United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

——— 

Argued February 17, 2005 Decided May 13, 2005 

No. 03-1147 

SBC COMMUNICATIONS INC., 

PETITIONER

v. 

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA, 

RESPONDENTS

Z-TEL COMMUNICATIONS, INC., ET AL., 

INTERVENORS

——— 

On Petition for Review of an Order of the 

Federal Communications Commission 

——— 

 Michael K. Kellogg argued the cause for petitioner. With 

him on the briefs were Colin S. Stretch, James D. Ellis, Gary 

L. Phillips, and Christopher Heimann. 

Richard K. Welch, Counsel, Federal Communications 

Commission, argued the cause for respondents. With him on 

the brief were R. Hewitt Pate, Assistant Attorney General, 

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

Mintz, Attorneys, John A. Rogovin, General Counsel, Federal 

Communications Commission, John E. Ingle, Deputy 

Associate General Counsel, and Suzanne M. Tetreault, 

Counsel. Catherine G. O'Sullivan and Nancy C. Garrison, 

Attorneys, U.S. Department of Justice, and Rodger D. Citron, 

Counsel, Federal Communications Commission, entered 

appearances. 

 Before: SENTELLE and ROBERTS, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

 Opinion for the court filed by Senior Circuit Judge

WILLIAMS. 

 WILLIAMS, Senior Circuit Judge: SBC challenges a 

Federal Communications Commission order finding that SBC 

(through various affiliates) violated the terms of a 

requirement, imposed as a condition to the FCC’s approval of 

a merger between SBC and Ameritech, that SBC “offer” 

intervenors Z-Tel and Core access to “shared transport” for 

intraLATA toll call traffic. Because the FCC failed to address 

the questions whether telecommunications carriers could 

waive their right to shared transport under the merger order 

and whether Z-Tel and Core had in fact waived that right, we 

vacate the Commission’s order and remand to the 

Commission for further proceedings. 

* * * 

 Under the Telecommunications Act of 1996, Pub. L. No. 

104-104, 110 Stat. 56, codified at 47 U.S.C. § 151 et seq. (the 

“Act”), incumbent local exchange carriers (“ILECs”) are 

required to allow new entrants, known as competitive local 

exchange carriers (“CLECs”), to lease “unbundled network 
3

elements” (“UNEs”) for use by the CLECs in providing 

telephone service. See 47 U.S.C. § 251(c)(3). The terms and 

conditions of this obligation to “unbundle” are set forth in 

“interconnection agreements” (“ICAs”) negotiated between 

the ILEC and CLEC or, if necessary, arbitrated by state 

commissions. Id. at §§ 252(a), (b). The parties must submit 

any interconnection agreement to the relevant state 

commission for approval. Id. at § 252(e). Where an ILEC 

provides a network element to one CLEC under a stateapproved agreement it must make that element available to 

any other “requesting” CLEC. Id. at § 252(i). The Act also 

makes clear that ILECs and CLECs may enter ICAs that differ 

from the unbundling requirements of §§ 251(b) or (c). See id. 

at § 252(a)(1). 

 The FCC has determined that the network elements 

subject to the unbundling requirements include “shared 

transport” facilities. See In the Matter of Implementation of 

the Local Competition Provisions in the Telecommunications 

Act of 1996, 11 FCC Rcd 15,499, 15,718, ¶ 440 (1996). 

“Shared transport is defined as the transmission facilities 

shared by more than one carrier, including the incumbent 

LEC, between end office switches, between end office 

switches and tandem switches, and between tandem switches 

in the incumbent LEC network.” 47 C.F.R. 

§ 51.319(d)(4)(i)(C) (2004). 

 The SBC-Ameritech merger required FCC approval, to be 

granted only if the Commission found that the attendant 

license transfers would serve “the public interest, 

convenience, and necessity.” 47 U.S.C. § 310(d). The 

Commission approved the merger subject to conditions aimed 

at mitigating certain potential anticompetitive effects. See In 

re Applications of Ameritech Corp. and SBC Communications 
4

Inc., 14 FCC Rcd 14,712 (1999) (“Merger Order”), vacated in 

part on other grounds, Ass’n of Communications Entrs. v. 

FCC, 235 F.3d 662 (D.C. Cir. 2001). Among these was the 

requirement that SBC and appropriate affiliates offer shared 

transport access to CLECs in the states formerly served by 

Ameritech, a condition imposed in response to Ameritech’s 

prior reluctance to offer unbundled access to shared transport 

services. See Merger Order, 14 FCC Rcd at 14,888 ¶ 425. 

Specifically, that condition provided: 

Within 12 months of the Merger Closing Date (but 

subject to state commission approval and the terms of any 

future Commission orders regarding the obligation to 

provide unbundled local switching and shared transport), 

SBC/Ameritech shall offer shared transport in the 

SBC/Ameritech Service Area within the Ameritech States 

under terms and conditions, other than rate structure and 

price, that are substantially similar to (or more favorable 

than) the most favorable terms SBC/Ameritech offers to 

telecommunications carriers in Texas as of August 27, 

1999. Subject to state commission approval and the terms 

of any future Commission orders regarding the obligation 

to provide unbundled local switching and shared 

transport, SBC/Ameritech shall continue to make this 

offer, at a minimum, until the earlier of (i) the date the 

Commission issues a final order in its UNE remand 

proceeding . . . finding that shared transport is not 

required to be provided by SBC/Ameritech in the relevant 

geographic area, or (ii) the date of a final, non-appealable 

judicial decision providing that shared transport is not 

required to be provided by SBC/Ameritech in the relevant 

geographic area. 
5

Merger Order, 14 FCC Rcd at 15,023-24, App. C ¶ 56 

(emphasis added). 

 SBC interpreted the Merger Order to require that it 

provide shared transport in the former Ameritech states—

Illinois, Indiana, Michigan, Ohio and Wisconsin—only for 

local exchange service, not for “intraLATA toll service.” 

LATAs (Local Access and Transport Areas) are service areas 

within which the Bell Operating companies were permitted to 

operate and provide telephone service. See United States v. 

Western Elec. Co., 569 F. Supp. 990, 993-94 (D.D.C. 1983). 

IntraLATA service is what consumers generally know as local 

service; intraLATA “toll” calls, however, encompass those 

long-distance calls that do not travel beyond the borders of a 

single LATA. See SBC Communications Inc. v. FCC, 138 

F.3d 410, 412 n.1 (D.C. Cir. 1998).

 The Commission initiated a proceeding with a notice of 

apparent liability, and went on to find that SBC had “failed to 

offer shared transport” for intraLATA toll service in the five 

former Ameritech states, and that this failure violated ¶ 56 of 

the merger conditions. In the Matter of SBC Communications, 

Inc., 17 FCC Rcd 19,923, 19,923-24, ¶¶ 1-2 (2002) 

(“Forfeiture Order”). As authorized by 47 U.S.C. 

§ 503(b)(2)(B) and 47 C.F.R. § 1.80(b)(2), (b)(5) (2002), the 

Commission imposed on SBC the statutory maximum fine of 

$1.2 million for each of the five states, for a total of $6 

million. See Forfeiture Order, 17 FCC Rcd at 19,934-37, 

¶¶ 22-27. SBC petitioned for review, and we upheld the 

Commission. SBC Communications, Inc. v. FCC, 373 F.3d 

140, 151-52 (D.C. Cir. 2004) (“SBC I”). 

 In August 2001 two CLECs, Z-Tel Communications and 

CoreComm Communications, Inc., filed a joint complaint 
6

with the FCC under 47 U.S.C. § 208, alleging that nine SBC 

affiliates had improperly refused to allow them to use shared 

transport to complete intraLATA toll calls in violation of the 

Act, the FCC’s implementing rules, and the Merger Order. 

 With regard to eight states outside the former Ameritech 

region the FCC denied the complaint. In the Matter of

CoreComm Communications, Inc. et al. v. SBC 

Communications Inc. et al., 18 FCC Rcd 7568, 7578-82, ¶¶ 

26-35 (2003) (“Liability Order”). For seven states the matter 

turned on circumstances of no great relevance here. As to 

California, the Commission found no violation because Z-Tel 

(Core was irrelevant because it had no agreement with Pacific 

Bell and never attempted to negotiate one) had voluntarily 

exercised its right under § 252(i) to opt-in to an existing ICA 

that did not permit the use of shared transport for intraLATA 

toll traffic. Id. at 7579-81, ¶ 29. Notwithstanding SBC’s 

obligation to make shared transport access available for 

intraLATA toll traffic under § 251(c)(3) and the 

Commission’s rules, see id. at 7581, ¶ 30, the Commission 

found no violation because “the obligations created by section 

251 and our rules are effectuated through the process 

established in section 252—that is, by reaching agreement 

through negotiation, arbitration, or opt-in,” id., and in 

California Z-Tel had sought to negotiate an amendment to the 

(in this respect) narrower pre-existing ICA without, as 

required, “comply[ing] with [the] modification or change of 

law provisions” in the ICA, id. 

 The FCC granted the complaint, however, with respect to 

the five states in the former Ameritech region. Paragraph 56 

of the Merger Order obligated SBC to “offer” shared 

transport for intraLATA toll. The Commission appeared to 
7

assume (incorrectly) that SBC’s conduct in relation to Core 

and Z-Tel rested on ICAs antedating the Merger Order: 

To the extent that [SBC’s] existing agreements with the 

Complainants did not make available shared transport for 

intraLATA toll, the Merger Order required [SBC] to 

agree to the necessary amendments to do so. When Core 

and Z-Tel asked for this functionality, however, [SBC] 

just said “no.” 

Id. at 7577, ¶ 21 (emphasis added). Although “under section 

252(a)(1), parties are free to negotiate terms that do not meet 

the requirements of sections 251(b) and (c),” id. at 7577, ¶ 23, 

the Commission held that “[e]ven if sections 251 and 252 did 

not obligate Defendants to amend their agreements with Core 

and Z-Tel to provide for shared transport for intraLATA toll 

traffic, the Merger Order did.” Id. The Commission reasoned 

that SBC’s contrary view “would run entirely counter to the 

basic purpose of the paragraph 56 condition,” id. at 7577, 

¶ 24, because “carriers who had been denied shared transport 

previously [under ICAs antedating the Merger Order] would 

be unable to amend their agreements to take advantage of a 

merger condition specifically designed to remedy the 

situation,” id. at 7578. 

 Although the Commission assumed that SBC was 

standing on pre-Merger Order ICAs, SBC points out that ZTel and Core had entered into or amended ICAs with SBC 

after the Merger Order—ICAs that did not provide for shared 

transport for intraLATA toll. According to SBC submissions 

that appear uncontradicted, Z-Tel in Illinois had “opted-in” to 

the “Illinois Base Agreement,” which did not provide this 

functionality; that agreement was approved by the relevant 

Illinois commission on August 9, 2000, long after issuance of 
8

the Merger Order on October 8, 1999. See Decl. of Rhonda 

Robinson ¶ 6 (Joint Appendix (“J.A.”) 56). In Indiana, Ohio, 

and Wisconsin, Z-Tel did not seek the now disputed 

functionality. See Revised Joint Statement ¶ 19 (J.A. 83). 

And in Michigan, there was no ICA between Z-Tel and SBC. 

Id. As for Core, it and SBC’s affiliates entered into ICAs in 

Michigan, Illinois, and Ohio before the Merger Order, but 

amended them after the order to respond to the merger 

conditions; the amendments provided for shared transport for 

intraLATA toll calls, but in an “interim” form that evidently 

ceased to be available, see Decl. of Melvin Flowers ¶ 9-19 

(J.A. 62-66), for reasons that do not appear clearly in the 

record. In Indiana and Wisconsin, there were no ICAs 

between Core and SBC. Id. at ¶¶ 5-7 (J.A. 61-62). For 

Wisconsin, Core sought to adopt an existing ICA, but when 

SBC’s affiliate sent the agreement to Core for its signature, 

Core never returned a signed agreement. Id. at ¶ 6 (J.A. 61). 

The record seems completely obscure on SBC-Core relations 

in Indiana. 

 SBC argues that the Commission’s order is arbitrary and 

capricious. It makes a broad argument that the Commission 

was inconsistent in its treatment of the statutory obligation (in 

California) and the ¶ 56 obligation. In California Z-Tel, and in 

the Ameritech states both Z-Tel and Core, had evidently 

entered into post-Merger Order ICAs that didn’t provide 

shared transport access for intraLATA toll calls and had 

sought to amend those ICAs—without following the ICAs’ 

provisions relating to contract modification or changes of law. 

That was fatal to Z-Tel’s claims of statutory violation in 

California. SBC argues that it should have had the same 

effect on the ¶ 56 claims, on the principle that ¶ 56 was simply 

“intended to create a substantive obligation, akin to an FCC 

unbundling rule, that would be implemented through the 1996 
9

Act’s procedural framework; it was not intended to be an endrun around that framework.” Petitioner’s Br. at 16. SBC also 

makes a narrower argument that the Commission reached its 

conclusion on the basis of a complete misunderstanding, 

thinking that the SBC affiliates held ILECs to the terms of 

pre-Merger Order ICAs, whereas in fact they rested on postMerger Order ICAs whose failure to cover shared transport 

for intraLATA toll service (to the extent true at all) resulted 

from Z-Tel’s and Core’s waiver of their entitlements under the 

Merger Order. 

* * * 

 Standing. To satisfy Article III’s standing requirement, a 

party must meet the well-known requirements of injury-infact, causation and redressability. See Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560-61 (1992); see also 

Rainbow/PUSH Coalition v. FCC, 330 F.3d 539, 542 (D.C. 

Cir. 2003). According to the Commission, SBC sustained no 

injury as a result of the Liability Order because the order 

simply “echoes” the Commission’s holding in the Forfeiture 

Order that SBC’s behavior had violated the merger condition 

in the Ameritech states. And, it says, the Liability Order

imposed no additional harm on SBC beyond that in the 

Forfeiture Order, as it added no burdens in addition to the $6 

million forfeiture. Even though at one point Z-Tel and Core 

could have taken advantage of the present order to seek 

damages, those firms neglected to file a supplemental 

complaint demanding damages within the Commission’s 60-

day time limit, see 47 C.F.R. § 1.722(e) (2003), and such 

additional relief is therefore now barred. 
10

 The Commission’s theory is mistaken. Whereas the 

Forfeiture Order found that CLECs generally had a right to 

shared transport for intraLATA toll, see Forfeiture Order, 17 

FCC Rcd at 19,933, ¶ 20, the Liability Order found that SBC 

must supply the functionality to two particular CLECs 

notwithstanding the terms of their ICAs, see Liability Order, 

18 FCC Rcd at 7576-78, ¶¶ 20-25. Thus, the Liability Order 

clarifies the Commission’s understanding of ¶ 56, as set out 

both in that order and in the Forfeiture Order, and clarifies it 

adversely to SBC. The Commission’s “echo” argument is at 

best only a variant of its preclusion theory, to which we now 

turn. 

 Issue and claim preclusion. Characterizing the present 

issue as whether “the Commission acted unlawfully in holding 

SBC liable for violating the paragraph 56 merger condition,” 

Respondents’ Br. at 17, the Commission argues that this court 

resolved that issue against SBC when it upheld the Forfeiture 

Order in SBC I; the doctrine of issue preclusion, it says, 

therefore bars SBC from raising the issue here. 

 Issue preclusion is not the doctrine the Commission is 

groping for. It bars relitigation of an issue by a party “that has 

actually litigated [the] issue.” Restatement (Second) of 

Judgments at 6 (1982) (emphasis added). Here the issue is 

SBC’s liability to two specific CLECs, revolving particularly 

around the circumstances under which a CLEC can waive, or 

inadequately assert, rights to the functionality. Had the 

Forfeiture Order addressed SBC’s relations with those firms, 

or the issue of inadequate CLEC assertion of entitlements, 

issue preclusion might well be apropos. But it did not. 

The Commission might, however, have a defense under

issue preclusion’s cousin, claim preclusion. It embodies the 
11

principle “that a party who once has had a chance to litigate a 

claim before an appropriate tribunal usually ought not to have 

another chance to do so.” Restatement (Second) of Judgments 

at 6 (1982) (emphasis added). It would not be completely 

implausible for the Commission to argue that SBC should 

have raised in the forfeiture proceedings the issues before us 

now—relating to the procedures for enforcement and the 

waivability of ¶ 56 entitlements. 

 We proceed to address the claim preclusion possibility, in 

part because of the historic confusion about how the concepts 

of claim and issue preclusion are applied, see, e.g., 16 

WRIGHT, MILLER & COOPER, FEDERAL PRACTICE AND 

PROCEDURE § 4414, at 349 & n.45 (2d ed. 2002), in part 

because the two defenses have a somewhat jurisdictional 

character: “As res judicata belongs to courts as well as to 

litigants, even a party’s forfeiture of the right to assert it . . . 

does not destroy a court’s ability to consider the issue sua 

sponte.” Stanton v. D.C. Ct. of Appeals, 127 F.3d 72, 77 

(D.C. Cir. 1997). 

 But the purpose of claim preclusion is to prevent 

“litigation of matters that should have been raised in an earlier 

suit.” Marrese v. American Academy of Orthopaedic 

Surgeons, 470 U.S. 373, 376 n.1 (1985) (emphasis added); cf. 

Yamaha Corp. of America v. U.S., 961 F.2d 245, 254 (D.C. 

Cir. 1992) (holding that issue preclusion would be unfair if 

applied “when the losing party clearly lacked any incentive to 

litigate the point in the first trial”); Kremer v. Chemical Const. 

Corp., 456 U.S. 461, 481 n.22 (1982) (explaining that the 

unfairness concerns underlying issue preclusion doctrine 

apply equally in the case of claim preclusion). Here, the 

record offers little support for the Commission’s implicit 

claim that SBC, defending itself against the claim that it had 
12

an obligation generally under the Merger Order to provide 

shared transport for intraLATA toll calls, should have been 

expected to assert innocence in relation to individual CLECs 

that may have waived or failed to assert proper demands for 

that functionality. Nothing in the Forfeiture Order, or in what 

the parties have placed before us, suggests that an attempt by 

SBC to raise the issue of its specific relations with these two 

firms would have made a particle of difference in the 

outcome. Indeed, in calculating the $6 million forfeiture on 

the basis of the number of states in the Ameritech region (a 

maximum penalty of $1.2 million in each of the five states), 

the Commission went out of its way to observe that for a 

company of SBC’s size, “a $6,000,000 forfeiture is not 

excessive” and “a smaller forfeiture would lack adequate 

deterrent effect.” Forfeiture Order, 17 FCC Rcd at 19,935, 

¶ 24.

 The Commission had the burden of establishing the 

defense, see Donovan v. Williams Enterprises, Inc., 744 F.2d 

170, 178 (D.C. Cir. 1984), and it has failed to do so, possibly 

because it never formulated the issue correctly. Compare 

Stanton, 127 F.3d at 77 (noting, in addressing belatedly raised 

preclusion issues, that “the relevant facts stand uncontroverted 

in the record before us”). 

Merits. Reaching the merits at last, we start with SBC’s 

argument that because the merger conditions are not FCC 

rules promulgated pursuant to notice and comment, but rather 

are “akin to a consent decree” between SBC and the 

Commission, the FCC’s interpretation of them is not entitled 

to the deference ordinarily due an agency interpretation of its 

rules under Thomas Jefferson University v. Shalala, 512 U.S. 

504, 512 (1994). In fact our precedents, recognizing agency 

authority to adjudicate issues and enter into settlements, treat 
13

settlements between an agency and a private party as 

equivalent to agency regulations for deference purposes. See 

National Fuel Gas Supply Corp. v. FERC, 811 F.2d 1563, 

1568-70 (D.C. Cir. 1987) (if the language of a settlement 

agreement is ambiguous, the court will give deference to the 

agency’s reading of it); see also MCI WorldCom Network 

Services, Inc. v. FCC, 274 F.3d 542, 547-48 (D.C. Cir. 2001). 

 SBC’s primary substantive argument is that the Merger 

Order incorporates the 1996 Act’s interconnection agreement 

process, 47 U.S.C. § 252, so that CLECs must comply with 

any existing ICAs’ modification and change of law provisions 

in order to get the benefit of anу functionality that ¶ 56 newly 

made available, as the Commission found was the case in 

California for ordinary UNEs under § 251. To show that the 

Merger Order clearly mandates this requirement, SBC 

equates the words stating the ILECs’ duty to supply the 

relevant UNEs (“offer” in the Merger Order and “provide” in 

1996 Act). To support that equation, SBC rests heavily on our 

conclusion in SBC I that the Merger Order’s requirement that 

SBC “offer” the functionality was equivalent, in that context, 

to “provid[ing]” it under § 251. See SBC I, 373 F.3d at 147. 

But our discussion there simply rejected SBC’s creative 

argument that SBC wasn’t “offer[ing]” shared transport for 

intraLATA toll calls in Texas, the benchmark under the 

Merger Order, because it was providing the service 

involuntarily under the statute. Id. We never made an allpurpose equation of the two terms. 

 SBC also argues that ¶ 56’s obvious gaps—especially the 

explicit exception for “rate structure and price”—necessarily 

mean that the § 252 process must apply. The Commission 

doesn’t really respond on this point; indeed, its counsel 

conceded at oral argument that the issue of price might 
14

necessitate use of the negotiation and arbitration procedures 

set forth in § 252. Oral Arg. Tape at 22:56-23:27. But we 

don’t think that such a substantive gap—which the parties 

might well have expected to be filled, for example, by states’ 

exercises of their powers to set UNE prices within the 

TELRIC framework devised by the Commission, see AT&T v. 

Iowa Utils. Bd., 525 U.S. 366, 384-85 (1999); see also 47 

U.S.C. § 252(c)(1)—makes it by any means clear that ¶ 56 

contemplated wholesale importation of the statute’s 

procedures. 

 At oral argument SBC somewhat amplified its suggestion 

that ¶ 56 had only substantive significance and implicitly 

relied on the procedures of § 252. It pointed out that the 

Commission’s unbundling rules had been vacated at the time 

of the Merger Order, so that no unbundling requirement 

formally existed. Oral Arg. Tape at 7:25-8:49. At its best, 

however, this argument would only mean that a purely 

substantive reading of ¶ 56 would still achieve a material 

Commission goal. That would not be inconsistent with ¶ 56’s 

also imposing on SBC a more affirmative procedural duty 

than does § 252. That is especially true in light of ¶ 56’s 

command that SBC “continue to make this offer [of shared 

transport]” available. Accordingly, we find the provision 

ambiguous, and the Commission’s reading—in the sense of 

rejecting wholesale incorporation of § 252—not unreasonable. 

 On the question whether the two complaining CLECs 

waived their entitlement to shared transport for intraLATA 

toll calls, the Commission is on far weaker footing. Its order 

said that ¶ 56 “required [SBC] to agree to the necessary 

amendments.” Liability Order, 18 FCC Rcd at 7576-77, ¶ 21. 

SBC admits that it didn’t affirmatively extend offers to Z-Tel 

and Core for access to shared transport for intraLATA toll 
15

calls. Oral Arg. Tape at 9:42-10:55. But it argues that Z-Tel 

and Core waived their right to that functionality by voluntarily 

entering into or amending ICAs (that didn’t provide it) after

the Merger Order. See “Defendants [sic] Legal Analysis,” 

filed October 10, 2001, at 9-14 (J.A. 48-53); see also supra at 

6-7. 

 Although the Commission’s order didn’t address the issue 

of waiver, it conceded at oral argument that the requirement to 

“offer” shared transport is potentially waivable. Oral Arg. 

Tape at 18:04-20:59. The concession is in tune with 

§ 252(a)(1), which explicitly allows “binding agreement[s]” 

between ILECs and CLECs for provision of network elements 

“without regard” to the standards of §§ 251(b) & (c). 

 Here the Commission order’s only allusion to SBC’s 

waiver argument was at best a glancing blow: 

To the extent that [SBC’s] existing agreements with the 

Complainants did not make available shared transport for 

intraLATA toll, the Merger Order required [SBC] to 

agree to the necessary amendments to do so. When Core 

and Z-Tel asked for this functionality, however, [SBC] 

just said “no.” 

Liability Order, 18 FCC Rcd at 7577, ¶ 21. 

 By referring to the ICAs in question as “existing 

agreements,” the Commission revealed an assumption 

contrary to the facts as SBC developed them in the record: in 

reality the agreements SBC invoked seem to have postdated 

the Merger Order. Further, the Commission never responded 

to SBC’s basic concept that the complainants had voluntarily 

abandoned their ¶ 56 entitlements to shared transport for 

intraLATA toll calls. Thus the Commission has never 
16

interpreted the exact scope of the duty. Did it oblige SBC to 

take aggressive steps to alert CLECs to the possibility, as the 

fast food seller might ask, “And you want fries with that?” 

Indeed, when SBC filed interrogatories aimed at creating a 

record on the negotiation of the post-Merger Order ICAs 

(Interrogatory 3), Z-Tel and Core refused to respond on the 

ground that the subject was irrelevant, see Complainant’s [sic] 

Objections to Interrogatories at 3-4 (J.A. 70-71), and the 

Commission upheld that refusal, see October 31, 2001 Letter 

from the Commission’s Enforcement Bureau, to Michael B. 

Hazzard, Counsel for Complainants, and Christopher M. 

Heimann, Counsel for Defendants (J.A. 75-77). We cannot 

rule on the Commission’s interpretation of the Liability Order 

until it elucidates the scope of the duties imposed. See SEC v. 

Chenery Corp., 332 U.S. 194, 196-97 (1947). 

 We vacate the order and remand for further proceedings 

in which the Commission may develop (and apply) its 

interpretation of the conditions under which CLECs may 

waive the ¶ 56 entitlement. 

 So ordered.