Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-01469/USCOURTS-caDC-05-01469-0/pdf.json

Parties Involved:
Federal Communications Commission
Respondent
McLeodUSA Telecommunications Services, Inc.
Petitioner
Qwest Corporation
Intervenor

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2007 Decided March 23, 2007 

No. 05-1450 

QWEST CORPORATION, 

PETITIONER

V. 

FEDERAL COMMUNICATIONS COMMISSION

AND UNITED STATES OF AMERICA, 

RESPONDENTS

MCLEODUSA TELECOMMUNICATIONS SERVICES, INC., ET AL.,

INTERVENORS

Consolidated with 

05-1469, 06-1014, 06-1039, 06-1043 

On Petitions for Review of an Order of the 

Federal Communications Commission 

L. Andrew Tollin argued the cause for petitioner Qwest 

Corporation. With him on the briefs were Michael Deuel 

Sullivan and Robert B. McKenna. 

 David P. Murray and Russell M. Blau argued the cause 

for CLEC Petitioners. On the briefs were Thomas Jones, 

Randy J. Branitsky, Richard M. Rindler, Patrick J. Donovan, 

USCA Case #05-1469 Document #1030355 Filed: 03/23/2007 Page 1 of 18
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Joshua M. Bobeck, and Mary C. Albert. Jason D. Oxman

entered an appearance. 

 Joseph R. Palmore, Counsel, Federal Communications 

Commission, argued the cause for respondents. With him on 

the brief were Thomas O. Barnett, Assistant Attorney General, 

U.S. Department of Justice, Catherine G. O’Sullivan and 

Nancy C. Garrison, Attorneys, Samuel L. Feder, General 

Counsel, Federal Communications Commission, Eric D. 

Miller, Deputy General Counsel, John E. Ingle, Deputy 

Associate General Counsel, and Nandan M. Joshi, Counsel. 

 L. Andrew Tollin, Michael Deuel Sullivan, Robert B. 

McKenna, Scott H. Angstreich, Michael E. Glover, and 

Edward H. Shakin were on the brief for intervenors Qwest 

Corporation and the Verizon Companies in support of 

respondents. 

 David E. Mills and J. G. Harrington were on the brief for 

intervenor Cox Communications, Inc. 

Before: GRIFFITH and KAVANAUGH, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

WILLIAMS, Senior Circuit Judge: Qwest, the incumbent 

local exchange carrier (“ILEC”) in Omaha, Nebraska, 

petitioned the Federal Communications Commission for 

forbearance under § 10(c) of the Communications Act, 47 

U.S.C. § 160(c), from some of its obligations under §§ 251(c) 

and 271 of the Act, 47 U.S.C. §§ 251, 271, in the Omaha 

Metropolitan Statistical Area (“MSA”). The Commission 

granted the petition in part, relieving Qwest of the duty to 

provide its competitors access to certain unbundled network 

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elements. In re Petition of Qwest Corporation for 

Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha 

Metropolitan Statistical Area, 20 FCC Rcd 19,415 (2005) 

(“Order”). Qwest and several competing local exchange 

carriers (“CLECs”) now seek review of various aspects of the 

Commission’s order. 

Qwest asserts that the Commission failed to act on its 

forbearance request before a statutory deadline, and that 

therefore the petition should have been “deemed granted” in 

full. The CLEC petitioners, in turn, challenge the 

Commission’s grant of forbearance as to §§ 251(c)(3) and 

271(c)(2)(B)(ii), attacking the Commission’s interpretation of 

§ 10(d) of the Act as unreasonable and its analysis under 

§ 10(a) and (b) as arbitrary and capricious. Qwest’s claim, 

however, is barred by the exhaustion requirement of 47 U.S.C. 

§ 405(a), a conclusion compelled by In re Core 

Communications, Inc., 455 F.3d 267 (D.C. Cir. 2006) 

(“Core”). We find the CLECs’ claims ill-founded. 

* * * 

 Qwest’s petition requested forbearance from many of the 

statutory and regulatory obligations to which it is subject as 

the incumbent local exchange carrier in the Omaha MSA, 

including its obligations under § 251(c) and the “competitive 

checklist” requirements of § 271(c)(2)(B)(i)-(vi) and (xiv). 

Order, 20 FCC Rcd at 19,416 ¶ 1 n.2. Section 10 of the Act 

provides that the Commission “shall forbear from applying 

any regulation or any provision” if it determines that: (1) the 

enforcement of such a regulation or provision is not necessary 

to ensure that rates or services are “just and reasonable and are 

not unjustly or unreasonably discriminatory”; (2) enforcement 

is “not necessary for the protection of consumers”; and (3) 

forbearance from applying such a regulation or provision is 

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“consistent with the public interest.” 47 U.S.C. § 160(a)(1)-

(3). In evaluating the public interest, the Commission must 

ask whether forbearance “will promote competitive market 

conditions.” Id. § 160(b). Section 10(d) provides that no 

petition for forbearance may be granted as to the obligations 

in §§ 251(c) or 271 until the Commission “determines that 

those requirements have been fully implemented.” Id.

§ 160(d). 

Any petition for forbearance “shall be deemed granted if 

the Commission does not deny the petition . . . within one year 

after the Commission receives it,” unless the Commission 

extends the deadline “an additional 90 days.” Id. § 160(c). 

The Commission timely granted itself a 90-day extension and, 

on the last day of the extended period, issued a news release 

announcing that it had voted to grant Qwest’s petition in part. 

News Release, FCC Grants Qwest Forbearance Relief in 

Omaha MSA, Sept. 16, 2005, Joint Appendix at 652. The 

release stated that the Commission was relieving Qwest of the 

“obligation to provide unbundled network elements (UNEs) to 

competitors in 9 of Qwest’s 24 wire center service areas,” 

noting “the substantial infrastructure investment made by Cox 

Communications, Inc. in its competitive network” in the 

Omaha MSA. Id. The release explained, however, that the 

Commission was leaving in place the other requirements of 

§ 251(c), as well as the obligation under § 271 to provide 

wholesale access to local loops, transport, and switching at 

just and reasonable prices. Id.

 The Commission issued the text of its Order on 

December 2, 2005, stating, anomalously, that its “decision 

shall be effective on Friday, September 16, 2005.” 20 FCC 

Rcd at 19,471 ¶ 112 & n.282. As prefigured in the release, 

the Order granted Qwest forbearance from providing 

unbundled loops and dedicated transport elements under 47 

U.S.C. § 251(c)(3), as well as related obligations in 

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§§ 251(c)(6) and 271. The Commission found those sections 

to have been “fully implemented” within the meaning of 

§ 10(d). 20 FCC Rcd at 19,439 ¶ 51. The “substantial 

intermodal competition” provided by Cox’s voice-enabled 

cable plant was “sufficient” to merit forbearance, the 

Commission held, in light of the continued applicability of 

other statutory and regulatory provisions designed to promote 

competition, such as the resale and interconnection 

requirements under § 251(c)(4), and access to loops, 

switching, and transport services under § 271(c)(2)(B)(iv)-

(vi). 20 FCC Rcd at 19,444, 19,446 ¶¶ 59, 62. The 

Commission relieved Qwest from the application of certain 

“dominant carrier” regulations under 47 U.S.C. § 214 and 47 

C.F.R. §§ 61.38 & 61.41-.49 (2006) in mass market switched 

access and mass market broadband Internet access services, 

but it denied the petition in all other respects. Id. at 19,417 

¶ 2, 19,424 ¶¶ 15-16. 

* * * 

 We begin with Qwest’s claim that its petition should have 

been “deemed granted” under § 10(c) because the 

Commission’s actions (a vote and press release) did not 

constitute a “den[ial]” under § 10(c). 

47 U.S.C. § 405(a) provides that “[t]he filing of a petition 

for reconsideration shall not be a condition precedent to 

judicial review of any such order [of the Commission] . . . 

except where the party seeking such review . . . relies on 

questions of fact or law upon which the Commission . . . has 

been afforded no opportunity to pass.” As we noted in Core,

this circuit has “strictly construed” § 405(a), “holding that we 

generally lack jurisdiction to review arguments that have not 

first been presented to the Commission.” 455 F.3d at 276 

(internal quotation marks omitted). While the statute does not 

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require that the Commission’s opportunity “be afforded in any 

particular manner, or by any particular party,” Coalition for 

Noncommercial Media v. FCC, 249 F.3d 1005, 1008 (D.C. 

Cir. 2001), the Commission must have somehow been put on 

notice of the problem. Time Warner Entertainment Co. v. 

FCC, 144 F.3d 75, 79 (D.C. Cir. 1998) (“Time Warner”). 

 Qwest acknowledges both the fact that it never raised the 

issue before the Commission and the principle that failure to 

do so isn’t excused merely because the issue arose 

unequivocally only at the moment the Commission took 

action. That principle is clear. In Core, as here, the 

Commission voted to deny a petition for forbearance and 

issued a press release within the statutory deadline, publishing 

its written order only after the deadline had passed; like 

Qwest, Core then argued, without seeking reconsideration, 

that its petition should be “deemed granted.” 455 F.3d at 274-

75. Yet, noting our precedents under § 405(a), we held that 

“even when a petitioner has no reason to raise an argument 

until the FCC issues an order that makes the issue relevant, 

the petitioner must file a petition for reconsideration with the 

Commission before it may seek judicial review.” Id. at 276-

77 (internal quotation marks omitted). 

 Qwest tries to distinguish Core by noting a subtle 

difference between its claim and Core’s. Whereas Core 

argued that the Commission was bound by § 10(c) to issue a 

fully fledged explanation of its ruling by the deadline (on pain 

of the petition’s being deemed granted), Qwest argues more 

modestly that § 10(c) requires simply a “legally effective 

public notice” with “enough detail about the rulings to allow 

the parties to alter their course of conduct.” Qwest Reply Br. 

at 5. This situates Qwest’s claim (it says) under “step one” in 

the conventional lexicon of Chevron U.S.A. Inc. v. Natural 

Resources Defense Council, Inc., 467 U.S. 837 (1984), i.e., a 

claim to which Congress has spoken “directly.” By contrast, 

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Qwest locates Core’s claim under “step two,” pointing to our 

statement in Core that we would “ordinarily accord deference 

to the Commission’s interpretation of . . . § 160(c)” under 

Chevron, and that petitioner’s failure to have raised its claim 

before the Commission “create[d] a problem regarding the 

extent of deference we owe the FCC’s statutory 

interpretation.” Core, 455 F.3d at 276. Exhaustion under 

§ 405(a) would serve no purpose here, Qwest contends, 

because its claim is that the Commission violated the plain 

meaning of § 10(c), a question on which a reviewing court 

would owe the Commission no deference. 

We think Qwest has misread Core on two levels. First, 

we see no evidence that the court judged Core’s claim to fall 

within step two. The court never embarks on an exegesis of 

§ 10(c), thus exercising a self-restraint wholly in keeping with 

one of the functions of exhaustion doctrine—to avoid 

premature judicial pronouncements. Moreover, the court’s 

statement quoted above—that we would “ordinarily accord 

deference to the Commission’s interpretation of . . . 

§ 160(c)”—makes complete sense as a simple recognition that 

a Commission reading of § 10(c) would fall within the general 

bailiwick of Chevron analysis. 

Second, even if Core had classified Core’s argument as 

belonging to step two, exhaustion is not excused simply 

because we might owe an agency no deference. Section 

405(a) applies on its face to all “questions of fact or law.” 47 

U.S.C. § 405(a). This court has frequently required § 405 

exhaustion for questions on which the Commission would 

have received no deference. See, e.g., Lutheran ChurchMissouri Synod v. FCC, 141 F.3d 344, 349 & n.6 (D.C. Cir. 

1998) (First Amendment claim); Time Warner, 144 F.3d at 80 

(collecting cases requiring exhaustion for asserted violations 

of Administrative Procedure Act). In fact, we have been 

“sticklers” in requiring § 405(a) exhaustion where a party 

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“complains of only a technical or procedural mistake, such as 

an obvious violation of a specific APA requirement.” Id. at 

80-81. 

Moreover, although courts have acknowledged the 

relationship between administrative exhaustion and deference 

to administrative agencies, see McCarthy v. Madigan, 503 

U.S. 140, 145 (1992), exhaustion serves other purposes as 

well. For instance, “‘[o]ne of the purposes of [section 405] is 

to afford the Commission the initial opportunity to correct 

errors in its decision or the proceeding leading to decision’”—

a goal equally applicable here. Time Warner, 144 F.3d at 80 

(quoting Rogers Radio Communication Services v. FCC, 593 

F.2d 1225, 1229 (D.C. Cir. 1978)) (alterations in original); see 

also McCarthy, 503 U.S. at 145 (exhaustion discourages 

disregard of agency procedures); Woodford v. Ngo, 126 S. Ct. 

2378, 2385 (2006) (agency proceedings “generally . . . 

resolve[] [claims] much more quickly and economically” than 

courts and “may produce a useful record for subsequent 

judicial consideration”). 

 Qwest next attempts to distinguish Core by arguing that 

the Commission here had already provided its view on the 

issue, i.e., it had had an “opportunity to pass” for purposes of 

§ 405(a). Qwest relies primarily on the Order’s reference to 

§ 10(c) in its effective date paragraph, 20 FCC Rcd at 19,471 

¶ 112 & n.282, and a footnote from a report unrelated to the 

instant proceedings, In re 2002 Biennial Regulatory Review, 

18 FCC Rcd 4726, 4739 ¶ 33 n.70 (2003) (“[F]ailure to act on 

[a § 10] forbearance petition within [the] statutory period 

causes it to be granted by operation of law.”); see also Petition 

of Core Communications, Inc. for Forbearance under 47 

U.S.C. § 160(c) from Application of the ISP Remand Order, 

19 FCC Rcd 20,179, 20,189 ¶ 28 & n.74 (2004) (noting 

§ 10(c)’s requirements and the statutory consequences of 

failure to meet the deadline). But while the cited phrases 

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manifest Commission awareness of the statutory deadline, 

they cannot be described as dispositions of an (unmade) claim 

that a vote and press release on the statutory deadline could 

not qualify as a “den[ial]” under § 10(c). See Qwest Br. at 3. 

Moreover, Qwest ignores our recent statement in Core—

where the Commission had employed an effective-date 

provision virtually identical to the one here—that § 405(a) 

barred us from being “the first authority to construe the 

meaning” of § 10(c). 455 F.3d at 277. 

 Finally, Qwest urges us to recognize certain exceptions to 

the exhaustion requirement: where agency action is alleged to 

be ultra vires, and where seeking an agency’s view would be 

futile. In fact, the parties dispute the existence of such 

exceptions. Compare Washington Ass’n for Television & 

Children v. FCC, 712 F.2d 677, 681-82 (D.C. Cir. 1983) 

(“WATCH”) (interpreting § 405 to “permit[] courts some 

discretion to waive exhaustion”), and Petroleum 

Communications, Inc. v. FCC, 22 F.3d 1164, 1170 (D.C. Cir. 

1994) (discussing futility and “patent violation[s] of the 

agency’s statutory authority” as “recognized exceptions” to 

exhaustion requirement), with Booth v. Churner, 532 U.S. 

731, 741 n.6 (2001) (“[W]e will not read futility or other 

exceptions into statutory exhaustion requirements where 

Congress has provided otherwise.”), and Avocados Plus Inc. 

v. Veneman, 370 F.3d 1243, 1247 (D.C. Cir. 2004) (“If the 

statute does mandate exhaustion, a court cannot excuse it.”). 

We need not, however, resolve this disagreement; even 

assuming the availability of such exceptions, Qwest has failed 

to show that either applies. 

 In its ultra vires arguments, Qwest looks to WATCH’s 

statement that exhaustion may be excused for challenges to 

agency action “‘patently in excess of [the agency’s] 

authority.’” 712 F.2d at 682 (quoting Detroit Edison Co. v. 

NLRB, 440 U.S. 301, 312 n.10 (1979)) (alteration in original); 

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see also Petroleum Communications, 22 F.3d at 1170 

(implying readiness to except “patent violation[s]” of statutory 

authority from § 405(a)). Whatever the exact meaning of 

§ 10(c), we can’t say that the Commission’s action here falls 

into the outer darkness of a “patent” violation. See also 

Mitchell v. Christopher, 996 F.2d 375, 378 (D.C. Cir. 1993) 

(ultra vires exception limited to “challenges that concern the 

very composition or ‘constitution’ of an agency”); Northwest 

Airlines, Inc. v. FAA, 14 F.3d 64, 73 (D.C. Cir. 1994) (failure 

to raise an issue “will not be excused merely because the 

litigant couches its claim in terms of the agency’s exceeding 

its statutorily-defined authority or ‘jurisdiction’”). 

 As to futility, our decisions entertaining the exception 

have demanded a very convincing record. In Omnipoint 

Corp. v. FCC, 78 F.3d 620 (D.C. Cir. 1996), for example, we 

found futility only where the Commission “was rapidly 

expediting the proceeding and appeared ‘wedded to the 

procedures that it had employed.’” 78 F.3d at 635 (quoting 

City of Brookings Municipal Tel. Co., 822 F.2d 1153, 1163 

(D.C. Cir. 1987)). Similarly, in Tribune Co. v. FCC, 133 F.3d 

61, 67 (D.C. Cir. 1998), we suggested that futility was 

appropriate only where the Commission’s position had 

“crystallized” or where the Commission was “firmly 

entrenched.” And in Nat’l Science and Technology Network, 

Inc. v. FCC, 397 F.3d 1013, 1014 (D.C. Cir. 2005), we said 

that futility required a “showing that an adverse decision was 

a certainty.” 

Here Qwest points to little more than the agency’s 

treatment of Core’s petition, where it had taken a similar 

approach (vote and press release on the deadline, with 

decision to follow). And in this case, it says, the timeliness 

arguments advanced in Core put the Commission on notice 

about disagreement with its reading of § 10(c). But one 

swallow doesn’t make a summer, and Qwest points to no case 

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(and we are aware of none) in which a single adverse decision 

by an agency, without more, demonstrated that its position 

had “crystallized” or that a future result was “a certainty.” 

Qwest adds that the § 10(c) deadline would not bind the 

Commission’s consideration of a petition for reconsideration. 

True enough, though hardly assurance that the Commission 

would drag its feet on such a petition, especially with the 

potential of a mandamus action hovering in the background. 

Moreover, the Commission’s treatment of the deadline on 

Core’s petition occurred in October 2004, see Core, 455 F.3d 

at 274, at which point Qwest’s petition had been pending for 

four months. Qwest’s failure at that point to file a memo 

insisting on its view of § 10(c) undermines its reliance on the 

risk of delay inherent in a post-decision petition for 

reconsideration. 

Thus we reject Qwest’s claim as barred by the exhaustion 

requirement of § 405(a). 

* * * 

 We next turn to the CLEC petitioners’ claims, beginning 

with their contention that § 251(c) was not “fully 

implemented” for the purposes of § 10(d). Our review of an 

agency’s interpretation of the statute it administers is 

governed by the familiar Chevron framework, under which we 

ask first whether Congress has “directly spoken” to the precise 

issue before us and, if it has not, whether the agency’s 

interpretation is reasonable. 467 U.S. at 842-43; see also 

Cellular Telecommunications & Internet Ass’n v. FCC, 330 

F.3d 502, 507 (D.C. Cir. 2003). 

Section 10(d) of the Act provides that “the Commission 

may not forbear from applying the requirements of section 

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251(c) or 271 . . . until it determines that those requirements 

have been fully implemented.” 47 U.S.C. § 160(d). In the 

Order, the Commission held that § 251(c) had been fully 

implemented “because the Commission has issued rules 

implementing section 251(c) and those rules have gone into 

effect.” 20 FCC Rcd at 19,440 ¶ 53. The Commission 

reasoned that “[the FCC itself] is the entity that ‘implements’ 

section 251(c),” noting that § 251(d)(1) requires the 

Commission to “complete all actions necessary to establish 

regulations to implement the requirements of [§ 251].” Id.

The CLECs dispute the Commission’s reliance on 

§ 251(d), and draw a contrast between that subsection’s 

requirement that “the Commission . . . complete all actions 

necessary to establish regulations to implement” § 251(c) and 

§ 10(d)’s reference to “fully implemented.” 47 U.S.C. 

§§ 160(d), 251(d) (emphasis added). The Commission’s 

reading of § 10(d), they argue, gives no meaning to the term 

“fully,” which in their view must implicate something more 

than the rulemaking contemplated by § 251(d). But the 

Commission stated that § 251(c) would be fully implemented 

only “once the Commission has completed its work of 

promulgating rules implementing section 251(c) and those 

rules have taken effect.” 20 FCC Rcd at 19,440 ¶ 54 n.135 

(emphasis added). We cannot say that such a reading is 

unreasonable. The statute does not define “implemented,” an 

ambiguity not clearly resolved one way or the other by 

reference to § 251(d). The Commission’s interpretation does 

give independent meaning, albeit a modest one, to the term 

“fully”—i.e., that regulations have both been promulgated and 

taken effect. In addition, it might well be thought that 

completion of “all actions necessary to establish regulations 

to implement” a section would naturally add up to “full[] 

implement[ation]” of that section. We also note petitioners’ 

failure to have offered any workable alternative test. See 

CLEC Br. at 41. 

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The CLECs further believe that under the plain language 

of § 251 the Commission can make a finding of full 

implementation of § 251(c) only if it can point to 

implementing action by the ILECs. To support this notion 

they point to the Commission’s own analysis in the Section 

271 Broadband Forbearance Order, In re Petition for 

Forbearance of the Verizon Telephone Companies Pursuant 

to 47 U.S.C. § 160(c), 19 FCC Rcd 21,496 (2004), where it 

rested a finding of implementation of the competitive 

checklist requirements of § 271(c) on the Bell Operating 

Companies’ having established compliance with those 

requirements and having secured entitlement to provide inregion interLATA service. Id. at 21,503 ¶¶ 15-16; see also 

Order, 20 FCC Rcd at 19,440-41 ¶ 54. Even assuming the 

CLECs’ reading of § 10(d) is reasonable, the Commission’s is 

also: “[T]he BOCs [Bell Operating Companies] have a role in 

implementing section 271(c) that incumbent LECs do not 

have in implementing section 251(c).” Order, 20 FCC Rcd at 

19,441 ¶ 54. In one case, company action subjects a company 

to the duties in question; in the other, Commission action does 

so. The Commission’s reading of § 10(d) reflects that 

distinction. 

We are equally unconvinced by petitioners’ argument that 

the Commission’s interpretation would allow forbearance 

from § 251(c) before the benefits from unbundling were 

“significantly realized.” This disregards the independent 

requirements of § 10, such as § 10(b)’s mandate to consider 

whether forbearance would “promote competitive market 

conditions.” 

Finally, the CLEC petitioners complain that the 

Commission’s interpretation of § 10(d) is inconsistent with a 

1996 order, In re Implementation of the Local Competition 

Provisions in the Telecommunications Act of 1996, 11 FCC 

Rcd 15,499 (1996) (“Local Competition Order”), which they 

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believe contemplates a role for States and service providers in 

implementing § 251(c) inconsistent with the Commission’s 

application of § 10(d) here. This is distinct from arguments 

based on the plain language of § 10(d) or the alleged 

inconsistency with the Commission’s analysis of forbearance 

from § 271 duties. But the argument is barred under § 405(a) 

because the Commission never had an “opportunity to pass” 

on it. Indeed, the CLECs appear to concede that the 1996 

order was never mentioned in the proceedings below. CLEC 

Reply Br. at 14. See Cellco Partnership v. FCC, 357 F.3d 88, 

102 (D.C. Cir. 2004) (“[Where petitioner] never argued to the 

Commission that its decision [on review] . . . was inconsistent 

with its [prior] decision . . . it cannot now argue that the 

Commission erred by failing to reconcile these two 

decisions.”). Nor was the substance of the inconsistency 

claim presented well enough to satisfy § 405(a), especially in 

light of our admonition that the Commission “need not sift 

pleadings and documents to identify arguments that are not 

stated with clarity by a petitioner.” Bartholdi Cable Co. v. 

FCC, 114 F.3d 274, 279 (D.C. Cir. 1997) (internal quotation 

marks omitted). None of the various record citations to which 

the CLECs refer, see CLEC Reply Br. at 14 n.5, is plausibly 

read as presenting the argument that the Commission’s 

proposed reading of § 10(d) was inconsistent with a prior 

Commission order discussing the roles of states and service 

providers under § 251(c). 

* * * 

Last, we reach the CLECs’ challenges to the 

Commission’s forbearance analysis under § 10(a) and (b). 

Our review here is governed by 5 U.S.C. § 706(2)(A), under 

which we set aside agency action that is “arbitrary, capricious, 

an abuse of discretion, or otherwise not in accordance with 

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law.” See AT&T Inc. v. FCC, 452 F.3d 830, 837 (D.C. Cir. 

2006). 

The Order grants Qwest forbearance from the obligation 

to provide unbundled loops and transport in “9 of Qwest’s 24 

wire centers in the Omaha MSA where competitive 

deployment is greatest.” 20 FCC Rcd at 19,444 ¶ 59. The 

Commission “tailor[ed] Qwest’s relief” to Cox’s “extensive” 

voice-enabled cable network, selecting nine wire centers in 

which “sufficient facilities-based competition” existed “to 

ensure that the interests of consumers and the goals of the Act 

[were] protected under the standards of section 10(a).” Id. at 

19,444-46 ¶¶ 59, 61-62. The Commission also relied on 

competitors’ continued access to interconnection rights under 

§ 251(c) and to Qwest’s loops, switching and transport under 

§ 271(c)(2)(b)(iv)-(vi). Id. at 19,446-47 ¶¶ 62, 64. 

Although the Commission recognized that Cox’s market 

share was larger in the residential than the enterprise market, 

it concluded that Cox nonetheless posed a “substantial 

competitive threat to Qwest” in both sectors. Id. at 19,448 

¶ 66. Cox had proven itself a “very successful[]” competitor 

even in the mass market (where revenue potential was 

“relatively low” compared to the enterprise market), was 

“actively marketing” itself to enterprise customers, had won 

over a “large number of significant Omaha businesses,” and 

had doubled its enterprise sales in Omaha each year for five 

consecutive years. Id. Moreover, Cox had relevant technical 

expertise, economies of scale and scope, sunk investments in 

network infrastructure (implying that the incremental costs for 

continuing and extending service would be relatively modest), 

and an established presence and brand in the Omaha MSA. 

Id.

In challenging the Commission’s reliance on Cox’s 

activities, the CLECs point to the Commission’s discussion in 

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its 2005 unbundling order, in which it declined to find that 

cable company competition throughout the country justified 

relieving ILECs of their obligation to provide unbundled 

network elements, and claim that “nothing” in the record 

distinguishes Cox from those facts. See In re Unbundled 

Access to Network Elements, Review of the Section 251 

Unbundling Obligations of Incumbent Local Exchange 

Carriers, 20 FCC Rcd 2533, 2556-57 ¶ 39 (2005) (“Triennial 

Review Remand Order,” or “TRRO”). But the TRRO

explicitly noted that these matters varied by geographic 

market. Id. Cox’s filings here, in fact, demonstrate its 

substantial coverage of the enterprise market, including 

provision of DS0 loops to business users. Order, 20 FCC Rcd 

at 19,450-51 ¶ 69. And we see nothing unreasonable in the 

factors invoked by the Commission—enumerated above—in 

forecasting an increase in competition. See id. at 19,448 ¶ 66. 

The CLECs also contend the Commission erred in relying 

on average network coverage across the nine wire centers, 

rather than examining each wire center individually. In theory 

the average could conceal substantial variation between 

individual centers, including possibly centers where Cox had 

no footprint at all. But in light of the Commission’s reliance 

on data showing Cox’s aggressive expansion in both the 

residential and enterprise markets, we cannot say that the 

possibility of wide variance in existing coverage is enough to 

undermine the Commission’s conclusions. 

Finally, petitioners take issue with the Commission’s 

reliance on Qwest’s wholesale offerings (ILEC plant usable 

by CLECs independently of the unbundled network element 

mandate) in granting forbearance in the enterprise and mass 

markets. These include both services Qwest is legally obliged 

to make available (under § 271(d)(2)(B)(iv)-(vi) and 

§ 251(c)(4)) and ones it has offered voluntarily (such as 

Qwest Platform Plus (“QPP”) services, which are 

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commercially negotiated wholesale services integrating loops, 

switching and transport into a single package). See Order, 20 

FCC Rcd at 19,448-50 ¶¶ 67-68. The CLECs again point to 

the TRRO, in which the Commission declined to adopt a 

general rule relieving the ILECs of unbundling obligations in 

local exchange markets whenever “carriers are potentially 

able to compete using special access or other tariffed 

alternatives.” See TRRO, 20 FCC Rcd at 2560 ¶ 46. 

But the TRRO explicitly recognized that an ILEC’s 

tariffed offerings could, in certain circumstances, be an 

avenue for competitive entry. See, e.g., TRRO, 20 FCC Rcd 

at 2561 ¶ 48 (“[A] carrier could, in theory, use [a] tariffed 

offering to enter a market.”). The Commission in fact relied 

on carriers’ “successful[] use[] [of] special access to compete” 

in the wireless and long-distance markets in concluding that 

ILECs need no longer provide access to UNEs in those 

markets. Id. at 2554-55 ¶ 36, 2560 ¶ 46. With respect to local 

exchange services, the TRRO stated only that “the availability 

of a tariffed alternative should not foreclose unbundled 

access.” Id. at 2561 ¶ 48 (emphasis added). As the TRRO 

explicitly left open the possibility that “sufficient facilitiesbased competition” might eventually make UNE relief 

appropriate in the local exchange market, either generally or 

in geographically specific markets, id. at 2556 ¶¶ 38 & 39 

n.116, the Order seems simply to apply that concept: here the 

Commission found the combination of tariffed ILEC facilities 

and facilities-based competition adequate to assure 

competition even if it partially relaxed Qwest’s obligations in 

the Omaha market. Compare id. at 2556-57 ¶ 39 with Order, 

20 FCC Rcd at 19,447-49 ¶¶ 65 & 67 n.177. 

The CLECs offer additional arguments, in part traceable 

to the Commission’s language in the TRRO, as to why 

Qwest’s wholesale services are not, on their own, a sufficient 

substitute for UNEs. For instance, absent other avenues for 

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competition, ILECs could thwart competition by undue hikes 

in the price of their wholesale inputs. Similarly, the CLECs 

complain that the loop component of the QPP service was 

available as a § 251(c)(3) network element, and thus that the 

Commission was wrong to rely on the continued availability 

of QPP offerings in granting forbearance from unbundling. 

But Cox’s independent cable infrastructure greatly mitigates 

these potential risks. In addition, the CLECs have provided 

no reason to disturb the Commission’s predictive judgment 

that “Qwest will not react to [the forbearance] decision . . . by 

curtailing wholesale access” to its high-capacity offerings, 

especially in light of the Commission’s finding that facilitiesbased competition from Cox gives Qwest a strong incentive to 

maximize use of its network by setting attractive prices on its 

wholesale alternatives. Order, 20 FCC Rcd at 19,448-49 ¶ 67, 

19,455 ¶ 79. 

In sum, we hold that the Commission reasonably 

concluded that § 251(c) was “fully implemented” for the 

purpose of § 10(d). Further, we find nothing arbitrary about 

granting forbearance in the nine wire centers, given Cox’s 

extensive network coverage in the residential market and 

growing competitive presence in the enterprise market. 

* * * 

 Accordingly, Qwest’s petition is dismissed as barred by 

47 U.S.C. § 405(a), and the CLECs’ petitions are denied on 

the merits. 

So ordered. 

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