Opinion ID: 382674
Heading Depth: 2
Heading Rank: 2

Heading: Preemption Only by FCC Tariff

Text: 32 NYT's main argument is that before the FCC can assert jurisdiction over NYT, the FCC must be prepared to make effective its own tariff substituting for the displaced state rate. That is to say, the agency may not preempt state regulation without itself occupying the field by effective regulation. Brief of NYT at 16. The argument is based on the proposition that state regulation in a given field is not preempted by the mere fact that Congress has conferred upon a federal agency the authority to occupy that field. H. P. Welch Co. v. New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500 (1939); Northwestern Bell Telephone Co. v. Nebraska State Railway Commission, 297 U.S. 471, 56 S.Ct. 536, 80 L.Ed. 810 (1936); Chrysler Corp. v. Tofany, 419 F.2d 499 (2d Cir. 1969). 33 Reliance on these principal cases is misplaced, however, for they each dealt with a situation in which Congress had given an agency power to regulate in a certain area, but the agency had not yet regulated in that area. Only in such situations have the courts stated that lack of federal regulation necessarily means that state regulation should continue unabated in order to prevent the existence of a regulatory void. In Northwestern Bell Telephone Co. v. Nebraska State Railway Commission, in which the appellant argued that the State Commission was powerless to regulate depreciation rates for telephone companies because Congress had turned over such authority to the ICC, the Court held that both the language of the statute and the nature of the subject matter indicated that Congress intended state regulation to continue until the ICC prescribed its own rates. At that time, the ICC had not yet set depreciation rates. 297 U.S. at 477-80, 56 S.Ct. at 538-539. In H. P. Welch Co. v. New Hampshire, again with an appellant arguing that state regulations were invalid, the Court held that it cannot be inferred that Congress intended to supersede any state safety measure prior to the taking effect of a federal measure found suitable to put in its place. 306 U.S. at 85, 59 S.Ct. at 441. Once more, though, the ICC had not yet acted in the area. Finally, in Chrysler Corp. v. Tofany, this court held that the federal statute directing the Department of Transportation to establish federal traffic safety standards for new equipment had no preemptive effect until such standards were in fact promulgated. 419 F.2d at 506-07. 34 Here, in contrast, what the FCC has done in its March 12, 1980, order is precisely what the courts above found lacking when they upheld those state regulations. The agency has not simply invalidated state regulation without substituting its own. Instead, the FCC has ruled that NYT must file tariffs with the FCC if NYT charges discriminatory rates for interstate FX and CCSA users. This FCC pronouncement is just the sort of regulation contemplated under the Communications Act. The rule does not create a regulatory vacuum, and NYT is not forced to forfeit recovery of its $39.867 million in costs. All the FCC's order really says is that the rate NYT wants to charge interstate FX/CCSA users may not be levied without FCC approval. However, NYT is free to go back to the PSC and ask for an appropriate nondiscriminatory tariff to cover its costs. This is exactly what the Bell Telephone affiliates in California and Missouri did, with the approval of the public utility commissions in those states, following the FCC's order of March 12, 1980. Thus, NYT could request a surcharge on FX and CCSA users that is the same for both interstate and intrastate users, presumably without instigating FCC regulation, or NYT could charge all New York state ratepayers a flat fee. 35 NYT argues that only a federally-approved tariff can constitute regulation. If this were the case, however, any time a state wanted to shift part of the rate burden away from state ratepayers, it could invalidate an existing state tariff and substitute for it a new tariff only on interstate service. According to NYT's argument, the FCC could not invalidate the NYT-PSC surcharge until it approved a new tariff covering NYT's revenue requirement. But this is simply not the rate separations scheme contemplated by the Act, which must be construed in light of the needs for comprehensive regulation and the practical difficulties inhering in state by state regulation of parts of an organic whole. General Telephone Co. v. FCC, 413 F.2d at 398. See also North Carolina Utilities Commission v. FCC, 537 F.2d at 795-96. In what is evidently an attempt by the PSC to force changes in national separations procedures, which the FCC already contemplates revising and which will be the subject of investigation and rulemaking, the PSC has put NYT in a difficult position, to be sure, but also has forced the FCC to act to protect interstate FX/CCSA users from discrimination.