Skip Navigation

Federal Communications Commission

English Display Options

Commission Document

ICC Brief of Intervenors Supp. Respondents, In Re: FCC 11-161

Download Options

Released: April 25, 2013
Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 1

IN THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

No. 11-9900
IN RE: FCC 11-161
On Petitions for Review of Orders of the
Federal Communications Commission

UNCITED BRIEF OF INTERVENORS SUPPORTING RESPONDENTS IN

RESPONSE TO THE JOINT INTERCARRIER COMPENSATION BRIEF

JONATHAN E. NUECHTERLEIN
SCOTT H. ANGSTREICH
HEATHER M. ZACHARY
BRENDAN J. CRIMMINS
KELLY P. DUNBAR
JOSHUA D. BRANSON
WILMER CUTLER PICKERING
KELLOGG, HUBER, HANSEN, TODD,
HALE AND DORR LLP
EVANS & FIGEL, P.L.L.C.
1875 Pennsylvania Avenue, N.W.
1615 M Street, N.W., Suite 400
Washington, D.C. 20006
Washington, D.C. 20036
(202) 663-6000
(202) 326-7900
CATHY CARPINO
MICHAEL E. GLOVER
GARY L. PHILLIPS
CHRISTOPHER M. MILLER
PEGGY GARBER
CURTIS L. GROVES
AT&T SERVICES, INC.
VERIZON
1120 20th Street, N.W.
1320 North Courthouse Road, 9th Floor
Washington, D.C. 20036
Arlington, Virginia 22201
(202) 457-3058
(703) 351-3071
Counsel for AT&T Inc.
Counsel for Verizon and Verizon Wireless
April 24, 2013
(Additional Counsel Listed Inside)

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 2
DAVID E. MILLS
J.G. HARRINGTON
DOW LOHNES PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036-6802
(202) 776-2000
Counsel for Cox Communications, Inc.
CARL W. NORTHROP
MARK A. STACHIW
MICHAEL LAZARUS
GENERAL COUNSEL, SECRETARY
ANDREW MORENTZ
& VICE CHAIRMAN
TELECOMMUNICATIONS LAW
METROPCS COMMUNICATIONS, INC.
PROFESSIONALS PLLC
2250 Lakeside Blvd.
875 15th Street, N.W., Suite 750
Richardson, Texas 75082
Washington, D.C. 20005
(214) 570-5800
(202) 789-3120
Counsel for MetroPCS Communications, Inc.
RICK CHESSEN
HOWARD J. SYMONS
NEAL M. GOLDBERG
ROBERT G. KIDWELL
STEVEN MORRIS
ERNEST C. COOPER
JENNIFER MCKEE
MINTZ LEVIN COHN FERRIS
THE NATIONAL CABLE &
GLOVSKY AND POPEO, P.C.
TELECOMMUNICATIONS
701 Pennsylvania Avenue, N.W.
ASSOCIATION
Suite 900
25 Massachusetts Avenue, N.W.
Washington, D.C. 20004
Suite 100
(202) 434-7300
Washington, D.C. 20001
(202) 222-2445
Counsel for NCTA
DAVID H. SOLOMON
L. CHARLES KELLER
WILKINSON BARKER KNAUER, LLP
2300 N Street, N.W.
Suite 700
Washington, D.C. 20037
(202) 783-4141
Counsel for T-Mobile USA, Inc.

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 3
CHRISTOPHER J. WRIGHT
BRENDAN KASPER
BRITA D. STRANDBERG
SENIOR REGULATORY COUNSEL
WILTSHIRE & GRANNIS LLP
VONAGE HOLDINGS CORPORATION
1200 18th Street, N.W.
23 Main Street
Washington, D.C. 20036
Holmdel, New Jersey 07733
(202) 730-1300
Counsel for Vonage Holdings Corporation

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 4

CORPORATE DISCLOSURE STATEMENTS

Pursuant to Federal Rule of Appellate Procedure 26.1, intervenors AT&T
Inc., Cox Communications, Inc., NCTA, MetroPCS Communications, Inc.,
T-Mobile, USA, Inc., Verizon, Verizon Wireless, and Vonage Holdings
Corporation respectfully submit the following corporate disclosure statements:

AT&T Inc.

AT&T Inc. (“AT&T”) is a publicly traded corporation that,
through its wholly owned affiliates, is principally engaged in the business of
providing communications services and products to the general public. AT&T has no
parent company, and no publicly held company owns 10 percent or more of its stock.

Cox Communications, Inc.

Cox Communications, Inc. (“Cox”) is a
privately held corporation, formed under the laws of the State of Delaware. Cox
Enterprises, Inc., a privately held corporation, owns Cox through a direct majority
interest and through a minority interest held by an intermediate holding company,
Cox DNS, Inc. Cox has no other parent companies within the meaning of Rule
26.1, and no publicly held company has a 10% or greater ownership interest in Cox.

MetroPCS Communications, Inc.

MetroPCS Communications, Inc. is a
publicly traded company listed on the New York Stock Exchange and is organized
to provide wireless and data services to its customers. MetroPCS has no parent
corporation, and, to MetroPCS’s knowledge, no publicly held company holds 10
percent or more of its stock.

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 5

NCTA.

The National Cable & Telecommunications Association (“NCTA”)
is the principal trade association of the cable industry in the United States. Its
members include owners and operators of cable television systems serving over
ninety (90) percent of the nation’s cable television customers as well as more than
200 cable program networks. NCTA’s cable operator members also provide high-
speed Internet service to more than 50 million households, as well as telephone
service to more than 26 million customers. NCTA also represents equipment
suppliers and others interested in or affiliated with the cable television industry.
NCTA has no parent companies, subsidiaries, or affiliates whose listing is required
by Rule 26.1.

T-Mobile, USA, Inc.

T-Mobile, USA, Inc., a Delaware corporation, is a
wholly owned subsidiary of T-Mobile Global Holding GmbH, a German entity,
which, in turn, is a wholly owned subsidiary of T Mobile Global Zwischenholding
GmbH, a German entity. T Mobile Global Zwischenholding GmbH is a wholly
owned subsidiary of Deutsche Telekom AG, a German entity. Deutsche Telekom
AG is a publicly traded company in that the American Depository Receipts of
Deutsche Telekom AG are publicly traded in the Over-the-Counter Market in the
United States. T-Mobile’s general nature and purpose are to provide wireless
voice and data services to customers throughout the United States.
ii

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 6

Verizon and Verizon Wireless.

The Verizon companies participating in
this filing are Cellco Partnership d/b/a Verizon Wireless and the regulated, wholly
owned subsidiaries of Verizon Communications Inc. Cellco Partnership, a general
partnership formed under the law of the State of Delaware, is a joint venture of
Verizon Communications Inc. and Vodafone Group Plc. Verizon Communications
Inc. and Vodafone Group Plc indirectly hold 55 percent and 45 percent partnership
interests, respectively, in Cellco Partnership. Both Verizon Communications Inc.
and Vodafone Group Plc are publicly traded companies. Verizon Communications
Inc. has no parent company. No publicly held company owns 10 percent or more
of Verizon Communications Inc.’s stock. Insofar as relevant to this litigation,
Verizon’s general nature and purpose is to provide communications services,
including broadband Internet access services provided by its wholly owned
telephone company and Verizon Online LLC subsidiaries and by Verizon
Wireless.

Vonage Holdings Corporation.

Vonage Holdings Corporation has no
parent corporation, and no publicly held corporation owns 10% or more of its
stock.
iii

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 7

TABLE OF CONTENTS

Page
CORPORATE DISCLOSURE STATEMENTS ........................................................ i
TABLE OF AUTHORITIES ..................................................................................... v
STATEMENT OF RELATED CASES .................................................................... ix
GLOSSARY ............................................................................................................... x
INTRODUCTION AND SUMMARY OF ARGUMENT ........................................ 1
ARGUMENT ............................................................................................................. 4
I.
COURTS HAVE CONSIDERED AND REJECTED
PETITIONERS’ CLAIMS .............................................................................. 4
II.
THE ORDER’S ADOPTION OF A UNIFORM ICC REGIME
DOES NOT VIOLATE 47 U.S.C. § 252(d)(2) ............................................... 7
A.
The FCC Reasonably Construed the Statute Not To Require the
Absurd Results That Petitioners’ Position Entails .............................. 10
B.
The Eighth Circuit’s Decision in Iowa Utilities Board Does Not
Support Petitioners’ Position ............................................................... 14
III.
PETITIONERS’ CHALLENGE TO THE FCC’S JURISDICTION
OVER ORIGINATING CHARGES LACKS MERIT ................................. 16
IV.
IN ALL EVENTS, THE COURT SHOULD NOT VACATE THE
CHALLENGED ICC RULES ....................................................................... 18
A.
The Court Can Remand Without Vacating ......................................... 18
B.
The USF Reforms Are Severable from the ICC Reforms .................. 20
CONCLUSION ........................................................................................................ 22
iv

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 8

TABLE OF AUTHORITIES

Page
CASES
Arizona Pub. Serv. Co. v. EPA, 562 F.3d 1116 (10th Cir. 2009) ............................ 20
AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366 (1999) ............................ 1, 4, 5, 6, 10,
11, 12, 15, 16, 17
Core Communications, Inc., In re, 455 F.3d 267 (D.C. Cir. 2006) ......................... 14
Core Communications, Inc. v. FCC, 592 F.3d 139 (D.C. Cir. 2010) ...... 1, 2, 6, 7, 10
Davis County Solid Waste Mgmt. v. EPA, 108 F.3d 1454 (D.C. Cir.
1997) ........................................................................................................ 20, 21
Forest Guardians v. Babbitt, 174 F.3d 1178 (10th Cir. 1999) ................................ 19
Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (1993) ......................................... 15
Iowa Utils. Bd. v. FCC:

120 F.3d 753 (8th Cir. 1997), aff ’d in part, rev’d in part, and
remanded sub nom. AT&T Corp. v. Iowa Utils. Bd.
, 525 U.S.
366 (1999) ................................................................................................ 17, 19

219 F.3d 744 (8th Cir. 2000), aff ’d in part, rev’d in part, and
remanded sub nom. Verizon Communication Inc. v. FCC
,
535 U.S. 467 (2002)............................................................................. 2, 14, 15
Kane, In re, 628 F.3d 631 (3d Cir. 2010) ................................................................ 15
Louisiana Pub. Serv. Comm’n v. FCC, 476 U.S. 355 (1986) .................................... 5
MCI Telecomms. Corp. v. FCC, 143 F.3d 606 (D.C. Cir. 1998) ............................. 20
MCImetro Access Transmission Servs., Inc. v. BellSouth Telecomms.,
Inc., 352 F.3d 872 (4th Cir. 2003) ................................................................. 17
MetroPCS California, LLC v. FCC, 644 F.3d 410 (D.C. Cir. 2011) ...................... 11
Milk Train, Inc. v. Veneman, 310 F.3d 747 (D.C. Cir. 2002) .................................. 20
National Ass’n of Regulatory Util. Comm’rs v. FCC, 737 F.2d 1095
(D.C. Cir. 1984) ............................................................................................. 18
v

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 9
Qwest Communications Int’l, Inc. v. FCC, 398 F.3d 1222 (10th Cir.
2005) .............................................................................................................. 19
Qwest Corp. v. FCC:

252 F.3d 462 (D.C. Cir. 2001) ....................................................................... 17

258 F.3d 1191 (10th Cir. 2001) ..................................................................... 18

No. 99-9546 (10th Cir. Aug. 27, 2001) ......................................................... 19
Southwestern Bell Tel. Co. v. Public Utils. Comm’n of Texas,
348 F.3d 482 (5th Cir. 2003) ......................................................................... 17
United States v. Nelson, 383 F.3d 1227 (10th Cir. 2004) .......................................... 5
ADMINISTRATIVE DECISIONS
First Report and Order, Implementation of the Local Competition
Provisions in the Telecommunications Act of 1996, 11 FCC Rcd
15499, modified on recon., 11 FCC Rcd 13042 (1996), vacated
in part, Iowa Utils. Bd. v. FCC
, 120 F.3d 753 (8th Cir. 1997),
aff ’d in part, rev’d in part sub nom. AT&T Corp. v. Iowa Utils.
Bd.
, 525 U.S. 366 (1999) ............................................................................... 16
Memorandum Opinion and Order, Joint Application by SBC
Communications Inc. et al. for Provision of In-Region,
InterLATA Services in Kansas and Oklahoma
, 16 FCC
Rcd 6237 (2001), aff ’d in part and remanded, Sprint
Communications Co. v. FCC
, 274 F.3d 549 (D.C. Cir. 2001) ...................... 17
Memorandum Opinion and Order, MAP Mobile Communications, Inc.
v. Illinois Bell Tel. Co., 24 FCC Rcd 5582 (2009) ........................................ 16
Memorandum Opinion and Order, Petition of WorldCom, Inc.
Pursuant to Section 252(e)(5) of the Communications Act
for Preemption of the Jurisdiction of the Virginia State
Corporation Commission Regarding Interconnection Disputes
,
17 FCC Rcd 27039 (2002) ............................................................................. 17
vi

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 10
Notice of Proposed Rulemaking, Developing a Unified Intercarrier
Compensation Regime, 16 FCC Rcd 9610 (2001) ........................................ 17
Notice of Proposed Rulemaking and Further Notice of Proposed
Rulemaking, Connect America Fund, 26 FCC Rcd 4554 (2011) ................. 13
Order on Remand and Report and Order and Further Notice of
Proposed Rulemaking, High-Cost Universal Service Support,
24 FCC Rcd 6475 (2008) ............................................................................. 6, 7
STATUTES AND REGULATIONS
Communications Act of 1934, 47 U.S.C. § 151 et seq. ................................ 1, 14, 15

47 U.S.C. § 152(b) ..................................................................................... 1, 10
47
U.S.C.
§ 201
................................................................................................
1
47
U.S.C.
§ 201(b)
....................................................................... 1, 4, 7, 10, 12

47 U.S.C. § 251 .................................................................................... 1, 11, 17

47 U.S.C. § 251(b)(5) ............................................. 1, 3, 4, 6, 7, 11, 12, 16, 18

47 U.S.C. § 252 .................................................................................... 2, 10, 11
47
U.S.C.
§ 252(a)(1)
.....................................................................................
11
47
U.S.C.
§ 252(b)
...........................................................................................
8
47
U.S.C.
§ 252(b)(1)
....................................................................................
11
47
U.S.C.
§ 252(d)(1)
....................................................................................
16

47 U.S.C. § 252(d)(2) ............................. 1, 2, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16
47
U.S.C.
§ 252(d)(2)(A)........................................................................... 8, 11
47
U.S.C.
§ 252(d)(2)(A)(i)
.............................................................................
9
47
U.S.C.
§ 252(d)(2)(A)(ii) ...................................................................... 9, 10
vii

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 11
47
U.S.C.
§ 252(d)(2)(B)(i)
.............................................................................
8

47 U.S.C. § 332 .................................................................................. 10, 12, 19
47
U.S.C.
§ 332(c)
.........................................................................................
10
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 ................. 4, 5
5 U.S.C. § 706(1) ..................................................................................................... 19
47 C.F.R. § 51.703(b) ......................................................................................... 16, 17
OTHER MATERIALS
Br. for Fed. Pet’rs, AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366
(1999) (No. 97-831) (U.S. filed Apr. 3, 1998), 1998 WL
396945 ........................................................................................................... 16
Br. for Pet’r Core Communications, Inc., Core Communications, Inc.
v. FCC, 592 F.3d 139 (D.C. Cir. 2010) (Nos. 08-1365 et al.)
(D.C. Cir. filed June 19, 2009), 2009 WL 2525340 ........................................ 7
Br. of Pet’rs Pub. Serv. Comm’n of New York et al., Core
Communications, Inc. v. FCC, 592 F.3d 139 (D.C. Cir. 2010)
(Nos. 08-1365 et al.) (D.C. Cir. filed June 19, 2009), 2009 WL
2564689 ........................................................................................................... 7
viii

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 12

STATEMENT OF RELATED CASES

Intervenors adopt the Statement of Related Cases set forth in the Federal
Respondents’ Uncited Response to the Joint Preliminary Brief of the Petitioners.
ix

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 13

GLOSSARY

1996 Act
Telecommunications Act of 1996, Pub. L. No. 104-104,
110 Stat. 56 (amending the Communications Act of
1934, 47 U.S.C. § 151 et seq.)
2011 NPRM
Notice of Proposed Rulemaking and Further Notice of
Proposed Rulemaking, Developing a Unified Intercarrier
Compensation Regime
, 26 FCC Rcd 4554 (2011)
Communications Act
Communications Act of 1934, as amended
or Act
(47 U.S.C. § 151 et seq.)
CMRS
Commercial Mobile Radio Service
FCC or Commission
Federal Communications Commission
FCC Br.
Federal Respondents’ Response to the Joint Intercarrier
Compensation Principal Brief of Petitioners
(filed Mar. 6, 2013)
ICC Intercarrier
Compensation
ILEC
Incumbent Local Exchange Carrier
ISP
Internet Service Provider
LEC Local
Exchange
Carrier
Order
Report and Order and Further Notice of Proposed
Rulemaking, Connect America Fund, 26 FCC Rcd 17663
(2011)
Pet. Br.
Joint Intercarrier Compensation Principal Brief of
Petitioners (filed Oct. 23, 2012)
Pet’rs Joint USF Br.
Joint Universal Service Fund Principal Brief
(filed Oct. 23, 2012)
Second ISP Remand
Order on Remand and Further Notice of Proposed
Order
Rulemaking, Intercarrier Compensation for ISP-Bound
Traffic
, 24 FCC Rcd 6475 (2008)
USF
Universal Service Fund
x

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 14

INTRODUCTION AND SUMMARY OF ARGUMENT

The FCC ably refutes the claims in petitioners’ Joint Intercarrier
Compensation Brief. Intervenors write separately to highlight four points.

I.


Petitioners portray the intercarrier compensation portions of the Order
as reaching novel legal conclusions that raise issues of first impression for this
Court. But the Order travels well-established paths, and many of petitioners’
claims have been rejected by other courts. For example, relying in part on 47
U.S.C. § 152(b), petitioners argue (at 14-25) that the FCC lacks authority to adopt
federal rules implementing 47 U.S.C. § 251(b)(5) that displace state authority over
intrastate access charges. But, in AT&T Corp. v. Iowa Utilities Board, 525 U.S.
366 (1999), the Supreme Court concluded that § 251 “clearly appl[ies] to intrastate
service”; that the FCC’s statutory authority in 47 U.S.C. § 201(b) “to carry out the
provisions of ” the Communications Act “extend[s] to implementation of ” § 251;
and that § 152(b) is irrelevant in this context. Id. at 378, 380 (internal quotations
omitted).
Petitioners also argue (at 38-40) that 47 U.S.C. § 252(d)(2) limits “the
FCC’s reliance on § 201 as a standalone basis for” regulating ICC charges. But,
in Core Communications, Inc. v. FCC, 592 F.3d 139 (D.C. Cir. 2010), the D.C.
Circuit upheld the FCC’s authority under § 201(b) to regulate ICC charges for
interstate traffic that also falls within the scope of § 251(b)(5), holding that §§ 251

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 15
and 252 do not “trump the FCC’s general rulemaking authority under section 201.”
Id. at 143 (internal quotations omitted).

II.


As the FCC explains, petitioners’ heavy reliance on § 252(d)(2) as a
supposed limitation on the FCC’s authority to enact a uniform ICC framework
suffers from numerous flaws; we elaborate on two of them.
First, petitioners’ construction of § 252(d)(2) would produce highly
anomalous consequences: it would enable the FCC to ensure national consistency
in the rules applicable to most of the traffic subject to that provision (as well as all
of the traffic not subject to that provision), but entitle states to adopt mutually
inconsistent ICC regimes for relatively tiny and arbitrarily defined categories of
traffic. Congress did not require that result, let alone in such unambiguous terms
as to overcome the FCC’s contrary, reasonable interpretation of § 252(d)(2).
Second, there is no merit to petitioners’ reliance on the Eighth Circuit’s
decision in Iowa Utilities Board v. FCC, 219 F.3d 744 (8th Cir. 2000) (subsequent
history omitted). As the FCC explains, that case addressed a fundamentally
different type of FCC rule, which (unlike bill-and-keep) was not a methodological
choice, but rather a fact-specific application of a methodological choice. We write
separately to point out that the Eighth Circuit’s holding in Iowa Utilities Board
rested on judicial estoppel, not statutory construction, and that, if the Eighth Circuit
2

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 16
had interpreted the statute as petitioners say, that interpretation would have been
plainly incorrect.

III.


Petitioners incorrectly argue that, because the text of § 251(b)(5)
does not mention call origination, the FCC cannot regulate ICC charges for call
origination. The FCC has long reasonably interpreted the omission of origination
in § 251(b)(5) to mean that the statute prohibits origination charges for traffic
subject to § 251(b)(5) — not that the agency lacks authority to regulate origination
charges — and numerous courts have approved of the FCC’s interpretation. The
FCC also reasonably determined to address origination charges on a step-by-step
basis.

IV.


However the Court resolves these petitioners’ challenges to the Order,
it should not vacate the ICC rules promulgated therein. This Court has authority
to remand matters to the FCC without vacating the underlying rules. Moreover,
the ICC rules are severable from the aspects of the FCC’s USF reforms that these
and other petitioners challenge.
3

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 17

ARGUMENT

I.

COURTS HAVE CONSIDERED AND REJECTED PETITIONERS’
CLAIMS

Several key questions presented in petitioners’ brief have been asked and
answered in prior judicial decisions.

A.


Petitioners contend (at 14) that the FCC’s statutory authority to
implement § 251(b)(5) “necessarily excludes intrastate access by . . . the action of
§ 152(b).” But the Supreme Court rejected that analysis in AT&T. There, as here,
parties argued that the FCC’s authority to implement provisions of the 1996 Act
did not “displace” states’ “traditional authority” over intrastate service. 525 U.S. at
379. The Supreme Court held, however, that the 1996 Act “clearly appl[ies] to
intrastate service” and that the FCC’s statutory authority in § 201(b) “to carry out
the provisions of [the Communications] Act” “extend[s] to implementation of ”
the 1996 Act, including “§§ 251 and 252.” Id. at 377-78, 380 (internal quotations
omitted).
The Court emphasized the breadth of the FCC’s authority to regulate
intrastate matters under those provisions. The Court explained that, “[w]ith regard
to the matters addressed by the 1996 Act,” Congress “unquestionably” has “taken
the regulation of local telecommunications competition away from the States.” Id.
at 378 n.6 (internal quotations omitted). Elaborating on that conclusion, the Court
recognized that the 1996 Act “fundamentally restructure[d] local telephone
4

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 18
markets” in a manner that established a “new federal regime [that] is to be guided
by federal-agency regulations” and “removed a significant area from the States’
exclusive control.” Id. at 371, 378 n.6, 381 n.8; see also id. at 385 n.10 (“Congress
has broadly extended its law into the field of intrastate telecommunications”).
The Supreme Court’s conclusion that Congress empowered the FCC to
regulate “intrastate telecommunications” under the 1996 Act was “unaffected by
47 U.S.C. § 152(b)” — on which petitioners rely here (at 14) — because “§ 201(b)
explicitly gives the FCC jurisdiction to make rules governing matters to which the
1996 Act applies.” 525 U.S. at 379, 380. Similarly, the Court rejected reliance on
Louisiana Public Service Commission v. FCC, 476 U.S. 355 (1986) — which
petitioners cite (at 19) — to narrow the scope of the FCC’s authority, explaining
that Louisiana PSC “involved the Commission’s attempt to regulate services over
which it had not explicitly been given rulemaking authority.” AT&T, 525 U.S. at
381 n.7.
Petitioners argue (at 19-20) that AT&T addressed only “local service” and
not “whether the 1996 Act preserved State ratemaking authority over intrastate
exchange access rates.” Nothing in the Court’s opinion or the statute, however,
supports petitioners’ proposed distinction between “local” intrastate traffic and
“non-local” intrastate traffic for purposes of the FCC’s authority. Cf. United States
v. Nelson, 383 F.3d 1227, 1232 (10th Cir. 2004) (“We do not . . . approach
5

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 19
opinions of the Supreme Court with a view to reaching the narrowest construction
possible.”). Petitioners’ claim that the FCC exceeded its authority in regulating
intrastate access charges cannot be squared with AT&T.

B.


Judicial precedent likewise forecloses petitioners’ argument (at 38-40)
that § 252(d)(2) limits “the FCC’s reliance on § 201 as a standalone basis for”
regulating ICC charges for interstate traffic. In Core, the D.C. Circuit addressed an
earlier FCC ruling regarding ICC charges by LECs serving dial-up Internet service
providers (“ISPs”). See Core, 592 F.3d at 140-43. The FCC had found that ISP-
bound traffic is jurisdictionally interstate, but nonetheless within § 251(b)(5) —
because (contrary to petitioners’ position here) § 251(b)(5) is not limited to local
traffic.1 The FCC also had concluded that it “retain[ed] full authority to regulate
charges for traffic and services subject to federal jurisdiction [under § 201], even
when it is within the sections 251(b)(5) and 252(d)(2) framework.” Second ISP
Remand Order ¶ 21.
On review, parties argued there (as they do here) that, when § 251(b)(5)
applies to interstate traffic, § 252(d)(2) limits the FCC’s authority to regulate ICC
1 See Order on Remand and Report and Order and Further Notice of
Proposed Rulemaking, High-Cost Universal Service Support, 24 FCC Rcd 6475,
¶ 7 (2008) (“Second ISP Remand Order”) (“[W]e conclude that the scope of
section 251(b)(5) is broad enough to encompass ISP-bound traffic. . . . [T]he better
view is that section 251(b)(5) is not limited to local traffic.”); id. ¶ 17 (“[T]he ISP-
bound traffic at issue here is clearly interstate in nature and thus also subject to our
section 201 authority.”).
6

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 20
charges for that interstate traffic.2 The D.C. Circuit rejected that argument. The
court acknowledged that the FCC, “en route to finding that § 201 authorized [it] to
impose its rate cap system on the communications in question, also expressed its
view that [those communications] were ‘subject to the reciprocal compensation
regime in sections 251(b)(5) and 252(d)(2).’ ” Core, 592 F.3d at 145 (quoting
Second ISP Remand Order ¶ 15).3 And it agreed with the FCC that, even though
the jurisdictionally interstate dial-up ISP traffic at issue there “implicate[d] the
regime[ ] of . . . §§ 251-252,” those provisions did not “trump the FCC’s general
rulemaking authority under section 201” for that interstate traffic. Id. at 143-44
(internal quotations omitted). The D.C. Circuit thus rejected the notion that
§ 252(d)(2) limits the FCC’s authority to regulate ICC charges for interstate traffic
under § 201(b).

II. THE

ORDER

’S ADOPTION OF A UNIFORM ICC REGIME DOES

NOT VIOLATE 47 U.S.C. § 252(d)(2)

Petitioners argue (at 28-40) that the FCC’s adoption of “bill-and-keep”
as the ultimate default compensation methodology violates § 252(d)(2). They
contend (at 4, 29) that § 252(d)(2) requires that states “set the rate for § 251(b)(5)
2 See Br. for Pet’r Core Communications, Inc. at 33-35, Core, supra
(Nos. 08-1365 et al.) (D.C. Cir. filed June 19, 2009), 2009 WL 2525340.
3 The D.C. Circuit also paid no heed to the argument raised there — which
petitioners also assert here — that § 251(b)(5) “applies only to reciprocal
compensation arrangements between competing local carriers for exchanges of
local traffic.” Br. of Pet’rs Pub. Serv. Comm’n of New York et al. at 20, Core,
supra (Nos. 08-1365 et al.) (D.C. Cir. filed June 19, 2009), 2009 WL 2564689.
7

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 21
traffic”; that “the FCC only has authority to set a [pricing] ‘methodology’ ” for that
traffic; and that bill-and-keep exceeds the FCC’s authority to implement
§ 252(d)(2) because it “results in a zero rate.” The FCC persuasively demonstrates
(at 41-43) that the bill-and-keep regime established in the Order fits comfortably
within the FCC’s conceded authority to design pricing methodologies. Indeed, the
statutory language does not mention state rate-setting at all, but rather provides
certain standards that states must apply “[f ]or the purposes of ” determining
“compliance by an incumbent [LEC] with section 251(b)(5)” in an arbitration
under § 252(b). 47 U.S.C. § 252(d)(2)(A).
The FCC also ably refutes (at 33-37) petitioners’ assertions that bill-and-
keep is inconsistent with the standards for ICC charges set forth in § 252(d)(2).
In particular, § 252(d)(2)(B)(i) specifies that those standards do not “preclude
arrangements that afford the mutual recovery of costs through the offsetting of
reciprocal obligations,” including “bill-and-keep arrangements.” Congress’s
specific endorsement of bill-and-keep arrangements forecloses petitioners’
argument that § 252(d)(2)(A) forbids them. Moreover, although petitioners assert
(at 36-37) that § 252(d)(2) “unambiguously provides” that bill-and-keep is
appropriate only where carrier rates are “symmetrical” and traffic is “in balance,”
no “symmetry” or “balanced traffic” limitation appears anywhere in that provision
8

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 22
— and certainly not “unambiguously.” See Order ¶ 774 n.1405 (JA___); FCC Br.
34-36.
Furthermore, as the FCC also explains (at 33-34), petitioners’ assertion (at
34-35) that bill-and-keep precludes carriers from recovering their actual costs lacks
merit. Bill-and-keep permits “the mutual and reciprocal recovery by each carrier
of costs” (47 U.S.C. § 252(d)(2)(A)(i)) by allowing carriers to recover their
termination costs from their own customers. See Order ¶ 775 (JA___). That is
enough to comply with § 252(d)(2); nothing in that section gives carriers a right to
recover their costs from other carriers.
Furthermore, § 252(d)(2) does not guarantee that carriers will recover the
full costs of the facilities used to terminate calls. The statute permits recovery only
of the “additional costs” of termination. 47 U.S.C. § 252(d)(2)(A)(ii). The term
“additional costs” can be reasonably construed as limited to the short-run
incremental costs of processing each additional call over already-constructed
facilities. See Order ¶ 753 n.1332 (JA___). The FCC accurately observed that
those costs are “extremely low, and very near $0.” Id. ¶ 746 n.1309 (JA___).
Petitioners have presented no evidence suggesting that bill-and-keep fails to
9

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 23
provide a “reasonable approximation” of such costs, 47 U.S.C. § 252(d)(2)(A)(ii),4
and their facial challenge to bill-and-keep fails for that reason alone.
Intervenors elaborate on two additional reasons why petitioners’ reliance on
§ 252(d)(2) is unavailing.

A.

The FCC Reasonably Construed the Statute Not To Require the
Absurd Results That Petitioners’ Position Entails

Petitioners’ argument that § 252(d)(2) forecloses the FCC’s uniform ICC
regime “is (necessarily) an extremely subtle one,” AT&T, 525 U.S. at 379, because
the FCC has independent authority to regulate the vast majority of the traffic
subject to the Order without regard to any limitations in § 252(d)(2).
First, the FCC has independent authority — not restricted in any way by
§ 252(d)(2) — to regulate ICC charges for all interstate and wireless traffic. As to
interstate traffic, § 201(b) gives the FCC authority to regulate such traffic without
regard to any limitations in § 252. See Core, 592 F.3d at 144. As to wireless
traffic, the FCC similarly has independent authority over intercarrier compensation
for such traffic under 47 U.S.C. § 332(c). See Order ¶ 779 (JA___); FCC Br. 24-
25 (citing cases); see also 47 U.S.C. § 152(b) (exempting § 332 from restrictions
4 Contrary to petitioners’ claim (at 34), the FCC did not “acknowledge[]
that competitive considerations generally prevent carriers” from recovering costs
through retail rates. See Order ¶ 864 (noting only that “[s]ome competitive LECs
have argued that their rates are constrained by incumbent LEC rates”) (JA___);
id. ¶ 908 n.1781 (saying only that competitive considerations “may” restrict
incumbent LECs’ ability to increase retail charges) (JA___).
10

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 24
on FCC jurisdiction over intrastate traffic).5 That includes authority “to preempt
any rates set by the states” that would “undermine the federal policy.” MetroPCS
California, LLC v. FCC, 644 F.3d 410, 413 (D.C. Cir. 2011). Thus, as to interstate
and wireless calls, petitioners’ primary criticism of bill-and-keep — that it intrudes
on state commissions’ authority under §§ 251 and 252 — is wholly inapplicable.
Second, even for many categories of intrastate wireline traffic, the FCC’s
power to implement § 251(b)(5) — which the Supreme Court confirmed in AT&T
— does not implicate the authority of state commissions under § 252. The class of
intrastate traffic to which § 251(b)(5) applies is significantly broader than the class
of intrastate traffic to which § 252(d)(2) applies. That is largely because, whereas
§ 251(b)(5) applies to all telecommunications exchanged with a LEC, § 252(d)(2)
applies only to ICC charges collected by incumbent LECs. See 47 U.S.C.
§ 252(a)(1) (allowing an “incumbent local exchange carrier” to “enter into a
binding agreement” and “submit[ ]” it “to the State commission” for approval);
id. § 252(b)(1) (carrier “may petition a State commission to arbitrate any open
issues” concerning negotiations involving an “incumbent local exchange carrier”);
id. § 252(d)(2)(A) (authorizing state commission to assess only “compliance by an
incumbent local exchange carrier with” § 251(b)(5)).
5 Indeed, in adopting bill-and-keep, the FCC “[i]n essence . . . adopted for
local telephone companies the same model that was already in place and continues
to work well for the wireless industry.” FCC Br. 3 (citing Order ¶ 34 (JA___)).
11

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 25
Thus, even on petitioners’ erroneous view that § 251(b)(5) is limited to local
traffic, that section still applies to local traffic exchanged between two competitive
LECs, or a competitive LEC and wireless carrier — yet § 252(d)(2) does not
establish a standard (or give states any authority with respect to charges) for that
traffic. Furthermore, even as to traffic exchanged with an incumbent LEC,
§ 252(d)(2) is silent about charges paid by an incumbent LEC; it applies only to
charges collected by an incumbent LEC. See id.
On the FCC’s interpretation of § 251(b)(5) (in place since 2001) to include
all telecommunications traffic, not merely local traffic, that section includes even
more intrastate traffic as to which § 252(d)(2) grants states no authority. That is
because, under the FCC’s interpretation, § 251(b)(5) includes traffic exchanged
between LECs and long-distance carriers — traffic that is not covered by
§ 252(d)(2). See Order ¶ 774 (JA___).
In sum, petitioners’ approach “produces a most chopped-up statute.” AT&T,
525 U.S. at 381 n.8. They are left to contend that — even though the FCC has
(1) independent authority to regulate ICC charges for interstate and wireless traffic
under §§ 201(b) and 332, and (2) plenary pricing authority over ICC charges for
various categories of intrastate traffic that are within § 251(b)(5) but outside
§ 252(d)(2) — § 252(d)(2) unambiguously precludes the FCC from establishing a
12

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 26
uniform ICC regime that also encompasses the narrow category of intrastate traffic
to which that provision applies.
But they can point to no statutory language that would require the FCC to
accept the absurd consequences their approach entails. On the contrary, as shown
above (at 8-10), the language of § 252(d)(2) is sufficiently broad to encompass the
FCC’s bill-and-keep default rule for the limited category of traffic to which that
section applies.
Furthermore, the FCC’s interpretation of that section — which allows for a
uniform ICC regime for all telecommunications traffic — is reasonable.
Petitioners’ contrary position ensures a “patchwork” of ICC rates,6 with the FCC’s
regime covering all interstate and wireless traffic and most intrastate traffic, but
50 or more different state regimes covering the remaining intrastate traffic. That
would perpetuate the very arbitrage and market distortions that the Order seeks to
eradicate, leaving in place the same incentives that existed before the Order to
mischaracterize traffic or engage in traffic-pumping schemes. See Order ¶ 752
(observing “marketplace distortions” where “rates apply differently across
providers”) (JA___); 2011 NPRM ¶ 40 (noting that “wasteful attempts to game the
6 Notice of Proposed Rulemaking and Further Notice of Proposed
Rulemaking, Connect America Fund, 26 FCC Rcd 4554, ¶ 502 (2011)
(“2011 NPRM”).
13

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 27
system will likely persist as long as ICC rates remain disparate and well above
carriers’ incremental costs of terminating a call”).
The point is not, as petitioners assert, that “a little unlawfulness is
permitted.” Pet. Br. 32 (internal quotations omitted). Rather, it is that the FCC
reasonably interpreted the statute not to impose the balkanized regime that their
reading produces. Cf. In re Core Communications, Inc., 455 F.3d 267, 283 (D.C.
Cir. 2006) (noting that it is “not for this court to second-guess the conclusion
reached by the agency” that the “policies favoring a unified compensation regime
outweigh” other concerns) (internal quotations omitted).

B.

The Eighth Circuit’s Decision in Iowa Utilities Board

Does Not
Support Petitioners’ Position

Petitioners erroneously rely (at 29-30) on the Eighth Circuit’s decision in
Iowa Utilities Board, 219 F.3d 744. The FCC’s brief correctly demonstrates (at
41-43) that the “proxy prices” that the Eighth Circuit struck down were unlike the
bill-and-keep framework established here, because (among other considerations)
bill-and-keep embodies a methodological choice about how costs should be
recovered, whereas the proxy prices were fact-specific applications of a (different)
methodological choice. Petitioners’ reliance on Iowa Utilities Board is unavailing
for two additional reasons.
First, the Eighth Circuit’s conclusion rested on the procedural doctrine of
judicial estoppel, rather than any substantive interpretation of the Act. The court
14

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 28
accepted the argument that the FCC’s proxy prices “should be vacated” because
the FCC had “expressly disavowed the proxy prices” in a related case before the
Supreme Court; it held that the FCC was “estopped from trying to now revive the
proxy prices.” 219 F.3d at 756. The language on which petitioners rely (at 29-30)
appears as part of the Eighth Circuit’s discussion of why it was “not persuaded”
by the FCC’s effort to explain away its “position before the Supreme Court” and
thereby to avoid judicial estoppel. 219 F.3d at 756. The Eighth Circuit’s holding
that judicial estoppel procedurally barred the FCC’s argument does not imply
anything about the proper legal construction of the Act. Cf. In re Kane, 628 F.3d
631, 638 (3d Cir. 2010) (when judicial estoppel applies, court does not “consider[ ]
the merits of the underlying claims”) (internal quotations omitted).7
Second, even if the Eighth Circuit’s decision could be read in a way that
would preclude the FCC from adopting bill-and-keep, it would be incorrect. The
Eighth Circuit’s remark about the FCC’s “authority” being limited “to design[ing]
a pricing methodology” rested entirely on the court’s interpretation of the Supreme
Court’s opinion in AT&T. See 219 F.3d at 757. But the Supreme Court did not say
that the FCC’s authority to implement § 252(d)(2) is limited to methodological
7 Nor could judicial estoppel foreclose the FCC’s position here. Cf. Good
Samaritan Hosp. v. Shalala, 508 U.S. 402, 417 (1993) (agencies are “not estopped
from changing” a “legal interpretation”).
15

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 29
issues.8 Rather, the relevant portion of the Court’s opinion addressed only charges
for interconnection and access to network elements under § 252(d)(1), which
unlike § 252(d)(2) expressly authorizes states to set “rates.” See AT&T, 525 U.S.
at 383-85. Furthermore, given the Court’s conclusion that the FCC regulations
implementing § 252(d)(1) were within the agency’s authority, the Court had no
occasion to opine on the outer limits of the FCC’s authority to promulgate “rules
to guide the state-commission judgments” applying that section. Id. at 385.

III.

PETITIONERS’ CHALLENGE TO THE FCC’S JURISDICTION
OVER ORIGINATING CHARGES LACKS MERIT

Petitioners challenge the FCC’s interpretation of § 251(b)(5) with respect to
originating ICC charges, asserting (at 25-26) that “[t]he FCC lacks any authority
over intrastate originating access charges” because “§ 251(b)(5) addresses only
the ‘transport and termination of telecommunications.’ ” But the FCC has long
reasonably interpreted § 251(b)(5) to preclude originating carriers from charging
other carriers for delivery of traffic covered by that section — not to preclude the
FCC from regulating originating charges for that traffic.9
8 Nor did the FCC concede that its authority is so limited. See Br. for Fed.
Pet’rs at 25-28, AT&T, supra (No. 97-831) (U.S. filed Apr. 3, 1998), 1998 WL
396945.
9 See FCC Br. 21 (citing First Report and Order, Implementation of the Local
Competition Provisions in the Telecommunications Act of 1996, 11 FCC Rcd
15499, ¶ 1042 (1996) (subsequent history omitted)); 47 C.F.R. § 51.703(b);
see also Memorandum Opinion and Order, MAP Mobile Communications, Inc. v.
Illinois Bell Tel. Co.
, 24 FCC Rcd 5582, ¶ 28 (2009) (“Section 51.703(b) of the
16

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 30
Numerous courts have approved of that interpretation. The Eighth Circuit
upheld the FCC’s rule against an ultra vires challenge. See Iowa Utils. Bd. v.
FCC, 120 F.3d 753, 800 n.21 (8th Cir. 1997) (upholding rule as applied to wireless
traffic) (subsequent history omitted).10 Other courts of appeals have consistently
enforced the FCC’s rule. See MCImetro Access Transmission Servs., Inc. v.
BellSouth Telecomms., Inc., 352 F.3d 872, 881 (4th Cir. 2003) (holding that
47 C.F.R. § 51.703(b) is “unambiguous” in prohibiting origination charges);
Southwestern Bell Tel. Co. v. Public Utils. Comm’n of Texas, 348 F.3d 482, 487
(5th Cir. 2003); Qwest Corp. v. FCC, 252 F.3d 462, 467-68 (D.C. Cir. 2001).
Commission’s rules prohibit LECs from charging CMRS carriers for traffic
originated on their networks.”); Memorandum Opinion and Order, Petition of
WorldCom, Inc. Pursuant to Section 252(e)(5) of the Communications Act for
Preemption of the Jurisdiction of the Virginia State Corporation Commission
Regarding Interconnection Disputes
, 17 FCC Rcd 27039, ¶ 53 (2002) (“the
Commission’s rules for section 251(b)(5) traffic . . . prohibit any LEC from
charging any other carrier for traffic originating on that LEC’s network”);
Notice of Proposed Rulemaking, Developing a Unified Intercarrier Compensation
Regime
, 16 FCC Rcd 9610, ¶ 112 (2001) (“Our current reciprocal compensation
rules preclude an ILEC from charging carriers for local traffic that originates on
the ILEC’s network.”); Memorandum Opinion and Order, Joint Application by
SBC Communications Inc. et al. for Provision of In-Region, InterLATA Services
in Kansas and Oklahoma
, 16 FCC Rcd 6237, ¶ 235 & n.698 (2001) (“rule[ ]
preclude[s] an incumbent LEC from charging carriers for local traffic that
originates on the incumbent LEC’s network”) (subsequent history omitted).
10 Although the Eighth Circuit vacated the rule as applied to local wireline
traffic, it did so based on an interpretation of the FCC’s authority to implement
§ 251 that the Supreme Court reversed in AT&T. See AT&T, 525 U.S. at 377-82;
see also Order ¶ 823 (JA___).
17

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 31
Now that the Commission has determined that all telecommunications,
including traffic previously subject to interstate and intrastate access charge
regimes, should be governed by § 251(b)(5), its longstanding interpretation of
§ 251(b)(5) requires the eventual prohibition of originating access charges.
See Order ¶¶ 777, 817, 961 n.1976 (JA___, ___, ___). The FCC acted reasonably
in capping, rather than immediately eliminating, originating ICC charges. See
Order ¶ 818 (JA___). No one challenges that decision, which was consistent with
the FCC’s authority to confront issues one step at a time. See, e.g., National Ass’n
of Regulatory Util. Comm’rs v. FCC, 737 F.2d 1095, 1135-36 (D.C. Cir. 1984)
(per curiam).

IV.

IN ALL EVENTS, THE COURT SHOULD NOT VACATE THE
CHALLENGED ICC RULES

A.

The Court Can Remand Without Vacating

Even if the Court were to conclude that further consideration by the FCC
is required for any issue raised by these petitioners, it should remand for that
consideration without vacating the challenged ICC rules. This Court followed that
approach in Qwest Corp. v. FCC, 258 F.3d 1191 (10th Cir. 2001), in which it
remanded “to allow the FCC to establish an adequate legal and factual basis for the
[order] and, if necessary, to reconsider the operative mechanism promulgated in
that Order.” Id. at 1201. The Court subsequently issued an order clarifying that it
had not vacated the rules adopted in the FCC’s order; “[r]ather, [the Court] merely
18

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 32
reversed and remanded for further hearings.” Order of Clarification at 4, Qwest,
supra (No. 99-9546) (10th Cir. Aug. 27, 2001); see also Qwest Communications
Int’l, Inc. v. FCC, 398 F.3d 1222, 1239 (10th Cir. 2005).11
By the time the Court hears oral argument in this appeal, more than two
years will have passed since the FCC released the Order, and the industry will
have changed significantly in light of the reforms adopted therein. The transition
to bill-and-keep will be well underway: by July 2013, ICC rates for wireline traffic
will have been reduced twice already, and the formerly separate rate structure for
intrastate access rates will have been eliminated. See Order ¶ 801 (figure 9)
(JA___). ICC rates for certain types of traffic — in particular, intraMTA traffic
exchanged between LECs and wireless providers — will already have moved to
bill-and-keep. See id. ¶¶ 806, 988, 995 (JA___, ___, ___).12 Against the backdrop
of the ICC rules promulgated in the Order, carriers have negotiated and
renegotiated interconnection agreements, settled disputes over ICC charges, and
adjusted business plans — including abandoning arrangements built on arbitraging
11 Forest Guardians v. Babbitt, 174 F.3d 1178 (10th Cir. 1999), is not to
the contrary. In that case, there was no agency action to vacate. The Court held
that the agency’s non-action violated a non-discretionary statutory duty, and it
remanded under 5 U.S.C. § 706(1) for publication of a final regulation. See id.
at 1193.
12 In all events, even if the Court were to vacate some of the FCC’s ICC
rules, other rules as to which the FCC’s authority is upheld should not be vacated.
See Iowa Utils. Bd., 120 F.3d at 800 n.21 (declining to vacate rules authorized by
the FCC’s independent authority over wireless traffic under § 332).
19

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 33
the former ICC regime. In short, “[t]he egg has been scrambled and there is no
apparent way to restore the status quo ante.” Milk Train, Inc. v. Veneman, 310
F.3d 747, 756 (D.C. Cir. 2002) (internal quotations omitted).
Given the passage of time and the scope of the reforms at issue, vacating
any of the ICC rules these petitioners challenge would cause massive industry
disruption and regulatory uncertainty. See MCI Telecomms. Corp. v. FCC, 143
F.3d 606, 609 (D.C. Cir. 1998) (per curiam) (“One factor we consider in exercising
. . . discretion [to remand without vacating] is the potential for disruption that might
be caused by vacating the order.”). Accordingly, if the Court were to grant the
petitions for review in any respect, it should remand without vacating the ICC
regulations.

B.

The USF Reforms Are Severable from the ICC Reforms

However this Court resolves the separate challenges to the FCC’s USF
reforms, it should not vacate the ICC regulations promulgated in the Order.
The Court “may partially set aside a regulation if the invalid portion is severable.”
Arizona Pub. Serv. Co. v. EPA, 562 F.3d 1116, 1122 (10th Cir. 2009). A
regulation is severable if “the severed parts ‘operate entirely independently of one
another’ ” and “the circumstances indicate the agency would have adopted the
regulation even without the faulty provision.” Id. (quoting Davis County Solid
Waste Mgmt. v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997) (per curiam)).
20

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 34
First, the FCC’s ICC reforms “operate entirely independently of ” the
agency’s separate decision to condition receipt of USF subsidies on deployment
of broadband networks. To be sure, the ICC reforms will result in some lost ICC
revenue for carriers, and the agency suggested that the availability of USF support
may in some circumstances serve as a backstop for carriers to recover their costs.
See Order ¶¶ 34, 742 n.1294, 757 (JA___, ___, ___). But the availability of USF
funding to replace lost ICC revenue does not depend on the validity of the aspects
of the FCC’s USF reforms that petitioners principally challenge here — namely,
the broadband condition and certain reductions in USF support provided for in the
Order. See generally Pet’rs Joint USF Br. If the FCC needed to make adjustments
to USF funding to accommodate a ruling from this Court on petitioners’ challenges
to the USF reforms, it could do so.
Second, there is no “ ‘substantial doubt’ that the agency would have
adopted” the ICC reforms on their own. Davis County, 108 F.3d at 1459. The
Order expressly states the agency’s “intent that each of the rules adopted herein
shall be severable” because “each of the separate universal service and intercarrier
compensation reforms . . . serve[s] a particular function toward the goal of
ubiquitous voice and broadband service.” Order ¶ 1405 (JA___).
21

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 35

CONCLUSION

For the foregoing reasons, and those set forth in the FCC’s brief, the Court
should reject the challenges presented in the Joint Intercarrier Compensation Brief.
Respectfully submitted,
/s/ Jonathan E. Nuechterlein
/s/ Scott H. Angstreich

JONATHAN E. NUECHTERLEIN
SCOTT H. ANGSTREICH
HEATHER M. ZACHARY
BRENDAN J. CRIMMINS
KELLY P. DUNBAR
JOSHUA D. BRANSON
WILMER CUTLER PICKERING
KELLOGG, HUBER, HANSEN, TODD,
HALE AND DORR LLP
EVANS & FIGEL, P.L.L.C.
1875 Pennsylvania Avenue, N.W.
1615 M Street, N.W., Suite 400
Washington, D.C. 20006
Washington, D.C. 20036
(202) 663-6000
(202) 326-7900
(jon.nuechterlein@wilmerhale.com)
(sangstreich@khhte.com)
CATHY CARPINO
MICHAEL E. GLOVER
GARY L. PHILLIPS
CHRISTOPHER M. MILLER
PEGGY GARBER
CURTIS L. GROVES
AT&T SERVICES, INC.
VERIZON
1120 20th Street, N.W.
1320 North Courthouse Road, 9th Floor
Washington, D.C. 20036
Arlington, Virginia 22201
(202) 457-3058
(703) 351-3071
Counsel for AT&T Inc.
Counsel for Verizon and Verizon Wireless
/s/ David E. Mills

DAVID E. MILLS
J.G. HARRINGTON
DOW LOHNES PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036-6802
(202) 776-2000
(dmills@dowlohnes.com)
Counsel for Cox Communications, Inc.
22

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 36
/s/ Carl W. Northrop
CARL W. NORTHROP
MARK A. STACHIW
MICHAEL LAZARUS
GENERAL COUNSEL, SECRETARY
ANDREW MORENTZ
& VICE CHAIRMAN
TELECOMMUNICATIONS LAW
METROPCS COMMUNICATIONS, INC.
PROFESSIONALS PLLC
2250 Lakeside Blvd.
875 15th Street, N.W., Suite 750
Richardson, Texas 75082
Washington, D.C. 20005
(214) 570-5800
(202) 789-3120
(cnorthrop@telecomlawpros.com)

Counsel for MetroPCS Communications, Inc.
/s/ Howard J. Symons
RICK CHESSEN
HOWARD J. SYMONS
NEAL M. GOLDBERG
ROBERT G. KIDWELL
STEVEN MORRIS
ERNEST C. COOPER
JENNIFER MCKEE
MINTZ LEVIN COHN FERRIS
THE NATIONAL CABLE &
GLOVSKY AND POPEO, P.C.
TELECOMMUNICATIONS
701 Pennsylvania Avenue, N.W.
ASSOCIATION
Suite 900
25 Massachusetts Avenue, N.W.
Washington, D.C. 20004
Suite 100
(202) 434-7300
Washington, D.C. 20001
(hjsymons@mintz.com)
(202) 222-2445
Counsel for NCTA
/s/ David H. Solomon
DAVID H. SOLOMON
L. CHARLES KELLER
WILKINSON BARKER KNAUER, LLP
2300 N Street, N.W.
Suite 700
Washington, D.C. 20037
(202) 783-4141
(dsolomon@wbklaw.com)
Counsel for T-Mobile USA, Inc.
23

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 37
/s/ Christopher J. Wright
CHRISTOPHER J. WRIGHT
BRENDAN KASPER
BRITA D. STRANDBERG
SENIOR REGULATORY COUNSEL
WILTSHIRE & GRANNIS LLP
VONAGE HOLDINGS CORPORATION
1200 18th Street, N.W.
23 Main Street
Washington, D.C. 20036
Holmdel, New Jersey 07733
(202) 730-1300
(cwright@wiltshiregrannis.com)
Counsel for Vonage Holdings Corporation
April
24,
2013

24

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 38

CERTIFICATE OF COMPLIANCE

Certificate of Compliance With Type-Volume Limitations,

Typeface Requirements, Type Style Requirements, Privacy Redaction

Requirements, and Virus Scan

1.
This brief contains 4,863 words of the 21,400 words the Court allocated for
the briefs of intervenors in support of the FCC in its October 1, 2012 Order
Consolidating Case No. 12-9575 with Other FCC 11-161 Cases, Establishing
Windstream Briefing Schedule, and Modifying Intervenor Participation. The
intervenors in support of the FCC have complied with the type-volume limitation
of that order because their briefs, combined, contain a total of fewer than 21,400
words, excluding the parts of those briefs exempted by Fed. R. App. P.
32(a)(7)(B)(iii).
2.
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and 10th Cir. R. 32(a) and the type style requirements of Fed. R. App. P.
32(a)(6) because this brief has been prepared in a proportionally spaced typeface
using Microsoft Word 2007 in 14-point Times New Roman font.
3.
All required privacy redactions have been made.
4.
This brief was scanned for viruses with Symantec Endpoint Protection
(version 12.1.671.4971, updated on April 24, 2013) and, according to the program,
is free of viruses.
/s/ Scott H. Angstreich
Scott H. Angstreich
April 24, 2013

Appellate Case: 11-9900 Document: 01019041714 Date Filed: 04/24/2013 Page: 39

CERTIFICATE OF SERVICE

I hereby certify that on April 24, 2013, I caused the foregoing Uncited Brief
of Intervenors Supporting Respondents in Response to the Joint Intercarrier
Compensation Brief to be filed by delivering a copy to the Court via e-mail at
FCC_briefs_only@ca10.uscourts.gov. I further certify that the foregoing
document will be furnished by the Court through (ECF) electronic service to all
parties in this case through a registered CM/ECF user. This document will be
available for viewing and downloading on the CM/ECF system.
/s/ Scott H. Angstreich
Scott H. Angstreich
April 24, 2013

Note: We are currently transitioning our documents into web compatible formats for easier reading. We have done our best to supply this content to you in a presentable form, but there may be some formatting issues while we improve the technology. The original version of the document is available as a PDF, Word Document, or as plain text.

close
FCC

You are leaving the FCC website

You are about to leave the FCC website and visit a third-party, non-governmental website that the FCC does not maintain or control. The FCC does not endorse any product or service, and is not responsible for, nor can it guarantee the validity or timeliness of the content on the page you are about to visit. Additionally, the privacy policies of this third-party page may differ from those of the FCC.