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Response to VON Coal. Brief, In Re: FCC 11-161, 11-9900 (10th Cir.)

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Released: March 18, 2013

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 1
FEDERAL RESPONDENTS’ UNCITED RESPONSE TO THE VOICE ON THE NET COALITION, INC.
PRINCIPAL BRIEF
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: 01019020715 Date Filed: 03/18/2013 Page: 2

TABLE OF CONTENTS


Table of Authorities.......................................................................................... ii 
Glossary ............................................................................................................. v 
Issue Presented .................................................................................................. 1 
Introduction and Summary of Argument .......................................................... 1 
Argument ........................................................................................................... 5 
I. 
VON Has Waived All Of Its Claims. ......................................................... 5 
II.  The FCC Complied With The APA’s Notice Requirements. .................... 7 
III.  The FCC Reasonably Explained Why It Barred VoIP
Providers From Blocking Calls. ............................................................... 11 
IV.  The FCC Has Authority To Ban Call Blocking By VoIP
Providers. ................................................................................................. 14 
Conclusion ....................................................................................................... 20 
i

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TABLE OF AUTHORITIES

CASES

 
Aeronautical Radio, Inc. v. FCC, 928 F.2d 428
(D.C. Cir. 1991) ........................................................................................... 10
American Council on Educ. v. FCC, 451 F.3d 226
(D.C. Cir. 2006) ........................................................................................... 18
Booth v. Churner, 532 U.S. 731 (2001) ............................................................ 7
Cellnet Commc’ns, Inc. v. FCC, 149 F.3d 429 (6th
Cir. 1998) ....................................................................................................... 7
Colorado Interstate Gas Co. v. FERC, 904 F.2d
1456 (10th Cir. 1990) .................................................................................. 12
Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir.
2010) ..................................................................................................... 16, 17
Computer & Commc’ns Indus. Ass’n v. FCC, 693
F.2d 198 (D.C. Cir. 1982) ........................................................................... 15
Covad Commc’ns Co. v. FCC, 450 F.3d 528 (D.C.
Cir. 2006) ..................................................................................................... 10
FCC v. Fox Television Stations, Inc., 556 U.S. 502
(2009) .......................................................................................................... 12
FCC v. National Citizens Comm. for Broad., 436
U.S. 775 (1978) ........................................................................................... 12
Fones4All Corp. v. FCC, 550 F.3d 811 (9th Cir.
2008) ..........................................................................................................6, 7
Franklin Sav. Ass’n v. Director, Office of Thrift
Supervision, 934 F.2d 1127 (10th Cir. 1991) ......................................... 4, 12
Globalstar, Inc. v. FCC, 564 F.3d 476 (D.C. Cir.
2009) .............................................................................................................. 7
Long Island Care at Home, Ltd. v. Coke, 551 U.S.
158 (2007) ................................................................................................... 10
Lujan v. Defenders of Wildlife, 504 U.S. 555
(1992) .......................................................................................................... 14
Nat’l Cable & Telecomms. Ass’n v. Brand X
Internet Servs., 545 U.S. 967 (2005) ........................................................... 15
ii

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Nuvio Corp. v. FCC, 473 F.3d 302 (D.C. Cir. 2006) ............................... 17, 18
Omnipoint Corp. v. FCC, 78 F.3d 620 (D.C. Cir.
1996) .............................................................................................................. 7
Qwest Corp. v. FCC, 482 F.3d 471 (D.C. Cir. 2007) ....................................... 6
Sorenson Commc’ns, Inc. v. FCC, 567 F.3d 1215
(10th Cir. 2009) .........................................................................................4, 6
Sorenson Commc’ns, Inc. v. FCC, 659 F.3d 1035
(10th Cir. 2011) ............................................................................................. 5
Stilwell v. Office of Thrift Supervision, 569 F.3d 514
(D.C. Cir. 2009) ........................................................................................... 13
United States v. Midwest Video Corp., 406 U.S. 649
(1972) .......................................................................................................... 15
United States v. Southwestern Cable Co., 392 U.S.
157 (1968) .......................................................................... 15, 16, 17, 18, 20
Vonage Holdings Corp. v. FCC, 489 F.3d 1232
(D.C. Cir. 2007) ........................................................................................... 18

STATUTES

 
5 U.S.C. §553(b)(3) ......................................................................................... 10
47 U.S.C. §151 ................................................................................................ 11
47 U.S.C. §152(a) ............................................................................................ 16
47 U.S.C. §153(24).......................................................................................... 14
47 U.S.C. §153(40).......................................................................................... 16
47 U.S.C. §153(50).......................................................................................... 14
47 U.S.C. §153(53).......................................................................................... 14
47 U.S.C. §153(59).......................................................................................... 16
47 U.S.C. §154(i) ............................................................................................ 16
47 U.S.C. §201(b)............................................................................................ 15
47 U.S.C. §208 .................................................................................................. 2
47 U.S.C. §222 ................................................................................................ 18
47 U.S.C. §251(a)(1) ....................................................................................... 17
47 U.S.C. §254 ................................................................................................ 11
iii

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47 U.S.C. §255 ................................................................................................ 18
47 U.S.C. §405(a) ..........................................................................................3, 5

REGULATIONS

 
47 C.F.R. §1.773 ............................................................................................... 2
47 C.F.R. §9.5 ................................................................................................... 7

ADMINISTRATIVE DECISIONS

 
Blocking Interstate Traffic in Iowa, 2 FCC Rcd
2692 (1987) ................................................................................................. 15
Developing a Unified Intercarrier Compensation
Regime, 27 FCC Rcd 1351 (Wireline Comp. Bur.
2012) .............................................................................................................. 1
Establishing Just and Reasonable Rates for Local
Exchange Carriers, 22 FCC Rcd 11629 (Wireline
Comp. Bur. 2007) ............................................................. 2, 7, 10, 11, 12, 15
Implementation of the Telecommunications Act of
1996, 22 FCC Rcd 6927 (2007) .................................................................. 18
IP-Enabled Services, 20 FCC Rcd 10245 (2005),
pet. for review denied, Nuvio Corp. v. FCC, 473
F.3d 302 (D.C. Cir. 2006) ........................................................................... 17
IP-Enabled Services, 22 FCC Rcd 11275 (2007) ........................................... 18
Petition for Declaratory Ruling that pulver.com’s
Free World Dialup is Neither
Telecommunications Nor a Telecommunications
Service
, 19 FCC Rcd 3307 (2004) .............................................................. 14

OTHER AUTHORITIES

 
76 Fed. Reg. 49401 (Aug. 10, 2011) ................................................................. 8

iv

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GLOSSARY


Act


Communications Act of 1934
APA
Administrative
Procedure
Act
FCC
Federal
Communications
Commission
IP
Internet
Protocol
IXC
Interexchange
Carrier
LEC
Local
Exchange
Carrier
PSTN
Public
Switched Telephone Network
VoIP


Voice over Internet Protocol
VON


Voice on the Net Coalition

v

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 7
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 VOICE ON THE NET
COALITION, INC. PRINCIPAL BRIEF

ISSUE PRESENTED

Whether the Federal Communications Commission (“FCC”) lawfully
exercised its authority when it prohibited providers of Voice over Internet
Protocol (“VoIP”) service from blocking telephone calls.

INTRODUCTION AND SUMMARY OF ARGUMENT

The FCC has long prohibited telecommunications carriers from
“blocking, choking, reducing, or otherwise restricting” the transmission of
telephone calls. Developing a Unified Intercarrier Compensation Regime, 27
FCC Rcd 1351, 1352 ¶3 (Wireline Comp. Bur. 2012). These practices, which
fall under the general rubric of “call blocking,” have significant economic and
public safety consequences. “Small businesses can lose customers who get
frustrated when their calls don’t go through,” and callers with a medical or

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 8
other emergency “may be unable to reach public safety officials.” Id. at 1352
¶2.
For decades, interexchange carriers (“IXCs”) – providers of long-
distance telephone service – have paid access charges to the local exchange
carriers (“LECs”) that originate and terminate long-distance calls. See FCC
Preliminary Br. 4-5. Several years ago, in response to access charges that
they considered unreasonably high, some IXCs began to block long-distance
calls “that terminate with certain [LECs] as a form of self help to resolve
disputes concerning the access rates of these [LECs].” Establishing Just and
Reasonable Rates for Local Exchange Carriers, 22 FCC Rcd 11629, 11629
¶1 (Wireline Comp. Bur. 2007) (“Call Blocking Declaratory Ruling”). At
that time, the FCC’s Wireline Competition Bureau issued a declaratory ruling
1
reiterating the agency’s “general prohibition on call blocking.” Id.
Today, a growing number of consumers are using VoIP service to
place telephone calls. See FCC Preliminary Br. 13-14. In the order on
review, the FCC determined that intercarrier compensation obligations would
apply prospectively to VoIP calls that are exchanged with LECs over the

1 The Bureau noted that FCC “rules and regulations provide carriers with
several mechanisms to address allegations of unreasonable access charges,
including tariff investigations and informal and formal complaints.” Id. at
11629 ¶1 (citing 47 C.F.R. §1.773 and 47 U.S.C. §208).
2

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public switched telephone network (“PSTN”). Connect America Fund, 26
FCC Rcd 17663, 18002 ¶933 (2011) (“Order”) (JA____, ____). The FCC
recognized that, going forward, “VoIP providers” – just like other providers
of long-distance service – may have incentives to block long-distance calls in
order to avoid paying “high access charges.” Id. ¶974 (JA____). The agency
further noted that, if a VoIP provider blocked “a call from a traditional
telephone customer to a customer of a VoIP provider, or vice versa,” it
“would deny the traditional telephone customer the intended benefits of
telecommunications interconnection under section 251(a)(1)” of the
Communications Act. Id. n.2043 (JA____). Accordingly, the FCC decided
to “prohibit blocking of voice traffic to or from the PSTN by [VoIP]
providers.” Id. ¶974 (JA____).
In challenging this decision, the Voice on the Net Coalition (“VON”)
contends that the FCC: (1) gave inadequate notice under the Administrative
Procedure Act (“APA”), Br. 9-13; (2) engaged in unreasoned
decisionmaking, Br. 13-15; and (3) exceeded its authority insofar as it
imposed a “no blocking” obligation on information services, Br. 15-19.
I. The FCC received “no opportunity to pass” on the claims presented
in VON’s brief. See 47 U.S.C. §405(a). Neither VON nor any other party
raised those issues before the FCC issued the Order, or on reconsideration.
3

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 10
VON has failed to preserve its arguments, and the Court should dismiss its
petition. Sorenson Commc’ns, Inc. v. FCC, 567 F.3d 1215, 1227-28 (10th
Cir. 2009) (“Sorenson I”).
II. In any event, the FCC satisfied its notice obligations under the APA
before it imposed a call blocking ban on VoIP providers. Under established
standards, the agency’s action was a logical outgrowth of the proposed rules
on which the FCC sought comment – specifically, its proposal to permit the
assessment of access charges on VoIP calls during a transitional period.
III. The FCC also reasonably explained why it banned the blocking of
calls by VoIP providers. The agency reasoned that, because the Order
requires VoIP providers to pay access charges during a transition period, they
might block calls to avoid paying high access charges, as other service
providers had done in the past. This reasonable predictive judgment is
entitled to this Court’s deference. Franklin Sav. Ass’n v. Director, Office of
Thrift Supervision, 934 F.2d 1127, 1145-46 (10th Cir. 1991).
IV. Regardless of whether VoIP services are classified as
“telecommunications services” or “information services” under the
Communications Act (“Act”), the FCC has authority to ban the blocking of
calls by VoIP providers. To the extent that VoIP services are
telecommunications services, VON does not dispute that the FCC may
4

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prohibit call blocking by VoIP providers as an “unjust and unreasonable”
practice under Title II of the Act. Alternatively, if VoIP services are
information services, the FCC may exercise its ancillary authority under Title
I of the Act to bar VoIP providers from blocking calls. The ban on call
blocking by VoIP providers is reasonably ancillary to the FCC’s effective
performance of its Title II duties to ensure the reliability of the nation’s
telecommunications network. Without such a ban, a telecommunications
carrier that is barred from blocking calls under Title II could evade that
restriction by asking an affiliated VoIP provider to block calls.

ARGUMENT

I.

VON HAS WAIVED ALL OF ITS CLAIMS.

“The filing of a reconsideration petition” with the FCC “is ‘a condition
precedent to judicial review … where the party seeking such review … relies
on questions of fact or law upon which the [FCC] … has been afforded no
opportunity to pass.’” Sorenson Commc’ns, Inc. v. FCC, 659 F.3d 1035,
1044 (10th Cir. 2011) (“Sorenson II”) (quoting 47 U.S.C. §405(a)). The FCC
received no “opportunity to pass” on any of the issues raised in VON’s brief.
And neither VON nor any other party petitioned for FCC reconsideration of
the ban on call blocking by VoIP providers. Consequently, section 405 of the
5

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Communications Act precludes judicial review of VON’s claims. See id. at
1044, 1048 n.8; Sorenson I, 567 F.3d at 1227-28.
VON alleges that the agency gave no prior notice that it intended to
ban call blocking by VoIP providers. Br. 9-13. Even if that were correct –
and it is not (see Part II below) – VON was still obliged to present its claims
to the FCC before bringing them to court. “[E]ven when a petitioner has no
reason to raise an argument until the FCC issues an order that makes the issue
relevant, the petitioner must file a petition for reconsideration with the
[agency] before it may seek judicial review.” Qwest Corp. v. FCC, 482 F.3d
471, 474 (D.C. Cir. 2007) (internal quotation marks omitted). This
exhaustion requirement is designed “to ‘afford the [FCC] the initial
opportunity to correct errors in its decision or the proceeding leading to
decision.’” Fones4All Corp. v. FCC, 550 F.3d 811, 818 (9th Cir. 2008)
(quoting Qwest, 482 F.3d at 475).
For example, a deficiency in an FCC rulemaking notice may not
become apparent until after the agency promulgates rules that were not
foreshadowed by the notice. Courts thus will not consider a claim that the
FCC provided inadequate notice unless the petitioner has filed a petition for
reconsideration to give the agency a chance to address the issue. See, e.g.,
6

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Globalstar, Inc. v. FCC, 564 F.3d 476, 483-85 (D.C. Cir. 2009); Cellnet
2
Commc’ns, Inc. v. FCC, 149 F.3d 429, 442-43 (6th Cir. 1998).

II.

THE FCC COMPLIED WITH THE APA’S NOTICE
REQUIREMENTS.

In a 2007 order, the FCC’s Wireline Competition Bureau made clear
that carriers may not block phone calls to avoid paying intercarrier
compensation. Call Blocking Declaratory Ruling, 22 FCC Rcd at 11631-32
¶¶5-7. Until recently, however, the FCC had never expressly resolved
whether intercarrier compensation obligations apply to interconnected VoIP
services, which enable customers “to make real-time voice calls to, and
receive calls from,” the PSTN. Connect America Fund, 26 FCC Rcd 4554,
4747 ¶612 (2011) (“2011 NPRM”) (JA____, ____); see also 47 C.F.R. §9.5
(defining “interconnected VoIP service”). This uncertainty spawned
“considerable dispute about whether, and to what extent, interconnected VoIP

2 VON may contend on reply that section 405 is inapplicable here because a
reconsideration petition would have been futile. This Court should reject any
such notion. Courts should “not read futility or other exceptions into
statutory exhaustion requirements where Congress has provided otherwise.”
Booth v. Churner, 532 U.S. 731, 741 n.6 (2001). Although the D.C. Circuit
has construed section 405 to contain a futility exception, see Omnipoint Corp.
v. FCC
, 78 F.3d 620, 635 (D.C. Cir. 1996), the Ninth Circuit has properly
concluded (in accordance with Booth) that section 405 does not permit a
futility exception because the statute does not expressly provide for one. See
Fones4All
, 550 F.3d at 818.
7

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 14
traffic is subject to existing intercarrier compensation rules.” 2011 NPRM
¶613 (JA____).
In an effort to clarify the compensation obligations associated with
interconnected VoIP calls, the FCC in 2011 sought comment on various
proposals to require interconnected VoIP providers to pay intercarrier
compensation during a transitional period (until the agency phases out
intercarrier compensation for all service providers). See 2011 NPRM ¶¶616-
619 (JA____-____); Public Notice, Further Inquiry into Certain Issues in the
Universal Service-Intercarrier Compensation Transformation Proceeding, 26
FCC Rcd 11112, 11128 (2011) (JA____, ____) (“Public Notice”) (published
at 76 Fed. Reg. 49401 (Aug. 10, 2011)). Initially, the agency considered
imposing compensation obligations solely on two-way interconnected VoIP
services (which permit customers both to make calls to, and receive calls
from, the PSTN). 2011 NPRM ¶612 (JA____). The FCC later sought
comment on a proposal that would also impose intercarrier compensation
requirements on “‘one-way’ interconnected VoIP services” (which “allow
8

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users to terminate calls to the PSTN, but not receive calls from the PSTN, or
3
vice versa”). Public Notice, 26 FCC Rcd at 11128 n.57 (JA____).
In the Order, the FCC established prospective intercarrier
compensation obligations for “VoIP-PSTN” traffic. Order ¶¶940-975
(JA____-____). It defined “VoIP-PSTN traffic” as “traffic exchanged over
PSTN facilities that originates and/or terminates in IP [i.e., Internet Protocol]
format.” Id. ¶940 (JA____) (internal quotation marks omitted). Applying
this definition, the agency imposed intercarrier compensation requirements on
both “one-way” and “two-way” interconnected VoIP services. Id. ¶941
4
(JA____).
The FCC also declared that VoIP providers subject to the new
intercarrier compensation rules may not block VoIP calls. Order ¶¶973-974
(JA____-____). VON argues that the agency took this action without
providing the notice required by the APA. Br. 9-13. This argument is
baseless.

3 VON observes that “[t]he term ‘one-way interconnected VoIP’ is not
defined in the Act or any FCC rule and was not used in the [2011 NPRM].”
Br. 3. But VON does not dispute that, in the Public Notice (which was
published in the Federal Register), the FCC clearly explained what it meant
by “one-way interconnected VoIP.”
4 The FCC emphasized that these obligations are “transitional.” Eventually,
VoIP-PSTN traffic – like all other intercarrier compensation traffic – “will be
subject to a bill-and-keep framework.” Order ¶933 (JA____).
9

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The APA generally requires that before an agency adopts a rule, it must
provide notice of “either the terms or substance of the proposed rule or a
description of the subjects and issues involved.” 5 U.S.C. §553(b)(3). To
satisfy this requirement, “[a]n agency’s final rule need only be a ‘logical
outgrowth’ of its notice.” Covad Commc’ns Co. v. FCC, 450 F.3d 528, 548
(D.C. Cir. 2006); see also Long Island Care at Home, Ltd. v. Coke, 551 U.S.
158, 174 (2007). The logical outgrowth test is satisfied if it was “reasonably
foreseeable” that the agency would take the action it did. Long Island Care,
551 U.S. at 175; see also Covad, 450 F.3d at 548 (asking whether parties
“should have anticipated the agency’s final course”) (internal quotation marks
omitted); Aeronautical Radio, Inc. v. FCC, 928 F.2d 428, 445-46 (D.C. Cir.
1991).
The rule at issue here passes that test. Given the close connection
between the imposition of access charges and the incentive to block calls, it
was reasonably foreseeable that, if the FCC decided to require access charge
payments for VoIP calls, it would bar VoIP providers from blocking such
calls in order to avoid access charges. Previously, the FCC’s Wireline
Competition Bureau had ruled that all carriers subject to intercarrier
compensation obligations are prohibited from blocking calls to evade those
obligations. Call Blocking Declaratory Ruling, 22 FCC Rcd at 11631-32
10

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¶¶5-7; see also 2011 NPRM ¶654 (JA____). Once the agency made clear that
VoIP providers must pay access charges, it was reasonable to assume that the
FCC would also act to prevent circumvention of that requirement (and the
endangerment of public safety) through call blocking.

III. THE FCC REASONABLY EXPLAINED WHY IT BARRED

VOIP PROVIDERS FROM BLOCKING CALLS.

The “ubiquity and reliability of the nation’s telecommunications
network” are critical to ensuring the nationwide availability of dependable
telephone service – one of “the explicit goals of the Communications Act.”
Call Blocking Declaratory Ruling, 22 FCC Rcd at 11629 ¶1 (citing 47 U.S.C.
§§151, 254). The FCC has long been “concerned that call blocking may
degrade the reliability” of the PSTN. Id. at 11631 ¶5; see also Order ¶973
(JA____). Accordingly, the FCC has barred call blocking “as a means of
‘self-help’ to address perceived unreasonable intercarrier compensation
charges.” Order ¶973 (JA____); see also Call Blocking Declaratory Ruling,
22 FCC Rcd at 11629 ¶1.
The FCC’s actions here were consistent with this established policy.
The agency explained that the prohibition on call blocking by VoIP providers
was necessary because VoIP providers – like other providers of telephone
service – “could have incentives” to block certain calls “in an effort to avoid
high access charges.” Order ¶974 (JA____).
11

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That judgment was eminently reasonable. Experience showed that, in
the absence of an express prohibition on call blocking, providers of wireline
and wireless telephone service blocked calls “to resolve disputes concerning
… access rates” they deemed unreasonable. Call Blocking Declaratory
Ruling, 22 FCC Rcd at 11629 ¶1. The FCC’s prediction that VoIP providers
might engage in the same conduct was based on the agency’s “knowledge of
the industry” and “common sense.” See Colorado Interstate Gas Co. v.
FERC, 904 F.2d 1456, 1463 n.14 (10th Cir. 1990) (internal quotation marks
omitted). “[E]ven in the absence of evidence, the agency’s predictive
judgment (which merits deference) makes entire sense.” FCC v. Fox
Television Stations, Inc., 556 U.S. 502, 521 (2009); see also Franklin Sav.
Ass’n, 934 F.2d at 1145-46.
Moreover, when the FCC makes a predictive judgment within its area
of expertise, “complete factual support in the record … is not possible or
required.” FCC v. National Citizens Comm. for Broad., 436 U.S. 775, 814
(1978). Therefore, contrary to VON’s assertion (Br. 13), the agency was not
required “to articulate an explanation grounded in … record evidence.”
The FCC did not ban call blocking by VoIP providers because there
was evidence that VoIP calls previously had been blocked. Rather, the
agency was concerned that VoIP providers would block calls in the future,
12

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after they became subject to the Order’s intercarrier compensation
obligations. “[A]gencies can, of course, adopt prophylactic rules to prevent
potential problems before they arise. An agency need not suffer the flood
before building the levee.” Stilwell v. Office of Thrift Supervision, 569 F.3d
514, 519 (D.C. Cir. 2009).
Although VON asserts that the FCC “merely speculated” that VoIP
providers would block calls (Br. 14), VON itself suggested – in comments
submitted for the record – that VoIP providers might resort to call blocking if
the FCC required them to pay access charges. See VON Comments, Apr. 1,
2011, at 4-5 (JA____-____) (if VoIP providers became subject to access
charges, “interconnected VoIP providers offering products integrated into
websites” could choose to “develop specific technology to prevent rural
Americans (and others living in areas with high access rates) from accessing
these innovative technologies or communicating with their online
counterparts”).
Indeed, VON’s legal challenge to the call blocking ban amounts to a
tacit admission that VON’s members wish to preserve their ability to block
calls in the future. If VON’s members had no intention of blocking calls,
VON could not establish that its members were injured by the call blocking
13

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ban – a prerequisite to Article III standing. See Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992).

IV.

THE FCC HAS AUTHORITY TO BAN CALL BLOCKING
BY VOIP PROVIDERS.

VON contends that the FCC exceeded its statutory authority insofar as
its ban on call blocking applies to “information services.” Br. 15-19. That is
incorrect.
The FCC has not yet decided whether VoIP services that are exchanged
with LECs over the PSTN should be classified as “telecommunications
5
services” or “information services” under the Communications Act. See
6
Order ¶974 & n.2042 (JA____).

5 The Act defines “telecommunications service” as “the offering of
telecommunications for a fee directly to the public, or to such classes of users
as to be effectively available directly to the public, regardless of the facilities
used.” 47 U.S.C. §153(53). “Telecommunications” means “the transmission,
between or among points specified by the user, of information of the user’s
choosing, without change in the form or content of the information as sent
and received.” Id. §153(50). The Act defines “information service” as “the
offering of a capability for generating, acquiring, storing, transforming,
processing, retrieving, utilizing, or making available information via
telecommunications.” Id. §153(24).
6 The Order concerns only VoIP services that are exchanged with LECs
over the PSTN. See Order ¶940 (JA____-____). While VON is correct that
the FCC has found one particular type of VoIP service to be an information
service (Br. 6), that service was not exchanged with LECs over the PSTN.
See Petition for Declaratory Ruling that pulver.com’s Free World Dialup is
Neither Telecommunications Nor a Telecommunications Service
, 19 FCC
Rcd 3307 (2004).
14

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If the FCC ultimately determines that the VoIP services subject to the
call blocking ban are telecommunications services, it would have authority to
ban VoIP call blocking as “an unjust and unreasonable practice” under 47
U.S.C. §201(b). Order ¶973 (JA____) (quoting Call Blocking Declaratory
Ruling, 22 FCC Rcd at 11631 ¶5). Indeed, it has banned call blocking by
providers of telecommunications services for decades. See, e.g., Blocking
Interstate Traffic in Iowa, 2 FCC Rcd 2692 (1987).
If the FCC ultimately determines that the affected VoIP services are
information services, it still would have authority to ban the blocking of VoIP
calls “under its Title I ancillary jurisdiction.” See Nat’l Cable & Telecomms.
Ass’n v. Brand X Internet Servs., 545 U.S. 967, 976, 996 (2005) (“Brand X”).
Title I of the Communications Act empowers the FCC to take measures that
are “reasonably ancillary to the effective performance of the [FCC’s] various
responsibilities” under the Act. United States v. Southwestern Cable Co., 392
U.S. 157, 178 (1968); see also United States v. Midwest Video Corp., 406
U.S. 649, 659-70 (1972). Specifically, the Supreme Court has recognized
that the FCC may “impose special regulatory duties on [information service
providers] under its Title I ancillary jurisdiction.” Brand X, 545 U.S. at 996.
See also Computer & Commc’ns Indus. Ass’n v. FCC, 693 F.2d 198, 213
(D.C. Cir. 1982) (the FCC may exercise ancillary jurisdiction over enhanced
15

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 22
data services, which “are not within the reach of Title II,” in order to ensure
compliance with the Title II requirement that rates for wire communications
services be “just and reasonable”). Section 4(i) of the Act, moreover,
authorizes the FCC to “perform any and all acts, make such rules and
regulations, and issue such orders, not inconsistent with this [Act], as may be
necessary in the execution of its functions.” 47 U.S.C. §154(i). The FCC’s
ban on call blocking by VoIP providers falls well within this Title I authority.
Contrary to VON’s assertion (Br. 16-18), the agency’s action here
satisfied the Supreme Court’s test for the FCC’s proper exercise of its
ancillary authority, see Southwestern Cable, 392 U.S. at 178, as well as the
two-part test that the D.C. Circuit recently applied in Comcast Corp. v. FCC,
600 F.3d 642, 646 (D.C. Cir. 2010).
First, the FCC’s “general jurisdictional grant under Title I [of the
Communications Act] covers the regulated subject.” Comcast, 600 F.3d at
646 (internal quotation marks omitted). Title I gives the FCC jurisdiction
over interstate “communication by wire or radio.” 47 U.S.C. §152(a). The
VoIP services at issue here fit the Act’s definitions of “radio
communication,” 47 U.S.C. §153(40), and “wire communication,” id.
§153(59), because they “involve transmission of [voice] by aid of wire, cable,
or other like connection and/or transmission [of voice] by radio.” Order ¶954
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Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 23
(JA____) (internal quotation marks omitted). Those services are therefore
“covered by the [FCC’s] general jurisdictional grant” under Title I. IP-
Enabled Services, 20 FCC Rcd 10245, 10262 ¶28 (2005), pet. for review
denied, Nuvio Corp. v. FCC, 473 F.3d 302 (D.C. Cir. 2006).
Second, the ban on call blocking by VoIP providers is “reasonably
ancillary to the [FCC’s] effective performance of its statutorily mandated
responsibilities.” Comcast, 600 F.3d at 646 (internal quotation marks
omitted); see also Southwestern Cable, 392 U.S. at 178. The agency
explained that, if it did not ban call blocking by VoIP providers, a
telecommunications carrier that is barred from blocking calls by section 201
of the Act could circumvent that constraint by partnering with a VoIP
provider and asking the VoIP provider to block calls. Order n.2043
(JA____). The FCC further noted that, if a VoIP provider blocked “a call
from a traditional telephone customer to a customer of a VoIP provider, or
vice versa,” it “would deny the traditional telephone customer the intended
benefits of telecommunications interconnection under section 251(a)(1)” of
the Act. Id. (citing 47 U.S.C. §251(a)(1)).
The use of ancillary authority is especially appropriate here because
consumers regard VoIP services “as substitutes for traditional voice telephone
services.” Order ¶63 (JA____). Likewise, the FCC treats interconnected
17

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 24
VoIP service like traditional telephone service in several respects. Like
providers of traditional phone service, interconnected VoIP providers must
7
8
provide 911 service, contribute to the federal Universal Service Fund, and
ensure that their networks can be accessed by authorized law enforcement
9
officials to conduct electronic surveillance. Moreover, the FCC has
previously relied on Title I authority to impose other obligations on VoIP
providers to ensure the achievement of such important Title II mandates as
protecting consumer privacy and providing telecommunications access to
10
disabled persons. The FCC’s action here to ensure that consumers’ calls are
completed fits comfortably within this line of decisions.
Supreme Court precedent supports the FCC’s reliance on its ancillary
authority to ban call blocking by VoIP providers. In Southwestern Cable,
392 U.S. at 167-80, the Court upheld the FCC’s authority to regulate cable
television in the 1960s, even though the Communications Act at that time

7 See Nuvio, 473 F.3d at 303-09.
8 See Vonage Holdings Corp. v. FCC, 489 F.3d 1232 (D.C. Cir. 2007).
9 See American Council on Educ. v. FCC, 451 F.3d 226 (D.C. Cir. 2006).
10 See, e.g., IP-Enabled Services, 22 FCC Rcd 11275, 11286-89 ¶¶21-24
(2007) (extending to VoIP providers the disability access requirements of 47
U.S.C. §255); Implementation of the Telecommunications Act of 1996, 22
FCC Rcd 6927, 6954-56 ¶¶54-57 (2007) (requiring VoIP providers to comply
with the consumer privacy safeguards of 47 U.S.C. §222).
18

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 25
made no mention of cable television. Deferring to the agency’s judgment that
the unregulated growth of cable television might “destroy or seriously
degrade the service offered by … local broadcasting stations,” id. at 175
(internal quotation marks omitted), the Court held that the FCC’s regulation
of cable television was “reasonably ancillary to the effective performance of
the [FCC’s] various responsibilities for the regulation of television
broadcasting.” Id. at 178. Thus, by regulating a service (cable television)
over which the agency had no express statutory authority, the FCC was able
to carry out its responsibility to regulate a service (broadcasting) over which
it unquestionably had authority.
Here, as in Southwestern Cable, the FCC reasonably concluded that it
could not effectively discharge its duty to regulate traditional communication
services under the Act unless it exercised its ancillary authority to regulate
emerging communication services. Just as the unchecked growth of cable
television in the 1960s threatened to degrade local television broadcasting,
the prospect of call blocking by VoIP providers under the new intercarrier
compensation rules created the possibility of circumvention of the Title II
prohibition on call blocking and “risk[ed] degradation of the country’s
telecommunications network.” Order ¶973 (JA____) (internal quotation
marks omitted). Thus, the ban on call blocking by VoIP providers was
19

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 26
“reasonably ancillary to the effective performance of the [FCC’s] various
responsibilities” under Title II to ensure the widespread availability of
reliable telephone service. See Southwestern Cable, 392 U.S. at 178.

CONCLUSION

The Court should dismiss VON’s petition for review because VON has
waived its claims. If the Court reaches the merits, it should deny VON’s
petition for review.
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 18, 2013
20

Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 27

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
Uncited Voice On The Net Coalition, Inc. Principal Brief was certified to be 4,094
words in length. Therefore, the FCC may file a response brief up to 4,708 words in
length. This brief contains 4,088 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 17, 2013, and according to the program
is free of viruses.




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


March 18, 2013









Appellate Case: 11-9900 Document: 01019020715 Date Filed: 03/18/2013 Page: 28

CERTIFICATE OF SERVICE



I hereby certify that on March 18, 2013, I caused the foregoing Federal
Respondents’ Uncited Response to the Voice on the Net Coalition, Inc. 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 18, 2013 

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