yКT?&\|5- f) ڷTud/14]e7i<칣!R9n$0z^hYg@z P7\\ 됤4%t JCmg C(5 9x!6V!Vwq#FR#  U!N %' w@- 4m  b Q !O];!3f%)F+-g0H246k8U"N%:UNs:U:<:E:UN:EM;Q> 0NA1BDF 0mIpGK BMMO!dQV>YnZP]` BBbOcdegi 0.'ojl*oUNrUNsBasKvy| ^d3>q 0 0A‰ 0TnW 0Ō*Bɑ B* 0h5 0| 0 BB 0K""" 0mmmmm AQ++++++++++++|| 0B 0D D/` B B* B*֜ B*HP LaserJet 4000 Series PCL 6HPBXLB0vL(hH  Z 6Times New Roman RegularX  E  U  U  D D u'C@ 3|x - - G 2$ XX      XX  2  /   SeeHarryNewton,NewtonsTelecomDictionary301(15thed.1999)(defining   exchangeas atelephoneswitchingcenterand,byextension,thelocalareaservedbyaswitchingcenter);GeneralTel.Co.ofCalif.,13F.C.C.2d448,460n.23(1968)(defining   exchangeas acentraloffice,orasystemoperatedbyit,providingtelephonecommunicationinacommunityorinpartofacity).Inlargercommunities,atelephonecompanywillgenerallyusemultipleswitchingofficesinplaceofasingleonetoprovideswitchingacrossthelocalexchangearea.See47U.S.C.153(47)(A).  2$ XX      XX  6  /   SeePetitionofBellAtlanticCorp.forRelieffromBarrierstoDeploymentofAdvanced  Telecomm.Svcs.,CCDkt.No.9811(filedJan.26,1998);PetitionoftheAllianceforPublic  TechnologyRequestingIssuanceofNoticeofInquiryandNoticeofProposedRulemakingToImplementSec.706ofthe1996Telecomm.Act,CCB/CPDNo.9815(filedFeb.18,1998);  PetitionofAmeritechCorp.ToRemoveBarrierstoInvestmentinAdvancedTelecomm. p Capability,CCDkt.No.9832(filedMar.5,1998);PetitionoftheAssnforLocalTelecomm. `  Svcs.(ALTS)foraDeclaratoryRulingEstablishingConditionsNecessarytoPromoteDeploymentofAdvancedTelecomm.CapabilityunderSec.706oftheTelecomm.Actof1996, @  CCDkt.No.9878(filedMay27,1998);SouthwesternBellTel.Co.etal.PetitionforRelief 0  fromRegulationPursuanttoSection706oftheTelecomm.Actof1996and47U.S.C.160forADSLInfrastructureandSvc.,CCDkt.No.9891(filedJune9,1998). E 2$ XX      XX  11  /   SeealsoMCICommunicationsCorp.,708F.2dat1093n.8(localtelephoneexchange  service enablesthecallingpartytodialanytelephoneconnectedtotheswitchednetworkwithinthatexchangearea);BellSouthOrder,13FCCRcdat20622(wirelessPCSmeetsdefinition  becauseuserscancallandreceivecallsfromeverycustomeronwirelessorwirelinenetwork).  2$ XX      XX  18  /   Congressslimitationof exchangeaccessto telephonetollservicelinksissignificant.  Beforethe1996Act,theAT&Tdivestituredecreedefined exchangeaccessmorebroadlyas theprovisionofexchangeservicesforthepurposeoforiginatingorterminatinginterexchange  telecommunicationsgenerically.AmericanTel.&Tel.Co.,552F.Supp.at228.Congresss  consciousdecisiontonarrowthescopeoftheterminthe1996Actmustbegivenmeaning.  2$ XX      XX  19  /   Asnotedabove,intheGTEADSLOrder,theFCCruledthatDSLisa specialaccess  service.GTEADSLOrder,13FCCRcdat22480.Thissimplymeansthattheaccesslinkis  dedicatedratherthanswitched.Id.SeealsoSouthwesternBellTel.Co.v.FCC,100F.3d1004,  1005(D.C.Cir.1996)(describingdifferencebetween specialand switchedaccess).Specialaccesscanbeeitherinformationorexchangeaccess,dependingonwhethertheaccesslinkisusedtooriginatetelephonetollserviceorinformationservices.BecauseDSLprovidesenduserswithadedicateddatalinktoaproviderofinformationservices(suchasanInternetserviceprovider),itconstitutesaspecialinformationaccessservice.  2$ XX      XX  1  /   XoNXXXLikewise,themerefactthatacarrierprovideslocalexchangeserviceasanincumbent  LECdoesnotmeanthatallofitstelecommunicationsservicesaresubjecttoincumbentLEC  regulation.EventhoughGTEandSprintaretheincumbentLECsinsomeserviceareas(suchassomeoftheVirginiasuburbsofWashington,D.C.),competitorscannotobtainunbundledaccesstotheelementsofSprintslongdistanceandinternationalnetworksundersection251(c)(3),orresalediscountsonGTEsnationwideInternetbackboneundersection251(c)(4),becausethesearenotservicesprovidedbySprintorGTEintheircapacitiesas localexchangecarriers.#XXXXoN#  2$ XX      XX  12  /   See,e.g.,OffshoreTel.Co.,3FCCRcdat4142(oilrigradioservicethatsimplylinksrig  callerstomainlandPSTNisnot telephoneexchangeservicewherecarrierprovidesnoswitchingofitsownthatwouldallowrigcallerstoconnecttoeachotherdirectly);CoxCable  Communications,Inc.,102F.C.C.2d110,122n.37(1985),vacatedasmoot,1FCCRcd561  (1986)(dataservicesprovidedovercabletelevisionnetworkarenot telephoneexchangeserviceeventhoughthereislimitedswitching,because cablesubscriberscannotcalleveryothersubscriberconnectedtotheswitch;subscriberscanonlycommunicatewithpredesignatedlocations). ) 2$ XX      XX  20  /   TheActdefines telecommunicationsas thetransmission,betweenoramongpoints  specifiedbytheuser,ofinformationoftheuserschoosing,withoutchangeintheformor  contentoftheinformationassentandreceived.47U.S.C.153(43)(emphasisadded).  Internetserviceprovidersarenotpassiveconduitsofdata.Instead,theyprovide informationservice,definedintheActas theofferingofacapabilityforgenerating,acquiring,storing,transforming,processing,retrieving,utilizing,ormakingavailableinformationviatelecommunications.Id.153(20).SeeFederalStateJointBd.onUniversalSvc.,13FCC P  Rcd11501,11540(1998)(rulingthatInternetserviceprovidersoffer informationservices,not telecommunications).  2$ XX      XX  21  /   See,e.g.,id.;AccessChargeReform,12FCCRcd15982,16133(1997)(notingthat  InternetserviceprovidersdonotusethePSTNthesamewaythatlongdistancecarriersandotherpurchasersof exchangeaccessdo).  2$ XX      XX  3  /   SeeImplementationoftheLocalCompetitionProvisionsintheTelecommunicationsAct  of1996,11FCCRcd15499,15691(1996)(hereinafter LocalCompetitionOrder).Seealso  SouthwesternBellTel.Co.v.FCC,153F.3d597,601(8thCir.1998),petitionforcert.filed,67  U.S.L.W.3561(U.S.Feb.26,1999)(No.981381)( localloops...connectenduserstothelocalexchange).  2$ XX      XX  14  /   TheAdvancedServicesOrdernotesthat thereisnotechnicalbarriertoanyenduser  establishingaconnectionwithanycustomerlocatedon[theDSLproviderspacketswitched]network,butthisisbesidethepoint.13FCCRcdat24033(42)TheendusermaydothisonlybycontactingtheDSLprovider,designatingtheothercustomer,andhavingtheDSLprovidersetupanewdedicateddatapipetothatothercustomer.TheendusercannotsetupandtakedownDSLconnectionstotheseothercustomersatwill,ashecanbydialinganordinarytelephonecall. ] 2$ XX      XX  13  /   SeeBellAtlanticTel.Cos.,13FCCRcd23667,23668(1998)(recognizingthatDSL  connectionsare dedicated);GTEADSLOrderat2246667(same).  2$ XX      XX  17  /   ݀TheFCCdeniesthatitever suggestedthattwowayvoiceserviceisanecessary  componentoftelephoneexchangeservice.AdvancedServicesOrder,13FCCRcdat24033  (42)(emphasisinoriginal).Butitneversuggestedanycriterionotherthanthisoneto  determinewhethersomethingistelephoneexchangeservice.ItcertainlyarticulatednosuchcriterionintheAdvancedServicesOrder.  2$ XX      XX  4  /   SeeSouthwesternBellTel.Co.,153F.3dat601( Interofficetransmissionfacilitiesare  thehighwaysofthelocalexchange.Theyconnecttheendofficesandtandemswitcheswithinthelocalexchangetooneanotherandcarrytelephonetrafficbetweenandamongtheseofficesandswitches.).  2$ XX      XX  8  /   See,e.g.,TeleconnectCo.v.BellTel.Co.ofPenn.,10FCCRcd1626,162829(1995);  PetitionforEmergencyReliefandDeclaratoryRulingfiledbyBellSouthCorp.,7FCCRcd  1619,1620(1992).  2$ XX      XX  5  /   SeeSouthwesternBellTel.Co.,153F.3dat601( [T]hevariousswitches...determine  whichinterofficetransmissionfacilitiesareusedtotransportthetrafficfromswitchtoswitch.);LocalCompetitionOrder,11FCCRcdat15706.(hH  Z 6Times New Roman Regular(hH  Z 6Times New Roman Regular\  `$Times NewRoman(hH  Z 6Times New Roman Regular ; 2$ XX      XX  16  /   WhiletheFCCrecitedabaretechnicaldescriptionofhowDSLservicesareconfigured,  seeAdvancedServicesOrder,13FCCRcdat24033(42),itneverexplainedwhataboutthis  technicalconfigurationmakesDSLservice comparable;itsimplysaidthatit s[aw]nothinginthisservicearchitecturemandatingaconclusionthatadvancedservices...falloutside𛀜ofthestatutorydefinition.Id.TheFCC omittedthecriticalstep"connectingthefactstothe p conclusion.SeeDicksonv.SecretaryofDefense,68F.3d1396,1405(D.C.Cir.1995). G 2$ XX      XX  2  /   SeeHarryNewton,NewtonsTelecomDictionary301(15thed.1999)(defining   exchangeas atelephoneswitchingcenterand,byextension,thelocalareaservedbyaswitchingcenter);GeneralTel.Co.ofCalif.,13F.C.C.2d448,460n.23(1968)(defining   exchangeas acentraloffice,orasystemoperatedbyit,providingtelephonecommunicationinacommunityorinpartofacity).Inlargercommunities,atelephonecompanywillgenerallyusemultipleswitchingofficesinplaceofasingleonetoprovideswitchingacrossthelocalexchangearea.See47U.S.C.153(47)(A).>$"Small Circle"0    2$ XX      XX  3  /   SeeImplementationoftheLocalCompetitionProvisionsintheTelecommunicationsAct  of1996,11FCCRcd15499,15691(1996)(hereinafter LocalCompetitionOrder).Seealso  SouthwesternBellTel.Co.v.FCC,153F.3d597,601(8thCir.1998),petitionforcert.filed,67  U.S.L.W.3561(U.S.Feb.26,1999)(No.981381)( localloops...connectenduserstothelocalexchange).  2$ XX      XX  4  /   SeeSouthwesternBellTel.Co.,153F.3dat601( Interofficetransmissionfacilitiesare  thehighwaysofthelocalexchange.Theyconnecttheendofficesandtandemswitcheswithinthelocalexchangetooneanotherandcarrytelephonetrafficbetweenandamongtheseofficesandswitches.).  2$ XX      XX  7  /   USWESTalsoaskedtheFCC,ifitdidfindthatUSWESTsDSLservicesconstitute   telephoneexchangeserviceor exchangeaccess,toforbearfromapplyinglocalmarketplaceregulationtotheseservices.PetitionforReliefat4452(J.A.______);ReplyCommentsat20  22(J.A.______);CommentsonALTSPetitionat1721(J.A.______).TheFCCsresolution  ofthisalternativerequestisnotatissueinthisappeal.(3$ ie!TRY3'"Letter (Portrait)3'3' Letter3'T XX         f 2$ XX      XX  9  /   SeealsoNorthCarolinaUtils.Commnv.FCC,552F.2d1036,1045(4thCir.1977)  М( Thetermtelephoneexchangeserviceisastatutorytermofart,andmeansservicewithinadiscretelocalexchangesystem.).Cf.MCICommunicationsCorp.v.AT&T,708F.2d1081,  1093n.8(7thCir.1983)(describingthenetworkconfigurationof localexchangetelephoneservice). d  2$ XX      XX  10  /   SeeAmericanTel.&Tel.,38FCC1127,1134(1965)( [T]hefactthatTWX  [teletypewriterexchange]service,insomeaspects,makesuseofexchangefacilitiesincommonwithtelephoneexchangeservicedoesnotconvertTWXserviceintotelephoneexchangeservice.).  2$ XX      XX  5  /   SeeSouthwesternBellTel.Co.,153F.3dat601( [T]hevariousswitches...determine  whichinterofficetransmissionfacilitiesareusedtotransportthetrafficfromswitchtoswitch.);LocalCompetitionOrder,11FCCRcdat15706.  2$ XX      XX  6  /   SeePetitionofBellAtlanticCorp.forRelieffromBarrierstoDeploymentofAdvanced  Telecomm.Svcs.,CCDkt.No.9811(filedJan.26,1998);PetitionoftheAllianceforPublic  TechnologyRequestingIssuanceofNoticeofInquiryandNoticeofProposedRulemakingToImplementSec.706ofthe1996Telecomm.Act,CCB/CPDNo.9815(filedFeb.18,1998);  PetitionofAmeritechCorp.ToRemoveBarrierstoInvestmentinAdvancedTelecomm. p Capability,CCDkt.No.9832(filedMar.5,1998);PetitionoftheAssnforLocalTelecomm. `  Svcs.(ALTS)foraDeclaratoryRulingEstablishingConditionsNecessarytoPromoteDeploymentofAdvancedTelecomm.CapabilityunderSec.706oftheTelecomm.Actof1996, @  CCDkt.No.9878(filedMay27,1998);SouthwesternBellTel.Co.etal.PetitionforRelief 0  fromRegulationPursuanttoSection706oftheTelecomm.Actof1996and47U.S.C.160forADSLInfrastructureandSvc.,CCDkt.No.9891(filedJune9,1998).  2$ XX      XX  7  /   USWESTalsoaskedtheFCC,ifitdidfindthatUSWESTsDSLservicesconstitute   telephoneexchangeserviceor exchangeaccess,toforbearfromapplyinglocalmarketplaceregulationtotheseservices.PetitionforReliefat4452(J.A.______);ReplyCommentsat20  22(J.A.______);CommentsonALTSPetitionat1721(J.A.______).TheFCCsresolution  ofthisalternativerequestisnotatissueinthisappeal.  2$ XX      XX  8  /   See,e.g.,TeleconnectCo.v.BellTel.Co.ofPenn.,10FCCRcd1626,162829(1995);  PetitionforEmergencyReliefandDeclaratoryRulingfiledbyBellSouthCorp.,7FCCRcd  1619,1620(1992). d 2$ XX      XX  9  /   SeealsoNorthCarolinaUtils.Commnv.FCC,552F.2d1036,1045(4thCir.1977)  М( Thetermtelephoneexchangeserviceisastatutorytermofart,andmeansservicewithinadiscretelocalexchangesystem.).Cf.MCICommunicationsCorp.v.AT&T,708F.2d1081,  1093n.8(7thCir.1982)(describingthenetworkconfigurationof localexchangetelephoneservice).  2$ XX      XX  1  /   XoNXXXLikewise,themerefactthatacarrierprovideslocalexchangeserviceasanincumbent  LECdoesnotmeanthatallofitstelecommunicationsservicesaresubjecttoincumbentLEC  regulation.EventhoughGTEandSprintaretheincumbentLECsinsomeserviceareas(suchassomeoftheVirginiasuburbsofWashington,D.C.),competitorscannotobtainunbundledaccesstotheelementsofSprintslongdistanceandinternationalnetworksundersection251(c)(3),orresalediscountsonGTEsnationwideInternetbackboneundersection251(c)(4),becausethesearenotservicesprovidedbySprintorGTEintheircapacitiesas localexchangecarriers.#XXXXoN#  2$ XX      XX  10  /   SeeAmericanTel.&Tel.,38FCC1127,1134(1965)( [T]hefactthatTWX  [teletypewriterexchange]service,insomeaspects,makesuseofexchangefacilitiesincommonwithtelephoneexchangeservicedoesnotconvertTWXserviceintotelephoneexchangeservice.).>Thin/Thick 2[ -d d E 2$ XX      XX  11  /   SeealsoMCICommunicationsCorp.,708F.2dat1093n.8(localtelephoneexchange  service enablesthecallingpartytodialanytelephoneconnectedtotheswitchednetworkwithinthatexchangearea);BellSouthOrder,13FCCRcdat20622(wirelessPCSmeetsdefinition  becauseuserscancallandreceivecallsfromeverycustomeronwirelessorwirelinenetwork).  2$ XX      XX  12  /   See,e.g.,OffshoreTel.Co.,3FCCRcdat4142(oilrigradioservicethatsimplylinksrig  callerstomainlandPSTNisnot telephoneexchangeservicewherecarrierprovidesnoswitchingofitsownthatwouldallowrigcallerstoconnecttoeachotherdirectly);CoxCable  Communications,Inc.,102F.C.C.2d110,122n.37(1985),vacatedasmoot,1FCCRcd561  (1986)(dataservicesprovidedovercabletelevisionnetworkarenot telephoneexchangeserviceeventhoughthereislimitedswitching,because cablesubscriberscannotcalleveryothersubscriberconnectedtotheswitch;subscriberscanonlycommunicatewithpredesignatedlocations). ] 2$ XX      XX  13  /   SeeBellAtlanticTel.Cos.,13FCCRcd23667,23668(1998)(recognizingthatDSL  connectionsare dedicated);GTEADSLOrderat2246667(same).()3$ ie!TRY3'"Letter (Portrait)3'3' Letter3'T XX         ` XX  0  / `   2$ XX      XX  14  /   TheAdvancedServicesOrdernotesthat thereisnotechnicalbarriertoanyenduser  establishingaconnectionwithanycustomerlocatedon[theDSLproviderspacketswitched]network,butthisisbesidethepoint.13FCCRcdat24033(42)TheendusermaydothisonlybycontactingtheDSLprovider,designatingtheothercustomer,andhavingtheDSLprovidersetupanewdedicateddatapipetothatothercustomer.TheendusercannotsetupandtakedownDSLconnectionstotheseothercustomersatwill,ashecanbydialinganordinarytelephonecall.  2$ XX      XX  15  /   5XoNXXXWhateverthepossibilityofsendingvoicetrafficthroughthepublicInternetasdataviaa  DSLconnection,#6XXXXoN#theDSLservicesthatUSWESTdescribedinitspetitionforadeclaratory  ruling(andforwhichitsoughtregulatoryclarification)weredataonlyservices,notsubstitutesfortraditionalvoiceservice.7 C SeeReplyCommentsat3637(J.A.______).Asubscribertoone  oftheseserviceswouldseparatelyobtainordinaryvoiceserviceattheusualexchangeservicecharge.(hH  Z 6Times New Roman Regular(hH  Z 6Times New Roman Regular 8  !  2$ XX      XX  16  /   5XoNXXXVoicetrafficcouldbepacketized(convertedintopacketswitcheddata)andsentthrough  theInternetviaaDSLconnectionasdata.#6XXXXoN#ButtheDSLservicesthatUSWESTdescribedinits  petitionforadeclaratoryruling(andforwhichitsoughtregulatoryclarification)weredataonlyservices,notsubstitutesfortraditionalvoiceservice.Asubscribertooneoftheseserviceswouldseparatelyobtainordinaryvoiceserviceattheusualprice. [CiteUSWscommitmentsnotto | marketpacketizedvoice.]  A 2$ XX      XX  16  /   WhiletheFCCrecitedabaretechnicaldescriptionofhowDSLservicesareconfigured,  seeAdvancedServicesOrder,13FCCRcdat24033(42),itneverexplainedwhataboutthis  technicalconfigurationmakesDSLservice comparable;itsimplysaidthatit s[aw]nothinginthisservicearchitecturemandatingaconclusionthatadvancedservices...falloutside𛀜ofthestatutorydefinition.Id.TheFCC omittedthecriticalstep"connectingthefactstothe p conclusion.SeeDicksonv.SecretaryofDefense,68F.3d1396,1405(D.C.Cir.1995).  2$ XX      XX  17  /   ݀TheFCCdeniesthatitever suggestedthattwowayvoiceserviceisanecessary  componentoftelephoneexchangeservice.AdvancedServicesOrder,13FCCRcdat24033  (42)(emphasisinoriginal).Butitneversuggestedanycriterionotherthanthisoneto  determinewhethersomethingistelephoneexchangeservice.ItcertainlyarticulatednosuchcriterionintheAdvancedServicesOrder.  2$ XX      XX  18  /   Congressslimitationof exchangeaccessto telephonetollservicelinksissignificant.  Beforethe1996Act,theAT&Tdivestituredecreedefined exchangeaccessmorebroadlyas theprovisionofexchangeservicesforthepurposeoforiginatingorterminatinginterexchange  telecommunicationsgenerically.AmericanTel.&Tel.Co.,552F.Supp.at228.Congresss  consciousdecisiontonarrowthescopeoftheterminthe1996Actmustbegivenmeaning.H  2$ XX      XX  19  /   Asnotedabove,intheGTEADSLOrder,theFCCruledthatDSLisa specialaccess  service.GTEADSLOrder,13FCCRcdat22480.Thissimplymeansthattheaccesslinkis  dedicatedratherthanswitched.Id.SeealsoSouthwesternBellTel.Co.v.FCC,100F.3d1004,  1005(D.C.Cir.1996)(describingdifferencebetween specialand switchedaccess).Specialaccesscanbeeitherinformationorexchangeaccess,dependingonwhethertheaccesslinkisusedtooriginatetelephonetollserviceorinformationservices.BecauseDSLprovidesenduserswithadedicateddatalinktoaproviderofinformationservices(suchasanInternetserviceprovider),itconstitutesaspecialinformationaccessservice. ) 2$ XX      XX  20  /   TheActdefines telecommunicationsas thetransmission,betweenoramongpoints  specifiedbytheuser,ofinformationoftheuserschoosing,withoutchangeintheformor  contentoftheinformationassentandreceived.47U.S.C.153(43)(emphasisadded).  Internetserviceprovidersarenotpassiveconduitsofdata.Instead,theyprovide informationservice,definedintheActas theofferingofacapabilityforgenerating,acquiring,storing,transforming,processing,retrieving,utilizing,ormakingavailableinformationviatelecommunications.Id.153(20).SeeFederalStateJointBd.onUniversalSvc.,13FCC P  Rcd11501,11540(1998)(rulingthatInternetserviceprovidersoffer informationservices,not telecommunications).  2$ XX      XX  21  /   See,e.g.,id.;AccessChargeReform,12FCCRcd15982,16133(1997)(notingthat  InternetserviceprovidersdonotusethePSTNthesamewaythatlongdistancecarriersandotherpurchasersof exchangeaccessdo).4m2EmphasisXXXQ\  `$Times NewRomanQ(Vm$0   (,!$0  0` (#(#   d 2$ XX      XX  9  /   SeealsoNorthCarolinaUtils.Commnv.FCC,552F.2d1036,1045(4thCir.1977)  М( Thetermtelephoneexchangeserviceisastatutorytermofart,andmeansservicewithinadiscretelocalexchangesystem.).Cf.MCICommunicationsCorp.v.AT&T,708F.2d1081,  1093n.8(7thCir.1982)(describingthenetworkconfigurationof localexchangetelephoneservice).(3$ ie!TRY3'"Letter (Portrait)3'3' Letter3'T XX          2$ XX      XX  15  /   XoNXXXWhateverthepossibilityofsendingvoicetrafficthroughthepublicInternetasdataviaa  DSLconnection,#XXXXoN#theDSLservicesthatUSWESTdescribedinitspetitionforadeclaratory  ruling(andforwhichitsoughtregulatoryclarification)weredataonlyservices,notsubstitutesfortraditionalvoiceservice.E C SeeReplyCommentsat3637(J.A.______).Asubscribertoone  oftheseserviceswouldseparatelyobtainordinaryvoiceserviceattheusualexchangeservicecharge. 8  !  2$ XX      XX  16  /   XoNXXXVoicetrafficcouldbepacketized(convertedintopacketswitcheddata)andsentthrough  theInternetviaaDSLconnectionasdata.#XXXXoN#ButtheDSLservicesthatUSWESTdescribedinits  petitionforadeclaratoryruling(andforwhichitsoughtregulatoryclarification)weredataonlyservices,notsubstitutesfortraditionalvoiceservice.Asubscribertooneoftheseserviceswouldseparatelyobtainordinaryvoiceserviceattheusualprice. [CiteUSWscommitmentsnotto | marketpacketizedvoice.] &0 d d(@$0  0` (#(#0 ` (#` (# ` (T$0  0` (#(#0 ` (#` (#0 (# (# 0.Normal S =jXXXQ\  `$Times NewRomanQ >Thick/Thin 2[ d -d(r$  0  /(e$TRY3'"Letter (Portrait)3' 3' Letter3'T XX       z|#}~C<< CLevel 1Level 2Level 3Level 4Level 5(3$ ie!TRY3'"Letter (Portrait)3'3' Letter3'T XX        ($$   1  ' dxdP Pd&P d d&p d Pd&p Pd d ie!TRY3'"Letter (Portrait)3'3' Letter3'T XX        X@7 7 ORALARGUMENTSCHEDULEDFOROCTOBER21,1999  A.) xdE[xA  @' INTHE & @ UNITEDSTATESCOURTOFAPPEALS@w w FORTHEDISTRICTOFCOLUMBIACIRCUIT   @򀀀   @%No.981410@򀀀    @b b USWESTCOMMUNICATIONS,INC.,   `     h     Petitioner, E  @)v.@ FEDERALCOMMUNICATIONSCOMMISSION@ andUNITEDSTATESOFAMERICA,   `     h     Respondents.  @򀀀 R @ ONPETITIONFORREVIEWOFANORDEROF@ THEFEDERALCOMMUNICATIONSCOMMISSION@򀀀  ]  @!BRIEFOFPETITIONER  ) @򀀀 2    `     h     WilliamT.LakeDanL.Poole `     h     JohnH.HarwoodII  4" RobertB.McKenna    h     JonathanJ.Frankel !# USWEST,INC.    h     WILMER,CUTLER&PICKERING #% 102019thStreet,N.W.Suite700 h     2445MStreet,N.W. |$& Washington,D.C.20036   h     Washington,D.C.20037 b% ' (303)6722861    h     (202)6636000 H&!( @% % CounselforPetitionerUSWESTCommunications,Inc. (d#* May17,1999A]) xdE+[xA  +&. 7×XXdXXd7  ',X` XX'"*US , SU , *@  CERTIFICATEASTOPARTIES,RULINGS,ANDRELATEDCASES      ` PursuanttoCircuitRule28(a)(1),petitionerUSWESTCommunications,Inc.submitsthefollowinginformation:   ` (A) PartiesandIntervenors  J  ` PetitionerUSWESTCommunications,Inc.isatelecommunicationscarrierthatprovideslocalexchangetelecommunications,data,wireless,andlongdistanceservicespursuanttotariffandcontractinfourteenwesternandmidwesternstates.USWESTCommunications,Inc.isawhollyownedsubsidiaryofUSWEST,Inc.,apubliclyheldcorporationthatprovidesservicestothepubliconlythroughitsoperatingsubsidiaries.InadditiontoUSWEST,Inc.,subsidiariesUSWESTCommunications,Inc.andUSWESTCapitalFunding,Inc.havesecuritiesinthehandsofthepublic.USWEST,Inc.ownsothersubsidiariesthatmarketunregulatedproductsandservices,noneofwhichhasissueddebtorstocktothepublic. ` TherespondentsinthisactionaretheFederalCommunicationsCommissionandtheUnitedStatesofAmerica. ` Thefollowingpartieshaveintervenedinthisaction:TelecommunicationsResellersAssociation,e.spireCommunications,Inc.,CompetitiveTelecommunicationsAssociation,SprintCorporation,MCITelecommunicationsCorporation,AT&TCorporation,AssociationforLocalTelecommunicationsServices,SBCCommunications,Inc.,SouthwesternBellTelephoneCompany,PacificBell,NevadaBell,LCIInternationalTelecomCorporation,NetworkAccessSolutions,Inc.,GTEServiceCorporation,RhythmsNetconnections,Inc.,TranswireCommunications,Inc.,NorthpointCommunications,Inc.,InternetAccessCoalition,CovadCommunicationsCompany,KMCTelecom,Inc.,HyperionTelecommunications,Inc.,McLeodUSAIncorporated,andFocalCommunicationsCorporation. -n(-'  6 ` (B) RulingunderReview   ` USWESTCommunications,Inc.haspetitionedtheCourttoreviewtheMemorandumOpinionandOrderadoptedbytheFederalCommunicationsCommissioninCCDocketNos.9811,9826,9832,9878,9881,98147,CCB/CPDNo.9815,andRM9244,DeploymentofWirelineServicesOfferingAdvancedTelecomm.Capability,13FCCRcd24011    (1998).TheorderisnumberedFCC98188andwasreleasedonAugust7,1998.AsummaryoftheorderwaspublishedintheFederalRegisteronAugust24,1998.See63Fed.Reg.45134 ^  (1998).AcopyoftheorderappearsintheJointAppendixat___. ` (C) RelatedCases. ,  ` ThiscasehasnotpreviouslybeenbeforethisCourtoranyothercourt.OnAugust14,1998,SouthwesternBellTelephoneCompanypetitionedtheUnitedStatesCourtofAppealsfortheEighthCircuittoreviewthesameorderinvolvedinthiscase,butsubsequentlywithdrewitspetition.USWESTCommunications,Inc.isnotawareofanyothercasesinvolvingsubstantiallythesamepartiesandthesameorsimilarissues.  ( @" TABLEOFCONTENTS   * ,XX,X` X*   `     h      p      x  Page | CERTIFICATEASTOPARTIES,RULINGS,ANDRELATEDCASES""J(#.?i b TABLEOFAUTHORITIES""I(#. iv . ~ GLOSSARY""I(#. vii i x   J JURISDICTIONALSTATEMENT`"`"H(#."1    STATEMENTOFISSUESPRESENTEDFORREVIEW""I(#.22   RELEVANTSTATUTORYPROVISIONS""I(#.pp'2 ^  STATEMENTOFTHECASE""I(#.nn2 *z  STATEMENTOFFACTS""I(#.( ( 4 F A!  A!0  0` (#(#    A.0` ` (#` (#StatutoryBackground#""I(#.@@(` (#` (##4A!݌  Ќ  A!  A!x0  0` (#(#    A!x݌ ` (#` (# Ќ  A!  A!0  0` (#(#    B. ` TraditionalTelephoneLocalExchangeServices#""I(#.ffA` (#` (##7A!3݌  Ќ  A!  A! 0  0` (#(#    A! 2 ݌ ` (#` (# Ќ  A!  A! 0  0` (#(#    C. ` DigitalSubscriberLineServices#""I(#.5` (#` (##9A! ݌ Z Ќ  A!  A!!0  0` (#(#    A!!!݌ ` (#` (# Ќ  A!  A!J"0  0` (#(#    D.0` ` (#` (#TheAdvancedServicesOrder#."."H(#./` (#` (##12A!J"e"݌ &v Ќ  SUMMARYOFARGUMENT."."H(#.14 B ARGUMENT!!F(#.  16    I.0 ` THEFCCVIOLATEDTHE1996ACTBYEXTENDINGLOCAL   EXCHANGEMARKETPLACEREGULATIONTONEWSERVICES ` (#` (# 0  0` (#(#THATARENEITHER TELEPHONEEXCHANGESERVICENOR EXCHANGEACCESS.#."."H(#.&` (#` (##16 <#" @Vm  @Vm%0        ` A.0 (#(#DigitalSubscriberLineServicesAreNot Telephone@Vm%;%݌%X $ (# (# Ќ  G  G&0  0` (#(#0 ` (#` (# `    ExchangeService.#."."H(#.+ (# (##17G&4&݌ %>!% Ќ  G  G'0  0` (#(#0 ` (#` (# `   G'.'݌  (# (# Ќ  H  H'0  0` (#(#0 ` (#` (#0 (# (#   1.0(#(#Digitalsubscriberlineservicesarenotintercommunicating ' #' serviceswithinalocaltelephoneexchangeandarenotcoveredH''݌ (#(# Ќ  H  H3)0  0` (#(#0 ` (#` (#0 (# (#   0(#(#bytheexchangeservicecharge.#."."H(#.=(#(##17H3)N)݌ )$) Ќ  H  HS*0  0` (#(#0 ` (#` (#0 (# (#   HS*n*݌ (#(# Ќ  H  H+0  0` (#(#0 ` (#` (#0 (# (#   2.0(#(#Digitalsubscriberlineservicesarenot comparabletoH+6+݌R+&+(#(# Ќ  H  H@,0  0` (#(#0 ` (#` (#0 (# (#   0(#(#traditionaltelephoneexchangeservice#."."H(#.D(#(##23H@,[,݌ 8,', Ќ  H  Hg-0  0` (#(#0 ` (#` (#0 (# (#   Hg--݌ (#(# Ќ  G  G/.0  0` (#(#0 ` (#` (# `   B.0 (# (#DigitalSubscriberLineServicesDoNotConstituteG/.J.݌ (# (# Ќ  G  G4/0  0` (#(#0 ` (#` (# `    ExchangeAccess.#."."H(#.+ (# (##27G4/O/݌ | Ќ    II.0 ` THEADVANCEDSERVICESORDERFALLSSHORTOFTHEH` (#` (# A!  A!00  0` (#(#     ` REASONEDDECISIONMAKINGREQUIREDOFADMINISTRATIVEAGENCIES.#."."H(#.n n ` (#` (##30A!00݌  d Ќ  A!  A!10  0` (#(#    A!11݌ ` (#` (# Ќ     ` A.0 TotheExtenttheFCCOffersAnyReasoning,ItsExplanationsAre  0 EntirelyInadequate.#."."H(#.  - (# (##31    G  G30  0` (#(#0 ` (#` (# `   G343݌  (# (# Ќ     ` B.0 TheFCCsFailureToDefinetheCategoriesofServiceSubjectto   Regulation"orEvenToSayWhichCategoryAppliesHere"Is  (# (# 0  0` (#(#0 ` (#` (#theEssenceofArbitraryandCapriciousAgencyAction.#."."H(#.XXO (# (##33 ^  G  GK50  0` (#(#0 ` (#` (# `   GK5f5݌  (# (# Ќ  CONCLUSION`"`"I(#. 35 *z  ADDENDUMA:RELEVANTSTATUTORYPROVISIONS!!H(#.((3A1 F ADDENDUMB:EXCERPTFROMTHE?X×XXXX×XXX×  ADVANCEDSERVICESORDER!!H(#.>B1  ?6     .,X` X,XX .   * ,XX,X` X*@    TABLEOFAUTHORITIES 98Ԉ  XoNXXX@( CASES   A.L.Pharma,Inc.v.Shalala,62F.3d1484(D.C.Cir.1995)4!4!E(#.F31,32 h AmericanLungAssociationv.EnvironmentalProtectionAgency, @  134F.3d388(D.C.Cir.1998)4!4!E(#.\\(31,32 , | #XXXXoN8#XXXXAchernarBroadcastingCo.v.FederalCommunicationsCommission,  T  62F.3d1441(D.C.Cir.1995)`"`"I(#.,,'#XXXX&:#XoNXXX17  D  Building&ConstructionTradesDepartment,AFL-CIOv.Martin, 0  961F.2d269(D.C.Cir.1992)`"`"I(#.**'33   Checkoskyv.SecuritiesandExchangeCommission,139F.3d221(D.C.Cir.1998)4!4!E(#.X33,34   #XXXXoN:#XXXXColoradoInterstateGasCo.v.FederalEnergyRegulatoryCommission, | 850F.2d769(D.C.Cir.1988)#XXXX<#XoNXXX`"`"I(#.,,'17 l X#XXXXoNH=#XXXX̀*  CompetitiveEnterpriseInstitutev.NationalHighwayTrafficSafetyAdministration, \   956F.2d321(D.C.Cir.1992)#XXXX=#XoNXXX`"`"I(#.,,'17 L   Dicksonv.SecretaryofDefense,68F.3d1396(D.C.Cir.1995)`"`"I(#.H24 8 #XXXXoN>#XXXX  Duttonv.Wolpoff&Abramson,5F.3d649(3dCir.1993)`"`"I(#.A18 ` #XXXX?#XoNXXX#XXXXoNp@#XXXX  Lorillardv.Pons,434U.S.575(1978)#XXXX@#XoNXXX`"`"I(#.018 < #XXXXoN-A#XXXX  IllinoisPublicTelecommunicationsAssociationv.FederalCommunicationsCommission, (   117F.3d555(D.C.Cir.1997)#XXXXA#XoNXXX`"`"I(#.,,'33     MCICommunicationsCorp.v.AmericanTelephone&TelegraphCo., "    708F.2d1081(7thCir.1983)?(#.FF(7,8,20,21 #! #XXXXoNB#XXXX򀀀*  MotorVehicleManufacturersAssociationv.StateFarmMutualAutomobileInsuranceCo., x% #   463U.S.28(1983)#XXXXC#XoNXXX`"`"I(#. 32 h&!$ #XXXXoND#XXXX  NorthCarolinaUtilitiesCommissionv.FederalCommunicationsCommission, T(#&   552F.2d1036(4thCir.1977)#XXXX)E#XoNXXX`"`"I(#.'20 D)$'   PacificNorthwestNewspaperGuild,Local82v.NLRB,877F.2d998(D.C.Cir.1989)`"`"I(#.  ]33 0+&)  ,l'* 򀀀*  Pearsonv.Shalala,164F.3d650(D.C.Cir.1999)`"`"I(#.zz;34  XSouthwesternBellTelephoneCo.v.FederalCommunicationsCommission,  100F.3d1004(D.C.Cir.1996)  A(#.(26,27,29 t SouthwesternBellTelephoneCo.v.FederalCommunicationsCommission, L  153F.3d597(8thCir.1998),petitionforcert.filed,67U.S.L.W.3561(U.S.Feb.26,1999)""J(#.r!r!g7 8  #XXXXoNF#XXXXTimeWarnerEntertainmentCo.v.FederalCommunicationsCommission,  ` 56F.3d151,190(D.C.Cir.1995)#XXXXsI#XoNXXX0 h  0hh(#h(#  #`"`"I(#.h(#h(##16  P  UnitedStatesv.AmericanTelephone&TelegraphCo., <  552F.Supp.131(D.D.C.1982)l l B(#.(5,27,28 (  @& STATUTES    XҀ*  47U.S.C.153(16)l l B(#.  5,27,28 t   47U.S.C.153(20)`"`"I(#.  29 L ̀*  47U.S.C.153(26) C(#.  3,5,30 $t   47U.S.C.153(43)`"`"I(#.  29 L ̀*  47U.S.C.153(47)(A) E(#.  passim $ ̀*  47U.S.C.153(47)(B)4!4!E(#.  23,24  ̀*  47U.S.C.153(48)`"`"I(#.  28  X47U.S.C.160`"`"I(#. 12 \! 47U.S.C.251(b)!!G(#. 4,6 4#! 47U.S.C.251(c)!!G(#. 4,6  %\ # 47U.S.C.251(g)!!F(#. 5,27 &4"% #XXXXoN4J#XXXXCommunicationsActof1934,Pub.L.No.416,3(r),48Stat.1064(1934)#XXXXO#XoNXXX`"`"I(#.||T17 ( $'   *%)  &    @  % REGULATIONS   47C.F.R 'P .69.2(b)`"`"I(#. 27    &  @  ADMINISTRATIVEMATERIALS L   AccessChargeRefo'L ~Qrm,12FCCRcd15982(1997)l l B(#.79,28,29 $ t #XXXXoN6P#XXXXAmendmentofParts21and43oftheCommission'sRulesandRegulationsRelativetovariousProceduralRequirementsfortheDomesticPublicRadioService,  @  76F.C.C.2d273(1980)`"`"I(#.( ( 18 0  #XXXXtR#XXXXAmericanTelephone&TelegraphCo.,38F.C.C.1127(1965)#XXXXS#XoNXXX`"`"I(#.&&C20   #XXXXoN6T#XXXXApplicationsforConsenttotheTransferofControlofLicensesandSection214   AuthorizationsfromTeleCommunications,Inc.toAT&TCorp.,  CSDkt.No.98178,FCC9924(rel.Feb.17,1999)`"`"I(#.<26  #XXXXT#XoNXXXX#XXXXoNV#XXXXԀ*  ApplicationofBellSouthCorp.etal.forProvisionofInRegion,InterLATAServices h   inLouisiana,13FCCRcd20599(1998)( BellSouthOrder)#XXXXaV#XoNXXX=(#.D18,19,20,21 X #XXXXoNxW#XXXX  ApplicationsofMidwestCorp.andTwoWayRadioofCarolina,Inc., D   53F.C.C.2d294(1975)`"`"I(#.( ( #XXXXW#XoNXXX18 4 #XXXXoNX#XXXXԀ*  BellAtlanticTelephoneCos.,BellAtlanticTariffNo.1,13FCCRcd23667(1998)#XXXX>Y#XoNXXX4!4!E(#.[19,21  p #XXXXoNY#XXXX  CoxCableCommunicationsInc.,102F.C.C.2d110(1985)`"`"I(#.""@#XXXXdZ#XoNXXX21  \ #XXXXoN [#XXXXԀ*  DeploymentofWirelineServicesOfferingAdvancedTelecommunicationsCapability, H   13FCCRcd24011(1998)( AdvancedServicesOrder)#XXXXd[#XoNXXX E(#.bb=passim  8   Federal-StateJointBoardonUniversalService,13FCCRcd11501(1998)4!4!E(#.VVQ25,29 "$    GeneralTelephoneCo.ofCaliforniaetal.,13F.C.C.2d448(1968)!!F(#.L7,20 $" ̀*  GTETelephoneOperatingCos.,GTOCTarriffNo.1,13FCCRcd22466(1998) &!$   ( GTEADSLOrder) E(#. passim p'"%   ImplementationoftheLocalCompetitionProvisionsinthe H)$'   TelecommunicationsActof1996,11FCCRcd15499(1996)!!F(#.A7,25 4*%(  #XXXXoNp\#XXXX  +p&)  &    񀀀*  ImplementationoftheLocalCompetitionProvisionsintheTelecommunications     Actof1996,CCDkt.No. '_ 9698,FCC9938(rel.Feb.25,1999)#XXXX_#XoNXXX`"`"I(#.H26  ̀*  ImplementationoftheNonAccountingSafeguardsofSections271and272ofthe    CommunicationsActof1934,asAmended,11FCCRcd21905(1996)( NonAccounting x 0  SafeguardsOrder)#4!4!E(#. (#(##28,29 d  X  OffshoreTelephoneCompany,RequesttoParticipateintheNationalExchangeCarrier <  Association,Inc.,3FCCRcd4137(1998)`"`"I(#.221 ( x #XXXXoN$a#XXXXOffshoreTelephoneCo.v.SouthCentralBellTelephoneCo.andAmerican P  TelephoneandTelegraphCo.,6FCCRcd2286(1991)#XXXXc#XoNXXX`"`"I(#.<18 @  #XXXXoNd#XXXXPetitionforEmergencyReliefandDeclaratoryRulingfiledbytheBellSouthCorp., ,  7FCCRcd1619(1992)`"`"I(#.> > 19   #XXXX&e#XoNXXX#XXXXoNf#XXXXTeleconnectCo.v.BellTelephoneCo.ofPennsylvania,10FCCRcd1626(1995)`"`"I(#.<<W#XXXXaf#XoNXXX19  #XXXXoNg#XXXXKevinWerbach,DigitalTornado:TheInternetandTelecommunicationPolicy45  (FederalCommunicationsCommission,OPPWorkingPaperSeriesNo.29,1997)0 x #!!G(#.xxA (# (##8,9  #XXXXlg#XoNXXX@}}$ MISCELLANEOUS  L #XXXXoNh#XXXXHarryNewton,NewtonsTelecomDictionary301(15thed.1999)f!f!E(#.FFG#XXXX5i#XoNXXX7,28 $t #XXXXoNi#XXXXUSWEST,MegaBitServices"Pricing(lastmodifiedMay14,1999) ` #XXXX7j#XoNXXX`"`"I(#.A22 P #XXXXoNk#XXXXWebstersThirdNewInternationalDictionary461(1971)#XXXXk#XoNXXX`"`"I(#.A24 @   *Authoritiesc hieflyrelieduponaremarkedwi  htan   th  n   anasterisk. .,X` X,XX 8.#XXXXoNl#  |&!$ @&   GLOSSARY rmԈ   ALTS :0 ` AssociationforLocalTelecommunicationsServices` (#` (#  DSL : ` Digitalsubscriberline(serviceortechnology) p  FCC : ` FederalCommunicationsCommission P   LEC : ` Localexchangecarrier 0   PCS : ` PersonalCommunicationsService `   PSTN : ` Publicswitchedtelephonenetwork @    0     @7 7 ORALARGUMENTSCHEDULEDFOROCTOBER21,1999  @'INTHE@! ! UNITEDSTATESCOURTOFAPPEALS@  FORTHEDISTRICTOFCOLUMBIACIRCUIT@򀀀 `  @%No.981410Oq@򀀀    @b b USWESTCOMMUNICATIONS,INC., `     h      p Petitioner, h  @)v.@ FEDERALCOMMUNICATIONSCOMMISSION@ andUNITEDSTATESOFAMERICA, `     h      p Respondents. X zs@򀀀 p @ ONPETITIONFORREVIEWOFANORDEROF@ THEFEDERALCOMMUNICATIONSCOMMISSIONqt@򀀀  @!BRIEFOFPETITIONERu@򀀀 @ @    JURISDICTIONALSTATEMENT  uԈ     ` ThisisapetitiontoreviewafinalorderoftheFederalCommunicationsCommission( FCC),releasedAugust7,1998inCCDocketNos.9811,9826,9832,9878,9881,98147,andCCB/CPDNo.9815andRM9244,DeploymentofWirelineServices p&!& OfferingAdvancedTelecomm.Capability,13FCCRcd24011(1998)( AdvancedServices P(#( Order).TheorderisreprintedintheJointAppendix( J.A.)beginningatpage___.A 0*%* summaryoftheorderwaspublishedintheFederalRegisteronAugust24,1998.See63Fed. ,`', Reg.45134(1998).USWESTCommunications,Inc.( USWEST)timelyfileditspetitionfor -@).o reviewonSeptember2,1998.ThisCourtthereforehasjurisdictionpursuantto47U.S.C.402(a)and28U.S.C.2342(1).VenueliesinthisCircuitpursuantto28U.S.C.2343.4u @H H    STATEMENTOFISSUESPRESENTEDFORREVIEW 0yԈ  p  y1.0 ` DidtheFCCviolatetheTelecommunicationsActof1996(the Act)byruling P  thatdigitalsubscriberline( DSL)servicesmayberegulatedas telephoneexchangeservice,eventhoughtheseservicesdonotstaywithinalocalexchange,donotinterconnectwiththelocalexchangenetwork,donotpermitlocalanytoanycalling,andarenotincludedinthebasiclocalcallingcharge? ` (#` (# 2.0 ` DidtheFCCviolatetheActbyrulingthatDSLservicesmayberegulatedas   exchangeaccess,eventhoughtheyarenotusedtobeginandendtelephonetollcalls,andeventhoughtheyaremutuallyexclusive informationaccessservices? ` (#` (# 3.0 ` DidtheFCCactarbitrarilyandcapriciouslybyfailingtoarticulateanydefinition ` of telephoneexchangeserviceand exchangeaccess,refusingtospecifywhichofthesestatutorycategoriescoversDSLservices,andfailingtoexplainwhyitbelieveseitherofthesecategoriesappliestoDSLservicesatall? ` (#` (# @    RELEVANTSTATUTORYPROVISIONS  T~Ԉ P  ` PertinentstatutoryprovisionsaresetforthinAddendumA,whichisboundwiththisbrief.*~@    STATEMENTOFTHECASE  BԈ $"  ` TheTelecommunicationsActof1996,Pub.L.104104,110Stat.56,codifiedat p&!$ 47U.S.C.151etseq.(hereinafter theActor the1996Act),regulatestelecommunications P(#& carriersaccordingtothedifferenttypesofservicetheyprovide.OnesetoftheActsrules, 0*%( designedtopromotecompetitioninthelocaltelephonemarketplace,appliesto localexchangecarriers. LocalexchangecarriersaredefinedintheActasentitiesthatprovideeitheroftwospecificlocaltelephoneservices: telephoneexchangeserviceor exchangeaccess.47U.S.C.153(26).BoththeActandconsistentFCCadministrativeprecedentdefine telephoneexchangeserviceasbasiclocalcallingserviceanditssubstitutes,and exchangeaccessasthelocallegofatelephonetotelephonelongdistancecall. ` ThisisapetitionforreviewofanorderoftheFCCapplyingthesestatutorycategoriestoanewkindofhighspeeddataandInternetaccessserviceknownasdigitalsubscriberlineservice,or DSL.SeeDeploymentofWirelineServicesOfferingAdvanced  Telecomm.Capability,13FCCRcd24011,2403134(3844)(1998)(hereinafter, Advanced  ServicesOrder).InFebruary1998,USWEST,acarrierprovidingbothlocaltelephoneand p DSLservicesinfourteenstates,petitionedtheFCCforadeclaratoryrulingclarifyingtheregulatorystatusofitsDSLservices.(JointAppendix( J.A.)at______.)Initspetitionanditscommentsonsimilarpetitionsfiledbyotherparties,USWESTdemonstratedthatitsDSLservicesarenot,andindeedarefundamentallyunlike,thetraditionallocaltelephoneserviceslongheldtocomewithinthedefinitionsof telephoneexchangeserviceand exchangeaccess:thoseDSLservicesarenotfunctionalormarketsubstitutesforbasiclocalcalling,donotuseorinterconnectwiththelocalexchangenetwork,andarenotusedtobeginandendtolltelephonecalls.(J.A.______,______,______.) ` Intheorderunderreview,theFCCrejectedthesearguments.TheFCCruledthatDSLconstituteseither telephoneexchangeserviceor exchangeaccess(althoughitdeclined 0*%( tosaywhich),makingacarrierthatprovidesDSLservicea localexchangecarrier.Advanced p&!$ ServicesOrder,13FCCRcdat24032(40).TheFCCdidnotarticulateanydefinitionof P(#&  telephoneexchangeserviceor exchangeaccess,nordiditgiveanyreasonwhyitbelieved 0*%( oneortheotherofthesecategoriescoversDSLservice.TheeffectoftheFCCsrulingisto ,`'* extendlocaltelephonemarketplaceregulationtothesenewdataandInternetaccessservices,eventhoughtheydonotshareanyofthedefiningcharacteristicsoflocaltelephoneservice. ` USWESTpetitionedthisCourttoreviewtheAdvancedServicesOrderon p September2,1998.OnOctober8,theFCCmovedtheCourttoholdthecaseinabeyance.TheCourtdeniedtheFCCsmotiononDecember22,1998.USWESTnowaskstheCourttovacatetheAdvancedServicesOrderascontrarytotheTelecommunicationsActandasarbitraryand `  capricious.Y@rr!   STATEMENTOFFACTS YԈ    A.0 ` StatutoryBackground JZ` (#` (#  XXXX  ` Z #XXXX<# Sections251(b)and(c)oftheTelecommunicationsActof1996placeanumberofnetworkandmarketopeningobligationson localexchangecarriers(or LECs)topromotecompetitioninthelocaltelephoneservicemarket.All localexchangecarriers,forexample, @ mustmaketheirservicesavailabletoothercarriersforresale,provideaccesstotheirrightsofway,andallowtheircustomerstoaccessothercarriersservicesthroughnondiscriminatorydialingarrangements.See47U.S.C.251(b).Inaddition,theincumbent localexchange 0 carrierinanarea"theonethatfirstprovidedlocaltelephoneservicetothearea"mustinterconnectwithitscompetitorsonreasonableterms,givethemaccesstocertainelementsofitsnetworkonanunbundledbasis,andprovidethemwithitslocalretailservicesatasubstantialdiscountforresale.Seeid.251(c). `'"%  ` TheActdefines localexchangecarriers𛀜bytheservicestheyprovide.A localexchangecarrieris anypersonthatisengagedintheprovisionofeitheroftwospecificlocal  +p&) telephoneservices: telephoneexchangeserviceand exchangeaccess.Id.153(26).What  Congressmeantbythesetwotermsistheprimaryissueinthiscase. ` Congressdefined telephoneexchangeserviceaseither(a) servicewithina p telephoneexchange,orwithinaconnectedsystemoftelephoneexchangeswithinthesameexchangeareaoperatedtofurnishtosubscribersintercommunicatingserviceofthecharacterordinarilyfurnishedbyasingleexchange,andwhichiscoveredbytheexchangeservicecharge,or(b) comparableserviceprovidedthroughasystemofswitches,transmissionequipment,or @  otherfacilities.Id.153(47).Ingeneral,andasexplainedbelow, telephoneexchange   serviceisbasiclocalcallingservice"whatacustomerreceivesforpayinghisorherbasicmonthlychargetoacompanysuchasBellAtlanticorUSWEST. ` Exchangeaccess,theotherlocalservicethatdefinesaLEC,is theofferingofaccesstotelephoneexchangeservicesorfacilitiesforthepurposeoftheoriginationorterminationoftelephonetollservices.Id.153(16). Exchangeaccessallowslongdistance 0 companiessuchasAT&Ttousethelocalexchangenetworktobeginandendthelongdistance( toll)telephonecallsplacedbylocalsubscribers.Asexplainedingreaterdetailbelow, exchangeaccessisoneoftwodifferentkindsofaccessservicesrecognizedintheAct;theotherkind, informationaccess,referstoservicesthatconnectlocalsubscriberstoprovidersofinformationanddataservices.See47U.S.C.251(g)(preservingAT&Tdivestitureconsent $" decreedistinctionbetween exchangeaccess,informationaccess,andexchangeservices);UnitedStatesv.AmericanTel.&Tel.Co.,552F.Supp.131,22829(D.D.C.1982)(consent P(#&  decree;defining exchangeaccessand informationaccess). 0*%(  ` Thedefinitionsof telephoneexchangeserviceand exchangeaccessarethus thekeytodeterminingwhethertheprovisionofaparticularserviceissubjecttotheActsrulesforthelocalexchangemarketplace.Ifacarrierisprovidingaservicethatqualifiesaseither telephoneexchangeserviceor exchangeaccess,thecarrierisactingasa localexchangecarrierandmustprovidetheservicesubjecttotheobligationsinsection251(b)oftheActand,ifthecarrierisanincumbentLEC,section251(c).Conversely,ifacarrierisprovidingϜsomethingthatisneither telephoneexchangeservicenor exchangeaccess,itisnotactinginthecapacityofaLEC,anditmayprovidetheservicefreefromLECregulation.XoNXXXForexample,   МwhenAT&Tentersalocalmarketandprovidesbasiclocalcallingservice(i.e., telephone   exchangeservice)incompetitionwithanincumbentLEC,AT&TisactingasaLECandmustprovidethatservicesubjecttosection251(b).ButAT&Tisnotsubjecttothatsectionwhenitsellslongdistanceservicesinthesamemarket,sinceitdoesnotprovidethoseservicesinitscapacityasaLEC.Thus,acompetitorcannotdemandtherighttoresellAT&TslongdistancevoiceandInternetbackboneservicesundertherequirementsofsection251(b)(1),forexample,ordemandaccesstotherightsofwaycontainingAT&Tsinterexchangefibersundersection251(b)(4). ,   f  1  /    #XXXXoNk#XoNXXX    #XXXXoNo#  "  o&    B. ` TraditionalTelephoneLocalExchangeServices Kp  Л ` The'5pԀpublicswitchedtelephonenetwork( PSTN)ismadeupoflocalswitchingcenters,calledexchanges,   f  2  /    כandlongdistance(or interexchange)connectionsbetweenthem. p SeeMCICommunicationsCorp.v.AmericanTel.&Tel.Corp.,708F.2d1081,1093nn.89(7th P  Cir.1983)(describinggenerallylocalandlongdistancetelephoneservice).Asinglelocalexchangecoversalimitedgeographicarea.Withinasingleexchangearea,virtuallyeveryhomeorbusinessisconnectedtoaswitchingoffice(or centraloffice)byapairofcopperwiresknownasa loop.     f  3  /    כEachofthecentraloffices,inturn,isconnectedbytrunklinestoevery   othercentralofficeintheexchange.   !  f  4  /    ׀Switchesinthecentralofficesroutesignalsalongthese  trunklinesthroughthetelephonecompanysnetwork.   '  f  5  /       ` Whenonepartyinalocalexchangedialsanyotherpartyinthatsameexchange,theswitcheschooseapathtothesecondpartyandestablishatemporary circuitbetweenthetwoparties(aprocessknownas circuitswitching),enablingthemtotalktoeachother.See p KevinWerbach,DigitalTornado:TheInternetandTelecomm.Policy45(Federal P  CommunicationsCommn,OPPWorkingPaperSeriesNo.29,1997)(hereinafter Digital 0  Tornado).Thepartieshaveexclusiveuseofthecircuitfortheentiredurationofthecall;only `  aftertheyhangupcanportionsofthepathbeusedbyothercallers.SeeDigitalTornadoat38, @  39.Thislocalexchangenetworkisan anytoanynetwork,meaningthatanyuserintheexchangecandialupandestablishatwowayconnectionwithanyotheruserinthelocalexchange.Customersordinarilypayabasicmonthlyfee"the exchangeservicechargereferredtointhedefinitionof telephoneexchangeservice,47U.S.C.153(47)(A)"tocoverallcallingwithintheexchange.SeeDigitalTornadoat39. P  ` Longdistance(interexchange)telephonecallsareroutedsimilarly.WhenapartyϜinonelocalexchangemakesacalltoapartyinadifferentexchange,thecalltravelsovertheloopfromthecallerspremisestothecentralofficeservingthosepremises,whereitisthenroutedtothecustomerslongdistance(interexchange)carrier.Theinterexchangecarriercarriesthecalloveritslongdistancenetworktothelocalexchangeofthecalledparty.SeeMCI "  CommunicationsCorp.,708F.2dat1093n.9.Thecallthentravelsoverthesecondlocal $" exchangenetworktothecentralofficeandloopservingthecalledparty.Again,theserviceiscircuitswitched"thatis,theswitchesestablishatemporary,exclusivepathforthecall.See P(#& DigitalTornadoat37(diagram).Localexchangecarriersprovideaccesstotheirexchanges 0*%( ( exchangeaccess)toenabletheinterexchangecarrierstocompletethesecalls,charginglocal ,`'* usersandtheinterexchangecarriers accesschargesforthisservice.SeeAccessCharge  Reform,12FCCRcd15982,1599094(1997)(discussingaccesschargesgenerally).These  longdistancecallsarealsoknownas tollcallsbecausethecallerpaysaseparatechargeforthemoverandabovethebasicmonthly exchangeservicecharge.̛ &   C. ` DigitalSubscriberLineServices   p   ` Digit' alsubscriberline,orDSL,servicesarefundamentallydifferentfromtraditionallocaltelephoneexchangeserviceandmakenouseofthecircuitswitchedPSTN.DSLservicesenablesubscriberstousetheirexistingloops,notforcallingwithinalocalexchangearea,buttosendandreceivedataatextremelyhighspeedstoandfrominformationserviceproviderslocatedaroundtheworld.SeeGTETel.OperatingCos.,13FCCRcd22466,  2247072(1998)(hereinafter GTEADSLOrder).SubscribersuseDSLservicesprimarilyto ` obtainadedicatedhighspeedconnectiontotheirchosenInternetserviceprovider(suchasAmericaOnline),whichthenallowsthesubscribertoaccesstheglobalInternetandretrieveinformationstoredondistantcomputerservers.Seeid. P  ` Unliketraditionalcircuitswitchedtelephoneservices,DSLtransportsinformationoverapacketswitcheddatanetwork.Dataisdividedintoseparatepackets,witheachpacket ! havingitsownuniqueidentificationanddestinationaddress.AdvancedServicesOrder,13FCC #! Rcdat2401516(6);DigitalTornadoat18.Thepacketstravelindependentlyoverthe % # network,oftenbydifferentroutes,andarereassembledonlyattheirfinaldestination.See `'"% DigitalTornadoat17.Astheytravel,thepacketssharethenetworkwithpacketsofother, @)$' unrelatedcommunicationstravelingtowardthesameordifferentdestinations.Routers  +p&) distributedthroughoutthenetworkreadtheaddressoneachpacketandsendthepacketalongthebestnetworkpathavailableatthattime.Apacketswitchednetworkdoesnotestablishanexclusivecircuit,eventemporarily,betweenendusersonacall.Instead,itestablishes virtual p circuits,inwhichpacketsfrommultipletransmissionsareintermixedinthesamefacilities.See P  AdvancedServicesOrder,13FCCRcdat2401516(6). 0   ` DSLtechnologyenablesthelooptocarrypacketsofdataatveryhighspeedscomparedtoordinarycircuitswitchedconnections.BeforetheadventofDSLtechnology,theloopwas generallythoughttobecapableofcarryingonlyarelativelymodeststreamofinformation,inlargepartbecausedatahadtobetranslatedintoanalogtelephonesignalsandsentovertheloopinanalogformat.Id.at24026(28).DSLtechnologyovercomesthis  limitationbyallowingpacketsofdatatoremainindigitalformandtravelalongsidevoicesignalsonthesameloopbutatdifferentfrequencies.Id.at2402627(29).Becausevoiceanddata P travelindifferentfrequencybands,theycansharetheloopsimultaneously,allowingcustomers 0 toaccesstheInternetwhilehavingavoiceconversationoverthesameline.Id. `  ` TheDSLservicesconsideredbytheFCCuseapairofdevicesattachedtoeachendofthesubscribersloop.Thedeviceatthesubscribershouseorbusinessdistinguishesbetweenvoiceanddatatraffic;dataisdividedintoindividualpacketsandloadedontotheloop,seeid.at2401516,2402627(6,29),whilevoiceiscarriedontheloopinthetraditional $" manner.Attheotherendoftheloop,theseconddevicesplitsthechannelsandsendstheminseparatedirections.Id.at24027(30).Voicetelephonecallsareforwardedtoandoverthe P(#& ordinarycircuitswitchedPSTN.Id.Thedatapackets,bycontrast,aretransmittedoveran 0*%( entirelyseparatepacketswitchednetworktothesubscriberschosenInternetserviceprovider ,`'* (whichmustalsoobtainaconnectiontothispacketswitchednetwork).TheInternetserviceproviderthendeliversthesubscribersdataintoglobalInternet.SeeGTEADSLOrder,13FCC  Rcdat2247172.Inshort,unlikeanordinarytelephonecall,aDSLtransmissionnevertravelsoverthePSTNonceitleavestheloop.SeeAdvancedServicesOrder,13FCCRcdat24027 P  (30)( Thus,thedatatraffic,aftertraversingthelocalloop,avoidsthecircuitswitchedtelephonenetworkaltogether.). ` ADSLserviceprovidesasubscriberwithadedicated,alwaysonconnectiontohisorherpredesignatedInternetserviceprovider.DSLestablishesafixedlogicalchannel(or permanentvirtualconnection)acrossitspacketswitchednetworkbetweenthesubscriberandtheInternetserviceprovider.See,e.g.,id.at24033n.73(42n.73).Asaresult,ratherthan  havingtodialatelephonenumbertoestablishaconnectionforeachnewconversationordatatransmission(asisnecessarywithatraditionalcircuitswitcheddialupconnectiontoanInternetserviceprovider),asubscribersconnectionis alwaysononcetheinitialconnectionwiththeInternetserviceproviderhasbeenmade.SeeGTEADSLOrder,13FCCRcdat22467.Bythe ` sametoken,DSLenablesasubscribertoconnectonlytotheInternetserviceproviderthatthe @ subscriberhaspreviouslydesignatedtobeattheotherendofthepacketswitcheddata pipeline.DSLdoesnotallowanytoanylocal intercommunicating,asdoestraditionalcircuitswitchedtelephoneservice.See47U.S.C.153(47)(A).Thesubscribers $" communicationswiththevariousserversthatcomprisetheglobalInternetareallmadethroughasinglepointofconnectionwithasingle,predesignatedInternetserviceprovider.  0*%( ֙  &   D.0 ` TheAdvancedServicesOrder ` (#` (#  ` InFebruar'#y1998,USWESTpetitionedtheFCCtoclarifytheregulatorytreatmentofcertainDSLandotherdataservices.USWESTproposedtoofferhighspeeddataonlyservicestoitscustomers,primarilyruralhomesandbusinessesinthewesternUnitedStates.XoNXXXPetitionofUSWESTCommunications,Inc.forRelieffromBarrierstoDeploymentofAdvanced 0  TelecommunicationsServices,CCDkt.No.9826(filedFeb.28,1998)(hereinafter Petitionfor X  Relief).(J.A.______.)Atroughlythesametime,severalotherincumbentlocaltelephone 0  companies#XXXXoN˛#alsopetitionedfordeclaratoryreliefandtheadoptionofnewFCCrules,asdida   publicinterestorganizationandatradeassociationofnewlocalentrants.   ( f  6  /    ׀TheFCCsetallthese  petitionsoutforpubliccomment. ` InitsPetitionforReliefanditscommentsonotherpartiespetitions,USWESTaskedtheFCCtoclarifythatitsDSLservicesarenotsubjecttolocalexchangecarrierregulationundersections251(b)and(c)ofthe1996Actbecausetheydonotconstitute telephoneexchangeserviceor exchangeaccessastheActdefinestheseterms.PetitionforReliefat45 h 46n.24(J.A.______);ReplyCommentsofUSWESTCommunications,Inc.,CCDkt.No.98 H 26at1820(filedMay6,1998)(hereinafter ReplyComments)(J.A.______);Commentsof  USWEST,Inc.,CCDkt.No.9878at1117(hereinafter CommentsonALTSPetition)(J.A.  ______).USWESTcontendedthattheDSLservicesdescribedinitspetitionarefundamentallyunlikethelocal,twoway,circuitswitchedservicesdescribedinthefirsthalfofCongresssdefinitionof telephoneexchangeservice(andlongheldbytheFCCtocomewithinthatdefinition),andthatsuchDSLservicesarenot comparableservicesunderthesecondhalfofthedefinitionbecausetheyarenotfunctionalormarketsubstitutesforlocal,twoway,circuitswitchedtelephoneservice.% ; ԛPetitionforReliefat4546n.24(J.A.______);ReplyComments,at   М1920(J.A.______);CommentsonALTSPetitionat1517(J.A.______).USWESTfurther  contendedthatDSLisnot exchangeaccessbecauseitdoesnotinvolveaccessto telephoneexchangeservicesorfacilitiesandisnotusedfor telephonetollservices.𛀀CommentsonALTS p Petitionat17(J.A.___). " ) f  7  /     P  ` Inaconsolidatedorderaddressingallofthepetitions,theFCCrejectedUSWESTsarguments.SeeAdvancedServicesOrder,13FCCRcdat2403134(𛁜3844).(The ` relevantsectionoftheAdvancedServicesOrderisreproducedinAddendumBtothisbrief.The @ entireorderappearsintheJointAppendixstartingatJ.A.___.)TheFCCdeclaredthatDSLservicesareeithertelephoneexchangeserviceorexchangeaccess,butitdeclinedtosaywhich. "  МId.at24032(𛁜40).TheagencygavenoreasonwhyeitherdefinitioncoversDSLservices. $" Indeed,itdidnotarticulateanyinterpretationofanyoftherelevantstatutorytermswhatsoever.Instead,theFCCmerelystatedthatitdisagreedwithUSWESTsconstructionoftheAct.Id.at  24032(41). ` TheFCCdidnotacknowledgeitslonglineofrulingsholdingthat telephoneexchangeservicereferstoordinarylocal,twoway,circuitswitchedservice.Italsorejected,withoutexplanation,USWESTsargumentthat comparableservicesmustbefunctionallysimilartoormarketsubstitutesforthesetraditionallocalservices,anditdidnotofferanalternativemeaningfor comparability.Id.󛀀TheFCCdidnotaddressthestatutorydefinitionof    exchangeaccessserviceatallexcepttoreciteit.Id.at24032n.70(41n.70).TheFCCthus  madenoattempttoexplainwhyitcouldlegallyextendlocalmarketplaceregulationtothesenewDSLservices;itsimplyassertedthatit [saw]nothing...mandatingaconclusiontothecontrary.Id.󛀜at24033(𛀜42). P ; @!  SUMMARYOFARGUMENT  |Ԉ  p М ` TheAdvancedServicesOrderviolatestheTelecommunicationsAct,ignores P longstandingFCCprecedent,andbearsnoneoftheindiciaofreasonedagencyaction.WhereasCongresscarefullydefinedthelocaltelephoneservices" telephoneexchangeserviceand exchangeaccess"thatwouldsubjectacarriertolocalexchangemarketplaceregulation,theAdvancedServicesOrderextendsthatregulationtodataandInternetserviceshavingnoneofthe % # characteristicsCongressspecified.Addinginsulttoerror,theAdvancedServicesOrderprovides `'"%  nojustificationatallforthisextension,otherthanthattheFCCsawnoreasonnottoregulate. @)$'  ` TheActdefines telephoneexchangeserviceaseitherservicewithinalocal   exchangethatpermitsallsubscriberstocalleachotherforabasicprice,or comparableservice.USWESTsDSLservicesdonotmeeteitherhalfofthedefinition.InternetboundDSLcommunicationsdonotstaywithinalocalexchangeanddonottransitorinterconnectwiththelocalexchangenetwork;moreover,DSLdoesnotprovideuniversallocalconnectivityandisnotincludedinasubscribersbasiclocalcallingcharge.NoraresuchDSLservices comparabletothelocalcallingservicesdescribedinthefirsthalfofthedefinition:Theyareasupplementto,andnotasubstitutefor,basiclocalservice,andDSLisnotfunctionallyequivalenttotwowayswitchedlocalcalling.Indeed,theFCCitselfhasconsistentlyheldthatservicesbearingthecharacteristicsofDSLdonotmeetthedefinitionof telephoneexchangeservice. ` Moreover,USWESTsDSLserviceisnot exchangeaccess.Thestatutorysine p quanonof exchangeaccessisthatitisusedfor telephonetollservice"definedintheAct P astelephonetotelephonelongdistancecalling.TheFCChasmadeclearthatservicesthatconnectsubscriberstoInternetandotherdataserviceprovidersare informationaccesslinks, ` not exchangeaccess. ` InadditiontobeingcontrarytotheTelecommunicationsAct,theAdvanced   ServicesOrderfallsshortofthereasoneddecisionmakingrequiredofadministrativeagencies. "  TheFCCrejectedUSWESTsprofferedconstructionoftheActbasedonnothingmorethanitsownipsedixit,anditproposednoalternativeinterpretationofthestatutorylanguageinplaceof p&!$ USWESTs.BecausetheFCCneverbotheredtoexplainwhyitbelieveditcouldstretch P(#&  telephoneexchangeserviceand exchangeaccesstocoverDSLservices,itisimpossibletoknowwhethertheAdvancedServicesOrderistheproductofrationalthinking,andimpossibleto ,`'* predictwhatrulestheFCCwillapplyinfuturecases.Ataminimum,theCourtshouldvacatetheAdvancedServicesOrderandremandittotheFCCformorereasonedconsideration.  Л &  @&  ARGUMENT  Ԉ `  М  I.0 ` THEF'` CCVIOLATEDTHE1996ACTBYEXTENDINGLOCAL @  EXCHANGEMARKETPLACEREGULATIONTONEWSERVICESTHATARENEITHER TELEPHONEEXCHANGESERVICENOR EXCHANGEACCESS. _ M` ` (#` (#  ` IntheAdvancedServicesOrder,theFCCrecognizedthatacarriersnetworkand @  marketopening obligationsundersection251turnonwhetherthecarrierisprovidingtelephoneexchangeserviceorexchangeaccess.AdvancedServicesOrder,13FCCRcdat  24031(𛀜38).Congresstookcaretodefine telephoneexchangeserviceand exchangeaccesstorefertoordinarylocaltelephoneservicesprovidedoverthetraditionalPSTNand comparableservices.ButtheFCCdrainedthesestatutorydefinitionsofanymeaningbystretchingthemtocovernewDSLservicesthatarenotlocal,donotusethePSTN,donotprovideuniversalconnectivitywithinalocalexchange,andarenotmarketorfunctionalsubstitutesforlocaltelephoneservice.Theagencyaccomplishedthisbypureipsedixit:Rather @ thanexplainhowthestatutorydefinitionscouldbereadtoapplytoDSLservices,theFCCsimplyannouncedthatit s[aw]nothing...mandatingaconclusionthatthesedefinitionscouldnotapply.Id.at24031(𛀜42). $"  ` TheCourtshouldreversetheAdvancedServicesOrderascontrarytotheplain p&!$ languageoftheActandtheFCCsownconsistentunderstandingofthatlanguage.BecauseCongresspreciselydefinedthestatutorytermsinquestion, thereisnooccasionfordeferencetotheagencysruling.TimeWarnerEntertainmentCo.v.FCC,56F.3d151,190(D.C.Cir.1995). ,`'* Moreover,theAdvancedServicesOrderdoesnotarticulateanyaffirmativeinterpretationofthe  statutorylanguagetowhichthisCourtcouldpossiblydefer.ThisCourthasheldthatit cannotdefertoavacuum,ColoradoInterstateGasCo.v.FERC,850F.2d769,774(D.C.Cir.1988), p or tomeredecisionalevasion.CompetitiveEnterpriseInst.v.NHTSA,956F.2d321,323 P  (D.C.Cir.1992).SeealsoAchernarBroad.Co.v.FCC,62F.3d1441,1447(D.C.Cir.1995) 0  ( Whileagencyexpertisedeservesdeference,itdeservesdeferenceonlywhenitisexercised.).&  ԛ0 `  A.0 ` (#` (#DigitalSubscriberLineServicesAreNot TelephoneExchange 0  МService. W   (# (# Л6 ` Cong')ressdefined telephoneexchangeserviceas (A)service withina  telephoneexchange ,orwithinaconnectedsystemoftelephoneexchangeswithinthesame  exchangeareaoperatedtofurnishtosubscribers intercommunicatingservice ofthecharacter p ordinarilyfurnishedbyasingleexchange,andwhichis coveredbytheexchangeservicecharge , P or(B) comparableservice providedthroughasystemofswitches,transmissionequipment,or 0 otherfacilities...bywhichasubscribercanoriginateandterminateatelecommunicationsservice.47U.S.C.153(47)(emphasisadded).USWESTsDSLservicesdonotmeeteitherhalfofthisdefinition.̛&  0 ` 0 ` (#` (#  1.0 (# (#Digitalsubscriberlineservicesarenotintercommunicating #! serviceswithinalocaltelephoneexchangeandarenotcoveredbytheexchangeservicecharge.  % #(#(#  ` Thefirst'#halfofthedefinitionof telephoneexchangeservice,47U.S.C.153(47)(A),hasremainedsubstantiallyunchangedsincetheoriginalCommunicationsActof1934.SeePub.L.No.416,3(r),48Stat.1064,1066(1934).Itdescribesordinary,circuit  +p&) switchedlocaltelephoneservice:thatis,an intercommunicatingserviceamongallthesubscribers withinasingletelephoneexchangeorsetofexchangesinthesamelocalarea,forwhichsubscriberspayabasiclocalservicecharge(the exchangeservicecharge).47U.S.C.153(47)(A).TheFCChaslonginterpretedthisdefinitionnarrowlytoreferto theprovisionofindividualtwowayvoicecommunicationbymeansofacentralswitchingcomplextointerconnectallsubscriberswithinageographicarea. Applicationof MidwestCorp.,53 `  F.C.C.2d294,300(1975).SeealsoOffshoreTel.Co.v.SouthCent.BellTel.Co.,6FCCRcd @  2286,2287(1991)(telephoneexchangeserviceis alocalcallingcapabilitythatpermitsacommunityofinterconnectedcustomerstomakecallstooneanotheroveraswitchednetwork);DomesticPublicRadioSvc.,76F.C.C.2d273,281(1980)(sameformulationasMidwestCorp.).  TheFCCitselfhascontinuedtointerpretthispartofthestatutorydefinitionexactlythesamewaysincethepassageofthe1996Act.SeeApplicationofBellSouthCorp.etal.forProvisionof P InRegion,InterLATAServicesinLouisiana,13FCCRcd20599,20621(1998)(hereinafter 0  BellSouthOrder)(sameformulationasMidwestCorp.).Indeed,theFCChasconcludedthat, ` byleavingthishalfofthedefinitionof telephoneexchangeserviceunchangedinthe1996Act,Congressintendedtoratifyandincorporatetheagencyslongstandinginterpretationofthestatutoryterm.SeeBellSouthOrder,13FCCRcdat20621&n.64(citingLorillardv.Pons, "  434U.S.575,580(1978)andDuttonv.Wolpoff&Abramson,5F.3d649,655(3dCir.1993)). $"  ` TheAdvancedServicesOrderdoesnotattempttoexplainhowDSLservicesmeet p&!$ eitherthetextof47U.S.C.153(47)(A)ortheFCCsownconsistentinterpretationofthattext.Anysuchattemptwouldhavebeendoomedtofail.First,whetherconsideredfromaserviceorafacilitiesperspective,DSLservicesdonotbeginandend withina telephoneexchangeorset ,`'* ofexchangesinthesamelocalarea.47U.S.C.153(47)(A).Consideringtheformer:CustomersuseDSLservicespredominantlyforhighspeedInternetaccess,notforlocalcommunicationwithinanexchange.SeeGTEADSLOrder,13FCCRcdat2247072;Bell p AtlanticTel.Cos.,13FCCRcd23667,23668(1998).ADSLcustomersendsashortburstof P  dataoveradedicated,highspeedconnectiontoapredesignatedInternetserviceprovider,whichthenforwardsthedatatotheworldwidenetworkofservers(datastoragecenters)comprisingtheInternet.SeeGTEADSLOrder,13FCCRcdat2247172.TheFCCdeemsthistobeasingle @  connectionbetweentheenduserandanyInternetserverwithwhichtheusercommunicates,whereverintheworldthatserverislocated.  * f  8  /    ׀Infact,theFCCrecentlyconfirmedthatDSL  basedInternetconnections donotterminateatthe[Internetserviceproviders]localserver...butcontinuetotheultimatedestinationordestinations,veryoftenatadistantInternetwebsiteaccessedbytheenduser"inotherwords,outsidetheuserslocalexchange.GTEADSL P Order,13FCCRcdat22476. 0  ` NordoDSLservicesuseorinterconnectwiththefacilitiesthattheFCChasconsistentlyassociatedwith telephoneexchangeservice"thetraditionalcircuitswitchedPSTN.CompareBellSouthOrder,13FCCRcdat20622(findingPCSwirelessservicetobe    telephoneexchangeservicebecausePCSusers areinterconnectedtothepublicswitchednetworkbymeansofacentralswitchingcomplex,andthusareabletoplaceandreceivecalls...tousersofothernetworksconnectedtothepublicswitchednetwork),withGeneralTel.Co.of p&!$ Calif.,13F.C.C.2d448,460(1968)(cabletelevisiontransmissiondoesnotmeetdefinition  becauseit doesnotrequireanexchange[and]doesnotgothroughanexchange).  $ B  + f  9  /    ׀DSL  transmissionsaretakenoffthePSTNatthefirstfeasiblepointbeforearrivingatanycircuitswitchorothervehicleofuniversalconnectivity,sothattheonlyfacilitythattheysharewithPSTNtrafficisthecopperloopconnectingtheenduserspremisestotheclosestcentraloffice.SeeAdvancedServicesOrder,13FCCRcdat24027(30)( Thus,thedatatraffic,after `  traversingthelocalloop,avoidsthecircuitswitchedtelephonenetworkaltogether.).UnderFCCprecedent,thisminimallevelofsharingisnotenoughtomakeDSLatelephoneexchangeservice, &@ -@ f  10  /    ׀andtheFCCdidnotsuggestotherwiseintheAdvancedServicesOrder.   ` EvenifonlytheinitiallegofaDSLcommunicationisconsidered"thatis,thehighspeedlinkbetweentheenduserandthepredesignatedISP"thatlinkbearsnoresemblancetotheanytoanylocal intercommunicatingserviceencompassedbythestatutorydefinition.47U.S.C.153(47)(A).AccordingtotheFCC,telephoneexchangeserviceinvolvesϜ acentralswitchingcomplexwhichinterconnectsallsubscriberswithinageographicarea.BellSouthOrder,13FCCRcdat20621.Andtelephoneexchangeserviceis alocalcalling @ capabilitythatpermitsacommunityofinterconnectedcustomerstomakecallstooneanother   over[such]aswitchednetwork.OffshoreTel.Co.,3FCCRcd4137,4142(1988).   / f  11  /    ׀Services  thatconnectonlypredesignatedlocationsordonotpermitubiquitouslocalintercommunicationdonot,accordingtotheFCC,constitutetelephoneexchangeservice. P 0P f  12  /    כ p  ` DSLdoesnotpermitanytoanyintercommunicationwithinalocalexchange.WhenanendusersignsupforDSL,theusermustalsospecifytheInternetserviceprovider(orotherparty)withwhomtheuserwantstoestablishitshighspeedconnection.OncetheDSLproviderestablishesapermanentvirtualconnectionbetweenthetwo,theenduserhasanalwayson,dedicated pipeconnectedexclusivelytotheotherparty.   1  f  13  /    כIftheotherpartyisanInternet   serviceprovider,itcan,inturn,routetrafficfromtheenduserspipeovertheInternet.ButthisroutingisdonebytheInternetserviceprovider,nottheDSLprovider;theendusersDSLpipealwaysremainspointedtoitslocallypredesignatedparty.TheendusercanasktheDSLprovidertoredirectitsdedicatedlinktoadifferentInternetserviceprovider,buttheendusercannotsimply dialupanyInternetserviceprovider(oranyotherDSLenduser)atwill,as 0 wouldbepossiblewithatrue,intercommunicating telephoneexchangeserviceunder47U.S.C.153(47)(A).  3 f  14  /    ׀Inotherwords,DSLservicesgenerallyinterconnectatasinglepoint  withinthelocalexchange,andpermitthecustomertocommunicatewiththeWorldWideWebonlythroughthissinglepoint. P  Л ` Finally,inordertoqualifyasa telephoneexchangeserviceundersubsection(A),thestatutealsorequiresthataservicebe coveredbytheexchangeservicecharge"thatis,thebasiclocalcallingcharge.47U.S.C.153(47)(A).DSLisnotincludedinthepriceofbasiclocaltelephoneservice. See,e.g.,USWEST,MegaBitServices"Pricing(lastmodified   May14,1999)( ThepricingofMegaBitServices[USWESTsDSLoffering]doesnotincludepricingofphoneservice.).NorisDSLasubstituteforlocaltelephoneservice,suchthattheDSLpricecouldbeadefactobasic p exchangeservicecharge. D  4  f  15  /    כCustomerswhopurchaseUSWESTsDSLconnectionsfortheir P datatrafficmustcontinuetobuybasiclocalvoicetelephoneserviceandpayseparatecharges.Seeid.( The[DSL]customersphoneserviceremainsthesameandthecustomercontinuesto ` paythecurrentchargesforresidentialorbusinessphoneservice.);GTEADSLOrder,13FCC  Rcdat2247122472(notingthat,withDSL, anenduserwillstillneedtopurchasestandardresidentialorbasicservice).&  0 ` 0 ` (#` (#  2.0 (# (#Digitalsubscriberlineservicesarenot comparableto @  traditionaltelephoneexchangeservice. | 0 (#(# : ` T'@ Lhe1996Actaddedthesecondpartofthedefinitionof telephoneexchangeϜservice,𛀜clarifyingthatthetermincludes comparableserviceprovidedthroughasystemof @  switches,transmissionequipment,orotherfacilities.47U.S.C.153(47)(B)(emphasisadded).Althoughthereisnolegislativehistoryexplainingthisamendmenttothepriorstatutorydefinition,itpresumablyreflectsanunderstandingthatnetworktechnologiesmightchangeovertime,andthatthetraditionallocaltelephoneservicesdescribedintheolddefinitionmighteventuallybeprovidedoverdifferentfacilitiesandnetworksthantheonesoriginallydescribed. ` TheAdvancedServicesOrdertakesthisamendmentasalicensetoremoveall 0 limitsontheclassofregulatedservices.InitscommentstotheFCC,USWESTarguedthat,byusingtheword comparable,Congressmeanttoincludethoseservicesthatarefunctionallysimilartoandcansubstitutefortheswitchedlocalserviceslongheldtosatisfytheoriginalstatutorydefinition.PetitionforReliefat4546n.24(J.A.______);ReplyCommentsat1920 "  (J.A.______);CommentsonALTSPetitionat1517(J.A.______).IntheOrder,however,the $" FCCignoredthisargumentandinsteadsetupandrejectedastrawman.TheFCCruledthattheamendment refutesanyattempttotiethesestatutorydefinitionstoaparticulartechnology"eventhoughUSWESThadneversuggestedthattechnologicalidentitywasthestandardof 0*%( comparability.AdvancedServicesOrder,13FCCRcdat24032(𛀜41).TheAdvancedServices ,`'* Orderdoesnotproposeanyalternativedefinitionof comparable.Nordoesitarticulateany  principlethatmightlimittheclassofservicesthatcouldberegulatedas telephoneexchangeϜservice.  8 f  16  /    כ p  ` TheCourtshouldrejecttheFCCsattempttodenycontenttothedefinitionof telephoneexchangeservice.WhileCongresssamendmentarguablyexpandedtherangeofservicesthatcountas telephoneexchangeservice,itplainlydidnotremovealllimitsontheterm.Onthecontrary,itonlybroadenedthedefinitiontoincludethoseservicesthatare comparabletothosedescribedinthepreexistinglanguage"again,twoway,anytoany,switchedlocalservices.47U.S.C.153(47)(B). ` Comparableherehasitsordinarymeaningof equivalentor similar; comparableserviceshave enoughlikecharacteristicsorqualitiestomakecomparisonappropriate.WebstersThirdNewIntlDictionary461(1971).Serviceis comparableto P traditionaltelephoneexchangeserviceifitisthefunctional equivalentofsuchservice,orsufficiently similartobeasubstitute.Indeed,thiswashowtheFCCitselfinterpreted `  comparabilityunderthissameprovisionpriortotheAdvancedServicesOrder:TheFCC @ ruled,forexample,thatcellularandotherwirelessservicesare comparablebecausewirelesscarriers providelocal,twowayswitchedvoiceserviceasaprincipalpartoftheirbusiness,andthesewirelessservicescould becomeatrueeconomicsubstituteforwirelinelocalexchange $" service.ImplementationoftheLocalCompetitionProvisionsintheTelecommunicationsAct,  11FCCRcd15499,1599916000(1996).  9 f  17  /    ׀SeealsoFederalStateJointBd.onUniversalSvc.,  13FCCRcd11501,11528(1998)(describingcomparabilityintermsofprovidingthesameservicesoveralternativefacilities,suchassubstitutesforthecopperloop).̛ ` Intheorderunderreview,however,theFCCdeniedthatitwasrequiredtofindthatDSLservicesareequivalenttoorsubstitutesfortraditionaltelephoneexchangeservice.See `  AdvancedServicesOrder,13FCCRcdat24032(41).Itcouldnothavemadethisfindingin @  anycase.USWESTsDSLservicesarenotamarketsubstituteforordinarytwowayswitchedlocalcalling.Theyarehighspeeddataservicesthataremarketedasasupplementto,notasubstitutefor,basiclocalservice;acustomerwhopurchasesDSLservicemuststillbuybasiclocaltelephoneserviceseparatelytomakeandreceivelocalcalls.Moreover,DSLservicesarenotfunctionallyequivalenttotraditionallocalcalling:Ratherthanofferingfreelyswitchedconnectionsamongallthesubscriberswithinalimitedlocalcallingarea,DSLprovidesonlyadedicatedconnectiontoapredesignatedlocalrecipient.SeeGTEADSLOrder,13FCCRcdat ` 22472. ` Notably,sinceissuingtheAdvancedServicesOrder,theFCChasruledthatthese   verysamecharacteristicswilldisqualifyaservicefromtheexpandeddefinitionof telephone "  exchangeservice.TheFCChasruledthateventypicaldialupInternetaccess,wheretheend $" usermakesanordinarycircuitswitchedtelephonecalloverthePSTNtoanInternetserviceproviderslocalnumber,isnot telephoneexchangeservicebecausethecommunicationisnotϜlocal:AswithaDSLtransmission,theFCCdeemsanInternetbounddialupcalltoterminatenotattheInternetserviceprovider,butatthevariouswebserverslocatedoutsidethelocalcallingarea.SeeDeclaratoryRuling,InterCarrierCompensationforISPBoundTraffic,CC 0  Dkt.No.9698,FCC9938,12,1617(rel.Feb.25,1999).Similarly,theFCChasrecentlyruledthat specialaccess"definedas adedicatedpathbetweenanenduserandaninterexchangecarrierspointofpresence"isnot telephoneexchangeservicebecauseitdoesnotinvolveanytoanyintercommunicationamongalllocalsubscribers.Insoruling,theFCCcitedDSLastheparadigmofa specialaccessservice.See󛀜Mem.Op.andOrder,Applications  forConsenttotheTransferofControlofLicensesfromTeleCommunications,Inc.toAT&TCorp.,CSDkt.No.98178,FCC9924,135&n.384(rel.Feb.17,1999)(citingGTEADSL P МOrder,13FCCRcdat22480).(Asexplainedinthenextsection,callingDSLa specialaccess 0 servicedoesnotmeanthatDSLis exchange󛀜access"thesecondservicethatdefinesaLEC. `  Specialaccesssimplymeansthattheconnectionisdedicatedratherthanswitched.SeeGTE @ ADSLOrder,13FCCRcdat22480;SouthwesternBellTel.Co.v.FCC,100F.3d1004,1005   (D.C.Cir.1996)(describingdifferencebetween specialand switchedaccess.))Theselaterholdingsconfirmthat,iftheFCChadactuallytriedtoapplythestatutetodeterminewhetherUS $" WESTsDSLservicesare comparabletotraditionaltelephoneexchangeservice,itwouldhavebeenrequiredtoagreewithUSWESTthattheyarenot.  0*%( &   0 `  B.0 ` (#` (#DigitalSubscriberLineServicesDoNotConstitute Exchange  МAccess.   (# (# Q ` Inthe'xdecisionunderreview,theFCCmerelyrecitedCongresssdefinitionof exchangeaccess,thenpromptlyignoredit.SeeAdvancedServicesOrder,13FCCRcdat `  2403233n.71(41n.71).Here,too,iftheagencyhadtriedtoapplythedefinition,itwould @  havehadtoacknowledgethatDSLservicesdonotfallwithinitsterms.DSLdoesnotinvolvetheuseoftelephoneexchangefacilitiestooriginateandterminatelongdistance tolltelephonecalls,thesinequanonof exchangeaccess. 0  Л ` Accessservicesrefergenericallyto servicesandfacilitiesprovidedfortheoriginationandterminationofanyinterstateorforeigntelecommunication.47C.F.R.69.2(b).SeealsoSouthwesternBellTel.Co.,100F.3dat1005(describingaccessservicesgenerally).  Therearetwodifferentsubcategoriesof accessservices.TheActsdefinitionofa localexchangecarrierappliesonlytoanentitythatprovides exchangeaccess,definedas the @ offeringofaccesstotelephoneexchangeservicesorfacilitiesforthepurposeoftheoriginationorterminationoftelephonetollservices.47U.S.C.153(16)(emphasisadded).Theother P subcategoryof accessserviceis informationaccess,definedsincebeforetheActas the 0 provisionofspecializedexchangetelecommunications...inconnectionwiththeorigination,termination,transmission,switching,forwardingorroutingoftelecommunicationstraffictoorfromthefacilitiesofaproviderofinformationservices.See󛀜UnitedStatesv.AmericanTel.& % # Tel.Co.,552F.Supp.131,229(D.D.C.1982)(AT&Tdivestituredecree).The1996Act `'"% preservesthedistinctionbetween exchangeand informationaccess,see,e.g.,47U.S.C. @)$' 251(g)(distinguishingbetween exchangeaccess,informationaccess,andexchangeservices),  +p&) andtheFCChasacknowledgedthattheseremaindistinctservicesundertheAct.See  МImplementationoftheNonAccountingSafeguardsofSections271and272ofthe  CommunicationsActof1934,asAmended,11FCCRcd21905,2202324n.621(1996) p (hereinafter NonAccountingSafeguardsOrder);AccessChargeReform,12FCCRcd15982, P  1613435(1997). ` DSLisnotusedtooriginateorterminate telephonetollservices,asisrequiredof exchangeaccess.47U.S.C.153(16).   : f  18  /    ׀The1996Actdefines telephonetollserviceas @   telephoneservicebetweenstationsindifferentexchangeareas"inotherwords,ordinarytelephonetotelephonelongdistancecalling.47U.S.C.153(48).(A stationissimplyanotherwordforatelephone.SeeHarryNewton,NewtonsTelecomDictionary744(15thed.  1999).)DSLservicedoesnotconnectonetelephoneusertoanotherforthepurposeofmakingalongdistancetollcall;therefore,itisnot exchangeaccess. P  ` DSLis,instead,aformof informationaccess"aservicegivingendusers 0  highspeeddataaccessfromtheircomputerstoInternetserviceprovidersandotherprovidersof ` informationservices.   < f  19  /    כFCCdecisionsmakethisclear.InitsNonAccountingSafeguards   Order,theFCCreaffirmedthatthedataservicesofferedbyInternetserviceproviderscannotbe   telephonetollservicesbecausethesecompaniesprovide informationservicesratherthanbasic telecommunications.11FCCRcdat2202324.   =  f  20  /    ׀Forthatreason,itfurtherheld,the P  accesslinksthatallowsubscriberstoreachinformationserviceproviderscannotbeconsidered exchangeaccess.Id.TheFCCheldthatinformationserviceprovidersinsteadpurchase `   informationaccess,which,itacknowledged,isawhollydistinctcategoryundertheAct.Id. @  Мn.621.TheFCChasreinforcedthisholdinginotherdecisionsconfirmingthatInternetserviceprovidersarenotrequiredtopaytheaccesschargesnormallypaidbypurchasersofexchangeaccess. H >H f  21  /    כ   ` TheFCCdidnotacknowledgetheseprecedentsintheAdvancedServicesOrder,  letalonedistinguishthem.Indeed,theFCCgavenoexplanationatallofhowDSLservicescouldconstitute exchangeaccess,justasitdidnotexplainwhytheymightmeettheoldorexpandeddefinitionsof telephoneexchangeservice.TracingthroughCongressslanguageandagencyprecedentmakesitabundantlyclearthatDSLisneitherofthetwokindsofservicelisted 0  inCongresssdefinitionofa localexchangecarrier,47U.S.C.153(26);rather,itfallsintheentirelydifferentstatutorycategoryofinformationaccess. &   II.0 ` THEADVANCEDSERVICESORDERFALLSSHORTOFTHE  REASONEDDECISIONMAKINGREQUIREDOFADMINISTRATIVEϜAGENCIES. Z ` (#` (#  < ` The'NfiveparagraphsoftheAdvancedServicesOrderpurportingtoaddressUS  WESTsstatutoryargumentsarehardlyamodelofadministrativeclarityorrationality.Asnotedabove,inrejectingthosearguments,theFCCneverarticulatesanyviewofwhatitbelieves telephoneexchangeserviceor exchangeaccesstomean,eventhoughitconcedesthatacarriersregulatoryobligations turnonwhetherthecarrierisprovidingoneortheotheroftheseservices.AdvancedServicesOrder,13FCCRcdat24031(𛀜38).Withrespectto 0  telephoneexchangeservice,theFCCtakesthemerefactoftheadditionofthe comparabilitytestaslicensetoreadthedefinitionslimitationsoutoftheAct.Id.at2403233(41).And #! withrespectto exchangeaccess,theFCCsaysnothingatall.Whatismore,theFCCrefuseseventosaywhichofthetwostatutorycategoriesmightapplytoDSLservices,id.at24032 `'"%  (40),andotherrecentordersstronglyindicatethatDSLdoesnotfallintoeithercategory.At @)$' itscore,theAdvancedServicesOrdersimplysays, IknowitwhenIseeit,andIllregulateit  whenIdo.  ` Ataminimum,theCourtshouldvacatetheAdvancedServicesOrderandremand p ittotheFCCforareasonedconsiderationofUSWESTsargumentsandexplanationofitsruling.TheFCCisentitledtonodeferenceinthisregard. Judicialdeferencetodecisionsofadministrativeagencies...restsonthefundamentalpremisethatagenciesengageinreasoneddecisionmaking.AmericanLungAssnv.EPA,134F.3d388,392(D.C.Cir.1998).Seealso @  A.L.Pharma,Inc.v.Shalala,62F.3d1484,1491(D.C.Cir.1995)( Deferringtoanagencys   exerciseofitsdiscretion...isnottantamounttoabdicatingthejudiciarysresponsibilityundertheAdministrativeProcedureActtosetasideagencyactionsthatarearbitrary,capricious,anabuseofdiscretion,orotherwisenotinaccordancewithlaw.).TheAdvancedServicesOrder p failsthattest.&  0 `  A.0 ` (#` (#TotheExtenttheFCCOffersAnyReasoning,ItsExplanationsAre  p EntirelyInadequate.   (# (#   ` To' ԀfindthatDSLservicesconstituteeither telephoneexchangeserviceor exchangeaccesswithinthemeaningofthe1996Act,theFCChadtofindoneofthreethings:(1)DSLservicesmeetthepreActdefinitionof telephoneexchangeservice,(2)DSLservicesare comparabletotheservicesthatmeetthepreActdefinition,or(3)DSLservicesfallwithinthestatutorydefinitionof exchangeaccess,meaningthattheyareusedfor telephonetollservices.TheAdvancedServicesOrdersaysnotawordaboutthefirstandthirdpropositions. P(#& Withrespecttothesecond,theFCCrejectsUSWESTsreadingof comparableservices"thattheymustbefunctionallyequivalenttoorsubstitutesforserviceslongheldtosatisfytheold ,`'* definition"onthebasisofastrawman.TheFCCsonlyexplanationisthatthe languageof  thestatute...refutesanyattempttotiethesestatutorydefinitionstoaparticulartechnology.AdvancedServicesOrder,13FCCRcdat2403233(𛁜41).ButthatisanargumentUSWEST p nevermade;onthecontrary,USWESTtooktechnologicalevolutionasagiven,andsuggestedthatcomparabilitybedefinedintermsoffunctionalormarketplacesimilarity.PetitionforRelief 0  at4546n.24(J.A.______);ReplyCommentsat1920(J.A.______);CommentsonALTS `  Petitionat1617(J.A.______). @   ` Inanyevent,theAdvancedServicesOrderoffersnodefinitionof comparable   thatcouldjustifyequatingnonlocal,nonanytoanyDSLserviceswithtraditionallocaltelephoneexchangeservice.TheOrderthuscontainsnoexplanationatallastowhytheFCC  mayextendlocalexchangeregulationtoDSLservices.Attheendoftheday,theFCCseekstoregulatebecauseitseesnoreasonnotto:Theagency see[s]nothing...mandatinga P conclusionthatadvancedservicesofferedbyincumbentLECsfalloutsideofthetelephoneexchangeserviceorexchangeaccessdefinitionssetforthintheAct.AdvancedServices ` МOrder,13FCCRcdat24033(𛀜42)(emphasisadded). @  ` Thisutterlackofjustification"andtacitsuggestionthatnoneisnecessary"cannotstand. [A]nagencymustcogentlyexplainwhyithasexerciseditsdiscretioninagivenϜmanner,...andthatexplanationmustbesufficienttoenable[acourt]toconcludethatthe[agencysaction]wastheproductofreasoneddecisionmaking.𛀀A.L.Pharma,Inc.,62F.3dat p&!$ 1491(quotingMotorVehicleMfrs.Assnv.StateFarmMut.Auto.Ins.Co.,463U.S.28,48,52 P(#& (1983)).SeealsoAmericanLungAssn,134F.3dat392( [I]twillnotdoforacourttobe 0*%( compelledtoguessatthetheoryunderlyingtheagencysaction.).Itisnotenoughforan ,`'* agencysimplytoreciteapartysarguments,thenissue ipsedixitconclusion[s]sayingnothingmorethan Wedisagree.IllinoisPub.Telecomm.Assnv.FCC,117F.3d555,564(D.C.Cir.  1997).SeealsoBuilding&Constr.TradesDept,AFLCIOv.Martin,961F.2d269,277(D.C. p Cir.1992)( Tostateaconclusionisnottoreason.).TheFCCsfailuretoarticulateitsreasonsforregulatingjustifiesavacationandremandoftheAdvancedServicesOrder. 0  &  0 `  B.0 ` (#` (#TheFCCsFailureToDefinetheCategoriesofServiceSubjectto P  Regulation"orEvenToSayWhichCategoryAppliesHere"IstheEssenceofArbitraryandCapriciousAgencyAction. i, ;,ӛ0  (# (#  ` B'N,yrefusingtoexplainthecriteriabywhichitwillconsideraservicetobe telephoneexchangeserviceor exchangeaccess(andthereforesubjecttotheobligationsofsections251(b)and(c)),theFCCleavestelecommunicationscarrierswithnoguidanceastowhendeployinganewservicewillsubjectthemtolocalexchangecarrierregulation.InthewakeoftheAdvancedServicesOrder,carriersmustsimplyassumethattheFCCmighttrytoregulate @ anyfuturetelecommunicationsservicetheyprovide,andadjusttheirinvestmentanddeployment  p decisionsaccordingly.(TheFCCsstatutoryerrorsinthiscaseonlyreinforcethisassumption.) P Moreover,anordersuchasthisonepermitstheFCCtomakeitselfunaccountable:Adecisionthatcontainsnoreasoningcannotbetestedforconsistencywithpriorrulingsandcannotbecomeprecedentthatconstrainstheagencyinthefuture. ` Such adhocery...isthecoreconcernunderlyingtheprohibitionofarbitraryorcapriciousagencyaction.PacificNorthwestNewspaperGuild,Local82v.NLRB,877F.2d `'"% 998,1003(D.C.Cir.1989)(quotationmarksomitted).Italsoviolates [e]lementaryadministrativelawnormsoffairnotice.Checkoskyv.SEC,139F.3d221,224(D.C.Cir.1998).  +p&) TheCourthasmadeclearthatit simplywillnotdoforagovernmentagencytodeclare"withoutexplanation"thataproposedcourseofprivateactionisnotapproved.Torefusetodefinethecriteriaitisapplyingisequivalenttosimplysayingnowithoutexplanation.Pearson p v.Shalala,164F.3d650,660(D.C.Cir.1999)(citationomitted).Anagencymayneverregulate P  simplybysaying, IknowitwhenIseeit.Id.Cf.Checkosky,139F.3dat225(rejecting 0  agencyinterpretationthateffectivelypermitsit aselfproclaimedlicensetochargeandproveimproperprofessionalconductwheneveritpleases,constrainedonlybyitsowndiscretion).Tobesure,anagencymayresolveissuesincrementallythroughcasebycaseproceedingsratherthanbygeneralregulation, butitmustbepossiblefortheregulatedclasstoperceivetheprincipleswhichareguidingagencyactionintheindividualcases.Pearson,164F.3dat661.It  isimpossibleforcarrierstoderiveanysuchprinciplesfromtheAdvancedServicesOrder p becausetheFCCwentoutofitswaytoavoidarticulatingany.  0 & @  @FF%   CONCLUSION 8    ` Fortheforegoingreasons,theAdvancedServicesOrdershouldbevacatedand  remandedtotheFCC. `     h     Respectfullysubmitted, `     h     򀀀 `   `     h     WilliamT.Lake `     h     JohnH.HarwoodII `     h     JonathanJ.Frankel `     h     WILMER,CUTLER&PICKERING `     h     2445MStreet,N.W. `     h     Washington,D.C.20037 `     h     (202)6636000 `     h     DanL.Poole `     h     RobertB.McKenna `     h     USWEST,INC. `     h     102019thStreet,N.W.Suite700 `     h     Washington,D.C.20036 `     h     (303)6722861 `     h     CounselforPetitioner ` DATE:May17,1999'@8  P 7XXdXXd7@ CERTIFICATEOFCOMPLIANCEWITHTYPEVOLUMELIMITATION    ` IHEREBYCERTIFY,pursuanttoFed.R.App.P.32(a)(7)(C),thatthisbriefcomplieswiththetypevolumelimitationsetforthinFed.R.App.P.23(a)(7)(B).Ifurthercertifythatthebriefcontains ______  10,150 words. `     h      p 򀀀 `   `     h      p JonathanJ.Frankel@ CERTIFICATEOFSERVICE     ` IHEREBYCERTIFYthatonMay17,1999,IcausedtwotrueandcorrectcopiesoftheforegoingBriefofPetitionertobeservedbyhanduponeachofthefollowing:XoNXXXLaurenceN.Bourne p JohnEdwardIngleChristopherJ.WrightFederalCommunicationsCommission445TwelfthStreet,SW,Room8A741Washington,DC20554    \ NancyCarolineGarrisonCatherineG.OSullivanU.S.DepartmentofJusticeAntitrustDivision,Appellate601DStreet,NWPatrickHenryBuildingWashington,DC20530#XXXXoNC#D ` IFURTHERCERTIFYthatonMay17,1999,IcausedtwotrueandcorrectcopiesoftheforegoingBriefofPetitionertobeservedbyfirstclassmail,postageprepaiduponeachofthefollowing: XoNXXX   +('*   CharlesC.HunterCatherineM.HannanHunterCommunicationsLawGroup1620IStreet,NW,Suite701Washington,DC20006 ` BradE.MutschelknausKelley,Drye&Warren120019thStreet,NW,Suite500Washington,DC200362423RileyMarieMurphyAmericanCommunicationsServices,Inc.131NationalBusinessParkway,Suite100Annapolis,MD20701GenevieveMorelliCompetitiveTelecommunicationsAssociation1900MStreet,NW,Suite800Washington,DC20036    p RobertJefferyAamothStevenA.AugustinoKelley,Drye&Warren120019thStreet,NW,Suite500Washington,DC200362423LeonMarvinKestenbaumHaroldRichardJuhnkeJayClarkKeithleySprintCorporation1850MStreet,NW,Suite1100Washington,DC20036AnthonyC.EpsteinJenner&Block60113thStreet,NW,12thFloorWashington,DC20005MatthewBennettPachmanMCITelecommunicationsCorp.113319thStreet,NWWashington,DC20036 `  @-(, PeterDouglasKeislerSidley&Austin1722EyeStreet,NW,Suite600Washington,DC200063795DavidW.CarpenterSidley&AustinOneFirstNationalPlazaChicago,IL60603 ` MarkC.RosenblumAmericanTelephone&Telegraph295NorthMapleAvenueBaskingRidge,NJ07920     EmilyM.WilliamsAssociationforLocalTelecommunicationsServices88817thStreet,NW,Suite900Washington,DC20006MarkLewisEvansKellogg,Huber,Hansen,Todd&Evans1301KStreet,NW,Suite1000WestWashington,DC20005 `      MichaelJ.ZpevakSouthwesternBellTelephoneOneBellPlaza,Room3008Dallas,TX75202  l JamesD.EllisSBCCommunications,Inc.175E.HoustonSanAntonio,TX78205DurwardD.DupreSBCCommunicationsInc.OneBellPlaza,Suite3703Dallas,TX75202   )$(   LindaLeeOliverHogan&Hartson55513thStreet,NWColumbiaSquareWashington,DC200041109 ` RodneyL.JoyceShook,Hardy&Bacon1850KStreet,NW,Suite900Washington,DC200062244GailLauriePolivyGTEServiceCorporation1850MStreet,NW,Suite1200Washington,DC200365801 h    JohnFrancisRaposaGTETelephoneOperationsP.O.Box152092Irving,TX750152092GlennB.ManishinJeffreyBlumenfeldBlumenfeld&Cohen1615MStreet,NW,Suite700Washington,DC20036 ` RandallBrianLowePiper&Marbury120019thStreet,NW,Suite700Washington,DC20036RuthMargaretMilkmanTheLawlerGroup7316WisconsinAvenueNW,Suite400Bethesda,MD20814 ` ColleenBoothbyLevine,Blaszak,Block&Boothby2001LStreet,NW,Suite900Washington,DC20036   T,'+   JonathanJacobNadlerSquire,Sanders&Dempsey1201PennsylvaniaAvenueNWWashington,DC20044 ` RussellM.BlauSwidlerBerlinShereffFriedman3000KStreet,NW,Suite300Washington,DC200075116DanaFrixSwidlerBerlinShereffFriedman3000KStreet,NW,Suite300Washington,DC200075116. `    RichardMartinRindlerSwidlerBerlinShereffFriedman3000KStreet,NW,Suite300Washington,DC200075116#XXXXoNF# @# [insertnames]   `     h      p 򀀀 T  `     h      p JonathanJ.Frankel