Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-97-01021/USCOURTS-caDC-97-01021-1/pdf.json

Parties Involved:
Cable & Wireless, Inc.
Petitioner
Federal Communications Commission
Respondent
United States of America
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

-

Filed September 16, 1997

No. 96-1394

ILLINOIS PUBLIC TELECOMMUNICATIONS ASSOCIATION,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND 

UNITED STATES OF AMERICA,

RESPONDENTS

COMPETITIVE TELECOMMUNICATIONS ASSOCIATION, ET AL.,

INTERVENORS

Consolidated with Nos. 96-1395, 96-1407, 96-1428, 96-1429,

96-1466, 96-1476, 96-1478, 96-1479, 96-1482, 96-1484,

96-1485, 96-1486, 97-1016, 97-1021, 97-1022, 97-1039,

97-1048, 97-1069, 97-1070, 97-1080

On Motion for Clarification or, 

Alternatively, for Partial Rehearing

-

USCA Case #97-1021 Document #296536 Filed: 09/16/1997 Page 1 of 4
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Before: EDWARDS, Chief Judge, GINSBURG and SENTELLE, 

Circuit Judges.

Supplemental opinion for the court filed by Circuit Judge 

GINSBURG.

GINSBURG, Circuit Judge: The Interexchange Carrier (IXC) 

Parties,1petitioners and intervenors, have moved for clarification of the effect of our judgment of July 1, 1997 or, alternatively, for partial rehearing. We grant the motion and clarify 

our opinion as follows.

When this court remands a rule to an agency for further 

consideration with little or no prospect of the rule's being readopted upon the basis of a more adequate explanation of the 

agency's reasoning, the practice of the court is ordinarily to 

vacate the rule. See Allied-Signal, Inc. v. USNRC, 988 F.2d 

146, 150-51 (D.C. Cir. 1993) (court takes account of "the 

seriousness of the order's deficiencies (and thus the extent of 

doubt whether the agency chose correctly) and the disruptive 

consequences of an interim change that may itself be 

changed"), quoting International Union, UMW v. FMSHA,

920 F.2d 960, 967 (D.C. Cir. 1990), which in turn referenced 

Washington Metro. Area Transit Comm'n v. Holiday Tours, 

Inc., 559 F.2d 841, 844 (D.C. Cir. 1977) and American Hosp. 

Supply Corp. v. Hospital Prods., Ltd., 780 F.2d 589, 593-94 

(7th Cir. 1986), both setting out analogous factors considered 

in deciding whether to grant a preliminary injunction. See 

also A.B.A. House of Delegates Res. No. 107B (Annual 

Meeting, San Francisco, Aug. 5-6, 1997) (listing factors to 

guide the court's exercise of discretion in deciding whether to 

vacate agency action, and recommending that "a reviewing 

court should normally strike the balance in favor of vacating 

the agency's action, unless special circumstances exist"). 

Thus we have vacated FCC rules even when we have "not 

foreclose[d] the possibility that the Commission may develop 

__________

1 Cable & Wireless, Inc., the Competitive Telecommunications 

Association, Excel Telecommunications, Inc., Frontier Corp., LCI 

International Telcom Corp., MCI Telecommunications Corporation, 

Sprint Corporation, Telco Communications Group, Inc., and WorldCom, Inc.

USCA Case #97-1021 Document #296536 Filed: 09/16/1997 Page 2 of 4
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a convincing rationale" for re-adopting the same rule on 

remand. Petroleum Communications, Inc. v. FCC, 22 F.3d 

1164, 1173 (D.C. Cir. 1994).

Pursuant to the aforementioned criteria, we now clarify 

that the court in this case did intend to vacate those portions 

of the Payphone Orders 2setting at $.35 the compensation 

that the IXCs must pay to payphone service providers for 

subscriber 800 and access code calls, both prescriptively 

during the interim period and as the default rate thereafter. 

The court likewise intended to vacate those portions of the 

Payphone Orders requiring that, during the first phase of the 

interim plan, the IXCs with annual toll revenues in excess of 

$100 million pay the full amount of the compensation rightfully due from all IXCs.

The FCC set the compensation rate for subscriber 800 and 

access code calls at the deregulated coin call rate of $.35 

because of the supposed similarity in the cost of originating 

the various types of payphone calls. As we emphasized in 

our opinion, however, "the record in this case is replete with 

evidence that the costs of local coin calls versus 800 and 

access code calls are not similar." Illinois Public Telecommunications Ass'n v. FCC, 117 F.3d 555, 563 (D.C. Cir. 1997). 

The FCC had purported to disagree with that evidence, but it 

"never provided any reasons for its 'disagreement.' " Id. at 

564. We infer that, if it were possible to reconcile the 

evidence with the agency's decision, the FCC would at least 

have attempted to do so. The FCC's "failure to respond to 

contrary arguments based on solid data" not only, as we said, 

"epitomizes arbitrary and capricious decisionmaking," id.; it 

also leaves the court with no basis for allowing the $.35 rate 

to remain in place pending further consideration on remand.

The FCC invoked "administrative convenience" for its decision that the 22 largest IXCs would have to pay millions of 

dollars per month for the costs of services received by other, 

smaller IXCs during the first phase of the interim plan. As 

__________

2

Implementation of the Pay Telephone Reclassification and 

Compensation Provisions of the Telecommunications Act of 1996,

CC Docket No. 96-128, Report and Order, 11 FCC Rcd 20541 

(1996); Order on Reconsideration, 11 FCC Rcd 21233 (1996).

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the court explained, however, administrative convenience 

"cannot possibly justify" that decision. Id. at 565. "Perhaps 

more fundamentally," we noted, "the FCC did not adequately 

justify why it based its interim plan on total toll revenues, as 

it did not establish a nexus between total toll revenues and 

the number of payphone-originated calls." Id.

Consequently, the court "grant[ed] the petition for review 

on these points," including the IXCs' explicit request that the 

Payphone Orders be vacated in these respects. The IXCs' 

motion for clarification is therefore

Granted.

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