United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 20, 2009 Decided July 17, 2009 

No. 07-1426 

AD HOC TELECOMMUNICATIONS USERS COMMITTEE, ET AL., 

PETITIONERS

v. 

FEDERAL COMMUNICATIONS COMMISSION AND UNITED 

STATES OF AMERICA, 

RESPONDENTS

AT&T INC., ET AL., 

INTERVENORS

Consolidated with 07-1427, 07-1429, 07-1430, 07-1431,

07-1452, 07-1484, 07-1503 

On Petitions for Review of Orders 

of the Federal Communications Commission 

Colleen L. Boothby and Christopher J. Wright argued the 

cause for private petitioners. With them on the briefs were 

David P. Murray, Thomas Jones, Randy Branitsky, Russell M. 

Blau, Joshua M. Bobeck, Brad E. Mutschelknaus, Genevieve 

Morelli, John J. Heitmann, Timothy J. Simeone, and Joseph 

C. Cavender. 
2 

Stefanie A. Brand was on the brief for petitioner the New 

Jersey Division of Rate Counsel. With her on the briefs was 

Ronald K. Chen and Christopher J. White. 

Richard K. Welch, Acting Deputy Associate General 

Counsel, Federal Communications Commission, argued the 

cause for respondent. With him on the brief were Matthew B. 

Berry, General Counsel, Jacob M. Lewis, Associate General 

Counsel, and Laurel R. Bergold, Counsel. Robert B. 

Nicholson and Robert J. Wiggers, Attorneys, U.S. Department 

of Justice, and James M. Carr, Counsel, Federal 

Communications Commission, entered appearances. 

Jonathan E. Nuechterlein argued the cause for 

intervenors AT&T Inc., et al. in support of the respondent. 

With him on the brief were Lynn R. Charytan, Heather M. 

Zachary, Jack S. Zinman, Gary L. Phillips, Paul K. Mancini,

Michael E. Glover, Edward Shakin, William H. Johnson, 

Craig J. Brown, Robert B. McKenna, David W. Zesiger, Scott 

H. Angstreich, Gregory G. Rapawy, and Gregg Sayre. 

Before: SENTELLE, Chief Judge, and KAVANAUGH, 

Circuit Judge, and EDWARDS, Senior Circuit Judge. 

Opinion for the Court filed by Circuit Judge

KAVANAUGH. 

KAVANAUGH, Circuit Judge: This case involves the 

FCC’s regulation of “special access” broadband lines that 

connect individual businesses to their incumbent local 

exchange carriers. Businesses need dedicated special access 

lines to utilize essential broadband applications. In many 

areas, however, only one incumbent local exchange carrier 

(usually AT&T, Verizon, or Qwest) maintains the special 
3 

access lines that connect to individual businesses in that 

locale. The “last mile” for broadband business customers thus 

differs from the analogous last mile for residential customers, 

who typically have at least two wires into their homes over 

which they can obtain Internet service (namely, their 

traditional telephone and cable lines). The ILECs’ current 

control of most special access lines into businesses forms the 

backdrop for the FCC’s action in this case. 

Applying its statutory forbearance authority, the FCC 

largely eliminated what the Commission refers to as 

dominant-carrier pricing regulation with respect to AT&T’s 

special access lines – as well as those of two smaller ILECs, 

Embarq and Frontier. But at the same time, the FCC 

maintained basic Title II common-carrier regulation on those 

ILECs’ special access lines, including requirements for 

interconnection and that ILECs’ prices be just, reasonable, 

and not unreasonably discriminatory. 

A coalition of businesses, as well as competitive 

broadband providers that lease special access lines from the 

ILECs, argue that the FCC’s decision was arbitrary and 

capricious under the Administrative Procedure Act. They 

contend that the FCC must continue to impose not just 

common-carrier regulation but also dominant-carrier pricing 

regulation on ILECs with respect to their special access lines. 

We disagree. Applying the deferential arbitrary and 

capricious standard, we find the FCC’s decision to recalibrate 

the degree of regulation imposed on the ILECs’ special access 

lines to be reasonable and reasonably explained. We 

therefore deny the petitions for review. 
4 

I 

The background leading to this case is familiar to many, 

but we recount it briefly. In so doing, we will simplify the 

story a bit and strive to keep the jargon to a minimum. 

Federal communications law historically distinguished 

telephone systems and cable systems. On the one hand, 

wireline telecommunications services have been governed by 

Title II of the Communications Act of 1934, which imposes 

various common-carrier requirements on telecommunications 

carriers. 

By contrast, cable services have been governed by a 

separate set of obligations set forth in Title VI of the Act. 

Cable services have generally been exempt from mandatory 

common-carrier regulation. 

Broadband services do not correspond to the old 

telephone-cable regulatory divide: A residential customer can 

obtain high-speed or broadband Internet access over the 

telephone line through Digital Subscriber Line (DSL) service 

offered by local “telephone companies,” or through cable 

modem service offered by “cable companies,” among other 

newer alternatives provided by satellite companies and 

electric companies. See Nat’l Cable & Telecomm. Ass’n v. 

Brand X Internet Servs., 545 U.S. 967, 975 (2005). 

The FCC ultimately decided that services offering the 

same essential functions to residential customers should not 

be regulated under different statutory frameworks simply 

because of the wire used. To harmonize its regulatory 

approach, the FCC ruled that many common-carrier 

obligations would not apply to residential broadband lines, 

whether DSL or cable modem. See Internet Over Cable 
5 

Declaratory Ruling, 17 F.C.C.R. 4,798 (2002); see also 

Wireline Broadband Order, 20 F.C.C.R. 14,853 (2005); see 

generally Brand X, 545 U.S. at 973-74; Daniel F. Spulber & 

Christopher S. Yoo, Rethinking Broadband Internet Access,

22 HARV. J.L. & TECH. 1, 16-18 (2008). 

Unlike residential customers who typically rely on their 

telephone or cable wires to obtain broadband Internet service, 

business customers ordinarily can obtain essential broadband 

services1

 only through a dedicated high-capacity special 

access line owned by an ILEC such as AT&T, Verizon, or 

Qwest. See WorldCom, Inc. v. FCC, 238 F.3d 449, 453 (D.C. 

Cir. 2001); Lawrence A. Sullivan, Is Competition Policy 

Possible in High Tech Markets?: An Inquiry Into Antitrust, 

Intellectual Property, and Broadband Regulation as Applied 

to “The New Economy,” 52 CASE W. RES. L. REV. 41, 76 

(2001). Because one ILEC usually controls the only special 

access line to an individual business, there is of course 

concern that the ILEC might charge unduly excessive rates or 

improperly discriminate against unaffiliated broadband 

service providers seeking to lease its lines. 

As a starting point, the FCC has determined that Title II 

pricing and common-carrier regulations largely still apply to 

the ILECs’ special access lines, absent forbearance. See 

Wireline Broadband Order, 20 F.C.C.R. at 14,861, ¶ 9. The 

issue for the FCC, therefore, has been when and how much to 

forbear from applying the Title II obligations using its 

statutory forbearance authority. See 47 U.S.C. §§ 160, 1302. 

To put that choice into context, some overview of Title II and 

the FCC’s regulations is necessary. 

 1

 Those services include Ethernet, Frame Relay, ATM, LAN, 

Video Transmission, Optical Network, and Wave-Based services. 
6 

Title II imposes certain mandatory common-carrier 

requirements on interstate telecommunications carriers. For 

example, telecommunications carriers must charge just and 

reasonable rates. Id. § 201(b). Telecommunications carriers 

must not engage in unreasonable discrimination. Id. § 202(a). 

And telecommunications carriers must allow other carriers to 

interconnect with their networks. Id. § 251(a)(1). 

Additional statutory pricing regulation also applies to 

what the FCC refers to as dominant carriers. As relevant 

here, dominant carriers are typically subject to rate-of-return 

regulation or price caps accompanied by stringent tariff 

advance filing rules, whereas non-dominant common carriers 

are not. See id. §§ 203(b), 204(a)(3); compare 47 C.F.R. §§ 

61.38, 61.41, 61.58 with id. §§ 1.773(a)(ii), 61.23(c).2

 

Title II was enacted in 1934 in part to regulate 

monopolistic telephone service, at a time when broadband 

service obviously was not offered. As Congress and the FCC 

have recognized, regulation of broadband can pose different 

issues and challenges than regulation of local telephony. 

 2

 The FCC’s so-called Computer Inquiry rules impose 

nondiscriminatory access and tariffing requirements on 

telecommunications carriers providing “enhanced” services – 

namely those that bundle computer-processing applications with 

“basic” telephone services. See Brand X, 545 U.S. at 976; Scott 

Blake Harris et al., Regulating Broadband, 23 COMM. LAW. 1, 34-

35 (Summer 2005). As applied by the FCC, those rules subject 

telecommunications carriers with greater market power to more 

stringent obligations. For purposes of this case, we need not 

discuss the overlapping obligations imposed by the Computer 

Inquiry pricing rules separately from those imposed by the FCC’s 

dominant-carrier pricing regulation: The FCC’s decisions to 

forbear from applying certain dominant-carrier regulations and 

Computer Inquiry requirements rise or fall together. 
7 

In 1996, to guide the FCC’s regulation of broadband in 

the residential and business markets, Congress enacted § 706 

of the Telecommunications Act, 47 U.S.C. § 1302. 

Section 706 directs the Commission to “encourage the 

deployment” of broadband “on a reasonable and timely 

basis.” Naturally, there are different ideas about the best 

means to achieve that statutory objective – for example, some 

advocate a more market-based approach (which would spur 

more facilities-based competition) and others favor a more 

common-carrier, equal-access-based approach. 

Interestingly, and perhaps not surprisingly given the 

compromises necessary to reach agreement on such a massive 

piece of legislation, Congress did not choose between those 

competing philosophies for broadband regulation. To be sure, 

the preamble to the Act does say that it is to “promote 

competition and reduce regulation.” Pub. L. No. 104-104, 

110 Stat. 56, 56 (1996) (emphasis added). But § 706 speaks 

in very broad terms and instructs the FCC to facilitate 

broadband deployment “by utilizing, in a manner consistent 

with the public interest, convenience, and necessity, price cap 

regulation, regulatory forbearance, measures that promote 

competition in the local telecommunications market, or other 

regulating methods that remove barriers to infrastructure 

investment.” And § 706 mandates that, if broadband 

capability is not being sufficiently deployed, the Commission 

“shall take immediate action to accelerate deployment of such 

capability by removing barriers to infrastructure investment 

and by promoting competition in the telecommunications 

market.” 

The general and generous phrasing of § 706 means that 

the FCC possesses significant, albeit not unfettered, authority 
8 

and discretion to settle on the best regulatory or deregulatory 

approach to broadband – a statutory reality that assumes great 

importance when parties implore courts to overrule FCC 

decisions on this topic.

As contemplated by § 706, the FCC has utilized 

forbearance from certain Title II regulations as one tool in its 

broadband strategy. Forbearance decisions are governed by 

the Communications Act’s § 10, codified as amended at 47 

U.S.C. § 160, which provides that any telecommunications 

carrier may file a petition with the FCC requesting that the 

Commission forbear from applying any Communications Act 

provisions or FCC rules to specific services. Under § 10, the 

FCC must grant forbearance if enforcement is unnecessary to 

ensure that rates and practices are just, reasonable, and not 

unreasonably discriminatory; enforcement is unnecessary to 

protect consumers; and forbearance is consistent with the 

public interest, in that it “will promote competitive market 

conditions” and “enhance competition among providers of 

telecommunications services.” 

Until recently, ILECs such as AT&T, Verizon, and 

Qwest had been subject to both basic common-carrier and 

dominant-carrier pricing regulation with respect to their 

special access lines. In 2004, Verizon filed a petition with the 

FCC seeking forbearance from regulations regarding its 

provision of certain special access services to business 

customers. 

The Commissioners deadlocked 2-2 on Verizon’s 

petition. The forbearance statute provides that a forbearance 

petition “shall be deemed granted if the Commission does not 

deny the petition for failure to meet the requirements for 

forbearance under [§ 10] within one year” of filing. Cf. Sprint 

Nextel Corp. v. FCC, 508 F.3d 1129, 1133 (D.C. Cir. 2007) 
9 

(“deemed granted” disposition of Verizon’s forbearance 

petition unreviewable). 

Later in 2006, AT&T and two smaller ILECs, Embarq 

and Frontier, sought to follow Verizon’s lead and filed 

petitions with the FCC seeking comparable forbearance.3

 As 

ILECs, they claimed that both dominant-carrier regulation and 

basic common-carrier requirements were unnecessary and 

unduly hindered their ability to compete in providing certain 

specified services over their special access lines. 

In 2007, the FCC (now back at full strength with five 

Commissioners) granted AT&T, Embarq, and Frontier only 

partial forbearance. See AT&T Title II and Computer Inquiry 

Forbearance, 22 F.C.C.R. 18,705 (2007) (AT&T Order); 

Embarq and Frontier Title II and Computer Inquiry 

Forbearance, 22 F.C.C.R. 19,478 (2007) (Embarq/Frontier 

Order). The FCC’s decision granted forbearance from 

dominant-carrier regulation but not from basic commoncarrier regulation. See AT&T Order, 22 F.C.C.R. at 18,707, ¶ 

2; Embarq/Frontier Order, 22 F.C.C.R. at 19,480, ¶ 2. The 

FCC emphasized that the ILECs, in operating their special 

access lines, must continue to comply with Title II commoncarrier regulation generally applicable to all 

telecommunications carriers – most importantly, the 

requirements to allow interconnection and to charge prices 

that are just, reasonable, and not unreasonably 

discriminatory.4

 3

 AT&T and BellSouth filed separate forbearance petitions but 

later merged. 

4

 The FCC later similarly resolved a forbearance petition by 

Qwest, another significant ILEC provider of special access lines. 
10 

Several competitor carriers that lease special access lines 

and a trade association representing broadband business 

customers challenge the FCC’s action. They argue that the 

FCC should have denied forbearance and maintained 

dominant-carrier regulation on these three ILECs. 

II 

Congress has directed the FCC to make the major policy 

decisions and to select the mix of regulatory and deregulatory 

tools the Commission deems most appropriate in the public 

interest to facilitate broadband deployment and competition. 

Telecommunications Act of 1996, § 706, 47 U.S.C. § 1302. 

Our task on review is therefore limited. We review the 

FCC’s action in this case only to ensure that it is not 

“arbitrary, capricious, an abuse of discretion, or otherwise not 

in accordance with law.” 5 U.S.C. § 706(2)(A). That 

standard is particularly deferential in matters such as this, 

which implicate competing policy choices, technical 

expertise, and predictive market judgments. See EarthLink, 

Inc. v. FCC, 462 F.3d 1, 12 (D.C. Cir. 2006); see also Time 

Warner Telecomm., Inc. v. FCC, 507 F.3d 205, 221 (3d Cir. 

2007).

The FCC’s forbearance decision in this case readily 

satisfies the applicable arbitrary and capricious standard of 

review. The FCC reached a hotly debated and eminently 

debatable, but ultimately reasonable, conclusion that 

eliminating the extra layer of dominant-carrier pricing 

regulation on the ILECs’ special access lines – while leaving 

in place basic Title II common-carrier regulation – will better 

promote competition and the public interest. We find no legal 

basis to upset the FCC’s policy judgment. 
11 

In this Court, petitioners primarily argue that the FCC 

examined the wrong product market and wrong geographic 

market when it analyzed competition in broadband services

nationwide, rather than focusing more precisely on special 

access lines in identified local markets. According to 

petitioners, the fact that there is competition among 

broadband business service providers – who generally lease 

special access lines from ILECs – does not change the fact 

that the ILECs control most connections to businesses. They 

suggest, therefore, that the FCC’s analysis is equivalent to 

arguing that there is competition in bus service to a local 

airport because of competition among the airlines providing 

air service at the airport. 

To begin with, in our recent decision in EarthLink, Inc. v. 

FCC, we rejected a similar argument challenging the FCC’s 

decision to forbear from imposing unbundling obligations on 

the Bell Operating Companies’ broadband services. 462 F.3d 

at 8. Given the rapidly changing state of the overall 

broadband market and § 706’s direction that the FCC may 

look to and attempt to shape possible future developments in 

regulating broadband, we stated that the law does not compel 

a “particular mode of market analysis or level of geographic 

rigor” when the agency forbears from imposing certain 

requirements on broadband providers. Id.; see also Time 

Warner Telecomm., 507 F.3d at 221 (examining FCC’s 

Wireline Broadband Order and permitting FCC to “refrain 

from a traditional market analysis and to rely instead on larger 

trends and predictions concerning the future of the broadband 

services market”). 

Even putting the EarthLink precedent aside, petitioners’ 

focus on the narrowest possible market is unavailing in this 

case. To be sure, petitioners’ submission might pack more 

force had the FCC lifted all common-carrier regulation on the 
12 

ILECs’ special access lines, thereby potentially allowing 

ILECs to leverage their control over special access lines into 

undue control of the broadband business services market (and 

to presumably squeeze out competitive broadband business 

service providers). But the FCC did no such thing. Rather, 

the Commission expressly recognized that ILECs’ control of 

bottleneck special access lines in certain local areas creates 

the potential for improper exercise of market power. The 

FCC therefore refused the ILECs’ forbearance petitions in 

part and retained basic Title II common-carrier regulation on 

the ILECs’ special access lines. As the Commission 

explained, AT&T, Embarq, and Frontier “continue to be 

subject to sections 201 and 202 of the Act . . . which, among 

other things, mandate that [the ILECs] provide interstate 

telecommunications services upon reasonable request and 

prohibit [the ILECs] from acting in an unjust or unreasonable 

manner or otherwise favoring particular entities in the 

provision of ‘like’ services provided to other entities.” AT&T 

Order, 22 F.C.C.R. 18,705, 18,726, ¶ 35 (2007); 

Embarq/Frontier Order, 22 F.C.C.R. 19,478, 19,498, ¶ 34 

(2007). 

Therefore, the precise issue here is whether the FCC was 

arbitrary and capricious in concluding that the ILECs, while 

subject to basic Title II common-carrier regulation, need not 

also be subjected to dominant-carrier regulation. 

For present purposes, the most relevant impact of 

dominant-carrier regulation is to subject ILECs to price caps, 

rate-of-return regulation, or FCC approval of its prices and 

rates – as opposed to a more generic Title II mandate to 

charge prices and rates that are just, reasonable, and not 

unreasonably discriminatory. The FCC determined that such 

additional dominant-carrier obligations on ILECs were “not 

necessary to ensure” that ILECs’ special access charges were 
13 

“just, reasonable, and not unjustly or unreasonably 

discriminatory.” AT&T Order, 22 F.C.C.R. at 18,723-24, 

¶ 30; Embarq/Frontier Order, 22 F.C.C.R. at 19,496, ¶ 29. 

The Commission explained at some length that dominantcarrier regulation – with its requirement that the FCC approve 

the ILECs’ prices and charges – “may create market 

inefficiencies, inhibit carriers from responding quickly to 

rivals’ new offerings, and impose other unnecessary costs.” 

AT&T Order, 22 F.C.C.R. at 18,725, ¶ 33; Embarq/Frontier 

Order, 22 F.C.C.R. at 19,497, ¶ 32. The Commission 

predicted that eliminating dominant-carrier regulation will 

increase competition by freeing the ILECs from unnecessary 

regulation. The “better policy,” the FCC said, was to allow 

the ILECs to “respond to technological and market 

developments without the Commission reviewing in advance 

the rates, and terms, and conditions under which [the ILECs 

offer] these services.” AT&T Order, 22 F.C.C.R. at 18,725, 

¶ 33; Embarq/Frontier Order, 22 F.C.C.R. at 19,497, ¶ 32. 

To respond to the concern that ILECs might be able to 

skirt their basic Title II common-carrier obligations to allow 

interconnection and charge just, reasonable, and not 

unreasonably discriminatory prices, the FCC pointed out that 

business end-users and competitive broadband service 

providers who lease or use the ILECs’ special access lines 

may bring complaints under 47 U.S.C. § 208. Section 208 

establishes a formal fast-track process for business end-users 

and competitive broadband providers to challenge the 

reasonableness of rates charged by ILECs, among other 

things. Under § 208, all complaints as to “the lawfulness of a 

charge, classification, regulation, or practice” will be 

investigated and resolved within five months. Id. § 208(b)(1). 

In its decision here, moreover, the FCC reiterated its 

commitment to the five-month mandate for resolution of 

§ 208 complaints. See AT&T Order, 22 F.C.C.R. at 18,726, 
14 

¶ 36; Embarq/Frontier Order, 22 F.C.C.R. at 19,498, ¶ 35. In 

that regard, it bears mention that competitive broadband 

business service providers and business customers are 

sophisticated entities that presumably would not be shy about 

invoking available remedies if faced with ILECs gouging 

them. 

The FCC’s decision also was limited in another important 

way: The FCC declined to grant forbearance with respect to 

the ILECs’ “TDM-based” DS1 and DS3 special access 

services – namely, those that use traditional Time Division 

Multiplexing technology. The FCC granted forbearance from 

dominant-carrier regulation only with respect to the ILECs’ 

“non-TDM-based” special access services: packet-switched 

broadband and optical transmission services.5

 This means the 

following: To the extent ILECs try to abuse their control over 

special access lines, competitive carriers not only can file 

§ 208 complaints with the FCC but also can obtain access to 

the ILECs’ price-regulated TDM-based services to provide 

and compete with the ILECs in providing non-TDM-based 

special access services. All parties concede that it is 

technically feasible to use TDM-based services in this way, 

but petitioners argue that it is not economically feasible to do 

so. In advancing this argument, they particularly focus on 

Ethernet service. As the FCC noted, however, that protest lies 

in some tension with the evident success of big-time 

competitive broadband business service providers that use 

ILECs’ TDM-based inputs, as reflected in the record 

evidence. See AT&T Order, 22 F.C.C.R. at 18,721, ¶ 26 & 

n.109; Embarq/Frontier Order, 22 F.C.C.R. at 19,494, ¶ 25 & 

 5

 The specified services include Ethernet, Frame Relay, ATM, 

LAN, Video Transmission, Optical Network, and Wave-Based 

services. See AT&T Order, 22 F.C.C.R. at 18,713, ¶ 12; 

Embarq/Frontier Order, 22 F.C.C.R. at 19,485-86, ¶ 12. 
15 

n. 102. For example, Time Warner Telecom has proclaimed 

that, by using ILECs’ TDM-based special access inputs in 

areas where it has not deployed its own facilities, it has been 

able to “affordably” and “cost-effectively deliver our 

industry-leading Ethernet portfolio to customers anywhere.” 

Press Release, Time Warner Telecom and Overture Networks 

Provide Ethernet Anywhere (June 6, 2006). Other 

competitive providers similarly advertise their ability to use 

DS1 and DS3 circuits to provide broadband services to 

businesses. See Press Release, Deltacom Launches New 

Ethernet Services Using Overture Networks Technology 

(June 14, 2007); Press Release, XO Communications Signs 

Multi-Million Dollar Deal with Hatteras Networks for 

Nationwide Mid-Band Ethernet Services Rollout (April 19, 

2007); see also Letter from William H. Johnson, Verizon 

Assistant General Counsel to Marlene H. Dortch, FCC 

Secretary, at 3 (Oct. 9, 2007). 

In refusing to continue saddling the ILECs with 

dominant-carrier regulation in addition to common-carrier 

regulation, the FCC also noted competitive carriers’ growing 

ability to deploy their own facilities and thereby reduce their 

reliance on ILECs altogether. See AT&T Order, 22 F.C.C.R. 

at 18,724, ¶ 32; Embarq/Frontier Order, 22 F.C.C.R. at 

19,496-97, ¶ 31. The FCC recognized the significant 

construction costs of replicating the ILECs’ last-mile 

connections to individual businesses. But those costs, the 

FCC explained, nonetheless could be justified – and perhaps 

more importantly, were already being justified by several 

competitive providers – by the sizable revenues that could be 

obtained. See AT&T Order, 22 F.C.C.R. at 18,724, ¶ 32 

(citing FCC findings, studies, and various competitive 

carriers’ public statements regarding their self-deployments); 

Embarq/Frontier Order, 22 F.C.C.R. at 19,496-97, ¶ 31 

(same). As intervenors noted, self-deployment is not simply a 
16 

theoretical possibility; it is occurring. Perhaps an obvious 

point, but a decision that gives owners of telecommunications 

lines more control over access to those lines tends to increase 

the incentive for competitors to build competing lines. The 

FCC is permitted under § 706 to take that action-forcing 

consideration into account when calibrating the appropriate 

degree of regulation on ILECs’ special access lines. The FCC 

thus reasonably considered both the existence and the 

desirability of self-deployment as factors that further 

supported eliminating dominant-carrier regulation on the 

ILECs. 

Finally, in reaching its decision, the FCC emphasized that 

its ongoing Special Access Rulemaking proceeding will 

address, on an industry-wide basis, general concerns about 

discriminatory practices by ILECs with respect to their special 

access lines. In that docket, the Commission is looking 

broadly and deeply at the market to make sure ILECs are not 

engaging in unjust and unreasonable practices. It is true that 

the proceeding seems to be moving at a slow pace. But even 

as we write, numerous interested parties are making their 

voices heard both to the FCC and in the broader public debate 

over this issue. That is as it should be. For present purposes, 

the relevant point is that the FCC’s forbearance decision in 

this particular matter (or in the related Verizon and Qwest 

special access matters) is not chiseled in marble. So Congress 

and the FCC will be able to reassess as they reasonably see fit 

based on changes in market conditions, technical capabilities, 

or policy approaches to regulation in this area. 

Putting all of the pieces together, we find the FCC’s 

approach in this case to be reasonable and reasonably 

explained. In seeking to promote broadband competition and 

deployment, the Commission maintained common-carrier 

regulation on the ILECs’ special access lines, including the 
17 

interconnection mandate and the requirement that prices be 

just, reasonable, and not unreasonably discriminatory. It 

made clear that the § 208 fast-track complaint process is open 

and available for prompt refereeing of disputes. It determined 

that competitive broadband service providers could use 

heavily regulated TDM-based services to compete. It 

recognized the fact and feasibility of competitive selfdeployment of special access lines – a development that both 

helps justify and will be furthered by the FCC’s decision. 

And finally, the FCC is continuing to study the overall market 

developments in special access on an industry-wide basis. 

Given all of that, we must defer to the Commission’s 

judgment that dominant-carrier pricing regulation is 

unnecessary to ensure just, reasonable, and nondiscriminatory rates and the protection of consumers, and that 

partial forbearance is consistent with the public interest. 

III 

We need only briefly address the separate arguments put 

forth by the New Jersey Division of Rate Counsel, or NJRC. 

We agree with the FCC that the NJRC has not 

demonstrated its Article III standing to challenge the AT&T 

Order. The NJRC alleges injury to New Jersey customers, 

but AT&T and its affiliates do not provide service in New 

Jersey. For New Jersey ratepayers, there is no “injury in fact” 

to speak of, no “causal relationship between the injury and the 

[AT&T Order],” and no “likelihood that the injury will be 

redressed by a favorable decision.” United Food & 

Commercial Workers Union Local 751 v. Brown Group, Inc., 

517 U.S. 544, 551 (1996). 

That said, the NJRC does have standing to challenge the 

Embarq/Frontier Order. But the NJRC’s federalism and 
18 

separation of powers objections to the FCC’s forbearance 

authority are not before the Court because they were not 

properly raised before the FCC. See Comments of the New 

Jersey Division of the Rate Counsel, No. 06-125 (Aug. 17, 

2006) at 5-6. Under 47 U.S.C. § 405(a), the FCC’s 

“opportunity to pass” on an issue is a “condition precedent to 

judicial review.” Accordingly, § 405(a) bars the NJRC’s 

constitutional claims against the Embarq/Frontier Order. 

 The NJRC’s only properly raised claim against the 

Embarq/Frontier Order, therefore, is that the FCC failed to 

provide adequate notice-and-comment procedures under the 

Administrative Procedure Act. But the FCC did provide an 

opportunity for notice and comment. See Public Notice, 21 

F.C.C.R. 8,022 (2006). We therefore reject the NJRC’s 

argument. 

* * * 

We deny the petitions for review. 

So ordered.