United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 7, 2006 Decided June 27, 2006

No. 05-1186

AT&T INC.,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

TIME WARNER INC. AND

TIME WARNER CABLE,

INTERVENORS

On Petition for Review of an Order of the

Federal Communications Commission

Jonathan E. Nuechterlein argued the cause for petitioner.

With him on the briefs were William T. Lake, Lynn R. Charytan,

Brian W. Murray, Stephen M. Obenski, James D. Ellis, and Gary

L. Phillips.

Nandan M. Joshi, Counsel, Federal Communications

Commission, argued the cause for respondent. On the brief

were Thomas O. Barnett, Acting Assistant Attorney General,

U.S. Department of Justice, Robert B. Nicholson and James J.
2

Fredricks, Attorneys, Samuel L. Feder, General Counsel,

Federal Communications Commission, Richard K. Welch,

Associate General Counsel, John E. Ingle, Deputy Associate

General Counsel, and Laurence N. Bourne, Counsel.

Before: RANDOLPH and TATEL, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

Concurring opinion filed by Circuit Judge RANDOLPH.

TATEL, Circuit Judge: Invoking section 10 of the

Communications Act of 1934, SBC Communications Inc. filed

a petition with the Federal Communications Commission

requesting that the Commission “forbear from applying Title II

common carrier regulation to IP platform services.” Fifteen

months later, the Commission denied the request for two

independent reasons: (1) the petition was “procedurally

defective” because the Commission had yet to determine

whether common carrier regulations even applied to IP platform

services, and (2) SBC failed to “identify with sufficient

precision” the regulations and services it intended the petition to

cover. Arguing that the first rationale conflicts with section 10

and the second is arbitrary and capricious, SBC—recently

renamed AT&T Inc.—petitions for review. Because we agree

that the Commission lacks section 10 authority to reject a

petition as procedurally improper just because it requests

forbearance from uncertain regulatory obligations, we reject the

Commission’s first rationale for denying SBC’s petition. And

because the Commission has failed to explain how its second

rationale is consistent with the specificity standard it has applied

in other contexts, we remand the case for further explanation

and consideration consistent with this opinion. 
3

I.

Congress enacted the Telecommunications Act of 1996 to

“encourage the rapid deployment of new telecommunications

technologies” by “promot[ing] competition and reduc[ing]

regulation” among telecommunications providers.

Telecommunications Act of 1996, Pub. L. No. 104-104, pmbl.,

110 Stat. 56, 56. Critical to Congress’s deregulation strategy,

the Act added section 10 to the Communications Act of 1934.

That section requires the Federal Communications Commission

to “forbear” from enforcing communications statutes and

regulations in certain specified circumstances. In particular,

section 10(a) provides that 

the Commission shall forbear from applying any

regulation or any provision of [federal

telecommunications law] to a telecommunications

carrier or telecommunications service, or class of

telecommunications carriers or telecommunications

services, in any or some of its or their geographic

markets, if the Commission determines that—

(1) enforcement of such regulation or provision

is not necessary to ensure that the charges, practices,

classifications, or regulations by, for, or in connection

with that telecommunications carrier or

telecommunications service are just and reasonable

and are not unjustly or unreasonably discriminatory;

(2) enforcement of such regulation or provision

is not necessary for the protection of consumers; and

(3) forbearance from applying such provision or

regulation is consistent with the public interest. 

47 U.S.C. § 160(a). Section 10(b) requires that in determining

whether forbearance is “consistent with the public interest,” the

Commission “shall consider whether forbearance from enforcing

the provision or regulation will promote competitive market
4

conditions, including the extent to which such forbearance will

enhance competition among [telecommunications] providers.”

Id. § 160(b). Section 10(c) allows telecommunications carriers

to petition the Commission for forbearance with respect to

particular services or facilities. Id. § 160(c). Should the

Commission fail to respond within one year, the petition “shall

be deemed granted,” although the Commission may extend the

one-year period by an additional 90 days if it “finds that an

extension is necessary to meet the requirements of subsection

(a).” Id. 

On February 5, 2004, SBC Communications Inc. filed a

section 10 petition requesting forbearance from “Title II

common carrier regulation” for “IP platform services,” Petition

of SBC Commc’ns Inc. for Forbearance, WC Docket No. 04-29,

at 1 (filed Feb. 5, 2004) (“Forbearance Petition”), which it

defined as “those services that enable any customer to send or

receive communications in IP format over an IP platform, and

the IP platforms on which those services are provided,” id. at i.

Acknowledging some general uncertainty as to whether Title II

actually covers these services, SBC urged the Commission to

“eliminate any doubt concerning the unregulated status of IP

platform services by expressly forbearing from applying Title II

regulation . . . to the extent that such regulation might otherwise

be found to apply.” Id. at 2. In a second simultaneously filed

petition, SBC requested a declaratory ruling “confirm[ing] that

IP platform services . . . are not subject to Title II regulation.”

Petition of SBC Commc’ns Inc. for a Declaratory Ruling i (filed

Feb. 5, 2004) (“Declaratory Ruling Petition”).

One month after SBC filed its two petitions, the Commission

issued an “IP-Enabled Services” Notice of Proposed

Rulemaking (NPRM) raising many of the same issues presented

in SBC’s petitions. See IP-Enabled Services, 19 F.C.C.R. 4863

(proposed Mar. 10, 2004). The Commission consolidated SBC’s
5

declaratory ruling request with the rulemaking proceedings and,

given the “substantial overlap between the issues presented in

the SBC Forbearance Petition and the IP-Enabled Services

NPRM,” extended the period for comment on the forbearance

petition to coincide with the NPRM’s comment cycle. Wireline

Competition Bureau Extends Comment Deadlines for SBC’s “IP

Platform Services” Forbearance Petition, 19 F.C.C.R. 5607,

5607 (Mar. 30, 2004) (public notice). During the following

year, SBC and other interested parties filed comments and ex

parte submissions relating to both the rulemaking proceeding

and SBC’s two petitions. 

After extending the one-year period by an additional ninety

days, the Commission denied SBC’s forbearance petition. The

Commission’s order explains: 

We find that the petition is procedurally defective

because it asks us to forbear from the application of

statutory provisions and regulations that “may or may

not” apply to the telecommunications carrier or

telecommunications service at issue. In addition, the

evidence and arguments set out in SBC’s petition and

subsequent pleadings are insufficiently specific to

permit a finding that forbearance is appropriate.

In re: Petition of SBC Commc’ns Inc. for Forbearance from the

Application of Title II Common Carrier Regulation to IP

Platform Servs., 20 F.C.C.R. 9361, 9361 (May 5, 2005)

(“Forbearance Order”). 

SBC filed a petition for review with this court, see 47

U.S.C. § 402(a) (allowing parties aggrieved by a Commission

order to appeal to this court) and, during briefing, merged with

AT&T Corp. to form a new company AT&T Inc. AT&T argues

that (1) nothing in section 10 permits the Commission to reject,
6

as procedurally improper, petitions seeking forbearance from

regulatory obligations that “may or may not” apply to the

facilities and services in question; and (2) the Commission acted

arbitrarily and capriciously in denying SBC’s petition on the

alternative ground that the petition lacked sufficient specificity

to determine whether section 10(a)’s requirements were

satisfied. 

II.

We begin with the Commission’s first reason for rejecting

the petition—that the Commission had yet to determine the

extent to which Title II actually covers IP-enabled services. In

its order denying SBC’s petition, the Commission relied on

language from two different parts of section 10 to explain why

it may reject as procedurally improper any “conditional”

forbearance petition, that is, any petition seeking forbearance

from uncertain regulatory obligations. 

First, section 10(a) uses the word “forbear,” which means,

the Commission says, “to desist from” or “cease.” Forbearance

Order, 20 F.C.C.R. at 9363 ¶ 5. Because “it would be

impossible” to “forbear” from applying a regulation “that does

not apply,” the Commission concluded, section 10 “do[es] not

govern petitions seeking such relief.” Id. In other words,

according to the Commission, it lacks authority to consider

conditional forbearance requests because “section 10 neither

contemplates nor permits grants of forbearance relating to

obligations that ‘may or may not’ apply to the . . . service at

issue.” Id. In its opening brief, AT&T offered a forceful

rebuttal to this interpretation of section 10, but we need not

consider the issue because the Commission, in addition to failing

to defend its position in its brief, affirmatively withdrew it at

oral argument. Oral Arg. 13:20-:35. 
7

We thus focus on the second provision the Commission

relied on to support its conclusion that conditional forbearance

petitions are “procedurally defective,” namely, section

10(a)(3)’s public interest requirement. The Commission

reasoned: 

[W]e find that the grant of a petition seeking

forbearance from a requirement that does not

unambiguously apply is contrary to the public

interest, and therefore does not satisfy the

requirements for granting forbearance under section

10(a)(3) of the Act. It is not in the public interest to

forbear from requirements before the Commission has

fully considered whether and under what technical

conditions the requirements apply in the first place.

To do so could preclude fully considered analysis,

particularly in light of the statutory deadline for

acting on forbearance petitions. The opposite

conclusion would effectively impose a deadline for

the Commission to rule on the appropriate regulatory

treatment of IP-enabled services. In addition, it is not

in the public interest for the Commission to devote

resources to determine whether to forbear from

imposing or enforcing requirements that might not

even apply. 

Forbearance Order, 20 F.C.C.R. at 9363 ¶ 6. 

Critical to the issue before us, the Commission pointed to

nothing in SBC’s forbearance request that flunked section

10(a)(3)’s public interest requirement. Instead, the Commission

denied SBC’s petition on the ground that all conditional

forbearance requests are, as a procedural matter, contrary to the

public interest and thus require no substantive consideration.

See id. (declaring that “a petition” seeking conditional
8

forbearance is not in the public interest, with no mention of the

petition submitted by SBC) (emphasis added). Indeed, the

Commission’s entire discussion focuses on its generic concern

that it has neither time nor resources to respond to conditional

forbearance requests. Asked about this at oral argument,

Commission counsel confirmed that the SBC order announces

a new rule, namely, that the Commission will reject any

conditional forbearance petition as procedurally defective rather

than ruling on its merits. Oral Arg. 26:15-28:13. The question

before us, then, is whether section 10(a)(3)’s public interest

requirement permits the Commission to adopt such a rule. 

We review the Commission’s interpretation of section

10(a)(3) in accordance with Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), asking

first whether Congress has “directly spoken” to the issue before

us, id. at 842. To answer this question, we “employ[] traditional

tools of statutory construction,” id. at 843 n.9, beginning “as

always, with the plain language of the statute,” Citizens Coal

Council v. Norton, 330 F.3d 478, 482 (D.C. Cir. 2003). If

Congress has not clearly expressed its intent on the matter, we

move to Chevron’s second step, deferring to the agency’s

interpretation as long as it “is based on a permissible

construction of the statute.” Chevron, 467 U.S. at 843; see also

Kay v. FCC, 393 F.3d 1339, 1343 (D.C. Cir. 2005) (explaining

that “we accord a substantial measure of deference to the

Commission’s interpretation” of telecommunications statutes).

In this case, however, we have no need to consider the

reasonableness of the Commission’s interpretation, for as we

explain below, Congress “has directly spoken to the precise

question at issue” and we “must give effect to [its]

unambiguously expressed intent.” Chevron, 467 U.S. at 842-43.

To begin with, the Commission’s interpretation conflicts

with section 10(b), which expressly directs that in determining
9

whether forbearance is consistent with the public interest under

section 10(a)(3), the Commission “shall consider whether

forbearance . . . will promote competitive market conditions,

including the extent to which such forbearance will enhance

competition among providers of telecommunications services.”

47 U.S.C. § 160(b). Yet under the Commission’s newly

announced rule, the Commission will never consider market

conditions when addressing conditional forbearance requests

because it views such requests as automatically failing section

10(a)(3)’s public interest requirement. Nothing in section 10

gives the Commission authority to so ignore section 10(b). 

The Commission’s approach violates section 10’s plain

language in a second respect. In the order before us, the

Commission effectively held that any conditional forbearance

petition will fail section 10(a)’s substantive “public interest”

requirement because section 10(c)’s deadline precludes “fully

considered analysis” of such petitions. In other words, the

Commission has declared it contrary to the public interest to

consider such petitions within the statutory time frame. Section

10(a)(3), however, gives the Commission authority to decide

only whether “forbearance . . . is consistent with the public

interest,” not to decide whether deciding whether to forbear is in

the public interest. Moreover, the Commission’s reasoning, if

extended, could gut section 10. For example, under the

Commission’s view, nothing would stop it from finding that the

statutory deadline permits “fully considered analysis” of only

narrow petitions, and thus adopting a rule that any petition

seeking forbearance from more than one regulation is contrary

to the public interest. This cannot be correct. Nothing in section

10(a)(3) allows the Commission to avoid ruling on the merits of

a forbearance petition whenever it finds the statutory deadline

inconvenient. Quite to the contrary, section 10(a)(3)’s very

purpose is to force the Commission to act within the statutory

deadline. 
10

For these reasons, the Commission’s new rule conflicts with

the statute’s plain language, and the Commission offers us no

reason to believe that “Congress did not mean what it appears to

have said.” Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1089

(D.C. Cir. 1996). Indeed, the rule runs counter to the

Telecommunications Act’s purpose—“reduc[ing] regulation in

order to . . . encourage the rapid deployment of new

telecommunication technologies,” Telecommunications Act of

1996, pmbl., 110 Stat. at 56. Parties petitioning for conditional

forbearance seek elimination of regulatory uncertainty, and even

the Commission recognizes that “regulatory uncertainty . . . in

itself may discourage investment and innovation” regarding the

very technologies Congress intended the Act to promote.

Inquiry Concerning High-Speed Access to the Internet Over

Cable and Other Facilities, 17 F.C.C.R. 4798, 4802 ¶ 5

(proposed 2002); see also Amendment of the Commission’s

Space Station Licensing Rules and Policies, 18 F.C.C.R. 10,760,

10,781 ¶ 45 n.115 (2003) (“The Commission has noted on

several occasions that regulatory uncertainty can discourage

investment, and so unnecessary regulatory uncertainty should be

avoided.”). 

Our conclusion finds support in AT&T Corp. v. FCC, 236

F.3d 729 (D.C. Cir. 2001). There, we considered whether the

Commission could deny a forbearance petition on the grounds

that an alternative route for seeking regulatory relief was

available. Answering no, we explained that Congress enacted

section 10 as a “viable . . . means of seeking forbearance” from

regulation, and the Commission “has no authority to sweep it

away” on the grounds that it would prefer to determine the

appropriate regulatory treatment of a telecommunications

service through a different mechanism. Id. at 738. So too here.

Just as the “availability of . . . an alternative route for seeking

[forbearance] does not diminish the Commission’s responsibility

to fully consider petitions under § 10,” id., a forbearance
11

request’s conditional nature gives the Commission no discretion

to escape ruling on its merits. 

 

We emphasize that nothing we say here precludes the

Commission from finding that the hypothetical nature of a

particular forbearance petition renders it impossible to determine

whether it satisfies section 10(a)’s substantive requirements. In

other words, when assessing the merits of a forbearance petition,

the Commission may take into account its conditional nature.

We hold only that the Commission may not refuse to consider

a petition’s merits solely because the petition seeks forbearance

from uncertain or hypothetical regulatory obligations. 

III.

This brings us to the Commission’s alternative basis for

denying SBC’s petition—that the petition was “not sufficiently

specific to determine whether the requested forbearance satisfies

the requirements of section 10.” Forbearance Order, 20

F.C.C.R. at 9366 ¶ 14. Specifically, the Commission ruled that

SBC had failed to identify both (1) the services and facilities it

sought forbearance for, and (2) the statutory and regulatory

provisions it sought forbearance from. AT&T argues that SBC’s

petition was sufficiently specific in both respects and that the

Commission’s finding to the contrary is arbitrary and capricious.

See 5 U.S.C. § 706(2)(A) (directing reviewing courts to set aside

agency action that is “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law”); see also

Verizon Tel. Cos. v. FCC, 374 F.3d 1229, 1235 (D.C. Cir. 2005)

(applying the “arbitrary and capricious” standard to a

Commission order denying a forbearance petition). Our review

of this aspect of the Commission’s decision is “narrow” and we

may “not . . . substitute [our] judgment for that of the agency.”

Motor Vehicle Mfrs. Ass’n, Inc. v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43 (1983). Put another way, the question is

not what we think about the petition, but whether the
12

Commission’s view of the petition is reasonable. See EaglePicher Indus. v. EPA, 759 F.2d 905, 921 (D.C. Cir. 1985)

(“Under the arbitrary and capricious standard we look to see if

the agency has . . . articulated a rational explanation for its

action.”). 

As for the Commission’s first basis for rejecting the

petition—that it insufficiently describes the services and

facilities it covers—the petition expressly seeks forbearance for

“IP platform services,” which it defines by reference to SBC’s

declaratory ruling petition. See Forbearance Petition 1. The

declaratory ruling petition devotes over five pages to defining

the term, explaining among other things that 

“IP platform services” consist of (a) IP networks and

their associated capabilities and functionalities (i.e.,

an IP platform), and (b) IP services and applications

provided over an IP platform that enable an end user

to send or receive a communication in IP format. The

communication may be voice, data, video, or any

other form of communication, so long as it is sent to

or received by an end user in IP over an IP platform.

This definition is expansive in that it encompasses the

IP networks themselves and the uses to which these

networks are put. It also encompasses both “services”

and “applications,” since the distinctions between

these concepts are meaningless for regulatory

purposes in the IP context. Instead, the key

characteristic of an IP platform service is that the

service must leave or reach the customer in IP over an

IP platform.

Declaratory Ruling Petition 28-29. The Commission points to

nothing ambiguous about this expansive definition. Instead, it

compares a footnote in the declaratory ruling petition that
13

“appears to request forbearance for services that can ride over

legacy networks,” Forbearance Order, 20 F.C.C.R. at 9366 ¶ 14

(emphasis omitted), to a subsequent SBC pleading indicating the

company never sought forbearance for the legacy networks

themselves, see id. Neither in its order nor its brief, however,

does the Commission explain precisely what it finds confusing

about these statements, and we decline to speculate on its behalf.

In its order, the Commission’s primary concern appeared to

be that SBC sought forbearance for a wide range of services.

See id. ¶ 15 (“The scope of SBC’s petition is . . . potentially very

broad.”); Resp’t’s Br. 28 (“[T]he Commission found that the

extraordinary breadth and generality of SBC’s petition made it

impossible to assess whether the forbearance standards had been

met.”). But as Commission counsel wisely conceded at oral

argument, “breadth alone would [not] be a reason to deny the

petition.” Oral Arg. 30:30-31:00. 

In sum, given SBC’s extensive definition of “IP platform

services” in its declaratory ruling petition and the Commission’s

failure to identify any inadequacies in that definition, the

Commission’s rejection of SBC’s petition as “insufficiently

specific” with respect to services and facilities was arbitrary and

capricious. 

More persuasive is the Commission’s conclusion that SBC

failed to adequately identify the regulations from which it

sought forbearance. Although the petition requests forbearance

from only “common carrier” and “economic” regulation under

Title II, see Forbearance Petition 1, 11, the Commission

correctly points out that the petition “never clearly identifie[d]

which specific provisions of Title II this limitation is meant to

exclude,” Forbearance Order, 20 F.C.C.R. at 9367 ¶ 16. Indeed,

although other telecommunications carriers—including AT&T,

the very company SBC merged with during the course of these

proceedings—submitted comments criticizing SBC for failing
14

to specify which Title II regulations it intended its petition to

cover, SBC refused to provide any clarification, asserting

instead that “it would elevate form over substance if forbearance

could be granted only following an individual examination of

every single provision of Title II standing alone.” Reply

Comments of SBC Commc’ns, Inc., WC Docket No. 04-29, at

19 (filed July 14, 2004). 

AT&T argues that further specificity was unnecessary

because the terms “economic” and “common carrier” clearly

refer to specific provisions in Title II. Citing an order and two

NPRMs in which the Commission itself used these terms—In

re: Vonage Holdings Corporation Petition for a Declaratory

Ruling Concerning an Order of the Minnesota Public Utilities

Commission, 19 F.C.C.R. 22,404 (2004) (“Vonage order”), IPEnabled Services, 19 F.C.C.R. 4863 (proposed 2004), and

Inquiry Concerning High-Speed Access to the Internet Over

Cable and Other Facilities, 17 F.C.C.R. 4798 (proposed

2002)—AT&T asserts that the Commission “has manifested its

understanding that ‘economic’ or ‘common carrier’ regulation

includes a readily identifiable list of certification, tariffing,

interconnection, service quality, and other related requirements

that are distinct from social policy and consumer protection

rules.” Pet’r’s Br. 30. AT&T also submitted a Rule 28(j) letter

pointing out that the Commission recently allowed a Verizon

forbearance petition to be “deemed granted” even though, like

the SBC petition, it “sought relief from the application of Title

II common carrier requirements without enumerating all the

requirements that fall into that category.” Pet’r’s 28(j) Letter,

Mar. 21, 2006; see also Fed. R. App. P. 28(j) (“If pertinent and

significant authorities come to a party’s attention after the

party’s brief has been filed . . . a party may promptly advise the

circuit clerk by letter . . . setting forth the citations.”).

The Commission has never attempted to reconcile either the

Vonage order or the two NPRMs with the case at hand, and it
15

remains unclear to us whether, in finding the SBC petition

insufficiently specific to warrant forbearance, the Commission

acted consistently with the specificity standard applied in these

other contexts. Perhaps the Vonage order differs from this case

because there the Commission used “economic” and “common

carrier” to describe a set of state, rather than federal,

telecommunications regulations. Perhaps the other two

examples differ because NPRMs require less specificity than

forbearance petitions. For us to so conclude, however, “would

impermissibly intrude on the agency’s prerogative to make

policy judgments for itself.” Nat. Res. Def. Council, Inc. v.

Herrington, 768 F.2d 1355, 1412 (D.C. Cir. 1985); see also

Cassell v. FCC, 154 F.3d 478, 483 (D.C. Cir. 1998) (“An

agency’s interpretation of its own precedent is entitled to

deference.”). As for the disposition of the Verizon petition,

although agencies normally “need not explain alleged

inconsistencies in the resolution of subsequent cases,” CHM

Broad. Ltd. P’ship v. FCC, 24 F.3d 1453, 1459 (D.C. Cir. 1994);

but cf. Williston Basin Interstate Pipeline Co. v. FERC, 165 F.3d

54, 61-62 (D.C. Cir. 1999); Panhandle E. Pipe Line Co. v.

FERC, 890 F.2d 435, 438-39 (D.C. Cir. 1989), we make an

exception where, as here, the later case is part of a pattern of

arguably inconsistent decision-making that began before the

challenged action, see Idaho Power Co. v. FERC, 312 F.3d 454,

464 (D.C. Cir. 2002) (vacating because, among other things, the

challenged orders were inconsistent with both prior and

subsequent agency actions). Accordingly, we remand the case

to the Commission with directions to either (1) explain how the

SBC petition is distinguishable from the four examples cited by

AT&T, or (2) reconsider the sufficiency of the SBC petition in

light of the specificity standard applied in those cases. See Fox

Television Stations, Inc. v. FCC, 280 F.3d 1027, 1048 (D.C. Cir.

2002) (finding remand, rather than vacatur, appropriate where
16

“we cannot say with confidence that the [agency action] is likely

irredeemable”).

 So ordered.
RANDOLPH, Circuit Judge, concurring: I concur in the

disposition because, given the Commission’s refusal to grant the

forbearance petition, there is no practical difference in this case

between remanding, on the one hand, and vacating and

remanding on the other. Contrast Checkosky v. SEC, 23 F.3d

452, 490-493 (D.C. Cir. 1994) (opinion of Randolph, J.). The

court, rather than finding the Commission’s decision arbitrary

and capricious, decides that it cannot come to a judgment

without further explanation from the Commission concerning its

subsequent actions. In this exceptional circumstance, remand

for further explanation is appropriate. Contrast id. at 490-91;

Detroit Newspaper Agency v. NLRB, 435 F.3d 302, 312-314

(D.C. Cir. 2006) (Henderson, J., dissenting).