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Response to Brief for ILEC, In Re: FCC 11-161, No. 11-9900 (10th Cir.)

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Released: March 20, 2013

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 1
FEDERAL RESPONDENTS’ UNCITED RESPONSE TO THE INCUMBENT LOCAL EXCHANGE CARRIER
INTERVENORS’ BRIEF IN SUPPORT OF PETITIONERS
IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

NO. 11-9900

IN RE: FCC 11-161

ON PETITIONS FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION

WILLIAM J. BAER
SEAN A. LEV
ASSISTANT ATTORNEY GENERAL
GENERAL COUNSEL


ROBERT B. NICHOLSON
PETER KARANJIA
ROBERT J. WIGGERS
DEPUTY GENERAL COUNSEL
ATTORNEYS


RICHARD K. WELCH
UNITED STATES
DEPUTY ASSOCIATE GENERAL COUNSEL
DEPARTMENT OF JUSTICE

WASHINGTON, D.C. 20530
LAURENCE N. BOURNE

JAMES M. CARR
MAUREEN K. FLOOD
COUNSEL

FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740


Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 2

TABLE OF CONTENTS


Table of Authorities.......................................................................................... ii 
Glossary ........................................................................................................... iii 
Introduction and Summary of Argument .......................................................... 1 
Argument ........................................................................................................... 2 
I. 
The Intervenors’ Challenges to the New Universal Service
Rules Lack Merit. ....................................................................................... 2 
II.  The Intervenors’ Challenges to the New Intercarrier
Compensation Rules Lack Merit. .............................................................. 4 
Conclusion ......................................................................................................... 6 
i

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 3

TABLE OF AUTHORITIES

CASES

 
Arapahoe County Pub. Airport Auth. v. FAA, 242
F.3d 1213 (10th Cir. 2001) ............................................................................ 2

STATUTES

 
47 U.S.C. §251(b)(5) ......................................................................................... 5
47 U.S.C. §251(f)(2) ......................................................................................... 5
47 U.S.C. §252(d)(2) ......................................................................................... 4
47 U.S.C. §254 .................................................................................................. 2
47 U.S.C. §254(b).............................................................................................. 3
47 U.S.C. §254(b)(5) ......................................................................................... 3
47 U.S.C. §410(c) .............................................................................................. 4
47 U.S.C. §1302 ................................................................................................ 3



ii

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 4

GLOSSARY


FCC
Federal
Communications
Commission
FCC Principal ICC Brief
Federal Respondents’ Response to the Joint
ICC Principal Brief of Petitioners
FCC Principal USF Brief
Federal Respondents’ Response to the Joint
USF Principal Brief of Petitioners
ICC
Intercarrier
Compensation
USF

Universal Service Fund

iii

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 5
IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

NO. 11-9900

IN RE: FCC 11-161

ON PETITIONS FOR REVIEW OF AN ORDER OF
THE FEDERAL COMMUNICATIONS COMMISSION

FEDERAL RESPONDENTS’ UNCITED RESPONSE TO THE INCUMBENT LOCAL
EXCHANGE CARRIER INTERVENORS’ BRIEF IN SUPPORT OF PETITIONERS

INTRODUCTION AND SUMMARY OF ARGUMENT

Some incumbent local exchange carriers and affiliated organizations
(collectively, “intervenors”) have intervened in support of certain petitioners
in this case. The brief filed by these intervenors merely repeats several of the
arguments that petitioners advanced in their briefs. The Federal
Communications Commission (“FCC”) does not wish to burden the Court by
repeating arguments it has made in other briefs. Therefore, in responding to
the arguments made by these intervenors, we will simply cross-reference to
other briefs where we explained why the arguments lack merit.
Insofar as the intervenors’ brief could be construed to present new
arguments that were not previously raised by any petitioner, the Court should
decline to consider any such arguments. Except in extraordinary cases,

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 6
intervenors may not enlarge the scope of a case by presenting issues that were
not raised by petitioners. Arapahoe County Pub. Airport Auth. v. FAA, 242
F.3d 1213, 1217-18 n.4 (10th Cir. 2001); see also Order Governing Motion
Practice in the Consolidated Proceedings, 10th Cir. No. 11-9900, at 6 (issued
March 13, 2012).

ARGUMENT

I.

THE INTERVENORS’ CHALLENGES TO THE NEW
UNIVERSAL SERVICE RULES LACK MERIT.

The intervenors argue that the Communications Act prohibits the FCC
from using Universal Service Fund (“USF”) subsidies to support non-
telecommunications services provided by non-telecommunications carriers.
Br. 17-18. Petitioners made the same claim in the Joint USF Brief (at 11-18).
Insofar as intervenors assert that entities that are not telecommunications
carriers and do not provide telecommunications services will receive USF
support under the new rules, that claim is not ripe and lacks merit. See FCC
Principal USF Br. 24-27. We also showed that the FCC has authority under
47 U.S.C. §254 to condition the receipt of USF subsidies on the deployment
of broadband-capable networks and the satisfaction of clearly defined
broadband public interest obligations. See FCC Principal USF Br. 12-24;
FCC Response to Wireless Carrier USF Principal Br. 9-23. In addition, we
explained that the FCC has independent authority under section 706 of the
2

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 7
Telecommunications Act of 1996, 47 U.S.C. §1302, to require recipients of
USF support to deploy broadband networks and services. See FCC Principal
USF Br. 27-30; FCC Response to Wireless Carrier USF Principal Br. 23-26.
Just like petitioners (Joint USF Br. 30-33), the intervenors maintain
that the new universal service rules fail to ensure “sufficient” funding to
“preserve and advance” universal service. Br. 13-15. As we explained in the
FCC Principal USF Brief (at 33-38), the FCC reasonably predicted that its
new rules would provide for sufficient USF support, and the agency’s
predictive judgment is entitled to deference.
The intervenors also adopt petitioners’ contentions (Joint USF Br. 36-
39) that the FCC’s benchmarking rule violates the statutory directive that
USF support be “predictable,” and that the FCC improperly delegated
authority to its Wireline Competition Bureau to implement this rule. Br. 15-
16 (citing 47 U.S.C. §254(b)(5)). In the FCC Principal USF Brief (at 40-46),
we explained that these claims are both procedurally barred and substantively
baseless.
Adopting another argument presented in the Joint USF Brief (at 53-55),
the intervenors contend that the FCC violated 47 U.S.C. §254(b) by
eliminating USF support in areas where an unsubsidized competitor offers
voice and broadband service. Br. 22-23. That contention lacks merit. See
3

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 8
FCC Principal USF Br. 58-61; FCC Response to Additional USF Issues
Principal Brief of Petitioners at 17-22.
The intervenors’ argument that the FCC violated 47 U.S.C. §410(c) by
failing to refer certain issues to a Joint Board (Br. 16-17) echoes an argument
in the Additional USF Issues Principal Brief of Petitioners (at 14-23). We
refuted it in the FCC Response to the Additional USF Issues Principal Brief
of Petitioners (at 11-17). See also FCC Principal ICC Br. 41 n.17.

II.

THE INTERVENORS’ CHALLENGES TO THE NEW
INTERCARRIER COMPENSATION RULES LACK
MERIT.

The intervenors contend that the FCC lacks statutory authority to “set a
specific rate” for intercarrier compensation (“ICC”). Br. 7-8. Petitioners
made the same argument in the Joint ICC Brief (at 28-31). We addressed that
argument in the FCC Principal ICC Brief (at 41-45), where we demonstrated
(among other things) that the Communications Act permits the use of a bill-
and-keep methodology.
The intervenors also assert that the FCC’s default bill-and-keep
methodology is inconsistent with 47 U.S.C. §252(d)(2). Br. 8-10. Petitioners
4

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 9
presented that argument in the Joint ICC Brief (at 31-38). We rebutted that
1
claim in the FCC Principal ICC Brief (at 33-37).
The intervenors reiterate petitioners’ argument (Joint ICC Br. 7-28)
that the FCC lacks authority to regulate intrastate access services under 47
U.S.C. §251(b)(5) and to preempt state regulation of intrastate access charges.
Br. 10-12. We refuted those arguments in the FCC Principal ICC Brief (at
12-22, 25-32).
Finally, the intervenors argue (Br. 19-21) – as did petitioners in the
Joint ICC Brief (at 49-57) – that the new ICC rules do not permit ILECs to
recover their “used and useful” costs. We showed in the FCC Principal ICC
Brief (at 45-54) that the claim is unfounded.

1 In a footnote (Br. 10 n.1), the intervenors adopt petitioners’ argument
(Joint ICC Br. 45-49) that the FCC lacks authority to interfere with states’
evaluation of requests for relief under 47 U.S.C. §251(f)(2). In the FCC
Principal ICC Brief (at 55-58), we explained why that assertion is unripe and
unsound.
5

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 10

CONCLUSION

The petitions for review should be dismissed in part and otherwise
denied.
Respectfully
submitted,
WILLIAM J. BAER
SEAN A. LEV
ASSISTANT ATTORNEY GENERAL
GENERAL COUNSEL


ROBERT B. NICHOLSON
PETER KARANJIA
ROBERT J. WIGGERS
DEPUTY GENERAL COUNSEL
ATTORNEYS


RICHARD K. WELCH
UNITED STATES
DEPUTY ASSOCIATE GENERAL
DEPARTMENT OF JUSTICE
COUNSEL
WASHINGTON, D.C. 20530


/s/ James M. Carr

LAURENCE N. BOURNE
JAMES M. CARR
MAUREEN K. FLOOD
COUNSEL

FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740

March 20, 2013
6

Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 11

CERTIFICATE OF COMPLIANCE

Certificate of Compliance With Type-Volume Limitations, Typeface

Requirements, Type Style Requirements, Privacy Redaction

Requirements, and Virus Scan


1.
This brief complies with the type-volume limitation of the Second Briefing
Order. It does not exceed 15% of the size of the brief to which it is responding. The
Incumbent Local Exchange Carriers’ Intervenors’ Brief was certified to be 4,476
words in length. Therefore, the FCC may file a response brief up to 5,147 words in
length. This brief contains 887 words, excluding the parts of the brief 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 filing has been prepared in a proportionally spaced typeface
using Microsoft Word 2010 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 11.0.7200.1147, updated on March 19, 2013, and according to the program
is free of viruses.




/s/ James M. Carr
James M. Carr
Counsel


March 20, 2013









Appellate Case: 11-9900 Document: 01019022585 Date Filed: 03/20/2013 Page: 12

CERTIFICATE OF SERVICE



I hereby certify that on March 20, 2013, I caused the foregoing Federal
Respondents’ Uncited Response to the Incumbent Local Exchange Carriers’
Intervenors’ 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/ James M. Carr
James M. Carr
Counsel


March 20, 2013 

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