Source: https://supreme.justia.com/cases/federal/us/564/10-313/opinion.html
Timestamp: 2016-07-29 15:58:19
Document Index: 40984130

Matched Legal Cases: ['§251', '§251', '§251', '§251', '§252', '§251', '§51', '§51', '§251', '§51', '§51', '§251', '§51', '§251', '§251', '§251', '§251', '§51', '§51', '§51', '§51', '§51', '§51']

Talk America, Inc. v. Michigan Bell Telephone Co.; Isiogu, et al. v. Michigan Bell Telephone Co. :: 564 U.S. ___ (2011) :: Justia U.S. Supreme Court Center Log In
Talk America, Inc. v. Michigan Bell Telephone Co.; Isiogu, et al. v. Michigan Bell Telephone Co. 564 U.S. ___ (2011)
The 1996 Act addressed that barrier to market entry by requiring incumbent LECs to share their networks with competitive LECs in several ways, two of which are relevant here. First, 47 U. S. C. §251(c)(3) requires incumbent LECs to lease “on an unbundled basis”—i.e., a la carte—network elements specified by the Commission. This makes it easier for a competitor to create its own network without having to build every element from scratch. In identifying which network elements must be available
for unbundled lease under §251(c)(3), the Commission
is required to consider whether access is “necessary”
and whether failing to provide access would “impair” a competitor’s provision of service. §251(d)(2). Second, §251(c)(2) mandates that incumbent LECs “provide … interconnection” between their networks and competitive LECs’ facilities. This ensures that customers on a competitor’s network can call customers on the incumbent’s network, and vice versa. The interconnection duty is independent of the unbundling rules and not subject to impairment analysis. It is undisputed that both un-bundled network elements and interconnection must be provided at cost-based rates. See §252(d)(1); Brief for Petitioner in No. 10–313, p. 28; Brief for Petitioners in No. 10–329, p. 7; Brief for Respondent 4.
The Court of Appeals for the Sixth Circuit affirmed over a dissent. Michigan Bell Telephone Co. v. Covad Communications Co., 597 F. 3d 370 (2010). At the court’s invitation, the FCC filed a brief as amicus curiae, arguing that the Triennial Review Remand Order did not change incumbent LECs’ interconnection obligations, including the obligation to lease entrance facilities for interconnection. The Sixth Circuit declined to defer to the FCC’s views, 597 F. 3d, at 375, n. 6, and also expressly disagreed with the Seventh and Eighth Circuits, id., at 384–386 (discussing Illinois Bell Tel. Co. v. Box, 526 F. 3d 1069 (2008),
and Southwestern Bell Tel., L. P. v. Missouri Pub. Serv. Comm’n, 530 F. 3d 676 (2008)).[Footnote 3]
The Commission contends that its regulations require AT&T to provide access at cost-based rates to its exist-
ing entrance facilities for the purpose of interconnection. The Commission’s interpretation proceeds in three steps. First, an incumbent LEC must lease “technically feasible” facilities for interconnection. Second, entrance facili-
ties are among the facilities that an incumbent must make available for interconnection, if technically feasible. Third, it is technically feasible to provide access to the particular entrance facilities at issue in these cases.
The Commission first contends that an incumbent LEC must lease, at cost-based rates, any requested facilities
for obtaining interconnection with the incumbent LEC’s network, unless it is technically infeasible to do so. Section 251(c)(2) mandates that an incumbent LEC provide interconnection, at cost-based rates, “at any technically feasible point within the carrier’s network.” The FCC
has long construed §251(c)(2) to require incumbent LECs to provide, at cost-based rates, “any technically feasible method of obtaining interconnection … at a particular point.” 47 CFR §51.321(a) (2010).
Next, the Commission contends that existing entrance facilities are among the facilities that an incumbent LEC must lease for interconnection. According to the FCC, the Triennial Review Remand Order adopted a regulatory def-inition that reestablished that entrance facilities are
part of an incumbent LEC’s network. See ¶137; see also 47 CFR §51.319(e) (2005). The end of every entrance facility is therefore a “point within [an incumbent] carrier’s network” at which a competing LEC could request interconnection, 47 U. S. C. §251(c)(2), and each entrance facility potentially provides a “technically feasible method of obtaining interconnection,” 47 CFR §51.321(a) (2010).
The FCC’s interpretation is not “plainly erroneous or inconsistent with the regulation[s]. ” Auer, supra, at 461 (internal quotation marks omitted). First, we disagree with AT&T’s argument that entrance facilities are not a part of incumbent LECs’ networks. Indeed, the Commission’s view on this question is more than reasonable; it is certainly not plainly erroneous. The Triennial Review Remand Order responded to the D. C. Circuit’s decision questioning the Commission’s earlier finding that entrance facilities are not network elements. It revised
the definition of dedicated transport—a type of network element—to include entrance facilities. Triennial Review Remand Order ¶¶136–137; see 47 CFR §51.319(e)(1) (defining dedicated transport to include “incumbent LEC transmission facilities … between wire centers or switches owned by incumbent LECs and switches owned by [competing] carriers”). Given that revised definition, it is perfectly sensible to conclude that entrance facilities are a part of incumbent LECs’ networks.
The better reading of the regulation is that it merely reflects that the “transport and termination of traffic” is subject to different regulatory treatment than interconnection. Compensation for transport and termination—that is, for delivering local telephone calls placed by
another carrier’s customer—is governed by separate stat-utory provisions and regulations. See 47 U. S. C. §§251(b)(5), 252(d)(2); 47 CFR §51.701. The Commission explains that a competitive LEC typically pays one fee for interconnection—“just for having the link”—and then an additional fee for the transport and termination of telephone calls. Tr. of Oral Arg. 28; see also Brief for United States as Amicus Curiae 3, n. 1. Entrance facilities, at least when used for the mutual exchange of traffic, seem to us to fall comfortably within the definition of interconnection. See 597 F. 3d, at 388 (Sutton, J., dissenting) (noting that entrance facilities are “designed for the very purpose of linking two carriers’ networks” (internal quotation marks omitted)).
Nor is there any other “reason to suspect that the interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” Auer, 519 U. S., at 462. We are not faced with a post-hoc rationalization by Commission counsel of agency action that is under judicial review. See ibid.; see also Burlington Truck Lines, Inc. v. United States, 371 U. S. 156, 168–169 (1962) (“The courts may not accept appellate counsel’s post hoc rationalizations for agency action; [SEC v.] Chenery[ Corp., 332 U. S. 194 (1947),] requires that an agency’s discretionary order be upheld, if at all, on the same basis articulated in the order by the agency itself”). And although the FCC concedes that it is advancing a novel interpretation of its longstanding interconnection regulations, novelty alone
is not a reason to refuse deference. The Commission ex-plains that the issue in these cases did not arise until recently—when it initially eliminated unbundled access to entrance facilities in the Triennial Review Order. Until then, the Commission says, a competitive LEC typically would elect to lease a cost-priced entrance facility under §251(c)(3) since entrance facilities leased under §251(c)(3) could be used for any purpose—i.e., both interconnection and backhauling—but entrance facilities leased under §251(c)(2) can be used only for interconnection. We see no reason to doubt this explanation.
The Commission’s initial decision to eliminate the obligation to unbundle entrance facilities, however, was not
a result of the narrower view of impairment mandated
by this Court and the D. C. Circuit. Instead, the Commission determined that entrance facilities need not be provided on an unbundled basis under §251(c)(3) on the novel ground that they are not network elements at all—something no court had ever suggested.
We are not concerned that the Triennial Review Remand Order did not expressly distinguish between backhauling and interconnection, though AT&T makes much of that fact. AT&T argues that the Commission’s holding
in the Triennial Review Remand Order is broader than that in the Triennial Review Order. In AT&T’s view, the Commission concluded in the Triennial Review Remand Order that competitors are not impaired if they lack cost-based access to entrance facilities for backhauling or interconnection.
Footnote 1 The Solicitor General, joined by counsel for the FCC, represents that the amicus brief for the United States filed in this Court reflects the Commission’s considered interpretation of its own rules and orders. Brief for United States as Amicus Curiae 31. We thus refer to the Government’s arguments in these cases as those of the agency. See, e.g., Chase Bank USA, N. A. v. McCoy, 562 U. S. ___, ___ (2011) (slip op., at 8).
Footnote 2 Although the parties and their amici disagree over the precise definition of backhauling, they all appear to agree that backhauling is important to competitive LECs and occurs when a competitive LEC uses an entrance facility to transport traffic from a leased portion of an incumbent network to the competitor’s own facilities. Backhauling does not involve the exchange of traffic between incumbent and competitive networks. See, e.g., Brief for Petitioners in No. 10–329, p. 25; Brief for United States Telecom Association et al. as Amici Curiae 32. It thus differs from interconnection—“the linking of two networks for the mutual exchange of traffic.” 47 CFR §51.5 (2010).
Footnote 3 The Ninth Circuit has since joined the Seventh and Eighth Circuits. Pacific Bell Tel. Co. v. California Pub. Util. Comm’n, 621 F. 3d 836 (2010).
Footnote 4 These cases concern only existing entrance facilities, and the Commission expressly declines to address whether it reads its regulations to require incumbent LECs to build new entrance facilities for interconnection. Brief for United States as Amicus Curiae 25, n. 7. The Commission suggests here, as it has before, that additional considerations of cost or reasonableness might be appropriate if a competitive LEC were to request that an incumbent LEC build new entrance facilities for interconnection. Ibid. (noting that the Commission’s Wireline Competition Bureau has declined to require an incumbent LEC to bear the entire cost of building new entrance facilities); see also Local Competition Order ¶553 (explaining with respect to meet-point arrangements that “the parties and state commissions are in a better position than the Commission to determine the appropriate distance that would constitute the required reasonable accommodation of interconnection”). We express no view on the matter.
Footnote 5 There is no merit to AT&T’s assertion that the FCC is improperly amending the list of “[t]echnically feasible methods of obtaining interconnection” set forth in 47 CFR §51.321(b). By its own terms, that list is nonexhaustive. See §51.321(b) (“[t]echnically feasible methods of obtaining interconnection … include, but are not limited to” the listed examples); see also §51.321(a) (“[A]n incumbent LEC shall provide … any technically feasible method of obtaining interconnection” (emphasis added)).
Footnote 6 The Commission has long recognized that a single facility can be used for different functions and that its regulatory treatment can vary depending on its use. Unbundled network elements, for example, may not be used for the exclusive provision of mobile wireless or long-distance services. 47 CFR §51.309(b) (2010). Similarly, interconnection arrangements may be used for local telephone service but not for long-distance services. §51.305(b).
Footnote 7 The parties and their amici dispute whether an incumbent LEC
has any way of knowing how a competitive LEC is using an entrance facility. This technical factual dispute simply underscores the appropriateness of deferring to the FCC. So long as the Commission is acting within the scope of its delegated authority and in accordance with prescribed procedures, it has greater expertise and stands in a better position than this Court to make the technical and policy judgments necessary to administer the complex regulatory program at issue here.