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Ronan Telephone Co. v. FCC & USA, No. 05-71995 (9th Cir.)

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Released: July 17, 2012

BRIEF FOR RESPONDENTS
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

NO. 05-71995

RONAN TELEPHONE COMPANY AND HOT SPRINGS
TELEPHONE COMPANY,
PETITIONER,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.

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

JOSEPH F. WAYLAND
SEAN A. LEV
ACTING 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
LAUREL R. BERGOLD

COUNSEL

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


TABLE OF CONTENTS


Table of Authorities......................................................................................... iv
STATEMENT OF ISSUES PRESENTED .......................................................1
JURISDICTIONAL STATEMENT..................................................................3
STATUTES AND REGULATIONS ................................................................4
COUNTERSTATEMENT OF THE CASE ......................................................4
COUNTERSTATEMENT OF THE FACTS....................................................6
I.
STATUTORY AND REGULATORY BACKGROUND.........................6
A. Pre-1996 Statutory and Regulatory Framework ...................................6
B. Telecommunications Act of 1996 .........................................................9
C. Local Competition Order ....................................................................13
II. THIS PROCEEDING ..............................................................................15
A. Proceedings Leading to the T-Mobile Order on Review. ...................15
B. The T-Mobile Order on Review..........................................................17
III. THE USF/ICC TRANSFORMATION ORDER .....................................20
IV. SUBSEQUENT DEVELOPMENTS.......................................................25
SUMMARY OF ARGUMENT ......................................................................25
ARGUMENT ..................................................................................................29
I.
THE COURT SHOULD REVIEW THE T-MOBILE
ORDER
UNDER DEFERENTIAL STANDARDS OF
REVIEW. .................................................................................................29
II. PETITIONERS’ CHALLENGE TO THE LAWFULNESS
OF SECTION 20.11(d) LACKS MERIT. ...............................................32
i

A. The FCC Adopted Section 20.11(d) as a Lawful Exercise
Of its Authority Under Sections 201 and 332(c) of the
Act. ......................................................................................................32
B. Petitioners’ Argument Concerning Section 257(b)(7) Is
Statutorily Barred And, In Any Event, Lacks Merit. ..........................35
C. Section 20.11 Leaves Intact the Section 251(f)(1) Rural
Exemption. ..........................................................................................38
D. Section 20.11(d) Is Reasonable...........................................................41
III. PETITIONERS’ CLAIM THAT THE FCC
UNLAWFULLY GAVE INCUMBENT LECs THE RIGHT
TO COMPEL NEGOTIATIONS AND ARBITRATIONS
IS NOT PROPERLY BEFORE THE COURT AND
LACKS MERIT. ......................................................................................44
IV. PETITIONERS’ CLAIM THAT THE FCC ERRED IN
NOT GIVING COMPETITIVE LECs A RIGHT TO
COMPEL NEGOTIATIONS AND ARBITRATIONS IS
NOT PROPERLY BEFORE THE COURT AND LACKS
MERIT. ....................................................................................................46
A. The Court Has No Jurisdiction to Entertain Petitioners’
Argument.............................................................................................46
1.
Section 405 Bars Petitioners’ Claim. ..............................................46
2.
Petitioners’ Lack Article III Standing.............................................48
3.
Petitioners Do Not Challenge Final Agency Action,
And Their Challenge Is Unripe. ......................................................49
B. The Commission Was Not Required to Give Competitive
LECs the Right to Compel Negotiations and Arbitrations
In the Rulemaking on Review. ............................................................51
V. PETITIONERS’ CLAIM THAT THE FCC VIOLATED
THE NOTICE-AND-COMMENT REQUIREMENTS OF
THE APA FAILS.....................................................................................53
ii

VI. THE COURT LACKS JURISDICTION TO CONSIDER
PETITIONERS’ CHALLENGE TO THE BILL-AND-
KEEP REGIME. ......................................................................................56
CONCLUSION ...............................................................................................59
iii

TABLE OF AUTHORITIES

CASES


Abbott Labs. v. Gardner, 387 U.S. 136 (1967) ...............................................51
Alma Commc’ns Co. v. Missouri Pub. Serv.
Comm’n, 490 F.3d 619 (8th Cir. 2007) .......................................................13
Am. Civil Liberties Union v. FCC, 523 F.2d 1344
(9th Cir. 1975) .............................................................................................29
Arizona Christian Sch. Tuition Org. v. Winn, 131
S. Ct. 1436 (2011) .......................................................................................48
AT&T Commc’ns of Cal., Inc. v. Pac-West, 651
F.3d 980 (9th Cir. 2011)..............................................................................10
AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366
(1999) .................................................................................................. passim
Barnum Timber Co. v. EPA, 633 F.3d 894 (9th Cir.
2011)............................................................................................................44
Bell v. New Jersey, 461 U.S. 773 (1983)..........................................................50
Booth v. Churner, 532 U.S. 731 (2001) ..........................................................43
Branch v. FCC, 824 F.2d 37 (D.C. Cir. 1987)................................................44
Cablevision Sys. Corp. v. FCC, 649 F.3d 695 (D.C.
Cir. 2011).....................................................................................................35
California Ass'n of Physically Handicapped, Inc. v.
FCC, 778 F.2d 823 (D.C. Cir. 1985)...........................................................44
Cassell v. FCC, 154 F.3d 478 (D.C. Cir. 1998)..............................................56
Cellular Phone Taskforce v. FCC, 205 F.3d 82 (2d
Cir. 2000).....................................................................................................52
Chevron USA Inc. v. Natural Res. Def. Council, 467
U.S. 837 (1984) .................................................................................... 30, 31
Cincinnati Bell Tel. Co. v. FCC, 69 F.3d 752 (6th
Cir. 1995).....................................................................................................52
City of Angels v. FCC, 745 F.2d 656 (D.C. Cir.
1984)............................................................................................................51
iv

City of Brookings Mun. Tel. Co. v. FCC, 822 F.2d
1153 (D.C. Cir. 1987)..................................................................................56
Clark v. City of Lakewood, 259 F.3d 996 (9th Cir.
2001)............................................................................................................45
Coal. for a Healthy California v. FCC, 87 F.3d 383
(9th Cir. 1996) .............................................................................................49
Confederated Tribes and Bands of the Yakama
Nation v. United States, 296 Fed. Appx. 566 (9th
Cir. 2008) .....................................................................................................51
Core v. FCC, 545 F.3d 1 (D.C. Cir. 2008)......................................................49
Farley Transp. Co., Inc. v. Santa Fe Trail Transp.
Co., 778 F.2d 1365 (9th Cir. 1985) ...............................................................5
FCC v. Florida Power Corp., 480 U.S. 245 (1987) .......................................57
FCC v. Schreiber, 381 U.S. 279 (1965) ................................................... 51, 52
FirstCom, Inc. v. Qwest, 555 F.3d 669 (8th Cir.
2009)............................................................................................................10
Fones4All Corp. v. FCC, 550 F.3d 811 (9th Cir.
2008), reh. denied, 561 F.3d 1031 (9th Cir. 2009) ............................. passim
Fones4All Corp. v. FCC, 561 F.3d 1031 (9th Cir.
2009)..................................................................................................... 36, 47
Franklin v. Massachusetts, 505 U.S. 788 (1992)............................................50
Globalstar v. FCC, 564 F.3d 476 (D.C. Cir. 2009) ........................................55
Gonzales v. Oregon, 546 U.S. 243 (2006) ......................................................32
Great Falls Cmty. TV Cable v. FCC, 416 F.2d 238
(9th Cir. 1969), disapproved, Fones4All, 561
F.3d 1031 (9th Cir. 2009)............................................................................47
Horne v. Flores, 129 S.Ct. 2579 (2009)................................................... 44, 48
Iacopi v. FCC, 451 F.2d 1142 (9th Cir. 1971)................................................51
Iowa Util. Bd. v. FCC, 120 F.3d 753 (8th Cir.
1997), rev’d in part and aff’d in part, AT&T
Corp. v. Iowa Utils. Bd.
, 525 U.S. 366 (1999)....................................... 7, 32
Judulang v. Holder, 132 S. Ct. 476 (2011) .....................................................29
v

LaMadrid v. Hegstrom, 830 F.2d 1524 (9th Cir.
1987)............................................................................................................54
Louis v. Dept. of Labor, 419 F.3d 970 (9th Cir.
2005)............................................................................................................53
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)......................... 44, 48, 49
Mayo Found. For Med. Educ. And Research v.
United States, 131 S.Ct. 704 (2011)............................................................34
MCI Telecomms. Corp. v. Bell Atlantic-
Pennsylvania, 271 F.3d 491 (3d Cir. 2001) ................................................42
Nat. Cable & Telecomm. Ass’n v. Brand X Internet
Servs., 545 U.S. 967 (2005).............................................................. 6, 30, 31
Northampton Media Assoc. v. FCC, 941 F.2d 1214
(D.C. Cir. 1991)...........................................................................................43
Northwest Ecosystem Alliance v. United States Fish
& Wildlife Serv., 475 F.3d 1136 (9th Cir. 2007).........................................29
Osorio v. Mayorkas. 656 F.3d 954 (9th Cir. 2011).........................................30
Pacific Bell v. Pac West Telecomm, Inc., 325 F.3d
1114 (9th Cir. 2003) ....................................................................................41
Quick Commc’ns, Inc. v. Michigan Bell Tel. Co.,
515 F.3d 581 (6th Cir. 2008).......................................................................42
Qwest v. FCC, 252 F.3d 462 (D.C. Cir. 2001)................................................32
Redmond-Issaquah R.R. Pres. Ass’n v. STB, 223
F.3d 1057 (9th Cir. 2000)............................................................................30
Russello v. United States, 464 U.S. 16 (1983) ................................................37
Schmier v. United States Court of Appeals for the
Ninth Circuit, 279 F.3d 817 (9th Cir. 2002) ...............................................45
Toilet Goods Ass’n v. Gardner, 387 U.S. 158
(1967) ..........................................................................................................51
United States Cellular Corp. v. FCC, 254 F.3d 78
(D.C. Cir. 2001)...........................................................................................52
United States v. L.A. Tucker Truck Lines, Inc., 344
U.S. 33 (1952) .............................................................................................36
vi

United States v. Valverde, 628 F.3d 1159 (9th Cir.
2010)............................................................................................................53
Verizon Commc’ns v. FCC, 535 U.S. 467 (2002).................................... 31, 34
Verizon Maryland, Inc. v. Pub. Serv. Comm’n of
Maryland, 535 U.S. 635 (2002) ....................................................................9
Whitman v. Am. Trucking Ass’ns., 531 U.S. 457
(2001)...........................................................................................................50

ADMINISTRATIVE DECISIONS


AirTouch Cellular v. Pacific Bell, 16 FCC Rcd
13502 (2001) .................................................................................................8
Connect America Fund, Report and Order and
Further Notice of Proposed Rulemaking, 26 FCC
Rcd 17663 (2011), petitions for review pending
sub nom. In re FCC 11-161 (10th Cir., filed Dec.
18, 2011).............................................................................................. passim
CRC Communications of Maine, Inc. and Time
Warner Cable Inc. for Preemption Pursuant to
Section 253 of the Communications Act,
26 FCC
Rcd 8259 (2011) ..........................................................................................39
Developing a Unified Intercarrier Compensation
Regime, Further Notice of Proposed Rulemaking,
20 FCC Rcd 4685 (2005) ............................................................................10
Implementation of Sections 3(n) and 332 of the
Communications Act Regulatory Treatment of
Mobile Services,
Second Report and Order, 9
FCC Rcd 1411 (1994) ...................................................................................8
Implementation of the Local Competition
Provisions in the Telecommunications Act of
1996
, First Report and Order, 11 FCC Rcd 15499
(1996), aff’d in part and rev’d in part, Iowa Utils.
Bd. v. FCC
, 120 F.3d 753 (9th Cir. 1997), rev’d
in part and aff’d in part
, AT&T Corp. v. Iowa
Utils. Bd.
, 525 U.S. 366 (1999) ...................................................................14
vii

Implementation of the Local Competition
Provisions In the Telecommunications Act of
1996
, Order on Remand and Report and Order,
16 FCC Rcd 9151, 9153 n.6 (2001) ............................................................11

STATUTES AND REGULATIONS


Telecommunications Act of 1996, Pub. L. No. 104-
104, 110 Stat. 56 (1996) ................................................................................9
5 U.S.C. § 553(b).............................................................................................24
5 U.S.C. § 553(b)(3)........................................................................................53
5 U.S.C. § 553(c)...................................................................................... 24, 53
5 U.S.C. § 554(e).............................................................................................16
5 U.S.C. § 704..................................................................................................49
5 U.S.C. § 706(2)(A) .......................................................................................29
28 U.S.C. § 2342 .............................................................................................49
28 U.S.C. § 2342(1) ..........................................................................................3
47 U.S.C. § 151, et seq. .............................................................................. 6, 33
47 U.S.C. § 153(44) ........................................................................................12
47 U.S.C. § 154(i) ........................................................................ 23, 26, 45, 46
47 U.S.C. § 154(j) ...........................................................................................28
47 U.S.C. § 201 .................................................................................... 2, 19, 26
47 U.S.C. § 201(a).............................................................................................7
47 U.S.C. § 201(b)................................................................................ 6, 12, 32
47 U.S.C. § 251(a).............................................................................................9
47 U.S.C. § 251(b).............................................................................................9
47 U.S.C. § 251(b)(5)............................................................................... 10, 33
47 U.S.C. § 251(b)(5)........................................................................................2
47 U.S.C. § 251(c)...........................................................................................10
47 U.S.C. § 251(c)(1) ............................................................................... 12, 38
47 U.S.C. § 251(d)(1)......................................................................................12
47 U.S.C. § 251(f) ...........................................................................................12
viii

47 U.S.C. § 251(f)(1) ......................................................................................38
47 U.S.C. § 251(f)(1)(B) .................................................................................39
47 U.S.C. § 251(g)...........................................................................................10
47 U.S.C. § 251(h)...........................................................................................10
47 U.S.C. § 251(i) ...........................................................................................13
47 U.S.C. § 252 ...............................................................................................13
47 U.S.C. § 252(a)(1) ............................................................................... 11, 38
47 U.S.C. § 252(b)(1)......................................................................................12
47 U.S.C. § 252(b)(4)(C) ................................................................................12
47 U.S.C. § 252(d)(2)(A)(i) ............................................................................11
47 U.S.C. § 252(d)(2)(B)(i)................................................................ 11, 29, 57
47 U.S.C. § 253 .................................................................................................9
47 U.S.C. § 259(b)(7)......................................................................................35
47 U.S.C. § 332 .................................................................................... 2, 19, 26
47 U.S.C. § 332(c)(1)(B)...................................................................................7
47 U.S.C. § 402(a).............................................................................................3
47 U.S.C. § 405 ...............................................................................................47
47 U.S.C. § 405(a)................................................................................ 3, 36, 55
47 U.S.C. § 554(d)...........................................................................................16
47 C.F.R. § 1.2 ................................................................................................16
47 C.F.R. § 20.11(a) ..........................................................................................8
47 C.F.R. § 20.11(b) (revised 2011) ....................................................... passim
47 C.F.R. § 20.11(d)........................................................................................18
47 C.F.R. § 20.11(e) ........................................................................................19
47 C.F.R. § 24.202(a) ......................................................................................13
47 C.F.R. § 51.503 ..........................................................................................34
47 C.F.R. § 51.505 ..........................................................................................34
47 C.F.R. § 51.701(b)(2) .................................................................................13
47 C.F.R. § 51.713 ..........................................................................................11
ix

OTHERS


U.S. CONST. amend. V ....................................................................................57
In re FCC 11-161 (10th Cir. No. 11-9900, filed
Dec. 18, 2011) .................................................................................. 6, 25, 57



x

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

NO. 05-71995

RONAN TELEPHONE COMPANY AND HOT SPRINGS TELEPHONE
COMPANY,
PETITIONER,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.

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

BRIEF FOR RESPONDENTS

STATEMENT OF ISSUES PRESENTED

In the order on review, the Federal Communications Commission
(“FCC” or “Commission”) adopted a rule, section 20.11(d), which prohibits
local telephone companies (also known as local exchange carriers or “LECs”)
from using tariffs as a means to collect compensation from commercial
mobile radio service (“CMRS”) providers (such as cellular telephone
providers) for the transport and termination of local CMRS calls. The FCC in
that order also adopted a companion rule, section 20.11(e), which in lieu of
tariffs gives incumbent LECs (i.e., those LECs in existence in 1996) the right

to compel CMRS providers to negotiate in good faith agreements governing
payment for such calls and, if necessary, to submit to compulsory arbitration
before a state regulatory commission any disputes about such payment.
Developing a Unified Intercarrier Compensation Regime, Declaratory Ruling
and Report and Order, 20 FCC Rcd 4855 (2005) (“T-Mobile Order”)
(subsequent history omitted). Petitioners Ronan Telephone Co. (“Ronan”)
and Hot Springs Telephone Co. (“Hot Springs”) — both incumbent LECs —
seek review of the T-Mobile Order.
The issues on review are as follows:
1. Whether the FCC’s adoption of section 20.11(d) is a reasonable
exercise of its authority under sections 201, 251(b)(5), and 332(c) of the
Communications Act, 47 U.S.C. §§ 201, 251(b)(5), 332.
2. Whether the doctrines of Article III standing, exhaustion, finality,
and/or ripeness preclude the Court from entertaining petitioners’ claim that
the FCC erred by not adopting a rule giving competitive LECs (market
entrants that have emerged since 1996) the right to compel a CMRS provider
to negotiate an interconnection agreement and submit to arbitration; if not,
whether the FCC acted within its discretion by not adopting such a rule in the
T-Mobile Order, when no party had raised the issue in the administrative
proceedings leading to that order.
2

3. Whether the exhaustion requirement codified in section 405(a) of
the Communications Act, 47 U.S.C. § 405(a), bars Ronan and Hot Springs
from arguing before this Court that the FCC did not provide the notice and
the opportunity for comment required by the Administrative Procedure Act
(“APA”), when they did not raise that issue before the FCC in a petition for
administrative reconsideration; if not, whether the FCC complied with those
APA requirements in its rulemaking.
4. Whether the Court lacks jurisdiction to review the “bill-and-keep”
compensation methodology when that methodology was not adopted in the T-
Mobile Order on review in this case.

JURISDICTIONAL STATEMENT

The Court has subject matter jurisdiction over final FCC rulemaking
orders under 47 U.S.C. § 402(a) and 28 U.S.C. § 2342(1). Petitioners’
challenge is timely. As demonstrated below, however, the Court lacks
jurisdiction to entertain portions of petitioners’ challenge to the rules adopted
in the order on review because petitioners have not established Article III
standing. Some issues raised by petitioners are also barred by principles of
exhaustion and/or finality. In addition, petitioners failed to invoke the
Court’s jurisdiction to entertain their challenge to the bill-and-keep
3

compensation mechanism because that mechanism was not adopted in the
order before the Court.

STATUTES AND REGULATIONS

Relevant statutes and regulations are set out in the appendix attached to
this brief.

COUNTERSTATEMENT OF THE CASE


Many telephone calls require the collaboration of two or more carriers.
For example, when a cell phone user makes a local call to a landline phone,
the call originates on the facilities of the CMRS provider (i.e., commercial
wireless provider), which then transmits the call to the facilities of a LEC.
The LEC in turn either itself terminates the call, i.e. completes the call to the
intended recipient, or transports it to another LEC that in turn terminates the
call. See T-Mobile Order ¶ 4 (ER 3).
In 2001, the Commission initiated a comprehensive proceeding to
revise its rules governing the intercarrier compensation arrangements for calls
that are transported on the facilities of two or more telecommunications
providers. Developing a Unified Intercarrier Compensation Regime, Notice
of Proposed Rulemaking, 16 FCC Rcd 9610 (2001) (“Intercarrier
Compensation NPRM”) (SER 021). While that rulemaking was pending, a
group of CMRS providers petitioned the Commission to issue an adjudicatory
4

ruling declaring that existing federal communications law prohibited
incumbent LECs from filing tariffs with state regulatory commissions as a
means of unilaterally assessing charges on CMRS providers for the LECs’
1
role in transporting and terminating local CMRS calls.
In the T-Mobile Order, the FCC denied the CMRS providers’ petition
for declaratory ruling. But in that same order, the FCC adopted a new rule
that prospectively prohibits LECs from filing tariffs that assess charges on
CMRS providers for the transport and termination of local CMRS calls. With
tariffs no longer available as a means to collect compensation for such calls,
the FCC accordingly enacted a companion rule that gives incumbent LECs
the right to require CMRS providers to negotiate in good faith compensation
agreements for local CMRS traffic and, if necessary, to submit any resulting
disputes to compulsory arbitration before state regulatory commissions.
Petitioners Ronan and Hot Springs (both incumbent LECs) petitioned
this Court to review the T-Mobile Order. At the same time, several other

1 In contrast with an individually negotiated contract providing for intercarrier
compensation, a tariff is a schedule of charges, terms, and conditions of
service that a communications carrier unilaterally determines and files with
the FCC (for interstate service) or a state regulatory commission (for
intrastate service). Unless the regulatory agency suspends or rejects the tariff,
those rates, terms, and conditions are “binding on the parties and ha[ve] the
force of law.” Farley Transp. Co., Inc. v. Santa Fe Trail Transp. Co., 778
F.2d 1365, 1372 (9th Cir. 1985).
5

parties filed petitions for administrative reconsideration with the FCC. The
FCC denied some of the reconsideration petitions in Connect America Fund,
Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd
17663 (2011) (“USF/ICC Transformation Order”) (further administrative
history omitted), petitions for review pending sub nom. In re FCC 11-161
(10th Cir. No. 11-9900, filed Dec. 18, 2011). The FCC in that order also
adopted a bill-and-keep framework for all telecommunications traffic
exchanged with a LEC, subject to a transition period for some services.
Ronan and Hot Springs did not file a petition for review of the USF/ICC
Transformation Order.

COUNTERSTATEMENT OF THE FACTS

I.

STATUTORY AND REGULATORY BACKGROUND

A. Pre-1996 Statutory and Regulatory Framework


The Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et
seq. (“Communications Act” or “Act”), establishes the regulatory framework
governing common carrier communications services. 47 U.S.C. § 151, et seq.
Congress in that Act created the FCC to “execute and enforce [its]
provisions.” 47 U.S.C. § 151. See Nat. Cable & Telecomm. Ass’n v. Brand X
Internet Servs., 545 U.S. 967, 980 (2005). To discharge that responsibility,
section 201(b) of the Act authorizes the FCC to “prescribe such rules and
regulations as may be necessary in the public interest.” 47 U.S.C. § 201(b).
6


The Act empowers the FCC to order carriers to connect their networks
in order to complete telephone calls. For example, section 332 of the Act —
a provision specifically pertaining to mobile communications services —
directs the FCC, upon receipt of a reasonable request from a CMRS provider,
to order a common carrier to establish physical connection with that provider
pursuant to section 201(a). 47 U.S.C. § 332(c)(1)(B). Section 201(a), in turn,
authorizes the FCC “in cases where the Commission . . . finds such action
necessary or desirable in the public interest” to order common carriers to
“establish physical connections with other carriers, to establish through routes
and charges applicable thereto and the divisions of such charges, and to
establish and provide facilities and regulations for operating such through
routes.” 47 U.S.C. § 201(a). The FCC’s authority under section 332 applies
2
both to interstate and intrastate interconnections.
Exercising its authority under sections 201(a) and 332(c), the FCC in
1994 adopted rules, codified at 47 C.F.R. § 20.11, governing the
interconnection and the intercarrier compensation for calls between LECs and

2 Although section 2(b), 47 U.S.C. § 152(b), states generally that the Act is
to be construed not to give the FCC jurisdiction over intrastate
communications, Congress made an exception to that jurisdictional limitation
for matters regulated under section 332. See Iowa Util. Bd. v. FCC, 120 F.3d
753, 800 n.21 (8th Cir. 1997), rev’d in part and aff’d in part, AT&T Corp. v.
Iowa Utils. Bd.
, 525 U.S. 366 (1999).
7

CMRS providers. Implementation of Sections 3(n) and 332 of the
Communications Act Regulatory Treatment of Mobile Services, Second
Report and Order, 9 FCC Rcd 1411, 1497-98, 1515 (¶¶ 227-29, 288) (1994)
(“CMRS Second Report”). The FCC determined that LECs must provide
“reasonable and fair interconnection for all commercial mobile radio
services,” id. at 1497 (¶ 230), which it specified to be the type of
interconnection reasonably requested by a CMRS provider unless the
interconnection is not technically feasible or economically reasonable. See
47 C.F.R. § 20.11(a). The FCC also required LECs and CMRS providers to
“comply with principles of mutual compensation,” 47 C.F.R. § 20.11(b)
(revised 2011). Mutual compensation principles require a LEC to
compensate a CMRS provider for the reasonable costs the CMRS provider
incurs in terminating calls originating on that LEC’s facility; conversely, the
CMRS provider must provide comparable compensation to the LEC for the
costs of CMRS-originated calls that terminate on the LEC’s facilities. See
3
CMRS Second Report, 9 FCC Rcd at 1498 (¶ 232).

3 The FCC did not preempt the state regulation of the actual termination
rates paid by LECs and CMRS providers. AirTouch Cellular v. Pacific Bell,
16 FCC Rcd 13502, 13507 (¶ 14) (2001).

8

B. Telecommunications Act of 1996

In 1996, Congress comprehensively amended the Communications Act
to establish a new model of competition in telecommunications markets.
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996)
(“1996 Act”). The 1996 Act had important implications for LEC-CMRS
interconnection. Until 1996, states typically granted an exclusive franchise in
each local service area to the LEC that owned and operated the local
telephone network. See AT&T Corp., 525 U.S. at 371. The 1996 Act
restructured local telephone markets by preempting state and local exclusive
franchise arrangements, 47 U.S.C. § 253, and creating “a new
telecommunications regime designed to foster competition in local telephone
markets.” Verizon Maryland, Inc. v. Pub. Serv. Comm’n of Maryland, 535
U.S. 635, 638 (2002).
To facilitate the rise of competition in local telephone markets, the
1996 Act imposes certain duties on all telecommunications carriers, 47
U.S.C. § 251(a); applies additional requirements to all LECs, 47 U.S.C.
§ 251(b); and imposes still further duties on carriers, such as the petitioners
9

4
here, that are incumbent LECs, 47 U.S.C. § 251(c). Of particular relevance
here is section 251(b)(5), which requires all LECs to “establish reciprocal
compensation arrangements for the transport and termination of
5
telecommunications.” 47 U.S.C. § 251(b)(5).
Under section 252(d)(2)(A)(i), just and reasonable reciprocal
compensation charges generally are those that provide for “the mutual and
reciprocal recovery by each carrier of costs associated with the transport and
termination on each carrier’s network facilities of calls that originate on the

4 There are two types of LECs: incumbent LECs and competitive LECs.
Until the passage of the 1996 Act, the incumbent LECs provided service as
state regulated monopolies. See AT&T Commc’ns of Cal., Inc. v. Pac-West,
651 F.3d 980, 982 (9th Cir. 2011). See also 47 U.S.C. § 251(h) (defining
incumbent LEC). The incumbent LECs’ rivals are known as competitive
LECs. See FirstCom, Inc. v. Qwest, 555 F.3d 669, 673 (8th Cir. 2009).
5 For many years after passage of the 1996 Act, the transport and
termination of long-distance calls (also known as “toll” calls) were not
subject to section 251(b)(5). See USF/ICC Transformation Order, 26 FCC
Rcd at 17915-16 (¶¶ 761-63). The FCC had established a different regime of
intercarrier compensation, known as access charges, for LEC origination and
termination of long-distance calls. Developing a Unified Intercarrier
Compensation Regime,
Further Notice of Proposed Rulemaking, 20 FCC Rcd
4685, 4687-88 (¶ 5) (2005). See 47 U.S.C. § 251(g) (preserving access
charge regime until it is “explicitly superseded” by the Commission). The
FCC, in its recent USF/ICC Transformation Order, decided to supersede the
access charge regime and, subject to a transition mechanism, regulate
terminating access traffic in accordance with the section 251(b)(5)
framework. 26 FCC Rcd at 17916 (¶ 764). As used in this brief to describe
CMRS calls, the term “local” denotes those calls that were not subject to the
access charges regime.
10

network facilities of the other carrier.” 47 U.S.C. § 252(d)(2)(A)(i). Section
252(d)(2)(B)(i), however, provides that section 251(b)(5) “shall not be
construed to preclude arrangements that afford the mutual recovery of costs
through the offsetting of reciprocal obligations, including arrangements that
waive mutual recovery (such as bill-and-keep arrangements).” 47 U.S.C.
6
§ 252(d)(2)(B)(i).
Congress in the 1996 Act designed a deregulatory process that relies in
the first instance on privately negotiated agreements between connecting
carriers to set the terms for reciprocal compensation and other duties under
section 251. Section 252(a)(1) permits an incumbent LEC and a requesting
telecommunications carrier to “negotiate and enter into a binding agreement”
for intercarrier compensation without regard to the standards established in
the Act or the FCC’s implementing regulations. See 47 U.S.C. § 252(a)(1).

6 The FCC’s rules define a “[b]ill-and-keep arrangement[]” as one “in
which carriers exchanging telecommunications traffic do not charge each
other for specific transport and/or termination functions or services,” 47
C.F.R. § 51.713, but rather each carrier “recovers from its own end-users the
cost of both originating traffic that it delivers to the other network and
terminating traffic that it receives from the other network.” Implementation
of the Local Competition Provisions In the Telecommunications Act of 1996
,
Order on Remand and Report and Order, 16 FCC Rcd 9151, 9153 n.6 (2001).
In other words, instead of paying or receiving compensation from another
carrier involved in transmitting the call, the originating and terminating
carriers “bill” their own end-user customers to recover their costs and “keep”
the revenue themselves.
11

Section 251(c)(1) requires incumbent LECs, upon receiving a request for
interconnection, to negotiate the terms and conditions of an interconnection
agreement in good faith (47 U.S.C. § 251(c)(1)), although section 251(f)
7
exempts an incumbent LEC that qualifies as a “rural telephone company”
from the duties imposed on incumbent LECs under section 251(c), including
the “good faith negotiation” requirement, unless certain requirements are met
(47 U.S.C. § 251(f)). If an interconnection agreement is not reached, section
252 directs the state commission to arbitrate and resolve the dispute. Id.
§§ 252(b)(1), 252(b)(4)(C).
Congress gave both the FCC and the state public utilities commissions
roles in implementing the reciprocal compensation obligations of section 251.
Congress authorized the FCC to promulgate rules “to carry out the
‘provisions of [the Communications] Act,’ which include §§ 251 and 252.”
AT&T Corp., 525 U.S. at 378 (quoting 47 U.S.C. 201(b)). See 47 U.S.C.
§ 251(d)(1) (directing the FCC to “establish regulations to implement”
section 251). The state commissions have a complementary responsibility in
certain circumstances to arbitrate disputed issues (such as reciprocal
compensation arrangements) between incumbent LECs and other carriers and

7 A “rural telephone company” is a small telephone company operating in a
sparsely populated area that meets one or more of the four criteria set forth in
section 3(37) of the Act, 47 U.S.C. § 153(44).
12

to ensure that the resulting interconnection agreements address arbitrated
issues in compliance with the 1996 Act and the FCC’s implementing
regulations. See 47 U.S.C. § 252. Section 251(i), however, specifies that
“[n]othing in [section 251] limit[s] or otherwise affect[s] the Commission’s
authority under section 201.” 47 U.S.C. § 251(i).

C. Local Competition Order

When it adopted rules implementing sections 251 and 252, the FCC
determined that section 251(b)(5) requires LECs to establish reciprocal
compensation arrangements for the exchange of local calls with CMRS
carriers, i.e., calls to or from a CMRS provider that originate and terminate
8
within the same Major Trading Area (“MTA”). Implementation of the Local
Competition Provisions in the Telecommunications Act of 1996, First Report
and Order, 11 FCC Rcd 15499, 16014, 16016 (¶¶ 1036, 1041) (1996) (“Local
Competition Order”), aff’d in part and rev’d in part, Iowa Utils. Bd. v. FCC,

8 Whereas a “local service area” defines the boundaries for local calls on
land lines, i.e., those non-toll calls not traditionally subject to access charges,
an MTA, which is a larger area, delineates a similar regulatory approach to
wireless calls. See Alma Commc’ns Co. v. Missouri Pub. Serv. Comm’n, 490
F.3d 619, 621 (8th Cir. 2007). See 47 C.F.R. §§ 24.202(a) (defining an
MTA); 51.701(b)(2) (defining non-access telecommunications traffic as
“[t]telecommunications traffic exchanged between a LEC and a CMRS
provider that, at the beginning of the call, originates and terminates within the
same [MTA].”)
13

120 F.3d 753, rev’d in part and aff’d in part, Iowa Utils. Bd., 525 U.S. 366.
See T-Mobile Order, ¶ 3 (ER 2).
Because CMRS carriers are not LECs, the FCC determined in 1996
that CMRS carriers are “not [themselves] subject to the obligations of section
251(b).” Local Competition Order, 11 FCC Rcd at 15996 (¶ 1005).
Accordingly, under the regime adopted in the Local Competition Order,
LECs could not invoke the section 252 arbitration process to require CMRS
carriers to compensate LECs for terminating LEC-originated calls under
section 251(b)(5). See T-Mobile Order, 15 (ER 10).
The FCC, in applying sections 251 and 252 to LEC-CMRS
interconnection in the Local Competition Order, did “not find[] that section
332 jurisdiction over interconnection has been repealed by implication, or
reject[] it as an alternative basis for jurisdiction.” 11 FCC Rcd at 16005
(¶ 1023). To the contrary, the FCC expressly recognized that “section 332 in
tandem with section 201 is a basis for jurisdiction over LEC-CMRS
interconnection.” Id. The FCC “preserve[d] [its] option” to “invoke [its]
jurisdiction under section 332 to regulate LEC-CMRS interconnection rates,”
if circumstances should so warrant. Id. at 16006 (¶ 1025).
14

II.

THIS PROCEEDING

A. Proceedings Leading to the T-Mobile Order

on Review.
In 2001, the FCC initiated a comprehensive rulemaking to re-examine
“the broad universe of existing intercarrier compensation arrangements.”
Intercarrier Compensation NPRM ¶ 2 (SER 023). Several sections of that
notice of proposed rulemaking specifically addressed matters relating to the
interconnection compensation arrangements between LECs and CMRS
providers. Id., ¶¶ 78-96 (SER 048-055). Among other issues, the FCC
sought “comment on the rules [the FCC] should adopt to govern LEC
interconnection arrangements with CMRS providers, whether pursuant to
section 332 or other statutory authority.” Id., ¶ 90 (SER 053). The FCC also
invited comments on “the relationship between the CMRS interconnection
authority assigned to the Commission under sections 201 and 332, and that
granted to the states under sections 251 and 252.” Id., ¶ 86 (SER 052).
The FCC received 75 comments and 62 replies in response to its notice
of proposed rulemaking. T-Mobile Order, App. B-C & App. D (¶ 4) (ER 14-
17, 21). Among the commenting parties were incumbent LECs, competitive
LECs, CMRS providers, communications users, Internet Service Providers,
and state regulatory commissions. Id., App. B-C (ER 14-17).
15

On September 6, 2002 — while the intercarrier compensation
rulemaking was pending before the Commission — a group of CMRS
providers petitioned the FCC to issue a ruling declaring that incumbent LECs
are prohibited under existing law from filing state tariffs that establish
charges for terminating CMRS traffic. Pet. for Declaratory Ruling, filed by
T-Mobile USA, Inc., Western Wireless Corporation, Nextel Communications
9
and Nextel Partners (Sept. 6, 2002) (SER 004). The CMRS providers argued
that incumbent LECs, by filing these tariffs, have circumvented the
negotiation procedures established by sections 251 and 252 and unilaterally
have set unfair and unlawful terms and conditions for interconnection. Id. at
5, 9 (SER 011, 015). The CMRS providers asked the FCC to issue an
adjudicative order under section 5(d) of the APA, 47 U.S.C. § 554(d),
directing the incumbent LECs to withdraw any existing wireless termination
tariffs or alternatively declaring that such tariffs to be “unlawful, void and of
no effect.” Id. at ii, 1 n.2, 10-14 (SER 006, 007, 016-020).
The FCC issued a public notice incorporating the petition for
declaratory ruling into the intercarrier compensation rulemaking docket (CC

9 The FCC has adjudicatory authority to “issue a declaratory order to
terminate a controversy or remove uncertainty.” 5 U.S.C. § 554(e). See 47
C.F.R. § 1.2 (authorizing the FCC “on motion or on its own motion” to “issue
a declaratory ruling terminating a controversy or removing uncertainty.”).

16

Docket No. 01-92) and inviting interested parties to comment on the petition.
“Comment Sought on Petitions for Declaratory Ruling Regarding Intercarrier
Compensation for Wireless Traffic,” 17 FCC Rcd 19046 (2002) (“2002
Public Notice”) (SER 001). The FCC received 33 comments and 22 replies
in response to the declaratory ruling petition. See T-Mobile Order at App. C
(ER 18-19).

B. The T-Mobile Order

on Review
In the T-Mobile Order on review, the FCC took two discrete actions:
first, it exercised its adjudicatory authority by denying the petition for
declaratory ruling (T-Mobile Order, ¶¶ 9-13 (ER 6-9)) and, second, it
exercised its rulemaking power to revise its existing rules, with prospective-
only effect, governing local CMRS-LEC traffic (id., ¶¶ 14-16 (ER 9-11)).
In denying the CMRS providers’ petition for declaratory ruling, the
FCC explained that existing law had not prescribed how LECs are to satisfy
their obligation to provide reciprocal compensation for local CMRS-LEC
traffic. Id., ¶¶ 9-13 (ER 6-9). Although section 251(b)(5) and the FCC’s
implementing rules “reference an ‘arrangement’ between LECs and other
telecommunications carriers, including CMRS providers,” the FCC pointed
out that neither the statute nor its regulations “explicitly address the type of
arrangement necessary to trigger the payment of reciprocal compensation or
17

the applicable compensation regime, if any, when carriers exchange traffic
without making prior arrangements with each other.” Id., ¶ 4 (ER 3). The
FCC thus held that incumbent LECs had not been “prohibited from filing
state termination tariffs and CMRS providers [had been] obligated to accept
the terms of applicable state tariffs.” Id., ¶¶ 4, 9-10 (ER 3, 6).
At the same time, the FCC found that the silence of section 251(b)(5)
and its rules in addressing the types of arrangements that trigger payment
obligations had resulted in disputes among carriers “as to whether and how
reciprocal compensation payment obligations arise in the absence of an
agreement or other arrangement between the originating and terminating
carriers.” Id., ¶ 4 (ER 3). To “clarify the type of arrangements necessary to
trigger payment obligations,” id., ¶ 9 (ER 6), the FCC adopted a new rule,
10
now codified at 47 C.F.R. § 20.11(d), prohibiting LECs prospectively from
filing tariffs that assess charges on CMRS providers for the termination of
local CMRS traffic. T-Mobile Order, ¶ 14 (ER 10). The FCC explained that
“negotiated agreements between carriers are more consistent with the pro-
competitive process and policies reflected in the 1996 Act” than unilaterally

10 Although this rule originally was codified in 2005 at 47 C.F.R.
§ 20.11(e), we cite to this rule throughout this brief under its current
codification, 47 C.F.R. § 20.11(d).
18

established tariffed charges. Id. The FCC relied on sections 201 and 332 as
its authority to adopt this rule. Id., ¶ 14 (ER 10). See 47 U.S.C. §§ 201, 332.
The FCC explained that section 251(b)(5) obligates LECs (not CMRS
providers) to enter into reciprocal compensation arrangements and that it may
be difficult for terminating LECs to persuade CMRS providers to enter into
agreements for reciprocal compensation arrangements for local CMRS-LEC
traffic. Id., ¶ 15 (ER 10-11). The FCC noted commenters’ statements in the
record that “CMRS providers may lack incentives to engage in negotiations
to establish reciprocal compensation arrangements.” Id., ¶ 15 (ER 10-11).
The FCC therefore decided that incumbent LECs should have the same right
to compel negotiations and arbitration as CMRS carriers have under sections
251 and 252. The FCC accordingly adopted a new rule, now codified at 47
11
C.F.R. § 20.11(e), requiring a CMRS provider receiving a request from an
incumbent LEC to negotiate an interconnection agreement in good faith and,
if requested, to submit to arbitration by the state commission. Id., 16 (ER
11).
The Commission in the T-Mobile Order made no changes to the default
intercarrier compensation methodology for local CMRS traffic in section

11 Although this rule originally was codified in 2005 at 47 C.F.R.
§ 20.11(f), we cite to this rule throughout this brief under its current
codification, 47 C.F.R. § 20.11(e).
19

20.11(b). After the FCC issued the T-Mobile Order, section 20.11(b) thus
continued to require the originating carrier, whether LEC or CMRS provider,
to pay reasonable compensation to the terminating carrier with respect to calls
terminating on that carrier’s network. 47 C.F.R. § 20.11(b) (revised 2011).
See USF/ICC Transformation Order, 26 FCC Rcd at 18932 (¶ 980).

III. THE USF/ICC TRANSFORMATION ORDER

On November 18, 2011, the FCC issued the USF/ICC Transformation
Order, 26 FCC Rcd 17663, which comprehensively amended the
Commission’s rules regarding its universal service program and its
intercarrier compensation regime. Of particular relevance to this case, the
FCC: (1) adopted bill-and-keep (see n. 7, supra) as the default intercarrier
compensation methodology, subject to a transition period for some services
(id. at 17904-25, 18037-39 (¶¶ 736-81, 994-97)); (2) denied some of the
petitions for administrative reconsideration or clarification of the T-Mobile
Order (id. at 17947-55 (¶¶ 833-43)); and (3) instituted further rulemaking to
consider, among other things, whether to extend to competitive LECs the
right to require CMRS carriers to negotiate interconnection agreements in
good faith and to submit to arbitration (id. at 17955, 18119 (¶¶ 845, 1324)).
Bill-and-Keep. Subject to a transition period for some services, the
FCC in its USF/ICC Transformation Order decided that bill-and-keep should
20

be the default methodology for all intercarrier compensation traffic,” id. at
17904 (¶ 736), including local LEC-CMRS traffic, id. at 18037-38 (¶¶ 994,
996). Because “both parties generally benefit from participating in a call,”
the FCC determined that the carriers of “both parties should split the cost of
the call.” Id. at 17907 (¶ 744). The FCC rejected the argument that bill-and-
keep results in “free termination,” explaining that bill-and-keep “merely shifts
the responsibility for recovery from other carrier’s customers to the customers
that chose to purchase service from that network.” Id. at 17909 (¶ 746).
The FCC further found that bill-and-keep had “significant . . .
advantages” over other compensation methods. Id. at 17904 (¶ 738). The
FCC explained that bill-and-keep “brings market discipline to intercarrier
compensation because it ensures that the customer who chooses a network
pays the network for the services the subscriber receives.” Id. at
17905(¶ 742). The FCC found that bill-and-keep is “less burdensome” than
approaches that require the FCC or state regulators to establish separate
intercarrier termination charges because it avoids the need for “complicated,
time consuming regulatory proceedings” to determine appropriate termination
and transport charges. Id. at 17906 (¶ 743).
Because CMRS carriers generally “incur but do not collect termination
charges,” the FCC also found that bill-and-keep will benefit the consumers of
21

wireless services by reducing the cost of those services. Id. at 17909 (¶ 748).
The FCC additionally determined that the bill-and-keep framework, which
more accurately reflects the incremental cost of making a call, will increase
carrier efficiency, promote innovation, and eliminate arbitrage and
marketplace distortions. Id. at 17910, 17911-12 (¶¶ 749-50, 752-54).
Furthermore, the Commission pointed out that section 252(d)(2)(B)(i), which
explicitly permits bill-and-keep arrangements, precludes any argument that
the Commission lacks authority to adopt this form of intercarrier
compensation methodology. Id. at 17921 (¶ 774).
To implement the bill-and-keep regime for local LEC-CMRS traffic,
the FCC in the USF/ICC Transformation Order revised section 20.11(b) by
eliminating the requirement that LECs and CMRS providers comply with
“principles of mutual compensation” and replacing it with the requirement
that LECs and CMRS providers exchange such traffic “under a bill-and-keep
arrangement . . . unless they mutually agree otherwise.” Id., App. A at 18158
(amending 47 C.F.R. § 20.11(b)).
Denial of Reconsideration Petitions of the T-Mobile Order. The FCC
in the USF/ICC Transformation Order addressed some petitions for
reconsideration or clarification of the T-Mobile Order. As a threshold matter,
the FCC reaffirmed its reliance on sections 201 and 332 of the Act as its
22

authority to require CMRS providers, upon request from an incumbent LEC,
to negotiate an interconnection agreement in good faith and to submit to
compulsory arbitration. Id. at 17947-53 (¶¶ 833-42). The FCC pointed out
that those statutory provisions authorized the agency to regulate the terms of
LEC-CMRS interconnection, including the associated compensation for that
traffic, and that it had adopted section 20.11(e) pursuant to that authority. Id.
at 17948-49 (¶¶ 834-36). The FCC also found that it had authority to adopt
section 20.11(e) pursuant to section 4(i) of the Act, which empowers the
agency to, inter alia, “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); see id. at 17945, 17949-51 (¶¶ 826, 837-39)
(citing section 4(i), and explaining how its rule is necessary to enable the
agency to discharge its statutory responsibilities under sections 201, 251(b)
and 332 of the Act).
The FCC clarified that, in adopting section 20.11(e), it had not
construed sections 251(c) and 252 to apply directly to CMRS providers. Id.
at 17945, 17949, 17951-53 (¶¶ 826, 833, 840-42). The FCC explained that it
had “exercised its authority under sections 201, 332, 251, and 4(i) [of the
Act] to apply to CMRS providers’ duties analogous to the negotiation and
23

arbitration requirements” that sections 251(c) and 252 place upon incumbent
LECs. Id. at 17952 (¶ 841) (emphasis added).
In addition, the FCC concluded that it had provided adequate public
notice under the APA in adopting new rules in the T-Mobile Order. Id. at
17954 (¶ 843). See 5 U.S.C. § 553(b), (c). The FCC explained that its 2001
notice of proposed rulemaking explicitly invited comments “on the rules the
Commission should adopt to govern LEC interconnection arrangements with
CMRS providers,” id. at 17954 (¶ 843) (quoting Intercarrier Compensation
NPRM, ¶ 90 (SER 053)), and that the administrative record included
comments urging the FCC to revise its rules to require CMRS providers to
negotiate interconnection agreements with LECs, id. at 17954 (¶ 843 n.1626).
Further Rulemaking. The FCC in the USF/ICC Transformation Order
declined “at this time” to extend to competitive LECs the rights to compel
CMRS providers to negotiate interconnection agreements and if necessary to
submit to arbitration. Id. at 17955 (¶ 845). The FCC explained that the
administrative record did not adequately address the policy and legal issues
relating to that extension. Id. At the same time, however, the FCC instituted
a further rulemaking that invited parties, inter alia, to comment on whether
the FCC should modify its rules to extend to competitive LECs the same right
to compel negotiations and arbitrations available to incumbent LECs under
24

section 20.11(e). Id. at 18119 (¶ 1324). That further rulemaking remains
pending before the Commission.

IV.

SUBSEQUENT DEVELOPMENTS.

Although the FCC in the USF/ICC Transformation Order resolved
petitions for reconsideration of the T-Mobile Order, neither Ronan nor Hot
Springs filed a petition for review of the USF/ICC Transformation Order,
and hence that order is not before this Court in this case. A number of other
parties, however, currently are seeking judicial review of the USF/ICC
Transformation Order in the Tenth Circuit. See In re FCC 11-161 (10th Cir.
No. 11-9900, filed Dec. 18, 2011). Ronan and Hot Springs are participating
in In re FCC 11-161 as intervenors in support of petitioners.
A number of parties have filed petitions for agency reconsideration of
the 2011 USF/ICC Transformation Order, many of which remain pending
before the agency. None of those petitions involves issues addressed in the
T-Mobile Order or the FCC’s denial of petitions requesting reconsideration of
that decision.

SUMMARY OF ARGUMENT

1. The FCC acted well within its statutory authority in adopting
section 20.11(d) of its rules. The FCC has broad rulemaking authority in
section 201(b) to implement the Communications Act, including section
25

251(b)(5)’s requirement that LECs establish “reciprocal compensation
arrangements.” By neither defining nor describing the term “arrangement,”
and by granting broad rulemaking authority to the FCC to implement the
Communications Act, Congress delegated authority to the Commission to
delineate the contours of that statutory requirement. Moreover, sections
201(a) and 332(c), which authorize the FCC to regulate the terms of LEC-
CMRS interconnection, including the associated compensation for that
traffic, independently give the FCC authority to enact section 20.11(d). The
Commission lawfully exercised that delegated authority in prohibiting LECs
from unilaterally establishing reciprocal compensation arrangements for local
CMRS traffic through tariff charges assessed on CMRS providers.

2. Petitioners’ challenge to the FCC’s authority to enact section
20.11(e) is not properly before the Court because petitioners (as incumbent
LECs) lack Article III standing to raise that claim. Section 20.11(e) benefits
incumbent LECs, such as Ronan and Hot Springs, by giving them the right to
compel CMRS providers to negotiate in good faith and to submit to
arbitration. Thus, petitioners cannot show any injury they have suffered as a
result of that rule. In any event, sections 4(i), 201, and 332 of the
Communications Act (47 U.S.C. §§ 154(i), 201, 332) — statutory provisions
ignored by petitioners — empowered the FCC to adopt section 20.11(e).
26

3. Like their challenge to section 20.11(e), petitioners’ claim that the
FCC erred by not enacting a rule giving competitive LECs the right to require
a CMRS provider to negotiate an interconnection agreement in good faith and
submit to arbitration is not properly before the Court. Because that issue was
not presented to the FCC in the administrative proceedings leading to the T-
Mobile Order on review, nor raised by petitioners in a petition for agency
reconsideration, section 405(a) of the Act, 47 U.S.C. § 405(a), bars
petitioners from raising that issue on review. As incumbent LECs (rather
than competitive LECs), Ronan and Hot Springs also lack Article III standing
to raise the issue because they have not shown that they are injured by the
FCC’s failure to adopt a rule giving competitive LECs the right to compel
negotiations and arbitrations. Furthermore, the Commission in the T-Mobile
Order made no decision as to whether competitive LECs should be given a
right to require CMRS providers to negotiate and submit to arbitrations, let
alone a decision that is final and ripe for review. The FCC is considering the
issue in a pending rulemaking and the doctrines of finality and ripeness
additionally bar the Court’s consideration of that issue at this time.
In any event, the Commission committed no error in declining at this
time to afford competitive LECs (as opposed to incumbent LECs like
petitioners) the right to compel negotiations and arbitrations in the T-Mobile
27

Order. Section 4(j) of the Communications Act, 47 U.S.C. § 154(j), gives the
Commission broad authority to determine the scope of its proceedings. It is
lawful and appropriate for the Commission to first address whether
incumbent LECs should have the right to compel negotiations and
arbitrations, and then consider whether to extend that right to competitive
LECs.
4. The FCC complied fully with the APA’s notice-and-comment
requirements. The 2001 notice of proposed rulemaking initiating this
proceeding both provided a clear description of the subjects and issues
involved in the rulemaking, and gave interested parties the opportunity to
comment on those matters. As incumbent LECs, petitioners lack third-party
standing to argue that the FCC failed to provide adequate notice to different
parties (i.e., competitive LECs) that are not before the Court in this case. In
addition, petitioners are barred by section 405(a) of the Act from raising the
APA issue on review because they failed to exhaust their administrative
remedies.
5. Finally, the Court lacks jurisdiction to consider petitioners’
challenge to the bill-and-keep methodology, which was adopted in an order
that is not before the Court. In the T-Mobile Order on review in this case, the
FCC did not impose a bill-and-keep methodology for local LEC-CMRS calls,
28

or even mention the term. In any event, petitioners’ claim that bill-and-keep
violates the 1996 Act is directly at odds with section 252(d)(2)(B)(i), a
provision in the 1996 Act that expressly permits bill-and-keep reciprocal
compensation arrangements. 47 U.S.C. § 252(d)(2)(B)(i). And because a
bill-and-keep mechanism allows LECs to recover their costs of transporting
and terminating CMRS calls from their own local exchange customers plus
explicit universal service support where necessary, it does not violate the
Takings Clause of the Fifth Amendment.

ARGUMENT

I.

THE COURT SHOULD REVIEW THE T-MOBILE ORDER


UNDER DEFERENTIAL STANDARDS OF REVIEW.


Petitioners bear a heavy burden to demonstrate that the T-Mobile Order
is “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A). Under this “highly deferential”
standard, the Court presumes the validity of agency action, Northwest
Ecosystem Alliance v. United States Fish & Wildlife Serv., 475 F.3d 1136,
1140 (9th Cir. 2007) (citation omitted), and does not “substitute its judgment
for that of the Commission.” Am. Civil Liberties Union v. FCC, 523 F.2d
1344, 1350 (9th Cir. 1975). The Court must affirm unless the FCC failed to
consider the relevant factors or made a clear error in judgment. E.g.,
Judulang v. Holder, 132 S. Ct. 476, 483 (2011).
29


For challenges to an agency’s interpretation of a statute it administers,
the Court reviews the agency’s decision in accordance with the two-step
approach prescribed by Chevron USA Inc. v. Natural Res. Def. Council, 467
U.S. 837 (1984). Under the first step, the Court must determine “whether
Congress has directly spoken to the precise question at issue.” 467 U.S. at
842. If so, “the [C]ourt, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.” Id. at 842-43.

Where “the statute is silent or ambiguous with respect to the specific
issue, the question for the court is whether the agency’s answer is based on a
permissible construction of the statute.” 467 U.S. at 843; see also Osorio v.
Mayorkas. 656 F.3d 954, 464-65 (9th Cir. 2011). Under this “deferential
standard,” Redmond-Issaquah R.R. Pres. Ass’n v. STB, 223 F.3d 1057, 1063
(9th Cir. 2000), silence or ambiguity in a statute that the agency is charged
with administering is a Congressional “delegation[] of authority to the agency
to fill the statutory gap in reasonable fashion.” Brand X, 545 U.S. at 980.
“Filling th[ose] gaps,” the Court explained, “involves difficult policy choices
that agencies are better equipped to make than courts.” Id. Thus, where there
is statutory silence or ambiguity, a federal court must accept the
administering agency’s reasonable interpretation of the statute even if that
interpretation is not “the only one it permissibly could have adopted . . . or
30

even the reading the court would have reached if the question initially had
arisen in a judicial proceeding.” Chevron, 467 U.S. at 843 n.11.

The standard of review set forth in petitioners’ brief is internally
12
inconsistent and contains significant legal errors. Contrary to petitioners’
assertions that the Court should give the FCC no (or limited) deference in
reviewing the rules the Commission adopts to fill in a gap in the
Communications Act (see Pet. Brief at 8), the Supreme Court many times has
held otherwise. E.g., Brand X, 545 U.S. at 980; Verizon Commc’ns v. FCC,
535 U.S. 467, 502, n.20, 523, 534-35 (2002); AT&T Corp., 525 U.S. at 387,
397.

12 On the one hand, petitioners correctly acknowledge that “[g]enerally,
courts defer to an agency’s interpretation of the statute that such agency is
empowered to enforce” and that “[t]he court reviews FCC implementation of
the 1996 Act in accordance with Chevron. Pet. Brief at 7, 8. On the other
hand, petitioners incorrectly contend — in direct conflict with Chevron —
that “deference to an agency interpretation applies only in the case of an
agency interpretation of its own regulations, not its interpretation of
Congressional statute” and that an agency’s interpretation of a federal statute
is “reviewed de novo by the court.” Pet. Brief at 7, 8.
31

II.

PETITIONERS’ CHALLENGE TO THE LAWFULNESS
OF SECTION 20.11(D) LACKS MERIT.

A. The FCC Adopted Section 20.11(d) as a Lawful Exercise

Of its Authority Under Sections 201 and 332(c) of the
Act.

Contrary to petitioners’ claims (Pet. Br. 8-13), the FCC acted well
within its statutory authority in adopting section 20.11(d) of its rules. Section
201(b) of the Communications Act gives the FCC wide-ranging authority to
adopt rules “to carry out the ‘provisions of [the Communications] Act,’ which
include [section] 251.” AT&T Corp., 525 U.S. at 378 (quoting 47 U.S.C.
201(b)); see also Gonzales v. Oregon, 546 U.S. 243, 258 (2006) (section
201(b) gives the FCC “broad power to enforce all provisions of the statute.”).
Section 201(b) thus authorizes the FCC to implement section 251(b)(5) by
adopting a rule barring LECs from establishing tariffed reciprocal
compensation arrangements for local CMRS service. And because section
20.11(d) involves intercarrier compensation for traffic between LECs and
CMRS providers, sections 332(c) and 201(a) independently give the FCC
authority to adopt section 20.11(d). T-Mobile Order, ¶ 14 & n.58 (ER 10).
See also Qwest v. FCC, 252 F.3d 462, 465-66 (D.C. Cir. 2001); Iowa Utils.
Bd., 120 F.3d at 800 n.21. Although the FCC expressly relied upon sections
332(c) and 201 as the source of its authority to enact section 20.11(d), T-
Mobile Order, ¶ 14 (ER 10), petitioners in contending that the FCC lacked
32

authority to enact section 20.11(d) never even mention those statutory
provisions.
Petitioners argue that the FCC lacked authority to adopt section
20.11(d) because “Congress intended the term ‘arrangements’ used in section
251(b)(5) to be interpreted more broadly than the FCC did in the Order.” Pet
Brief at 9. Contrary to petitioners’ contention, the FCC in the T-Mobile
Order did not hold that Congress, in using the term “arrangement” in section
251(b)(5), intended to exclude arrangements established by tariff. T-Mobile
Order, ¶ 4 (ER 3). See Pet. Brief at 10. To the contrary, the FCC, in denying
the petition for declaratory ruling, declined to find unlawful under section
251(b)(5) the existing state termination tariffs that the LECs had filed to
establish reciprocal compensation arrangements for local CMRS traffic. See
T-Mobile Order, ¶¶ 10-13 (ER 6-9).
Although Congress required LECs to establish reciprocal compensation
“arrangements,” 47 U.S.C. § 251(b)(5), it did not define or otherwise specify
the types of arrangements covered by that statutory term. See T-Mobile
Order, ¶ 4 (ER 3). Congress’ use of the broad, ambiguous term
“arrangement,” coupled with its affirmative grant to the FCC of rulemaking
authority to “execute and enforce” the Communications Act, 47 U.S.C. § 151,
33

is a delegation of authority to the FCC to delineate the contours of that
statutory requirement.
The FCC in exercising its rulemaking authority to implement section
251(b)(5) has considerable discretion to use its experience and expertise to
make “reasonable policy choice[s].” See, e.g., Mayo Found. For Med. Educ.
And Research v. United States, 131 S. Ct. 704, 713 (2011) (administering
agency required “to make interpretive choices for statutory
implementation.”). For example, the FCC’s rules implementing the
requirement in section 252(d)(1)(A) that rates for network elements be “based
on . . . cost” prescribe use of the total element long-run incremental cost
(“TELRIC”) methodology. See 47 C.F.R. §§ 51.503, 51.505. Even though
Congress in section 252(d)(1)(A) did not specifically mandate that cost-based
rates be based on a TELRIC methodology, the Supreme Court upheld the
TELRIC rules as a lawful implementation of section 252(d)(1)(A). Verizon,
13
535 U.S. 467. Similarly, the fact that Congress in section 251(b)(5) did not
expressly bar termination tariffs as reciprocal compensation arrangements
does not prevent the FCC from adopting that prohibition in the exercise of its
own authority under section 201(b) to adopt rules to implement and give

13 Petitioners’ claim that TELRIC rates are not “reasonable” rates, Pet. Brief
at 13, is contrary to the holding of the Supreme Court in Verizon.
34

specificity to section 251(b)(5). Nor is there anything in section 251(b)(5)
that limits the FCC’s authority under sections 201 and 332 to regulate the
terms of LEC-CMRS interconnection, including the associated compensation
for that traffic. Specifically, nothing in the undefined term “arrangements” in
section 251(b)(5) unambiguously requires the FCC to permit the filing of
tariffs among the permissible reciprocal compensation arrangements. Cf.
Cablevision Sys. Corp. v. FCC, 649 F.3d 695, 709 (D.C. Cir. 2011)
(petitioners “have no basis for arguing that section 628 [of the
Communications Act] unambiguously precludes the Commission” from
exercising rulemaking authority).

B. Petitioners’ Argument Concerning Section 257(b)(7) Is

Statutorily Barred And, In Any Event, Lacks Merit.

Section 259(b)(7) of the Act — a provision involving infrastructure
sharing — requires LECs to “file with the Commission or State for public
inspection, [specified] tariffs, contracts or other arrangements.” 47 U.S.C.
§ 259(b)(7). According to petitioners, the language of section 259(b)(7)
shows that Congress in section 251(b)(5) specifically intended to permit
LECs to establish tariffed reciprocal compensation arrangements and thus
section 20.11(d) is “plainly inconsistent” with section 251(b)(5). Pet. Brief at
10. Petitioners’ argument is not properly before the Court and, in any event,
is meritless.
35

Section 405(a) of the Act provides that the filing of a petition for
agency reconsideration is “a condition precedent to judicial review”
whenever a litigant “relies on questions of fact or law upon which the
Commission . . . has been afforded no opportunity to pass.” 47 U.S.C.
§ 405(a). See Fones4All Corp. v. FCC, 550 F.3d 811 (9th Cir. 2008), reh.
denied, 561 F.3d 1031 (9th Cir. 2009). Because no party in the
administrative proceedings leading to the order on review had argued that
section 259(b)(7) shows that the FCC cannot prohibit LECs from establishing
reciprocal compensation arrangements required by section 251(b)(5) through
tariffed termination charges assessed on CMRS providers, the FCC had no
opportunity to pass on that legal question. Ronan and Hot Springs did not
raise the issue in a petition for reconsideration, and thus section 405(a) bars
them from presenting it on judicial review. Fones4All, 561 F.3d at 1033
(section 405 exhaustion rule is strictly enforced). See United States v. L.A.
Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952) (“[A]s a general rule . . .
courts should not topple over administrative decisions unless the
administrative body not only has erred but has erred against objection made
at the time appropriate under its practice.”)
In any event, petitioners’ argument is unavailing. Section 259(b)(7)
expressly states that the arrangements that a LEC must file with the FCC
36

include “tariffs,” whereas section 251(b)(5) does not describe the types of
arrangements that satisfy the reciprocal compensation obligation. The fact
that Congress chose different — and more precise — wording in section
259(b)(7) than in section 251(b)(5) is an indication that where Congress
specifically intended to include tariffs in the types of arrangements used to
satisfy a statutory obligation, it expressed that intent with plainly worded
language. See Russello v. United States, 464 U.S. 16, 23 (1983) (“Where
Congress includes particular language in one section of a statute but omits it
in another section of the same Act, it is generally presumed that Congress
acts intentionally and purposely in the disparate inclusion or exclusion.”)
(citation and internal quotation marks omitted). Conversely, the omission of
specific language in section 251(b)(5) comparable to that in section 259(b)(7)
signifies that Congress chose not to specify what type of arrangements satisfy
the reciprocal compensation obligation, see T-Mobile Order, at ¶ 4 (ER 3).
Congress’s failure to specify in section 251(b)(5) the particular types of
reciprocal compensation “arrangements” contemplated thus left the FCC free
to reasonably exercise its rulemaking authority consistent with the ambiguous
statutory language.
37

C. Section 20.11 Leaves Intact the Section 251(f)(1) Rural

Exemption.

Petitioners next challenge the lawfulness of section 20.11(d) on the
ground that the rule allegedly terminates the rural exemption in section
251(f)(1) of the Communications Act, thus usurping the power of state public
utility commissions to determine that section 251(f)(1) exempts a rural
incumbent LEC from its duty to negotiate in good faith an interconnection
agreement with a CMRS provider. Pet. Brief at 6, 9, 12. That argument is
baseless.
Section 251(c)(1) generally requires an incumbent LEC, upon
receiving a request from a telecommunications carrier for interconnection,
services, or network elements, to negotiate an agreement with the requesting
telecommunications carrier in good faith. 47 U.S.C. §§ 251(c)(1), 252(a)(1).
Section 251(f), however, exempts rural incumbent LECs from the duty to
negotiate with a party making a bona fide request unless a state commission
determines that the request “is not unduly economically burdensome, is
technically feasible” and generally is consistent with statutory universal
service requirements. 47 U.S.C. § 251(f)(1). When a rural incumbent LEC
refuses to negotiate with a party making a bona fide request for negotiation
under section 251(c), the requesting party can submit a notice of its request to
the state commission, which in turn conducts an expedited inquiry to
38

determine whether the statutory criteria for terminating the rural exemption
are met. 47 U.S.C. § 251(f)(1)(B).
Nothing in section 20.11 of the FCC’s rules colorably affects either the
right of a rural incumbent LEC to invoke the section 251(f)(1) exemption to
the duty to negotiate under section 251(c)(1) or the authority of a state
commission to give that exemption effect. A state commission retains the
power, upon receiving a request to compel a rural incumbent LEC to
negotiate, to adjudicate whether the statutory criteria for terminating the rural
exemption have been met. And unless it terminates the rural exemption, the
state commission will apply that exemption in denying the request to compel
negotiations under section 251(c)(1).
In any event, petitioners — as LECs — unquestionably have the duty
to establish reciprocal compensation arrangements under section 251(b)(5).
The exemption in section 251(f)(1), where applicable, exempts rural
incumbent LECs only from the requirements of section 251(c), not from the
additional obligations set forth in section 251(b), including the duty to
establish reciprocal compensation arrangements. See CRC Communications
of Maine, Inc. and Time Warner Cable Inc. for Preemption Pursuant to
Section 253 of the Communications Act, 26 FCC Rcd 8259, 8267 (2011).
Moreover, as shown above, the FCC adopted section 20.11(d) pursuant to,
39

inter alia, its authority under sections 201 and 332 to establish rules
governing the intercarrier compensation for traffic between LECs and CMRS
providers, which is not subject to the exemption in section 251(f)(1).
Although their argument is not clearly articulated, petitioners appear to
contend that section 20.11(d), by prohibiting rural incumbent LECs from
receiving compensation for terminating local CMRS traffic through tariffed
termination charges assessed on CMRS providers, effectively requires those
carriers to negotiate interconnection agreements with CMRS providers in
order to receive compensation for terminating CMRS-LEC calls. That
argument is meritless. As noted above, in the absence of an intercarrier
agreement prescribing a different reciprocal compensation arrangement,
section 20.11(b) provides for a bill-and-keep arrangement for local CMRS-
LEC traffic. 47 C.F.R. § 20.11(b). Thus, the FCC’s rules give incumbent
LECs (rural or otherwise) the choice of recovering the costs of transporting
and terminating local CMRS-LEC calls either by the mechanism prescribed
in a negotiated intercarrier compensation agreement or from their own local
exchange customers (plus universal service support payments, if necessary)
14
through a bill-and-keep arrangement.

14 As discussed in section VI, the lawfulness of section 20.11(b) is not
before the Court in this case.
40

D. Section 20.11(d) Is Reasonable.

Petitioners next contend that section 20.11(d) arbitrarily compels LECs
to incur the costs of engaging in individualized negotiations. Pet. Brief at 11.
That is incorrect. As noted above, LECs can avoid the costs of negotiating
interconnection agreements with CMRS providers by using a bill-and-keep
compensation methodology. See 47 C.F.R. § 20.11(b). Under that
mechanism, LECs may recover the costs of transporting and terminating local
CMRS traffic: a bill-and-keep regime merely shifts the source of that
recovery from CMRS providers to the LECs’ own local exchange customers
(with the potential for recovery of additional government subsidies under the
Universal Service Program, where necessary). USF/ICC Transformation
Order, 26 FCC Rcd at 17909 (¶ 746).
Moreover, as the FCC explained in adopting section 20.11(d),
individually negotiated intercarrier agreements “are more consistent with the
pro-competitive process and policies reflected in the 1996 Act” than are
unilaterally imposed tariff charges imposed upon CMRS providers. T-Mobile
Order, ¶ 14 (ER 9). The decisions of this Court and other courts amply
support that conclusion. See, e.g., Pacific Bell v. Pac West Telecomm, Inc.,
325 F.3d 1114, 1127 (9th Cir. 2003) (“[T]he point of § 252 is to replace the
comprehensive state and federal regulatory scheme with a more market-
41

driven system that is self-regulated through negotiated interconnection
agreements.”); MCI Telecomms. Corp. v. Bell Atlantic-Pennsylvania, 271
F.3d 491, 500 (3d Cir. 2001) (the 1996 Act reflects Congress’s “clear
preference . . . for . . . negotiated agreements”); Quick Commc’ns, Inc. v.
Michigan Bell Tel. Co., 515 F.3d 581, 585 (6th Cir. 2008) (“Congress’s
chosen mechanism for increasing competition in the local
telecommunications market” was “the private and voluntary mutual
negotiation of interconnection agreements.”).
Petitioners further contend that the FCC’s decision in the T-Mobile
Order to prohibit tariffs for local CMRS service is inconsistent with its
subsequent determination in the USF/ICC Transformation Order, 26 FCC
Rcd at 17939 (¶ 812) to permit the continued tariffing of certain traffic that
had been subject to the FCC’s access charges regime during a transition
period.
Section 405(a) of the Act, 47 U.S.C. § 405(a), bars petitioners from
raising that argument on judicial review, because petitioners never presented
it to the FCC in the proceedings below. See Fones4All, 550 F.3d at 817-19.
The fact that the alleged inconsistency could not have occurred until six years
after the T-Mobile Order was issued does not preclude application of section
405(a)’s exhaustion requirement. Section 405(a) contains no exception for an
42

argument that the FCC ignored a “‘precedent[]’ that d[oes] not precede,”
Northampton Media Assoc. v. FCC, 941 F.2d 1214, 1217 (D.C. Cir. 1991),
and this Court has made clear that it will not read “‘exceptions into [the]
statutory exhaustion [requirement] where Congress has provided otherwise,’”
Fones4All, 550 F.3d at 818 (quoting Booth v. Churner, 532 U.S. 731, 741 n.6
(2001)).
In any event, petitioners’ argument lacks merit. The FCC in the
USF/ICC Transformation Order “adopt[ed] bill-and-keep as the default
methodology for all intercarrier compensation traffic,” 26 FCC Rcd at 17904
(¶ 736), but permitted the LECs to continue to file access charge tariffs for
the transport and termination of toll traffic during a limited transition period
to “avoid [the] disruption” of “flash-cutting the whole industry to a new
regime.” id. at 17939, 18023 (¶¶ 812, 964). That transition is consistent with
section 251(g), which expressly preserves the tariffed access charge regime
for such toll traffic until “explicitly superseded” by the Commission. 47
U.S.C. § 251(g). The FCC fully explained in the USF/ICC Transformation
Order the unique considerations justifying distinct treatment of that separate
form of traffic, see 26 FCC Rcd at 17939, 18023 (¶¶ 812, 964), and these
different considerations belie petitioners’ claim that the agency arbitrarily
43

created an inconsistency between the T-Mobile Order challenged in this case
and the subsequent USF/ICC Transformation Order.

III. PETITIONERS’ CLAIM THAT THE FCC UNLAWFULLY

GAVE INCUMBENT LECS THE RIGHT TO COMPEL
NEGOTIATIONS AND ARBITRATIONS IS NOT
PROPERLY BEFORE THE COURT AND LACKS MERIT.

Petitioners lack standing to argue that the FCC had no statutory
authority to adopt a rule giving incumbent LECs the right to compel CMRS
providers to negotiate interconnection agreements and if necessary to submit
to arbitration. See Pet. Brief at 18. It is well established that Article III of the
Constitution requires a party that seeks to invoke the court’s jurisdiction to
show, inter alia, a concrete and particularized injury-in-fact that is traceable
to the challenged action. See, e.g., Horne v. Flores, 129 S.Ct. 2579, 2592
(2009); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992); Barnum
15
Timber Co. v. EPA, 633 F.3d 894, 897 (9th Cir. 2011). As the parties
seeking to invoke federal jurisdiction, petitioners bear the burden of
establishing each element of constitutional standing. Lujan, 504 U.S. at 561;

15 Courts have held that parties challenging administrative orders (including
those that were parties to the proceedings before the agency) likewise must
establish their standing to invoke the jurisdiction of an Article III court. E.g.,
Branch v. FCC, 824 F.2d 37, 40 (D.C. Cir. 1987); California Ass’n of
Physically Handicapped, Inc. v.
FCC, 778 F.2d 823, 825-26 (D.C. Cir. 1985).
44

see Schmier v. United States Court of Appeals for the Ninth Circuit, 279 F.3d
817, 821 (9th Cir. 2002).
Ronan and Hot Springs (both incumbent LECs) have not shown that
section 20.11(e) — a rule that benefits incumbent LECs — subjects them to
any injury. That new provision simply provides incumbent LECs another
option of which they can take advantage if they so choose. That additional
option thus caused no harm to petitioners, and they thus lack standing to raise
this claim. Clark v. City of Lakewood, 259 F.3d 996, 1006 (9th Cir. 2001)
(party “must demonstrate standing for each form of relief he seeks.”)
In any event, petitioners are wrong in contending that the FCC lacked
authority to promulgate section 20.11(e). Sections 201 and 332 of the Act
give the FCC authority to adopt a rule giving incumbent LECs the right to
request interconnection, including associated compensation, from CMRS
providers and to compel them to negotiate interconnection agreements and
submit to arbitration if necessary. See USF/ICC Transformation Order, 26
FCC Rcd at 17947-49 (¶ 833-36). In addition, the FCC was authorized to
adopt section 20.11(e) pursuant to section 4(i) of the Act, which empowers
the agency, among other things, to “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). As the Commission
45

explained, exercise of its authority under section 4(i) was reasonably
necessary to implement the agency’s express statutory duties under sections
201, 251(b)(5), and 332 of the Act. See id. at 17945, 17949-50 (¶¶ 826, 837-
39) (citing 47 U.S.C. § 154(i)). Petitioners do not even mention sections 201,
332 or 4(i), let alone show why those grants of statutory authority do not
permit the FCC to adopt section 20.11(e) of its rules.

IV.

PETITIONERS’ CLAIM THAT THE FCC ERRED IN NOT
GIVING COMPETITIVE LECS A RIGHT TO COMPEL
NEGOTIATIONS AND ARBITRATIONS IS NOT
PROPERLY BEFORE THE COURT AND LACKS MERIT.

Having argued that the FCC lacked authority to adopt section 20.11(e)
as to incumbent LECs, petitioners next argue that the FCC erred by not
extending that (allegedly unlawful) rule to competitive LECs to entitle them
to compel a CMRS provider to negotiate an interconnection agreement in
good faith, and to compel arbitration if necessary. As shown below, whether
viewed under the rubric of exhaustion, standing, finality, or ripeness, that
challenge is not properly before the Court, and in any event it lacks merit.

A. The Court Has No Jurisdiction to Entertain Petitioners’

Argument.

1. Section 405 Bars Petitioners’ Claim.
Section 405(a) bars petitioners from arguing on review that the FCC
erred by not giving competitive LECs a right to compel CMRS providers to
negotiate interconnection agreements and submit to arbitration if necessary.
46

47 U.S.C. § 405(a). See Fones4All, 550 F.3d at 817-19. The FCC was
“afforded no opportunity to pass” on the issue because no party presented it
in the agency proceedings leading to the adoption of the T-Mobile Order. 47
U.S.C. § 405. As petitioners did not raise the issue in a petition for agency
reconsideration, they failed to fulfill the statutory “condition precedent to
judicial review.” Id.
The fact that the FCC subsequently addressed the issue in the USF/ICC
Transformation Order, 26 FCC Rcd at 17955 (¶ 845), does not render section
405(a) inapplicable. In Great Falls Cmty. TV Cable v. FCC, 416 F.2d 238
(9th Cir. 1969), disapproved, Fones4All, 561 F.3d 1031, this Court held that
section 405 did not bar the petitioner from presenting an issue that the FCC
had addressed in an order not before the Court on review. The Court found
that it had “discretion to determine whether and to what extent judicial review
of questions not raised before the agency should be denied.” Id. at 239. In
Fones4All, however, this Court explicitly disavowed the “flexible attitude
toward exhaustion” articulated in Great Falls. 561 F.3d at 1033.
Emphasizing that “section 405’s exhaustion requirement is statutory,” the
Court explained that the Great Falls exhaustion analysis “represent[s] a prior
era of administrative law” that “has been superseded by intervening Supreme
Court authority and is no longer binding.” Fones4All, 561 F.3d 1032-33.
47

2. Petitioners’ Lack Article III Standing.
The Court lacks jurisdiction over petitioners’ argument on the
additional and independent ground that petitioners have not shown how they
are injured by the fact that the T-Mobile Order did not afford competitive
LECs the right to compel CMRS providers to negotiate and submit to
compulsory arbitration. They thus lack standing to raise that issue on review.
See Arizona Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 1436, 1442
(2011); Horne, 129 S.Ct. at 2592; Lujan, 504 U.S. at 560. Ronan and Hot
Springs are incumbent LECs, see Pet. Br. at 14 n.4, not competitive LECs,
and thus are not among the class of carriers affected by the challenged agency
inaction.
Petitioners make no claim that Hot Springs is injured because the FCC
did not extend to competitive LECs the right to compel negotiations and
arbitrations. In a footnote in their brief, petitioners allege that Ronan has
“plans” to offer services as a competitive LEC, Pet. Br. at 14 n.4, but that
claim falls short. First, to establish standing, the party seeking review must
submit “affidavits or other evidence” substantiating with “specific facts” its
claim of injury-in-fact. Lujan, 504 U.S. at 563. Ronan presented no
affidavits from company officials or other evidence substantiating its plans to
become a competitive LEC. Nor has Ronan described those plans except in
48

vague and conclusory terms. In Core v. FCC, 545 F.3d 1 (D.C. Cir. 2008),
the court held that a LEC had failed to substantiate an alleged injury-in-fact
by claiming that the FCC’s action would affect services it planned to offer.
The court explained that the LEC in Core, like Ronan in this case, did not
“say anything to indicate the seriousness of its plans, which might range from
a gleam in management’s eye to a well-developed business plan.” 545 F.3d
at 2. So too here.
Second, Ronan has failed to indicate when its “plans” to become a
competitive LEC will be put into effect. As the Supreme Court has stated,
“‘some day’ intentions — without. . . any specification of when the some day
will be — do not support a finding of the ‘actual and imminent’ injury.”
Lujan, 504 U.S. at 564. Ronan’s inchoate plan to become a competitive LEC
at some indefinite date in the future is therefore insufficient to establish its
Article III standing.
3. Petitioners Do Not Challenge Final Agency Action,

And Their Challenge Is Unripe.

The Court has jurisdiction only over FCC decisions that are “final.” 28
U.S.C. § 2342. See Coal. for a Healthy California v. FCC, 87 F.3d 383 (9th
Cir. 1996). See also 5 U.S.C. § 704 (judicial review in APA limited to “final
agency action.”). “The core question [in determining finality] is whether the
agency has completed its decision-making process, and whether the result of
49

that process is one that will directly affect the parties [seeking review].”
Franklin v. Massachusetts, 505 U.S. 788, 797 (1992). “Only if the [agency]
has rendered its last word on the matter in question is its action ‘final’ and thus
reviewable.” Whitman v. Am. Trucking Ass’ns., 531 U.S. 457, 479 (2001)
(internal citation omitted). In determining the finality of agency action, courts
take a “pragmatic” approach, “focusing on whether judicial review at [this]
time will disrupt the administrative process.” Bell v. New Jersey, 461 U.S.
773, 779 (1983).
The FCC in the T-Mobile Order made no decision, let alone a final
decision, as to whether it should give competitive LECs the same right to
compel negotiations and arbitrations as CRMS providers. To be sure, the FCC
in that order adopted a rule giving that right to incumbent LECs. But no party
to the administrative proceedings leading to the T-Mobile Order specifically
argued that the FCC should confer that right on competitive LECs, and the
agency in that order reasonably did not attempt to resolve that matter without
the benefit of a record on the issue. The FCC first addressed the issue six years
later in the USF/ICC Transformation Order — an order not on review in this
case — when it initiated a rulemaking to compile a record that would enable
it to make an informed decision on the matter. 26 FCC Rcd at 17955, 18119
(¶¶ 845, 1324). The FCC has not yet issued a decision in that rulemaking.
50


Until the FCC actually makes a ruling, the Court should not adjudicate
whether the FCC is legally required to give competitive LECs right to compel
negotiations and arbitration in a manner analogous to the section 251/252
framework. “As the Supreme Court has noted, it is difficult to review an
agency decision that has yet to be made.” Confederated Tribes and Bands of
the Yakama Nation v. United States, 296 Fed. Appx. 566, 569 (9th Cir. 2008)
16
(citation omitted).


B. The Commission Was Not Required to Give Competitive

LECs the Right to Compel Negotiations and Arbitrations
In the Rulemaking on Review.

Section 4(j) of the Act gives the FCC wide discretion to “conduct its
proceedings in such manner as will best conduce to the proper dispatch of
business and to the ends of justice.” 47 U.S.C. § 154(j). See FCC v.
Schreiber, 381 U.S. 279, 290 (1965); Iacopi v. FCC, 451 F.2d 1142, 1149
(9th Cir. 1971). By this statute, Congress gave the FCC “broad discretion in
structuring its own proceedings.” City of Angels v. FCC, 745 F.2d 656, 664
(D.C. Cir. 1984).

16 For similar reasons, petitioners’ challenge to the absence of a negotiation-
and-arbitration procedure for competitive LECs parallel to the procedure
applicable to incumbent LECs (like petitioners themselves) is unripe for
judicial review. See Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967);
Toilet Goods Ass’n v. Gardner, 387 U.S. 158, 162-63 (1967).
51

Given the “broad procedural authority” conferred by section 4(j), see
Schreiber, 381 U.S. at 289, it is well established that the FCC need not deal
with every aspect of a problem in “‘one fell swoop.’” Cellular Phone
Taskforce v. FCC, 205 F.3d 82, 92-93 (2d Cir. 2000) (citation omitted).
Rather, the FCC has broad discretion to “proceed one step at a time,”
Cincinnati Bell Tel. Co. v. FCC, 69 F.3d 752, 767 (6th Cir. 1995),
“addressing itself to the phase of the problem which seems most acute,”
United States Cellular Corp. v. FCC, 254 F.3d 78, 86 (D.C. Cir. 2001)
(citation and internal quotation marks omitted).

That is exactly what the FCC did here. Because no parties had
addressed in the proceedings leading to the T-Mobile Order the need to give
competitive LECs the right to compel CMRS providers to negotiate in good
faith, and if necessary to submit to binding arbitration, the FCC reasonably
did not address that matter in its rulemaking order. When the matter was
brought to the FCC’s attention, it initiated a further rulemaking to compile a
record sufficient to render an informed decision on the matter. That approach
is well within the broad discretion accorded to the FCC by section 4(j) to
order its own proceedings.
52

V.

PETITIONERS’ CLAIM THAT THE FCC VIOLATED
THE NOTICE-AND-COMMENT REQUIREMENTS OF
THE APA FAILS.

The APA generally requires an agency, before adopting a substantive
rule, to publish a “notice of proposed rulemaking” that includes “either the
terms or the substance of the proposed rule or a description of the subjects
and issues involved,” 5 U.S.C. § 553(b)(3); see also Louis v. Dept. of Labor,
419 F.3d 970, 974 (9th Cir. 2005), and to give interested persons an
opportunity to comment, 5 U.S.C. § 553(c); see also United States v.
Valverde, 628 F.3d 1159, 1162 (9th Cir. 2010). Petitioners are wrong in
contending that the FCC failed to comply with these procedural requirements
in the rulemaking below.
The FCC, in the 2001 notice of proposed rulemaking initiating the
proceeding below, clearly stated its intention to re-examine all existing
intercarrier compensation arrangements, including interconnection
compensation arrangements between LECs and CMRS providers.
Intercarrier Compensation NPRM, ¶¶ 78-96 (SER 048-055). See USF/ICC
Transformation Order, 26 FCC Rcd 17954 (¶ 843); T-Mobile Order, ¶ 5 (ER
3-4). The FCC also specifically invited interested parties to file comments on
the matters at issue in the rulemaking, including “comment[s] on the rules
[the FCC] should adopt to govern LEC interconnection arrangements with
53

CMRS providers, whether pursuant to section 332, or other statutory
authority.” Intercarrier Compensation NPRM, ¶ 90 (SER 053).
In arguing that the FCC failed to provide adequate notice of its
rulemaking, petitioners fail to even acknowledge the Intercarrier
Compensation NPRM that initiated the rulemaking below. Instead, they
predicate their argument entirely upon a public notice the FCC issued one
year later on the CMRS providers’ petition for declaratory ruling. Pet. Brief
at 14 (citing 2002 Public Notice (SER 001)). Petitioners rely upon the wrong
FCC document. The FCC did not initiate the rulemaking below by issuing a
public notice of a request for adjudication. As explained above, it initiated
the rulemaking in the Intercarrier Compensation NPRM, and petitioners do
not purport to identify any procedural deficiencies as to that notice.

Moreover, petitioners — which submitted comments in the rulemaking
below — do not argue that they lacked adequate notice. They instead contend
that “the FCC did not provide adequate notice to non-[incumbent LECs] that
it would be creating a rule impacting their business operations.” Pet. Brief at
14 (emphasis added). Because Ronan and Hot Springs are incumbent LECs,
not competitive LECs, they lack standing to challenge the adequacy of notice
given to competitive LECs. See Section IV.A.2, supra. See LaMadrid v.
Hegstrom, 830 F.2d 1524, 1530 (9th Cir. 1987) (APA notice requirement
54

ensures that “the challenging part[ies] had notice of the agency’s
contemplated action”) (emphasis added). Tellingly, no competitive LEC has
challenged the FCC’s compliance with the APA either by seeking judicial
review of the T-Mobile Order or by intervening in support of petitioners in
this case.
In an attempt to salvage their claim that competitive LECs were not
given adequate notice, petitioners assert that “[competitive LECs] did not
participate, file comments, or submit replies in the proceeding.” Pet. Brief at
14. That assertion is unfounded. The FCC in fact received pleadings from a
number of competitive LECs in the administrative proceedings below. See T-
Mobile Order, App. B-C & App. D (ER 14-17, 21).
Finally, like many of their other arguments, petitioners’ APA argument
is jurisdictionally barred by section 405 of the Act, 47 U.S.C. § 405(a), for
failure to exhaust their administrative remedies. See Fones4All, 550 F.3d at
817-19. The APA issue was not presented to the FCC in the administrative
proceedings leading to the adoption of the T-Mobile Order, and petitioners
failed to satisfy the statutory “condition precedent to judicial review” by
raising the issue in a petition for agency reconsideration. 47 U.S.C. § 405(a).
See, e.g., Globalstar v. FCC, 564 F.3d 476, 483-85 (D.C. Cir. 2009) (section
405 bars petitioner from raising APA notice-and-comment issue); Cassell v.
55

FCC, 154 F.3d 478 (D.C. Cir. 1998) (same); City of Brookings Mun. Tel. Co.
17
v. FCC, 822 F.2d 1153, 1163-64 (D.C. Cir. 1987) (same).

VI.

THE COURT LACKS JURISDICTION TO CONSIDER
PETITIONERS’ CHALLENGE TO THE BILL-AND-KEEP
REGIME.

In purporting to challenge the bill-and-keep mechanism, petitioners
seek judicial review of the wrong order. See Pet. Brief at 19-21. The FCC
did not impose a bill-and-keep mechanism for local LEC-CMRS calls — or
even mention the subject of bill-and-keep compensation arrangements — in
the T-Mobile Order before the Court. As noted above, the Commission
adopted bill-and-keep as the default mechanism for local LEC-CMRS traffic
more than six years later in the USF/ICC Transformation Order. USF/ICC
Transformation Order, 26 FCC Rcd at 18037, 18038 (¶¶ 994, 996). Neither
Ronan nor Hot Springs filed a petition for review of the USF/ICC
18
Transformation Order, which currently is on review in the Tenth Circuit.

17 Petitioners cannot circumvent section 405’s jurisdictional bar by pointing
to the fact that the FCC subsequently addressed the APA issue in a different
order — the USF/ICC Transformation Order, 26 FCC Rcd at 17954 (¶ 843)
— that is not before the Court in this case. See Section IV.A.1, supra.
18 Petitioners could have invoked this Court’s jurisdiction to review the
Commission’s adoption of bill-and-keep as a default methodology by filing a
petition for review of the USF/ICC Transformation Order and moving to
consolidate that petition for review (and the other petitions for review of the
USF/ICC Transformation Order) with this case. Petitioners, however, failed
to do so.
56

See In re FCC 11-161 (10th Cir. No. 11-9900, filed Dec. 18, 2011). Thus,
the Court lacks jurisdiction to entertain petitioners’ challenge to FCC’s
default bill-and-keep regime.
In the event the Court reaches this claim — and it should not — the
Court should reject it. Petitioners contend that “‘bill-and-keep’ violates the
language of the 1996 Act,” Pet. Brief at 13, but in the very next sentence of
their brief they concede that section 252(d)(2)(B)(i) expressly states that the
1996 Act is not to be construed “‘to preclude’ offsetting reciprocal
obligations such as ‘bill and keep’ [arrangements],” id. (citing 47 U.S.C.
§ 252(d)(2)(B)(i)). Section 252(d)(2)(B)(i), which expressly permits bill-and-
keep reciprocal compensation arrangements, is thus fatal to petitioners’ claim
that bill-and-keep “contradicts Congressional intent,” Pet. Brief at 19.
Petitioners’ contention that bill-and-keep violates the Takings Clause
of the Fifth Amendment fares no better. See U.S. CONST. amend. V. It is
“settled beyond dispute” that rate regulation is “constitutionally permissible
. . . [s]o long as the rates set are not confiscatory.” FCC v. Florida Power
Corp., 480 U.S. 245, 253 (1987). The FCC’s adoption of bill-and-keep as a
default mechanism for local CMRS calls prescribes no rates, let alone rates
that are confiscatory. A bill-and-keep compensation methodology applies
only if the CMRS provider and the LEC have not agreed to a different
57

compensation methodology. And even where it applies, the default bill-and-
keep compensation system does not preclude the LEC from recovering its
costs of transporting and terminating local CMRS traffic; it merely shifts the
source of that recovery from the CMRS provider to the LEC’s own telephone
customers (with additional universal service support, where necessary).
USF/ICC Transformation Order, 26 FCC Rcd at 17909 (¶ 746). Thus,
petitioners’ statutory and constitutional objections to the bill-and-keep regime
have no colorable basis.
58

CONCLUSION

The Court should dismiss the petition for review in part for lack of
jurisdiction as indicated above, and otherwise should in part deny the petition
for review and affirm the T-Mobile Order.
Respectfully
submitted,
JOSEPH F. WAYLAND
SEAN A. LEV
ACTING ASSISTANT ATTORNEY
GENERAL COUNSEL
GENERAL


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

ATTORNEYS
RICHARD K. WELCH

DEPUTY ASSOCIATE GENERAL
UNITED STATES
COUNSEL
DEPARTMENT OF JUSTICE

WASHINGTON, D.C. 20530
/s/ Laurel R. Bergold


LAUREL R. BERGOLD
COUNSEL

FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
July 16, 2012
59

STATEMENT OF PENDENCY OF OTHER RELATED

PROCEEDINGS OR CASES



The Order on review has not been before this Court or any
other court previously. A subsequent order arising from the same
administrative proceeding as the T-Mobile Order is before the Tenth Circuit
in In re FCC 11-1161 (10th Cir. No. 11-9900, filed Dec. 18, 2011).

/s/
Laurel
R.
Bergold







Laurel
R.
Bergold
Counsel
Federal
Communications
Commission
Washington,
D.C.
20554
(202)
418-1747
July 16, 2011


Form 6.

Certificate of Compliance With Type-Volume Limitation,
Typeface Requirements, and Type Style Requirements

1.
This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B)
because:
this brief contains words, excluding the parts of the brief exempted
12,441
by Fed. R. App. P. 32(a)(7)(B)(iii), or
this brief uses a monospaced typeface and contains lines of text,
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 the type style requirements of Fed. R. App. P. 32(a)(6) because:
this brief has been prepared in a proportionally spaced typeface using (state name
and version of word processing program)
Microsoft Word 2003
(state font size and name of type style) 14-point Times New Roman
, or
this brief has been prepared in a monospaced spaced typeface using (state name
and version of word processing program)
with (state number of characters per inch and name of type style)
.
Signature Laurel R. Bergold
Attorney for Federal Communications Commission
Date July 16, 2012













STATUTORY APPENDIX




5 U.S.C. § 553
5 U.S.C. § 554

28 U.S.C. § 2342

47 U.S.C. § 151
47 U.S.C. § 153(44)
47 U.S.C. § 154(i) & (j)
47 U.S.C. § 201
47 U.S.C. § 251
47 U.S.C. § 252
47 U.S.C. § 253
47 U.S.C. § 259(b)(7)
47 U.S.C. § 332
47 U.S.C. § 405

47 C.F.R. § 1.2
47 C.F.R. § 20.11(2005)
47 C.F.R. § 20.11(2011)
47 C.F.R. § 24.202
47 C.F.R. § 51.503
47 C.F.R. § 51.505
47 C.F.R. § 51.713

5 U.S.C. § 553




UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART I. THE AGENCIES GENERALLY
CHAPTER 5. ADMINISTRATIVE PROCEDURE
SUBCHAPTER II. ADMINISTRATIVE PROCEDURE


§ 553. Rule making

(a) This section applies, according to the provisions thereof, except to the
extent that there is involved--

(1) a military or foreign affairs function of the United States; or

(2) a matter relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts.

(b) General notice of proposed rule making shall be published in the Federal
Register, unless persons subject thereto are named and either personally
served or otherwise have actual notice thereof in accordance with law. The
notice shall include--

(1) a statement of the time, place, and nature of public rule making
proceedings;

(2) reference to the legal authority under which the rule is proposed; and

(3) either the terms or substance of the proposed rule or a description of the
subjects and issues involved.

Except when notice or hearing is required by statute, this subsection does not
apply--

(A) to interpretative rules, general statements of policy, or rules of agency
organization, procedure, or practice; or


(B) when the agency for good cause finds (and incorporates the finding and
a brief statement of reasons therefor in the rules issued) that notice and
public procedure thereon are impracticable, unnecessary, or contrary to the
public interest.

(c) After notice required by this section, the agency shall give interested
persons an opportunity to participate in the rule making through submission
of written data, views, or arguments with or without opportunity for oral
presentation. After consideration of the relevant matter presented, the agency
shall incorporate in the rules adopted a concise general statement of their
basis and purpose. When rules are required by statute to be made on the
record after opportunity for an agency hearing, sections 556 and 557 of this
title apply instead of this subsection.

(d) The required publication or service of a substantive rule shall be made
not less than 30 days before its effective date, except--

(1) a substantive rule which grants or recognizes an exemption or relieves a
restriction;

(2) interpretative rules and statements of policy; or

(3) as otherwise provided by the agency for good cause found and
published with the rule.

(e) Each agency shall give an interested person the right to petition for the
issuance, amendment, or repeal of a rule.


5 U.S.C. § 554




UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART I. THE AGENCIES GENERALLY
CHAPTER 5. ADMINISTRATIVE PROCEDURE
SUBCHAPTER II. ADMINISTRATIVE PROCEDURE


§ 554. Adjudications

(a) This section applies, according to the provisions thereof, in every case of
adjudication required by statute to be determined on the record after
opportunity for an agency hearing, except to the extent that there is
involved--

(1) a matter subject to a subsequent trial of the law and the facts de novo in
a court;

(2) the selection or tenure of an employee, except a [FN1] administrative
law judge appointed under section 3105 of this title;

(3) proceedings in which decisions rest solely on inspections, tests, or
elections;

(4) the conduct of military or foreign affairs functions;

(5) cases in which an agency is acting as an agent for a court; or

(6) the certification of worker representatives.

(b) Persons entitled to notice of an agency hearing shall be timely informed
of--

(1) the time, place, and nature of the hearing;

(2) the legal authority and jurisdiction under which the hearing is to be
held; and


(3) the matters of fact and law asserted.

When private persons are the moving parties, other parties to the proceeding
shall give prompt notice of issues controverted in fact or law; and in other
instances agencies may by rule require responsive pleading. In fixing the
time and place for hearings, due regard shall be had for the convenience and
necessity of the parties or their representatives.

(c) The agency shall give all interested parties opportunity for--

(1) the submission and consideration of facts, arguments, offers of
settlement, or proposals of adjustment when time, the nature of the
proceeding, and the public interest permit; and

(2) to the extent that the parties are unable so to determine a controversy by
consent, hearing and decision on notice and in accordance with sections
556 and 557 of this title.

(d) The employee who presides at the reception of evidence pursuant to
section 556 of this title shall make the recommended decision or initial
decision required by section 557 of this title, unless he becomes unavailable
to the agency. Except to the extent required for the disposition of ex parte
matters as authorized by law, such an employee may not--

(1) consult a person or party on a fact in issue, unless on notice and
opportunity for all parties to participate; or

(2) be responsible to or subject to the supervision or direction of an
employee or agent engaged in the performance of investigative or
prosecuting functions for an agency.

An employee or agent engaged in the performance of investigative or
prosecuting functions for an agency in a case may not, in that or a factually
related case, participate or advise in the decision, recommended decision, or
agency review pursuant to section 557 of this title, except as witness or
counsel in public proceedings. This subsection does not apply--

(A) in determining applications for initial licenses;


(B) to proceedings involving the validity or application of rates, facilities,
or practices of public utilities or carriers; or

(C) to the agency or a member or members of the body comprising the
agency.

(e) The agency, with like effect as in the case of other orders, and in its
sound discretion, may issue a declaratory order to terminate a controversy or
remove uncertainty.



28 U.S.C. § 2342




UNITED STATES CODE ANNOTATED
TITLE 28. JUDICIARY AND JUDICIAL PROCEDURE
PART VI. PARTICULAR PROCEEDINGS
CHAPTER 158. ORDERS OF FEDERAL AGENCIES; REVIEW


§ 2342. Jurisdiction of court of appeals

The court of appeals (other than the United States Court of Appeals for the
Federal Circuit) has exclusive jurisdiction to enjoin, set aside, suspend (in
whole or in part), or to determine the validity of--

(1) all final orders of the Federal Communications Commission made
reviewable by section 402(a) of title 47;

(2) all final orders of the Secretary of Agriculture made under chapters 9
and 20A of title 7, except orders issued under sections 210(e), 217a, and
499g(a) of title 7;

(3) all rules, regulations, or final orders of--

(A) the Secretary of Transportation issued pursuant to section 50501,
50502, 56101-56104, or 57109 of title 46 or pursuant to part B or C of
subtitle IV, subchapter III of chapter 311, chapter 313, or chapter 315 of
title 49; and

(B) the Federal Maritime Commission issued pursuant to section 305,
41304, 41308, or 41309 or chapter 421 or 441 of title 46;

(4) all final orders of the Atomic Energy Commission made reviewable by
section 2239 of title 42;

(5) all rules, regulations, or final orders of the Surface Transportation
Board made reviewable by section 2321 of this title;

(6) all final orders under section 812 of the Fair Housing Act; and


(7) all final agency actions described in section 20114(c) of title 49.

Jurisdiction is invoked by filing a petition as provided by section 2344 of
this title.




47 U.S.C. § 151




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER I. GENERAL PROVISIONS


§ 151. Purposes of chapter; Federal Communications Commission
created


For the purpose of regulating interstate and foreign commerce in
communication by wire and radio so as to make available, so far as possible,
to all the people of the United States, without discrimination on the basis of
race, color, religion, national origin, or sex, a rapid, efficient, Nation-wide,
and world-wide wire and radio communication service with adequate
facilities at reasonable charges, for the purpose of the national defense, for
the purpose of promoting safety of life and property through the use of wire
and radio communications, and for the purpose of securing a more effective
execution of this policy by centralizing authority heretofore granted by law
to several agencies and by granting additional authority with respect to
interstate and foreign commerce in wire and radio communication, there is
created a commission to be known as the “Federal Communications
Commission”, which shall be constituted as hereinafter provided, and which
shall execute and enforce the provisions of this chapter.



47 U.S.C. § 153(44)




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND
RADIOTELEGRAPHS
CHAPTER 5 -- WIRE OR RADIO COMMUNICATION
SUBCHAPTER I -- GENERAL PROVISIONS

§ 153. Definitions

* * * * * *

(44) Rural telephone company

The term “rural telephone company” means a local exchange carrier
operating entity to the extent that such entity--

(A) provides common carrier service to any local exchange carrier study
area that does not include either--

(i) any incorporated place of 10,000 inhabitants or more, or any part thereof,
based on the most recently available population statistics of the Bureau of
the Census; or

(ii) any territory, incorporated or unincorporated, included in an urbanized
area, as defined by the Bureau of the Census as of August 10, 1993;

(B) provides telephone exchange service, including exchange access, to
fewer than 50,000 access lines;

(C) provides telephone exchange service to any local exchange carrier study
area with fewer than 100,000 access lines; or

(D) has less than 15 percent of its access lines in communities of more than
50,000 on February 8, 1996.

* * * * * *


47 U.S.C. § 154(i) & (j)




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER I. GENERAL PROVISIONS


§ 154. Federal Communications Commission

* * * * * *

(i) Duties and powers

The Commission may perform any and all acts, make such rules and
regulations, and issue such orders, not inconsistent with this chapter, as may
be necessary in the execution of its functions.

(j) Conduct of proceedings; hearings

The Commission may conduct its proceedings in such manner as will best
conduce to the proper dispatch of business and to the ends of justice. No
commissioner shall participate in any hearing or proceeding in which he has
a pecuniary interest. Any party may appear before the Commission and be
heard in person or by attorney. Every vote and official act of the
Commission shall be entered of record, and its proceedings shall be public
upon the request of any party interested. The Commission is authorized to
withhold publication of records or proceedings containing secret information
affecting the national defense.

* * * * * *



47 U.S.C. § 201




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER II. COMMON CARRIERS
PART I. COMMON CARRIER REGULATION


§ 201. Service and charges

(a) It shall be the duty of every common carrier engaged in interstate or
foreign communication by wire or radio to furnish such communication
service upon reasonable request therefor; and, in accordance with the orders
of the Commission, in cases where the Commission, after opportunity for
hearing, finds such action necessary or desirable in the public interest, to
establish physical connections with other carriers, to establish through routes
and charges applicable thereto and the divisions of such charges, and to
establish and provide facilities and regulations for operating such through
routes.

(b) All charges, practices, classifications, and regulations for and in
connection with such communication service, shall be just and reasonable,
and any such charge, practice, classification, or regulation that is unjust or
unreasonable is declared to be unlawful: Provided, That communications by
wire or radio subject to this chapter may be classified into day, night,
repeated, unrepeated, letter, commercial, press, Government, and such other
classes as the Commission may decide to be just and reasonable, and
different charges may be made for the different classes of communications:
Provided further, That nothing in this chapter or in any other provision of
law shall be construed to prevent a common carrier subject to this chapter
from entering into or operating under any contract with any common carrier
not subject to this chapter, for the exchange of their services, if the
Commission is of the opinion that such contract is not contrary to the public
interest: Provided further, That nothing in this chapter or in any other
provision of law shall prevent a common carrier subject to this chapter from
furnishing reports of positions of ships at sea to newspapers of general
circulation, either at a nominal charge or without charge, provided the name

of such common carrier is displayed along with such ship position reports.
The Commission may prescribe such rules and regulations as may be
necessary in the public interest to carry out the provisions of this chapter.



47 U.S.C. § 251




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND
RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTHER II. COMMON CARRIERS
PART II. DEVELOPMENT OF COMPETITIVE MARKETS


§ 251. Interconnection

(a) General duty of telecommunications carriers

Each telecommunications carrier has the duty--

(1) to interconnect directly or indirectly with the facilities and equipment
of other telecommunications carriers; and

(2) not to install network features, functions, or capabilities that do not
comply with the guidelines and standards established pursuant to section
255 or 256 of this title.

(b) Obligations of all local exchange carriers

Each local exchange carrier has the following duties:

(1) Resale

The duty not to prohibit, and not to impose unreasonable or discriminatory
conditions or limitations on, the resale of its telecommunications services.

(2) Number portability

The duty to provide, to the extent technically feasible, number portability
in accordance with requirements prescribed by the Commission.

(3) Dialing parity


The duty to provide dialing parity to competing providers of telephone
exchange service and telephone toll service, and the duty to permit all such
providers to have nondiscriminatory access to telephone numbers, operator
services, directory assistance, and directory listing, with no unreasonable
dialing delays.

(4) Access to rights-of-way

The duty to afford access to the poles, ducts, conduits, and rights-of-way of
such carrier to competing providers of telecommunications services on
rates, terms, and conditions that are consistent with section 224 of this title.

(5) Reciprocal compensation

The duty to establish reciprocal compensation arrangements for the
transport and termination of telecommunications.

(c) Additional obligations of incumbent local exchange carriers

In addition to the duties contained in subsection (b) of this section, each
incumbent local exchange carrier has the following duties:

(1) Duty to negotiate

The duty to negotiate in good faith in accordance with section 252 of this
title the particular terms and conditions of agreements to fulfill the duties
described in paragraphs (1) through (5) of subsection (b) of this section and
this subsection. The requesting telecommunications carrier also has the
duty to negotiate in good faith the terms and conditions of such
agreements.

(2) Interconnection

The duty to provide, for the facilities and equipment of any requesting
telecommunications carrier, interconnection with the local exchange
carrier's network--

(A) for the transmission and routing of telephone exchange service and
exchange access;


(B) at any technically feasible point within the carrier's network;

(C) that is at least equal in quality to that provided by the local exchange
carrier to itself or to any subsidiary, affiliate, or any other party to which
the carrier provides interconnection; and

(D) on rates, terms, and conditions that are just, reasonable, and
nondiscriminatory, in accordance with the terms and conditions of the
agreement and the requirements of this section and section 252 of this
title.

(3) Unbundled access

The duty to provide, to any requesting telecommunications carrier for the
provision of a telecommunications service, nondiscriminatory access to
network elements on an unbundled basis at any technically feasible point
on rates, terms, and conditions that are just, reasonable, and
nondiscriminatory in accordance with the terms and conditions of the
agreement and the requirements of this section and section 252 of this title.
An incumbent local exchange carrier shall provide such unbundled
network elements in a manner that allows requesting carriers to combine
such elements in order to provide such telecommunications service.

(4) Resale

The duty--

(A) to offer for resale at wholesale rates any telecommunications service
that the carrier provides at retail to subscribers who are not
telecommunications carriers; and

(B) not to prohibit, and not to impose unreasonable or discriminatory
conditions or limitations on, the resale of such telecommunications
service, except that a State commission may, consistent with regulations
prescribed by the Commission under this section, prohibit a reseller that
obtains at wholesale rates a telecommunications service that is available
at retail only to a category of subscribers from offering such service to a
different category of subscribers.


(5) Notice of changes

The duty to provide reasonable public notice of changes in the information
necessary for the transmission and routing of services using that local
exchange carrier's facilities or networks, as well as of any other changes
that would affect the interoperability of those facilities and networks.

(6) Collocation

The duty to provide, on rates, terms, and conditions that are just,
reasonable, and nondiscriminatory, for physical collocation of equipment
necessary for interconnection or access to unbundled network elements at
the premises of the local exchange carrier, except that the carrier may
provide for virtual collocation if the local exchange carrier demonstrates to
the State commission that physical collocation is not practical for technical
reasons or because of space limitations.

(d) Implementation

(1) In general

Within 6 months after February 8, 1996, the Commission shall complete
all actions necessary to establish regulations to implement the requirements
of this section.

(2) Access standards

In determining what network elements should be made available for
purposes of subsection (c)(3) of this section, the Commission shall
consider, at a minimum, whether--

(A) access to such network elements as are proprietary in nature is
necessary; and

(B) the failure to provide access to such network elements would impair
the ability of the telecommunications carrier seeking access to provide
the services that it seeks to offer.

(3) Preservation of State access regulations


In prescribing and enforcing regulations to implement the requirements of
this section, the Commission shall not preclude the enforcement of any
regulation, order, or policy of a State commission that--

(A) establishes access and interconnection obligations of local exchange
carriers;

(B) is consistent with the requirements of this section; and

(C) does not substantially prevent implementation of the requirements of
this section and the purposes of this part.

(e) Numbering administration

(1) Commission authority and jurisdiction

The Commission shall create or designate one or more impartial entities to
administer telecommunications numbering and to make such numbers
available on an equitable basis. The Commission shall have exclusive
jurisdiction over those portions of the North American Numbering Plan
that pertain to the United States. Nothing in this paragraph shall preclude
the Commission from delegating to State commissions or other entities all
or any portion of such jurisdiction.

(2) Costs

The cost of establishing telecommunications numbering administration
arrangements and number portability shall be borne by all
telecommunications carriers on a competitively neutral basis as determined
by the Commission.

(3) Universal emergency telephone number

The Commission and any agency or entity to which the Commission has
delegated authority under this subsection shall designate 9-1-1 as the
universal emergency telephone number within the United States for
reporting an emergency to appropriate authorities and requesting
assistance. The designation shall apply to both wireline and wireless
telephone service. In making the designation, the Commission (and any
such agency or entity) shall provide appropriate transition periods for areas

in which 9-1-1 is not in use as an emergency telephone number on October
26, 1999.

(f) Exemptions, suspensions, and modifications

(1) Exemption for certain rural telephone companies

(A) Exemption

Subsection (c) of this section shall not apply to a rural telephone
company until (i) such company has received a bona fide request for
interconnection, services, or network elements, and (ii) the State
commission determines (under subparagraph (B)) that such request is not
unduly economically burdensome, is technically feasible, and is
consistent with section 254 of this title (other than subsections (b)(7) and
(c)(1)(D) thereof).

(B) State termination of exemption and implementation schedule

The party making a bona fide request of a rural telephone company for
interconnection, services, or network elements shall submit a notice of its
request to the State commission. The State commission shall conduct an
inquiry for the purpose of determining whether to terminate the
exemption under subparagraph (A). Within 120 days after the State
commission receives notice of the request, the State commission shall
terminate the exemption if the request is not unduly economically
burdensome, is technically feasible, and is consistent with section 254 of
this title (other than subsections (b)(7) and (c)(1)(D) thereof). Upon
termination of the exemption, a State commission shall establish an
implementation schedule for compliance with the request that is
consistent in time and manner with Commission regulations.

(C) Limitation on exemption

The exemption provided by this paragraph shall not apply with respect to
a request under subsection (c) of this section, from a cable operator
providing video programming, and seeking to provide any
telecommunications service, in the area in which the rural telephone
company provides video programming. The limitation contained in this
subparagraph shall not apply to a rural telephone company that is

providing video programming on February 8, 1996.

(2) Suspensions and modifications for rural carriers

A local exchange carrier with fewer than 2 percent of the Nation's
subscriber lines installed in the aggregate nationwide may petition a State
commission for a suspension or modification of the application of a
requirement or requirements of subsection (b) or (c) of this section to
telephone exchange service facilities specified in such petition. The State
commission shall grant such petition to the extent that, and for such
duration as, the State commission determines that such suspension or
modification--

(A) is necessary--

(i) to avoid a significant adverse economic impact on users of
telecommunications services generally;

(ii) to avoid imposing a requirement that is unduly economically
burdensome; or

(iii) to avoid imposing a requirement that is technically infeasible; and

(B) is consistent with the public interest, convenience, and necessity.

The State commission shall act upon any petition filed under this
paragraph within 180 days after receiving such petition. Pending such
action, the State commission may suspend enforcement of the
requirement or requirements to which the petition applies with respect to
the petitioning carrier or carriers.

(g) Continued enforcement of exchange access and interconnection
requirements

On and after February 8, 1996, each local exchange carrier, to the extent that
it provides wireline services, shall provide exchange access, information
access, and exchange services for such access to interexchange carriers and
information service providers in accordance with the same equal access and
nondiscriminatory interconnection restrictions and obligations (including
receipt of compensation) that apply to such carrier on the date immediately

preceding February 8, 1996 under any court order, consent decree, or
regulation, order, or policy of the Commission, until such restrictions and
obligations are explicitly superseded by regulations prescribed by the
Commission after February 8, 1996. During the period beginning on
February 8, 1996 and until such restrictions and obligations are so
superseded, such restrictions and obligations shall be enforceable in the
same manner as regulations of the Commission.

(h) Definition of incumbent local exchange carrier

(1) Definition

For purposes of this section, the term ‘incumbent local exchange carrier’
means, with respect to an area, the local exchange carrier that--

(A) on February 8, 1996, provided telephone exchange service in such
area; and

(B)(i) on February 8, 1996, was deemed to be a member of the exchange
carrier association pursuant to section 69.601(b) of the Commission's
regulations (47 C.F.R. 69.601(b)); or

(ii) is a person or entity that, on or after February 8, 1996, became a
successor or assign of a member described in clause (i).

(2) Treatment of comparable carriers as incumbents

The Commission may, by rule, provide for the treatment of a local
exchange carrier (or class or category thereof) as an incumbent local
exchange carrier for purposes of this section if--

(A) such carrier occupies a position in the market for telephone exchange
service within an area that is comparable to the position occupied by a
carrier described in paragraph (1);

(B) such carrier has substantially replaced an incumbent local exchange
carrier described in paragraph (1); and

(C) such treatment is consistent with the public interest, convenience, and
necessity and the purposes of this section.


(i) Savings provision

Nothing in this section shall be construed to limit or otherwise affect the
Commission's authority under section 201 of this title.



47 U.S.C. § 252




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER II. COMMON CARRIERS
PART II. DEVELOPMENT OF COMPETITIVE MARKETS


§ 252. Procedures for negotiation, arbitration, and approval of
agreements


(a) Agreements arrived at through negotiation

(1) Voluntary negotiations

Upon receiving a request for interconnection, services, or network
elements pursuant to section 251 of this title, an incumbent local exchange
carrier may negotiate and enter into a binding agreement with the
requesting telecommunications carrier or carriers without regard to the
standards set forth in subsections (b) and (c) of section 251 of this title.
The agreement shall include a detailed schedule of itemized charges for
interconnection and each service or network element included in the
agreement. The agreement, including any interconnection agreement
negotiated before February 8, 1996, shall be submitted to the State
commission under subsection (e) of this section.

(2) Mediation

Any party negotiating an agreement under this section may, at any point in
the negotiation, ask a State commission to participate in the negotiation
and to mediate any differences arising in the course of the negotiation.

(b) Agreements arrived at through compulsory arbitration

(1) Arbitration

During the period from the 135th to the 160th day (inclusive) after the date

on which an incumbent local exchange carrier receives a request for
negotiation under this section, the carrier or any other party to the
negotiation may petition a State commission to arbitrate any open issues.

(2) Duty of petitioner

(A) A party that petitions a State commission under paragraph (1) shall, at
the same time as it submits the petition, provide the State commission all
relevant documentation concerning--

(i) the unresolved issues;

(ii) the position of each of the parties with respect to those issues; and

(iii) any other issue discussed and resolved by the parties.

(B) A party petitioning a State commission under paragraph (1) shall
provide a copy of the petition and any documentation to the other party or
parties not later than the day on which the State commission receives the
petition.

(3) Opportunity to respond

A non-petitioning party to a negotiation under this section may respond to
the other party's petition and provide such additional information as it
wishes within 25 days after the State commission receives the petition.

(4) Action by State commission

(A) The State commission shall limit its consideration of any petition
under paragraph (1) (and any response thereto) to the issues set forth in the
petition and in the response, if any, filed under paragraph (3).

(B) The State commission may require the petitioning party and the
responding party to provide such information as may be necessary for the
State commission to reach a decision on the unresolved issues. If any party
refuses or fails unreasonably to respond on a timely basis to any reasonable
request from the State commission, then the State commission may
proceed on the basis of the best information available to it from whatever
source derived.


(C) The State commission shall resolve each issue set forth in the petition
and the response, if any, by imposing appropriate conditions as required to
implement subsection (c) of this section upon the parties to the agreement,
and shall conclude the resolution of any unresolved issues not later than 9
months after the date on which the local exchange carrier received the
request under this section.

(5) Refusal to negotiate

The refusal of any other party to the negotiation to participate further in the
negotiations, to cooperate with the State commission in carrying out its
function as an arbitrator, or to continue to negotiate in good faith in the
presence, or with the assistance, of the State commission shall be
considered a failure to negotiate in good faith.

(c) Standards for arbitration

In resolving by arbitration under subsection (b) of this section any open
issues and imposing conditions upon the parties to the agreement, a State
commission shall--

(1) ensure that such resolution and conditions meet the requirements of
section 251 of this title, including the regulations prescribed by the
Commission pursuant to section 251 of this title;

(2) establish any rates for interconnection, services, or network elements
according to subsection (d) of this section; and

(3) provide a schedule for implementation of the terms and conditions by
the parties to the agreement.

(d) Pricing standards

(1) Interconnection and network element charges

Determinations by a State commission of the just and reasonable rate for
the interconnection of facilities and equipment for purposes of subsection
(c)(2) of section 251 of this title, and the just and reasonable rate for
network elements for purposes of subsection (c)(3) of such section--


(A) shall be--

(i) based on the cost (determined without reference to a rate-of-return or
other rate-based proceeding) of providing the interconnection or
network element (whichever is applicable), and

(ii) nondiscriminatory, and

(B) may include a reasonable profit.

(2) Charges for transport and termination of traffic

(A) In general

For the purposes of compliance by an incumbent local exchange carrier
with section 251(b)(5) of this title, a State commission shall not consider
the terms and conditions for reciprocal compensation to be just and
reasonable unless--

(i) such terms and conditions provide for the mutual and reciprocal
recovery by each carrier of costs associated with the transport and
termination on each carrier's network facilities of calls that originate on
the network facilities of the other carrier; and

(ii) such terms and conditions determine such costs on the basis of a
reasonable approximation of the additional costs of terminating such
calls.

(B) Rules of construction

This paragraph shall not be construed--

(i) to preclude arrangements that afford the mutual recovery of costs
through the offsetting of reciprocal obligations, including arrangements
that waive mutual recovery (such as bill-and-keep arrangements); or

(ii) to authorize the Commission or any State commission to engage in
any rate regulation proceeding to establish with particularity the
additional costs of transporting or terminating calls, or to require

carriers to maintain records with respect to the additional costs of such
calls.

(3) Wholesale prices for telecommunications services

For the purposes of section 251(c)(4) of this title, a State commission shall
determine wholesale rates on the basis of retail rates charged to subscribers
for the telecommunications service requested, excluding the portion
thereof attributable to any marketing, billing, collection, and other costs
that will be avoided by the local exchange carrier.

(e) Approval by State commission

(1) Approval required

Any interconnection agreement adopted by negotiation or arbitration shall
be submitted for approval to the State commission. A State commission to
which an agreement is submitted shall approve or reject the agreement,
with written findings as to any deficiencies.

(2) Grounds for rejection

The State commission may only reject

(A) an agreement (or any portion thereof) adopted by negotiation under
subsection (a) of this section if it finds that--

(i) the agreement (or portion thereof) discriminates against a
telecommunications carrier not a party to the agreement; or

(ii) the implementation of such agreement or portion is not consistent
with the public interest, convenience, and necessity; or

(B) an agreement (or any portion thereof) adopted by arbitration under
subsection (b) of this section if it finds that the agreement does not meet
the requirements of section 251 of this title, including the regulations
prescribed by the Commission pursuant to section 251 of this title, or the
standards set forth in subsection (d) of this section.

(3) Preservation of authority


Notwithstanding paragraph (2), but subject to section 253 of this title,
nothing in this section shall prohibit a State commission from establishing
or enforcing other requirements of State law in its review of an agreement,
including requiring compliance with intrastate telecommunications service
quality standards or requirements.

(4) Schedule for decision

If the State commission does not act to approve or reject the agreement
within 90 days after submission by the parties of an agreement adopted by
negotiation under subsection (a) of this section, or within 30 days after
submission by the parties of an agreement adopted by arbitration under
subsection (b) of this section, the agreement shall be deemed approved. No
State court shall have jurisdiction to review the action of a State
commission in approving or rejecting an agreement under this section.

(5) Commission to act if State will not act

If a State commission fails to act to carry out its responsibility under this
section in any proceeding or other matter under this section, then the
Commission shall issue an order preempting the State commission's
jurisdiction of that proceeding or matter within 90 days after being notified
(or taking notice) of such failure, and shall assume the responsibility of the
State commission under this section with respect to the proceeding or
matter and act for the State commission.

(6) Review of State commission actions

In a case in which a State fails to act as described in paragraph (5), the
proceeding by the Commission under such paragraph and any judicial
review of the Commission's actions shall be the exclusive remedies for a
State commission's failure to act. In any case in which a State commission
makes a determination under this section, any party aggrieved by such
determination may bring an action in an appropriate Federal district court
to determine whether the agreement or statement meets the requirements of
section 251 of this title and this section.

(f) Statements of generally available terms


(1) In general

A Bell operating company may prepare and file with a State commission a
statement of the terms and conditions that such company generally offers
within that State to comply with the requirements of section 251 of this
title and the regulations thereunder and the standards applicable under this
section.

(2) State commission review

A State commission may not approve such statement unless such statement
complies with subsection (d) of this section and section 251 of this title and
the regulations thereunder. Except as provided in section 253 of this title,
nothing in this section shall prohibit a State commission from establishing
or enforcing other requirements of State law in its review of such
statement, including requiring compliance with intrastate
telecommunications service quality standards or requirements.

(3) Schedule for review

The State commission to which a statement is submitted shall, not later
than 60 days after the date of such submission--

(A) complete the review of such statement under paragraph (2) (including
any reconsideration thereof), unless the submitting carrier agrees to an
extension of the period for such review; or

(B) permit such statement to take effect.

(4) Authority to continue review

Paragraph (3) shall not preclude the State commission from continuing to
review a statement that has been permitted to take effect under
subparagraph (B) of such paragraph or from approving or disapproving
such statement under paragraph (2).

(5) Duty to negotiate not affected

The submission or approval of a statement under this subsection shall not
relieve a Bell operating company of its duty to negotiate the terms and

conditions of an agreement under section 251 of this title.

(g) Consolidation of State proceedings

Where not inconsistent with the requirements of this chapter, a State
commission may, to the extent practical, consolidate proceedings under
sections 214(e), 251(f), 253 of this title, and this section in order to reduce
administrative burdens on telecommunications carriers, other parties to the
proceedings, and the State commission in carrying out its responsibilities
under this chapter.

(h) Filing required

A State commission shall make a copy of each agreement approved under
subsection (e) of this section and each statement approved under subsection
(f) of this section available for public inspection and copying within 10 days
after the agreement or statement is approved. The State commission may
charge a reasonable and nondiscriminatory fee to the parties to the
agreement or to the party filing the statement to cover the costs of approving
and filing such agreement or statement.

(i) Availability to other telecommunications carriers

A local exchange carrier shall make available any interconnection, service,
or network element provided under an agreement approved under this
section to which it is a party to any other requesting telecommunications
carrier upon the same terms and conditions as those provided in the
agreement.

(j) “Incumbent local exchange carrier” defined

For purposes of this section, the term “incumbent local exchange carrier”
has the meaning provided in section 251(h) of this title.



47 U.S.C. § 253




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER II. COMMON CARRIERS
PART II. DEVELOPMENT OF COMPETITIVE MARKETS


§ 253. Removal of barriers to entry

(a) In general

No State or local statute or regulation, or other State or local legal
requirement, may prohibit or have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate telecommunications service.

(b) State regulatory authority

Nothing in this section shall affect the ability of a State to impose, on a
competitively neutral basis and consistent with section 254 of this title,
requirements necessary to preserve and advance universal service, protect
the public safety and welfare, ensure the continued quality of
telecommunications services, and safeguard the rights of consumers.

(c) State and local government authority

Nothing in this section affects the authority of a State or local government to
manage the public rights-of-way or to require fair and reasonable
compensation from telecommunications providers, on a competitively
neutral and nondiscriminatory basis, for use of public rights-of-way on a
nondiscriminatory basis, if the compensation required is publicly disclosed
by such government.

(d) Preemption

If, after notice and an opportunity for public comment, the Commission
determines that a State or local government has permitted or imposed any

statute, regulation, or legal requirement that violates subsection (a) or (b) of
this section, the Commission shall preempt the enforcement of such statute,
regulation, or legal requirement to the extent necessary to correct such
violation or inconsistency.

(e) Commercial mobile service providers

Nothing in this section shall affect the application of section 332(c)(3) of
this title to commercial mobile service providers.

(f) Rural markets

It shall not be a violation of this section for a State to require a
telecommunications carrier that seeks to provide telephone exchange service
or exchange access in a service area served by a rural telephone company to
meet the requirements in section 214(e)(1) of this title for designation as an
eligible telecommunications carrier for that area before being permitted to
provide such service. This subsection shall not apply--

(1) to a service area served by a rural telephone company that has obtained
an exemption, suspension, or modification of section 251(c)(4) of this title
that effectively prevents a competitor from meeting the requirements of
section 214(e)(1) of this title; and

(2) to a provider of commercial mobile services.



47 U.S.C. § 259(b)(7)




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER II. COMMON CARRIERS
PART II. DEVELOPMENT OF COMPETITIVE MARKETS


§ 259. Infrastructure sharing

* * * * * *

(b) Terms and conditions of regulations

The regulations prescribed by the Commission pursuant to this section shall-

(7) require that such local exchange carrier file with the Commission or
State for public inspection, any tariffs, contracts, or other arrangements
showing the rates, terms, and conditions under which such carrier is
making available public switched network infrastructure and functions
under this section.

* * * * * *


47 U.S.C. § 332




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER III. SPECIAL PROVISIONS RELATING TO RADIO
PART I. GENERAL PROVISIONS


§ 332. Mobile services

(a) Factors which Commission must consider

In taking actions to manage the spectrum to be made available for use by the
private mobile services, the Commission shall consider, consistent with
section 151 of this title, whether such actions will--

(1) promote the safety of life and property;

(2) improve the efficiency of spectrum use and reduce the regulatory
burden upon spectrum users, based upon sound engineering principles,
user operational requirements, and marketplace demands;

(3) encourage competition and provide services to the largest feasible
number of users; or

(4) increase interservice sharing opportunities between private mobile
services and other services.

(b) Advisory coordinating committees

(1) The Commission, in coordinating the assignment of frequencies to
stations in the private mobile services and in the fixed services (as defined
by the Commission by rule), shall have authority to utilize assistance
furnished by advisory coordinating committees consisting of individuals
who are not officers or employees of the Federal Government.

(2) The authority of the Commission established in this subsection shall not

be subject to or affected by the provisions of part III of Title 5 or section
1342 of Title 31.

(3) Any person who provides assistance to the Commission under this
subsection shall not be considered, by reason of having provided such
assistance, a Federal employee.

(4) Any advisory coordinating committee which furnishes assistance to the
Commission under this subsection shall not be subject to the provisions of
the Federal Advisory Committee Act.

(c) Regulatory treatment of mobile services

(1) Common carrier treatment of commercial mobile services

(A) A person engaged in the provision of a service that is a commercial
mobile service shall, insofar as such person is so engaged, be treated as a
common carrier for purposes of this chapter, except for such provisions of
subchapter II of this chapter as the Commission may specify by regulation
as inapplicable to that service or person. In prescribing or amending any
such regulation, the Commission may not specify any provision of section
201, 202, or 208 of this title, and may specify any other provision only if
the Commission determines that--

(i) enforcement of such provision is not necessary in order to ensure that
the charges, practices, classifications, or regulations for or in connection
with that service are just and reasonable and are not unjustly or
unreasonably discriminatory;

(ii) enforcement of such provision is not necessary for the protection of
consumers; and

(iii) specifying such provision is consistent with the public interest.

(B) Upon reasonable request of any person providing commercial mobile
service, the Commission shall order a common carrier to establish physical
connections with such service pursuant to the provisions of section 201 of
this title. Except to the extent that the Commission is required to respond
to such a request, this subparagraph shall not be construed as a limitation
or expansion of the Commission's authority to order interconnection

pursuant to this chapter.

(C) The Commission shall review competitive market conditions with
respect to commercial mobile services and shall include in its annual report
an analysis of those conditions. Such analysis shall include an
identification of the number of competitors in various commercial mobile
services, an analysis of whether or not there is effective competition, an
analysis of whether any of such competitors have a dominant share of the
market for such services, and a statement of whether additional providers
or classes of providers in those services would be likely to enhance
competition. As a part of making a determination with respect to the public
interest under subparagraph (A)(iii), the Commission shall consider
whether the proposed regulation (or amendment thereof) will promote
competitive market conditions, including the extent to which such
regulation (or amendment) will enhance competition among providers of
commercial mobile services. If the Commission determines that such
regulation (or amendment) will promote competition among providers of
commercial mobile services, such determination may be the basis for a
Commission finding that such regulation (or amendment) is in the public
interest.

(D) The Commission shall, not later than 180 days after August 10, 1993,
complete a rulemaking required to implement this paragraph with respect
to the licensing of personal communications services, including making
any determinations required by subparagraph (C).

(2) Non-common carrier treatment of private mobile services

A person engaged in the provision of a service that is a private mobile
service shall not, insofar as such person is so engaged, be treated as a
common carrier for any purpose under this chapter. A common carrier
(other than a person that was treated as a provider of a private land mobile
service prior to August 10, 1993) shall not provide any dispatch service on
any frequency allocated for common carrier service, except to the extent
such dispatch service is provided on stations licensed in the domestic
public land mobile radio service before January 1, 1982. The Commission
may by regulation terminate, in whole or in part, the prohibition contained
in the preceding sentence if the Commission determines that such
termination will serve the public interest.


(3) State preemption

(A) Notwithstanding sections 152(b) and 221(b) of this title, no State or
local government shall have any authority to regulate the entry of or the
rates charged by any commercial mobile service or any private mobile
service, except that this paragraph shall not prohibit a State from regulating
the other terms and conditions of commercial mobile services. Nothing in
this subparagraph shall exempt providers of commercial mobile services
(where such services are a substitute for land line telephone exchange
service for a substantial portion of the communications within such State)
from requirements imposed by a State commission on all providers of
telecommunications services necessary to ensure the universal availability
of telecommunications service at affordable rates. Notwithstanding the first
sentence of this subparagraph, a State may petition the Commission for
authority to regulate the rates for any commercial mobile service and the
Commission shall grant such petition if such State demonstrates that--

(i) market conditions with respect to such services fail to protect
subscribers adequately from unjust and unreasonable rates or rates that
are unjustly or unreasonably discriminatory; or

(ii) such market conditions exist and such service is a replacement for
land line telephone exchange service for a substantial portion of the
telephone land line exchange service within such State.

The Commission shall provide reasonable opportunity for public
comment in response to such petition, and shall, within 9 months after the
date of its submission, grant or deny such petition. If the Commission
grants such petition, the Commission shall authorize the State to exercise
under State law such authority over rates, for such periods of time, as the
Commission deems necessary to ensure that such rates are just and
reasonable and not unjustly or unreasonably discriminatory.

(B) If a State has in effect on June 1, 1993, any regulation concerning the
rates for any commercial mobile service offered in such State on such date,
such State may, no later than 1 year after August 10, 1993, petition the
Commission requesting that the State be authorized to continue exercising
authority over such rates. If a State files such a petition, the State's existing
regulation shall, notwithstanding subparagraph (A), remain in effect until
the Commission completes all action (including any reconsideration) on

such petition. The Commission shall review such petition in accordance
with the procedures established in such subparagraph, shall complete all
action (including any reconsideration) within 12 months after such petition
is filed, and shall grant such petition if the State satisfies the showing
required under subparagraph (A)(i) or (A)(ii). If the Commission grants
such petition, the Commission shall authorize the State to exercise under
State law such authority over rates, for such period of time, as the
Commission deems necessary to ensure that such rates are just and
reasonable and not unjustly or unreasonably discriminatory. After a
reasonable period of time, as determined by the Commission, has elapsed
from the issuance of an order under subparagraph (A) or this subparagraph,
any interested party may petition the Commission for an order that the
exercise of authority by a State pursuant to such subparagraph is no longer
necessary to ensure that the rates for commercial mobile services are just
and reasonable and not unjustly or unreasonably discriminatory. The
Commission shall provide reasonable opportunity for public comment in
response to such petition, and shall, within 9 months after the date of its
submission, grant or deny such petition in whole or in part.

(4) Regulatory treatment of communications satellite corporation

Nothing in this subsection shall be construed to alter or affect the
regulatory treatment required by title IV of the Communications Satellite
Act of 1962 [47 U.S.C.A. § 741 et seq.] of the corporation authorized by
title III of such Act [47 U.S.C.A. § 731 et seq.].

(5) Space segment capacity

Nothing in this section shall prohibit the Commission from continuing to
determine whether the provision of space segment capacity by satellite
systems to providers of commercial mobile services shall be treated as
common carriage.

(6) Foreign ownership

The Commission, upon a petition for waiver filed within 6 months after
August 10, 1993, may waive the application of section 310(b) of this title
to any foreign ownership that lawfully existed before May 24, 1993, of any
provider of a private land mobile service that will be treated as a common
carrier as a result of the enactment of the Omnibus Budget Reconciliation

Act of 1993, but only upon the following conditions:

(A) The extent of foreign ownership interest shall not be increased above
the extent which existed on May 24, 1993.

(B) Such waiver shall not permit the subsequent transfer of ownership to
any other person in violation of section 310(b) of this title.

(7) Preservation of local zoning authority

(A) General authority

Except as provided in this paragraph, nothing in this chapter shall limit or
affect the authority of a State or local government or instrumentality
thereof over decisions regarding the placement, construction, and
modification of personal wireless service facilities.

(B) Limitations

(i) The regulation of the placement, construction, and modification of
personal wireless service facilities by any State or local government or
instrumentality thereof--

(I) shall not unreasonably discriminate among providers of functionally
equivalent services; and

(II) shall not prohibit or have the effect of prohibiting the provision of
personal wireless services.

(ii) A State or local government or instrumentality thereof shall act on
any request for authorization to place, construct, or modify personal
wireless service facilities within a reasonable period of time after the
request is duly filed with such government or instrumentality, taking into
account the nature and scope of such request.

(iii) Any decision by a State or local government or instrumentality
thereof to deny a request to place, construct, or modify personal wireless
service facilities shall be in writing and supported by substantial evidence
contained in a written record.


(iv) No State or local government or instrumentality thereof may regulate
the placement, construction, and modification of personal wireless
service facilities on the basis of the environmental effects of radio
frequency emissions to the extent that such facilities comply with the
Commission's regulations concerning such emissions.

(v) Any person adversely affected by any final action or failure to act by
a State or local government or any instrumentality thereof that is
inconsistent with this subparagraph may, within 30 days after such action
or failure to act, commence an action in any court of competent
jurisdiction. The court shall hear and decide such action on an expedited
basis. Any person adversely affected by an act or failure to act by a State
or local government or any instrumentality thereof that is inconsistent
with clause (iv) may petition the Commission for relief.

(C) Definitions

For purposes of this paragraph--

(i) the term “personal wireless services” means commercial mobile
services, unlicensed wireless services, and common carrier wireless
exchange access services;

(ii) the term “personal wireless service facilities” means facilities for
the provision of personal wireless services; and

(iii) the term “unlicensed wireless service” means the offering of
telecommunications services using duly authorized devices which do
not require individual licenses, but does not mean the provision of
direct-to-home satellite services (as defined in section 303(v) of this
title).

(8) Mobile services access

A person engaged in the provision of commercial mobile services, insofar
as such person is so engaged, shall not be required to provide equal access
to common carriers for the provision of telephone toll services. If the
Commission determines that subscribers to such services are denied access
to the provider of telephone toll services of the subscribers' choice, and that
such denial is contrary to the public interest, convenience, and necessity,

then the Commission shall prescribe regulations to afford subscribers
unblocked access to the provider of telephone toll services of the
subscribers' choice through the use of a carrier identification code assigned
to such provider or other mechanism. The requirements for unblocking
shall not apply to mobile satellite services unless the Commission finds it
to be in the public interest to apply such requirements to such services.

(d) Definitions

For purposes of this section--

(1) the term “commercial mobile service” means any mobile service (as
defined in section 153 of this title) that is provided for profit and makes
interconnected service available (A) to the public or (B) to such classes of
eligible users as to be effectively available to a substantial portion of the
public, as specified by regulation by the Commission;

(2) the term “interconnected service” means service that is interconnected
with the public switched network (as such terms are defined by regulation
by the Commission) or service for which a request for interconnection is
pending pursuant to subsection (c)(1)(B) of this section; and

(3) the term “private mobile service” means any mobile service (as defined
in section 153 of this title) that is not a commercial mobile service or the
functional equivalent of a commercial mobile service, as specified by
regulation by the Commission.



47 U.S.C. § 405




UNITED STATES CODE ANNOTATED
TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5. WIRE OR RADIO COMMUNICATION
SUBCHAPTER IV. PROCEDURAL AND ADMINISTRATIVE
PROVISIONS


§ 405. Petition for reconsideration; procedure; disposition; time of
filing; additional evidence; time for disposition of petition for
reconsideration of order concluding hearing or investigation; appeal of
order


(a) After an order, decision, report, or action has been made or taken in any
proceeding by the Commission, or by any designated authority within the
Commission pursuant to a delegation under section 155(c)(1) of this title,
any party thereto, or any other person aggrieved or whose interests are
adversely affected thereby, may petition for reconsideration only to the
authority making or taking the order, decision, report, or action; and it shall
be lawful for such authority, whether it be the Commission or other authority
designated under section 155(c)(1) of this title, in its discretion, to grant such
a reconsideration if sufficient reason therefor be made to appear. A petition
for reconsideration must be filed within thirty days from the date upon
which public notice is given of the order, decision, report, or action
complained of. No such application shall excuse any person from complying
with or obeying any order, decision, report, or action of the Commission, or
operate in any manner to stay or postpone the enforcement thereof, without
the special order of the Commission. The filing of a petition for
reconsideration shall not be a condition precedent to judicial review of any
such order, decision, report, or action, except where the party seeking such
review (1) was not a party to the proceedings resulting in such order,
decision, report, or action, or (2) relies on questions of fact or law upon
which the Commission, or designated authority within the Commission, has
been afforded no opportunity to pass. The Commission, or designated
authority within the Commission, shall enter an order, with a concise
statement of the reasons therefor, denying a petition for reconsideration or
granting such petition, in whole or in part, and ordering such further

proceedings as may be appropriate: Provided, That in any case where such
petition relates to an instrument of authorization granted without a hearing,
the Commission, or designated authority within the Commission, shall take
such action within ninety days of the filing of such petition.
Reconsiderations shall be governed by such general rules as the Commission
may establish, except that no evidence other than newly discovered
evidence, evidence which has become available only since the original
taking of evidence, or evidence which the Commission or designated
authority within the Commission believes should have been taken in the
original proceeding shall be taken on any reconsideration. The time within
which a petition for review must be filed in a proceeding to which section
402(a) of this title applies, or within which an appeal must be taken under
section 402(b) of this title in any case, shall be computed from the date upon
which the Commission gives public notice of the order, decision, report, or
action complained of.

(b)(1) Within 90 days after receiving a petition for reconsideration of an
order concluding a hearing under section 204(a) of this title or concluding an
investigation under section 208(b) of this title, the Commission shall issue
an order granting or denying such petition.

(2) Any order issued under paragraph (1) shall be a final order and may be
appealed under section 402(a) of this title.



47 C.F.R. § 1.2




CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER A. GENERAL
PART 1. PRACTICE AND PROCEDURE
SUBPART A. GENERAL RULES OF PRACTICE AND
PROCEDURE - GENERAL


§ 1.2 Declaratory rulings.

(a) The Commission may, in accordance with section 5(d) of the
Administrative Procedure Act, on motion or on its own motion issue a
declaratory ruling terminating a controversy or removing uncertainty.

(b) The bureau or office to which a petition for declaratory ruling has been
submitted or assigned by the Commission should docket such a petition
within an existing or current proceeding, depending on whether the issues
raised within the petition substantially relate to an existing proceeding. The
bureau or office then should seek comment on the petition via public notice.
Unless otherwise specified by the bureau or office, the filing deadline for
responsive pleadings to a docketed petition for declaratory ruling will be 30
days from the release date of the public notice, and the default filing
deadline for any replies will be 15 days thereafter.



47 C.F.R. § 20.11(2005)




CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER B. COMMON CARRIER SERVICES
PART 20. COMMERCIAL MOBILE SERVICES

(Effective: April 29, 2005 to December 28, 2011)

§ 20.11 Interconnection to facilities of local exchange carriers.

(a) A local exchange carrier must provide the type of interconnection
reasonably requested by a mobile service licensee or carrier, within a
reasonable time after the request, unless such interconnection is not
technically feasible or economically reasonable. Complaints against carriers
under section 208 of the Communications Act, 47 U.S.C. 208, alleging a
violation of this section shall follow the requirements of §§ 1.711–1.734 of
this chapter, 47 CFR 1.711–1.734.

<Text of subsection (b) effective until Dec. 29, 2011.>

(b) Local exchange carriers and commercial mobile radio service providers
shall comply with principles of mutual compensation.

(1) A local exchange carrier shall pay reasonable compensation to a
commercial mobile radio service provider in connection with terminating
traffic that originates on facilities of the local exchange carrier.

(2) A commercial mobile radio service provider shall pay reasonable
compensation to a local exchange carrier in connection with terminating
traffic that originates on the facilities of the commercial mobile radio
service provider.

<Text of subsection (b) effective Dec. 29, 2011.>

(b) Local exchange carriers and commercial mobile radio service providers
shall exchange Non–Access Telecommunications Traffic, as defined in §

51.701 of this chapter, under a bill-and-keep arrangement, as defined in §
51.713 of this chapter, unless they mutually agree otherwise.

(c) Local exchange carriers and commercial mobile radio service providers
shall also comply with applicable provisions of part 51 of this chapter.

(d) Local exchange carriers may not impose compensation obligations for
traffic not subject to access charges upon commercial mobile radio service
providers pursuant to tariffs.

(e) An incumbent local exchange carrier may request interconnection from a
commercial mobile radio service provider and invoke the negotiation and
arbitration procedures contained in section 252 of the Act. A commercial
mobile radio service provider receiving a request for interconnection must
negotiate in good faith and must, if requested, submit to arbitration by the
state commission. Once a request for interconnection is made, the interim
transport and termination pricing described in § 51.715 of this chapter shall
apply.









47 C.F.R. § 20.11(2012)



CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER B. COMMON CARRIER SERVICES
PART 20. COMMERCIAL MOBILE SERVICES

(Effective: January 11, 2012)

§ 20.11 Interconnection to facilities of local exchange carriers.

(a) A local exchange carrier must provide the type of interconnection
reasonably requested by a mobile service licensee or carrier, within a
reasonable time after the request, unless such interconnection is not
technically feasible or economically reasonable. Complaints against carriers
under section 208 of the Communications Act, 47 U.S.C. 208, alleging a
violation of this section shall follow the requirements of §§ 1.711–1.734 of
this chapter, 47 CFR 1.711–1.734.

(b) Local exchange carriers and commercial mobile radio service providers
shall exchange Non–Access Telecommunications Traffic, as defined in
§ 51.701 of this chapter, under a bill-and-keep arrangement, as defined in
§ 51.713 of this chapter, unless they mutually agree otherwise.

(c) Local exchange carriers and commercial mobile radio service providers
shall also comply with applicable provisions of part 51 of this chapter.

(d) Local exchange carriers may not impose compensation obligations for
traffic not subject to access charges upon commercial mobile radio service
providers pursuant to tariffs.

(e) An incumbent local exchange carrier may request interconnection from a
commercial mobile radio service provider and invoke the negotiation and
arbitration procedures contained in section 252 of the Act. A commercial
mobile radio service provider receiving a request for interconnection must
negotiate in good faith and must, if requested, submit to arbitration by the
state commission.

47 C.F.R. § 24.202




CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER B. COMMON CARRIER SERVICES
PART 24. PERSONAL COMMUNICATIONS SERVICES
SUBPART E. BROADBAND PCS


§ 24.202 Service areas.

Broadband PCS service areas are Major Trading Areas (MTAs) and Basic
Trading Areas (BTAs) as defined in this section. MTAs and BTAs are based
on the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd
Edition, at pages 38–39 (“BTA/MTA Map”). Rand McNally organizes the
50 states and the District of Columbia into 47 MTAs and 487 BTAs. The
BTA/MTA Map is available for public inspection at the Office of
Engineering and Technology's Technical Information Center, 445 12th
Street, SW, Washington, DC 20554.

(a) The MTA service areas are based on the Rand McNally 1992
Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38–39, with
the following exceptions and additions:

(1) Alaska is separated from the Seattle MTA and is licensed separately.

(2) Guam and the Northern Mariana Islands are licensed as a single
MTA-like area.

(3) Puerto Rico and the United States Virgin Islands are licensed as a
single MTA-like area.

(4) American Samoa is licensed as a single MTA-like area.

(b) The BTA service areas are based on the Rand McNally 1992
Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38–39, with

the following additions licensed separately as BTA-like areas: American
Samoa; Guam; Northern Mariana Islands; Mayagüez/Aguadilla–Ponce,
Puerto Rico; San Juan, Puerto Rico; and the United States Virgin Islands.
The Mayagüez/Aguadilla–Ponce BTA consists of the following municipios:
Adjuntas, Aguada, Aguadilla, Añasco, Arroyo, Cabo Rojo, Coamo, Guánica,
Guayama, Guayanilla, Hormigueros, Isabela, Jayuya, Juana Díaz, Lajas, Las
Marías, Mayagüez, Maricao, Maunabo, Moca, Patillas, Peñuelas, Ponce,
Quebradillas, Rincón, Sabana Grande, Salinas, San Germán, Santa Isabel,
Villalba, and Yauco. The San Juan BTA consists of all other municipios in
Puerto Rico.


47 C.F.R. § 51.503




CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER B. COMMON CARRIER SERVICES
PART 51. INTERCONNECTION
SUBPART F. PRICING OF ELEMENTS


§ 51.503 General pricing standard.


(a) An incumbent LEC shall offer elements to requesting
telecommunications carriers at rates, terms, and conditions that are just,
reasonable, and nondiscriminatory.

(b) An incumbent LEC's rates for each element it offers shall comply with
the rate structure rules set forth in §§ 51.507 and 51.509, and shall be
established, at the election of the state commission--

(1) Pursuant to the forward-looking economic cost-based pricing
methodology set forth in §§ 51.505 and 51.511; or

(2) Consistent with the proxy ceilings and ranges set forth in § 51.513.

(c) The rates that an incumbent LEC assesses for elements shall not vary on
the basis of the class of customers served by the requesting carrier, or on the
type of services that the requesting carrier purchasing such elements uses
them to provide.



47 C.F.R. § 51.505




CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER B. COMMON CARRIER SERVICES
PART 51. INTERCONNECTION
SUBPART F. PRICING OF ELEMENTS


§ 51.505 Forward-looking economic cost.

(a) In general. The forward-looking economic cost of an element equals the
sum of:

(1) The total element long-run incremental cost of the element, as
described in paragraph (b); and

(2) A reasonable allocation of forward-looking common costs, as
described in paragraph (c).

(b) Total element long-run incremental cost. The total element long-run
incremental cost of an element is the forward-looking cost over the long run
of the total quantity of the facilities and functions that are directly
attributable to, or reasonably identifiable as incremental to, such element,
calculated taking as a given the incumbent LEC's provision of other
elements.

(1) Efficient network configuration. The total element long-run
incremental cost of an element should be measured based on the use of
the most efficient telecommunications technology currently available and
the lowest cost network configuration, given the existing location of the
incumbent LEC's wire centers.

(2) Forward-looking cost of capital. The forward-looking cost of capital
shall be used in calculating the total element long-run incremental cost of
an element.


(3) Depreciation rates. The depreciation rates used in calculating
forward-looking economic costs of elements shall be economic
depreciation rates.

(c) Reasonable allocation of forward-looking common costs--

(1) Forward-looking common costs. Forward-looking common costs are
economic costs efficiently incurred in providing a group of elements or
services (which may include all elements or services provided by the
incumbent LEC) that cannot be attributed directly to individual elements
or services.

(2) Reasonable allocation.

(i) The sum of a reasonable allocation of forward-looking common costs
and the total element long-run incremental cost of an element shall not
exceed the stand-alone costs associated with the element. In this context,
stand-alone costs are the total forward-looking costs, including corporate
costs, that would be incurred to produce a given element if that element
were provided by an efficient firm that produced nothing but the given
element.

(ii) The sum of the allocation of forward-looking common costs for all
elements and services shall equal the total forward-looking common
costs, exclusive of retail costs, attributable to operating the incumbent
LEC's total network, so as to provide all the elements and services
offered.

(d) Factors that may not be considered. The following factors shall not be
considered in a calculation of the forward-looking economic cost of an
element:

(1) Embedded costs. Embedded costs are the costs that the incumbent
LEC incurred in the past and that are recorded in the incumbent LEC's
books of accounts;

(2) Retail costs. Retail costs include the costs of marketing, billing,
collection, and other costs associated with offering retail
telecommunications services to subscribers who are not
telecommunications carriers, described in § 51.609;


(3) Opportunity costs. Opportunity costs include the revenues that the
incumbent LEC would have received for the sale of telecommunications
services, in the absence of competition from telecommunications carriers
that purchase elements; and

(4) Revenues to subsidize other services. Revenues to subsidize other
services include revenues associated with elements or
telecommunications service offerings other than the element for which a
rate is being established.

(e) Cost study requirements. An incumbent LEC must prove to the state
commission that the rates for each element it offers do not exceed the
forward-looking economic cost per unit of providing the element, using a
cost study that complies with the methodology set forth in this section and §
51.511.

(1) A state commission may set a rate outside the proxy ranges or above
the proxy ceilings described in § 51.513 only if that commission has
given full and fair effect to the economic cost based pricing methodology
described in this section and § 51.511 in a state proceeding that meets the
requirements of paragraph (e)(2) of this section.

(2) Any state proceeding conducted pursuant to this section shall provide
notice and an opportunity for comment to affected parties and shall result
in the creation of a written factual record that is sufficient for purposes of
review. The record of any state proceeding in which a state commission
considers a cost study for purposes of establishing rates under this section
shall include any such cost study.



47 C.F.R. § 51.713




CODE OF FEDERAL REGULATIONS
TITLE 47. TELECOMMUNICATION
CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER B. COMMON CARRIER SERVICES
PART 51. INTERCONNECTION
SUBPART H. RECIPROCAL COMPENSATION FOR TRANSPORT
AND TERMINATION OF TELECOMMUNICATIONS TRAFFIC


§ 51.713 Bill-and-keep arrangements.

Bill-and-keep arrangements are those in which carriers exchanging
telecommunications traffic do not charge each other for specific transport
and/or termination functions or services.







05-71995


IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT


Ronan Telephone Co., et al, Petitioner

v.

Federal Communications Commission and the United States of
America, Respondents.


CERTIFICATE OF SERVICE


I, Laurel R. Bergold, hereby certify that on July 16, 2012, I electronically
filed the foregoing Brief for Respondents with the Clerk of the Court for the
United States Court of Appeals for the Ninth Circuit by using the CM/ECF
system. Participants in the case who are registered CM/ECF users will be
served by the CM/ECF system.

Some of the participants in the case, denoted with asterisks below, are not
CM/ECF users. I certify further that I have directed that copies of the
foregoing document be mailed by First-Class Mail to those persons, unless
another attorney at the same mailing address is receiving electronic service.


Ivan C. Evilsizer
Robert Nicholson
Evilsizer Law Office
Robert J. Wiggers
2301 Colonial Drive
Antitrust Division/Appellate Section
Suite 2B
U.S. Department of Justice
Helena, MT 59601
950 Pennsylvania Avenue, N.W.
Counsel for: Ronan Telephone
Room 3228
Company and Hot Springs Television Washington, D.C. 20530
Company
Counsel for: USA




Cheryl A. Tritt
Alan Jay Lazarus
David H. Solomon
Drinker Biddle & Reath, LLP
Frank Whitney Krogh
20th Floor
Wilkinson Barker Knauer, LLP
50 Fremont Street
2300 N Street, N.W., Suite 700
San Francisco, CA 94105-2235
Washington, D.C. 20037
Counsel for: Sprint Nextel
Counsel for: T-Mobile USA, Inc.
Corporation.



Carl W. Northrop

Telecommunications Law
Professionals PLLC
875 15th Street, N.W.
Washington, D.C. 20005
Counsel for: MetroPCS
Communications, Inc.




/s/ Laurel R. Bergold

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