United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 5, 2012 Decided June 7, 2013

No. 11-1467

NORTHERN VALLEY COMMUNICATIONS, LLC,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED 

STATES OF AMERICA,

RESPONDENTS

AT&T CORPORATION, ET AL.,

INTERVENORS

Consolidated with 11-1468

On Petitions for Review of Orders of 

the Federal Communications Commission

Ross A. Buntrock argued the cause for petitioner. With 

him on the briefs was G. David Carter. 

Joel Marcus, Counsel, Federal Communications 

Commission, argued the cause for respondents. With him on 

the brief were Joseph F. Wayland, Acting Assistant Attorney 

General, U.S. Department of Justice, Robert B. Nicholson and 

Nickolai G. Levin, Attorneys, and Austin C. Schlick, General 
2

Counsel, Federal Communications Commission, Peter

Karanjia, Deputy General Counsel, and Richard K. Welch, 

Deputy Associate General Counsel. Jacob M. Lewis, 

Associate General Counsel, entered an appearance.

David H. Solomon argued the cause for intervenors. 

With him on the brief were Russell P. Hanser, Marc 

Goldman, James C. Cox, Scott H. Angstreich, Gregory G. 

Rapawy, Michael B. Fingerhut, Gary L. Phillips, Michael E. 

Glover, and Christopher M. Miller. 

Before: GARLAND, Chief Judge, KAVANAUGH, Circuit 

Judge, and RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

KAVANAUGH, Circuit Judge: When you make a longdistance telephone call, the call travels from your local 

exchange carrier, known as a LEC, to a long-distance carrier. 

The long-distance carrier routes the call to the call recipient’s 

LEC. That LEC then completes the call to the recipient. 

LECs are classified as either competitive (CLECs) or 

incumbent (ILECs). Subject to FCC approval, CLECs may

impose tariffs on long-distance carriers for access to CLECs’ 

customers. In recent years, the FCC has grown concerned

that some CLECs have engaged in what is known as “traffic 

pumping” or “access stimulation.” What’s happened is that 

some CLECs with high access rates apparently have entered 

into agreements with high-volume local customers, such as 

conference call companies. CLECs greatly increase their 

access minutes – but do not reduce their access rates to reflect 

lower average costs – and share a portion of the increased 

access revenues with the conference call companies. In many 
3

cases, the CLECs charge the conference call companies

nothing for phone service. It’s a win-win for the CLECs and 

the conference call companies, while the long-distance 

carriers, who have to pay the tariffed access rates, pay 

significant amounts to the CLECs.

This case involves a tariff filed by Northern Valley, a 

CLEC in South Dakota. The FCC ruled that Northern Valley 

could not tariff long-distance carriers for calls to Northern 

Valley’s non-paying customers (for example, to conference 

call companies that obtained service from Northern Valley for 

no charge). The FCC explained that, by regulation, CLECs 

may tariff long-distance carriers only for access to the 

CLECs’ “end users.” See Access Charge Reform, 19 FCC 

Rcd. 9108, 9114, ¶ 13 (2004); 47 C.F.R. § 61.26(a). In the

related context of ILECs, an “end user” has been defined by 

the FCC to mean the recipient of a “telecommunications 

service.” See 47 C.F.R. § 69.2(m). The FCC here stated that 

identical terms used in different but related rules should be 

construed to have the same meaning; therefore, a CLEC’s 

“end user” likewise means the recipient of a 

“telecommunications service.” In turn, “telecommunications 

service” is defined by the Communications Act of 1934 as 

service provided for a fee. See 47 U.S.C. § 153(53). 

Following that chain of logic, the FCC concluded that a 

CLEC may tariff long-distance service only if the CLEC’s 

end user is a paying customer – that is, a customer paying “a 

fee.” 

In challenging the FCC’s decision, Northern Valley

contends that the FCC’s ruling contradicts two previous FCC 

orders that allowed CLECs to charge long-distance carriers 

for calls to a CLEC’s non-paying customers. But in both 

orders, the FCC construed only the terms of the tariff at issue

in those cases, not FCC regulations. In those cases, the FCC 
4

did not construe its regulations to allow CLECs to charge 

long-distance carriers for calls to a CLEC’s non-paying 

customers. See Qwest Communications Corp. v. Farmers & 

Merchants Mutual Telephone Co., 22 FCC Rcd. 17,973,

17,987, ¶¶ 35, 37-38 (2007); Qwest Communications Corp. v. 

Farmers & Merchants Mutual Telephone Co., 24 FCC Rcd. 

14,801, 14,085, ¶ 10 (2009). 

On another tack, Northern Valley points out that the FCC 

has previously refrained from directly regulating the 

relationship between the CLEC and the end user. But the

flaw in that argument is that the FCC is not here regulating 

the relationship between the CLEC and the end user; rather, 

the FCC is regulating the relationship between the CLEC and 

the long-distance carrier. 

In short, we conclude that the FCC reasonably interpreted

and applied the relevant regulations. Moreover, nothing in 

the Communications Act precludes the FCC’s approach in 

this case, as Northern Valley’s counsel appropriately 

acknowledged at oral argument. See Tr. of Oral Arg. at 6. 

Therefore, we uphold the FCC’s decision that CLECs may not 

rely on tariffs to charge long-distance carriers for access to 

CLECs’ non-paying customers.

In a separate aspect of its decision in this case, the FCC 

disapproved a provision in Northern Valley’s tariff that 

required long-distance carriers to dispute a charge in writing 

within 90 days if the carrier wanted to preserve a legal 

challenge. The FCC concluded that the 90-day provision 

conflicted with the two-year statute of limitations set forth in 

the statute. See 47 U.S.C. § 415(b). In our view, the FCC 

permissibly interpreted the statute to preclude the 90-day 

provision of the tariff. Although contracts may shorten 

statutes of limitation, CLEC tariffs are unilaterally imposed.
5

Therefore, contractual principles that permit the shortening of

a statute of limitations do not apply here. The Fourth Circuit, 

the only other court of appeals to examine that issue in the 

context of the Communications Act, has reached the same 

conclusion. See MCI Worldcom Network Services, Inc. v. 

Paetec Communications, Inc., 204 F. App’x 271, 272 (4th 

Cir. 2006). Under other statutes, courts have likewise

disallowed analogous tariff provisions. See, e.g., Kraft Foods 

v. Federal Maritime Commission, 538 F.2d 445, 446 (D.C. 

Cir. 1976) (Shipping Act); Shortley v. Northwestern Airlines, 

104 F. Supp. 152, 155 (D.D.C. 1952) (Civil Aeronautics Act 

of 1938). Therefore, we uphold the FCC’s decision that 

Northern Valley’s 90-day provision violated the two-year 

statute of limitations set forth in the statute.

* * *

We have considered all of Northern Valley’s arguments. 

We deny the petitions for review. 

So ordered.