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

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Released: April 25, 2013
Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 1

IN THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

____________

NO. 11-9900
____________

IN RE: FCC 11-161
____________

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

UNCITED BRIEF OF INTERVENOR NATIONAL TELECOMMUNICATIONS
COOPERATIVE ASSOCIATION IN SUPPORT OF THE FCC’S
RESPONSE TO THE VOICE ON THE NET COALITION, INC. BRIEF
(DEFERRED APPENDIX APPEAL)
____________

Russell M. Blau
Tamar E. Finn
Bingham McCutchen, LLP
2020 K Street NW
Washington, DC 20006
Tel. (202) 373-6000
russell.blau@bingham.com
tamar.finn@bingham.com

Counsel for the National
Telecommunications Cooperative
Association

APRIL 24, 2013



Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 2

CORPORATE DISCLOSURE STATEMENT


Pursuant to Rule 26.1 of the Federal Rules of Appellate
Procedure, the National Telecommunications Cooperative
Association (“NTCA”) respectfully submits the following corporate
disclosure statement:

The NTCA is a trade association representing approximately
880 small rural telephone companies and cooperatives, many of
whom may be affected by the outcome of this proceeding. Four of
those telephone company members (Mosinee Telephone Company,
LLC; Oakwood Telephone Company; Salem Telephone Company;
and Tenney Telephone Company) are operating subsidiaries of
Telephone and Data Systems, Inc. (NYSE: TDS; TDS.S) and may
be affected by the outcome of this proceeding. Effective March 1,
2013, NTCA and the Organization for the Promotion and
Advancement of Small Telecommunications Companies
(“OPASTCO”) merged under the name NTCA. The following
members of OPASTCO that were not also members of NTCA
before the merger are also either publicly traded or owned by
publicly traded companies: Hickory Tech Corporation (HTCO);
NTELOS Holdings Corp (NTLS); and New Ulm Telecom, Inc.
(NULM).


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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 3

TABLE OF CONTENTS

CORPORATE DISCLOSURE STATEMENT ............................... ii 
TABLE OF CONTENTS .......................................................... iii 
GLOSSARY ............................................................................ v 
SUMMARY OF ARGUMENT ................................................... 1 
ARGUMENT .......................................................................... 1 
I. 
The FCC Provided Notice that it Could Address Blocking
of VoIP Calls ................................................................. 1 
II. 
The FCC Justified its Ancillary Authority to Prohibit Call-
Blocking by VoIP Providers ............................................ 4 
CERTIFICATE OF COMPLIANCE ........................................... 8 
CERTIFICATE OF SERVICE .................................................. 9 



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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 4

TABLE OF AUTHORITIES

Page(s)
FEDERAL CASES

Action for Children's Television v. FCC,
564 F.2d 458 (D.C. Cir. 1977) ................................................................ 2
Bowman Transportation, Inc. v. Arkansas-Best Freight
System, Inc.,
419 U.S. 281 (1974) ............................................................................ 4, 5
Comcast v. FCC,
600 F.3d 642 (D.C. Cir. 2010) ................................................................ 4
Nader v. FCC,
520 F.2d 182 (D.C. Cir. 1975) ............................................................ 4, 5

STATUTES

47 U.S.C. § 201(b) ....................................................................................... 6
47 USC § 251(b)(5) ...................................................................................... 6
47 USC § 251(g) .......................................................................................... 6

ADMINISTRATIVE DECISIONS

Connect America Fund,
FCC 11-13, Notice of Proposed Rulemaking, 26 F.C.C.R.
4554 (2011) ......................................................................................... 2, 3
Connect America Fund,
FCC 11-161, Report and Order and Further Notice of
Proposed Rulemaking, 26 F.C.C.R. 17663 (2011)..................... 1, 4, 5, 6
Connect America Fund, Public Notice, DA-1348, 26 F.C.C.R.
11112 (2011) ........................................................................................... 3


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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 5

GLOSSARY

Act, or 1934 Act
Communications Act of 1934, as
amended
APA
Administrative Procedure Act
FCC, or Commission
Federal Communications Commission
ICC Intercarrier
Compensation
ILEC
Incumbent Local Exchange Carrier
JA Joint
Appendix
Notice
Further Inquiry Into Certain Issues In
The Universal Service-Intercarrier
Compensation Transformation
Proceeding, Connect America Fund,
Public Notice, DA-1348, 26 F.C.C.R.
11112 (2011)
NPRM
Connect America Fund, FCC 11-13,
Notice of Proposed Rulemaking, 26
F.C.C.R. 4554 (2011)
NTCA Intervenor
National
Telecommunications Cooperative
Association
Order
Connect America Fund, FCC 11-161,
Report and Order and Further Notice of
Proposed Rulemaking, 26 F.C.C.R.
17663 (2011)
VoIP
Voice over Internet Protocol
VON
Petitioner Voice on the Net Coalition
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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 6

SUMMARY OF ARGUMENT

VON erroneously asserts that the FCC failed to provide
sufficient notice under the APA to apprise interested parties that
it was considering adopting a VoIP anti-blocking rule, including
for one-way VoIP, and that the Order did not justify the FCC’s
assertion of ancillary authority over VoIP providers that could be
classified as information service providers rather than
telecommunications carriers.
These claims lack merit. The FCC’s notices, when read
together, provide the requisite notice and the resulting rule was a
logical outgrowth of those notices. Similarly, the Order, as a
whole, explains how the FCC’s VoIP anti-blocking rule is covered
by the Act’s jurisdictional grant and is reasonably ancillary to the
FCC’s statutory responsibilities regarding intercarrier
compensation.

ARGUMENT

I.

The FCC Provided Notice that it Could Address
Blocking of VoIP Calls

VON misreads the APA’s standard when it argues that the
FCC failed to afford VoIP providers an opportunity to comment on


Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 7
its proposed anti-blocking rule. VON asserts that the FCC “did not
discuss or seek comment on the issue of call-blocking by VoIP
providers,” and never discussed “one-way VoIP providers in any
context.” VON Br. at 10. Neither statement is accurate. VON
admits that the NPRM refers to call-blocking, Id. at 10-11; and the
NPRM notified the public that the FCC’s reforms could apply to
non-interconnected VoIP providers. NPRM ¶612. (JA-). VON
appears to argue that the FCC never linked its discussion of call-
blocking with its discussion of VoIP. But the APA only requires
the final rule to “be a logical outgrowth” of the notice, FCC Br. at
10, and a notice “need not specify every precise proposal which
[the agency] may ultimately adopt as a rule” provided it “fairly
apprise[s] interested parties of the issues involved.” Action for
Children's Television v. FCC, 564 F.2d 458, 470 (D.C. Cir. 1977).
In part, the FCC aimed its ICC reforms at minimizing
disputes between providers. NPRM ¶604. (JA-). The FCC sought
comment on reforms to improve the signaling information used for
billing between providers (“phantom traffic”), Id. ¶620-34 (JA-); to
reduce disputes regarding traffic stimulation in calling areas
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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 8
where ICC rates were high, Id. ¶635-677 (JA-); and to require
payment of ICC on VoIP traffic for which the FCC previously had
not definitively imposed an obligation. Id. ¶608-619. (JA-). The
FCC explained that its pre-existing anti-blocking policy factored
into industry disputes because carriers had to deliver calls – even
if an ICC obligation was disputed or rates appeared unfair. Id.
¶654. (JA-). The FCC rejected proposals to allow blocking of calls
lacking proper signaling information. Id. ¶634 (JA-_) n.980. (JA-)
It also proposed applying revised signaling rules to interconnected
VoIP. Id. ¶37. (JA-). The FCC thus provided notice that its anti-
blocking rule was integral to its ICC reforms.
The FCC also asked whether its “focus on [interconnected]
VoIP is too narrow” and whether ICC obligations should apply to
“other forms of VoIP traffic.” Id. ¶612. (JA-). It subsequently
sought comment on proposals to apply ICC obligations and new
signaling rules to “one-way” VoIP traffic. Notice at 11128. (JA-).
One-way VoIP providers were plainly notified that the FCC was
considering including their traffic within its ICC regime, which
could include an anti-blocking rule.
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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 9

II. The FCC Justified its Ancillary Authority to Prohibit

Call-Blocking by VoIP Providers

VON claims that the Order “failed completely” to explain
how the VoIP anti-blocking rule satisfies the two-part test
governing the FCC’s exercise of ancillary authority. VON Br. at
17. But the FCC is not required to explain its analysis in the
specific paragraphs where it announced the anti-blocking rule. See
Nader v. FCC, 520 F.2d 182, 193 (D.C. Cir. 1975) (Court “must
uphold the [FCC’s] decision if, upon consideration of the entire
record, the agency’s rationale reasonably may be perceived.”) See
also Bowman Transportation, Inc. v. Arkansas-Best Freight
System, Inc., 419 U.S. 281, 286 (1974). (Court should “uphold a
decision of less than ideal clarity if … agency’s path may
reasonably be discerned.”)
The FCC’s anti-blocking rule falls within its jurisdiction
under Title I of the Act because VoIP is plainly “communications
by wire or radio.” See Order ¶954; (JA-); FCC Br. at 16.1 The

1 The FNPRM explains that because “it is ‘communications
by wire or radio,’ the Commission clearly has subject matter
jurisdiction over …packetized voice traffic.” ¶1357. (JA-).
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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 10
Order further explains that VoIP providers “offer[] service over
broadband networks[,]” ¶63, which fall within the FCC’s “general
jurisdictional grant.” Comcast v. FCC, 600 F.3d 642, 646 (D.C. Cir.
2010).
The Order contains sufficient discussion of the anti-blocking
rule and the FCC’s statutorily mandated responsibilities to satisfy
the “reasonably ancillary” prong of Comcast. The Order recaps the
long-standing no-blocking rule, responding to concerns that
providers might block calls to “address perceived unreasonable
[ICC] charges.” Order ¶973. (JA-). The FCC extended the anti-
blocking rule to VoIP providers because they “likewise could have
incentives to avoid such rates.” Id. ¶974. (JA-).
VON still denies any linkage with the effective performance
of the FCC’s “specific statutorily-mandated responsibilities.” VON
Br. at 17. VON’s claim is inconsistent with the standard requiring
the Court to “consider[] … the entire record” Nader, 520 F.2d at
193, and affirm “if the agency’s path may reasonably be
discerned.” Bowman, 419 U.S. at 286. That path is visible where
the FCC asserts authority over ICC rates.
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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 11
The FCC is obligated to “ensure that interstate switched
access rates remain just and reasonable, as required under section
201(b) of the Act.” Order ¶662. (JA-). “Section 201 has long
conferred authority on the Commission to regulate interstate
communications to ensure that ‘charges, practices, classifications,
and regulations’ are ‘just and reasonable.’” Id. ¶771. (JA-). The
FCC also relied on Sections 251(b)(5) and 251(g) to exercise
authority, including transitional authority over ICC rates for all
telecommunications, including VoIP traffic. Id. ¶¶954, 956-57.
(JA-).
The FCC’s anti-blocking rule for VoIP, as part of its ICC
reform, is plainly in furtherance of its statutorily mandated
responsibilities regarding ICC rates and thus is reasonably
ancillary to the effective performance of its duties.


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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 12






Respectfully submitted,


/s/
Tamar E. Finn


Russell M. Blau
Tamar E. Finn
Bingham McCutchen, LLP
2020 K Street NW
Washington, DC 20006
Tel. (202) 373-6000
russell.blau@bingham.com
tamar.finn@bingham.com


Counsel for the National
Telecommunications
Cooperative Association


April 24, 2013


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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 13

CERTIFICATE OF COMPLIANCE

Certificate of Compliance With Type-Volume Limitations,

Typeface Requirements, Type Style Requirements, Privacy

Redaction Requirements, and Virus Scan



1. This brief contains 999 words of the 21,400 words the
Court allocated for the briefs of intervenors in support of the FCC
in its October 1, 2012 Order Consolidating Case No. 12-9575 with
Other FCC 11-161 Cases, Establishing Windstream Briefing
Schedule, and Modifying Intervenor Participation. The
intervenors in support of the FCC have complied with the type-
volume limitation of that order because their briefs, combined,
contain a total of fewer than 21,400 words, excluding the parts of
those briefs exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of
Fed. R. App. P. 32(a)(5) and 10th Cir. R. 32(a) and the type style
requirements of Fed. R. App. P. 32(a)(6) because this filing has
been prepared in a proportionally spaced typeface using Microsoft
Word 2010 in 14-point Century Schoolbook font.

3. All required privacy redactions have been made.

4. This brief was scanned for viruses with Symantec
Endpoint Protection, version 11, updated on April 24, 2013, and
according to the program is free of viruses.

/s/ Tamar E. Finn




April 24, 2013


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Appellate Case: 11-9900 Document: 01019041759 Date Filed: 04/24/2013 Page: 14

CERTIFICATE OF SERVICE



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


/s/ Tamar E. Finn




April 24, 2013
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