Opinion ID: 185983
Heading Depth: 2
Heading Rank: 3

Heading: Forbearance

Text: 33 The statutory test for forbearance under § 10(a) has three prongs that must all be satisfied before the Commission is obligated to forbear from enforcing a regulation or a statutory provision: (1) enforcement... is not necessary to ensure that the charges, practices, classifications, or regulations ... are just and reasonable and are not unjustly or unreasonably discriminatory; (2) enforcement ... is not necessary for the protection of consumers; and (3) forbearance ... is consistent with the public interest. See 47 U.S.C. § 160(a). The three prongs of § 10(a) are conjunctive. The Commission could properly deny a petition for forbearance if it finds that any one of the three prongs is unsatisfied. Because we conclude that the Commission did not err in finding that the second prong was not met, it is unnecessary for us to address the FCC's decision with respect to the other two prongs. 34 Petitioners' challenge to the Commission's application of § 10(a)'s second prong centers on the meaning of statutory term necessary. Petitioners contend that, in applying the second prong (not necessary for the protection of consumers), the Commission erred in failing to construe necessary to mean absolutely required, indispensable, or essential. Petitioners' position is that the Commission must forbear from enforcement of its wireless number portability rules if enforcement is not absolutely required to protect consumers. See Petitioners' Br. 23-28. Petitioners argue that enforcement of the wireless number portability rules is not absolutely required to protect consumers, because, in petitioners' view, the rate of wireless consumers switching carriers is high even absent number portability. See id. at 26. 35 Petitioners contend that this reasoning is compelled by the plain meaning of the adjective necessary, which, they point out, often is defined as absolutely required, indispensable, or essential. See Petitioners' Br. 23 (citing MERRIAM WEBSTER'S COLLEGIATE DICTIONARY 744 (10th ed.2000)). But dueling over dictionary definitions is pointless, for it fails to produce any plain meaning of the disputed word. See A. Raymond Randolph, Dictionaries, Plain Meaning, and Context in Statutory Interpretation, 17 HARV. J.L. & PUB. POL'Y 71 (1994). If we focus on legal contexts, BLACK'S LAW DICTIONARY 1052 (7th ed.1999) defines necessary and proper to mean [b]eing appropriate and well adapted to fulfilling an objective. For example, in the context of the Necessary and Proper Clause of the Constitution, U.S. CONST. art. I, § 8, cl. 18, the Supreme Court long ago rejected the view that the Necessary and Proper Clause demands that an Act of Congress be ` absolutely necessary' to the exercise of an enumerated power. See McCulloch v. Maryland, 4 Wheat. 316, 414-15, 4 L.Ed. 579 (1819). Rather, it suffices that a statute is `conducive to ...' and is `plainly adapted' to [its] end, id., at 417, 421. Jinks v. Richland County, ___ U.S. ___, ___, 123 S.Ct. 1667, 1671, 155 L.Ed.2d 631 (2003) (emphasis in original). Hence the word necessary does not always mean absolutely required or indispensable. 36 Indeed, there are many situations in which the use of the word necessary, in context, means something that is done, regardless of whether it is indispensable, to achieve a particular end. See Randolph, supra, at 72-74. For example, necessary improvement is defined as an improvement to property that is made to prevent its deterioration. WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE UNABRIDGED 1511 (1976). The point is simple: it is crucial to understand the context in which the word is used in order to comprehend its meaning. See McCulloch, 17 U.S. (4 Wheat.) at 414 (stating that the word necessary admits of all degrees of comparison; and is often connected with other words, which increase or diminish the impression the mind receives of the urgency it imports). 37 In AT&T Corp. v. Iowa Utilities Board, 525 U.S. 366, 390 & n. 11, 119 S.Ct. 721, 735 & n. 11, 142 L.Ed.2d 835 (1999), the Supreme Court applied a narrow construction of necessary in reviewing a challenge to the Commission's interpretation of the term in 47 U.S.C. § 251(d)(2). This court followed suit in GTE Service Corp. v. FCC, 205 F.3d 416, 423 (D.C.Cir.2000), in reviewing the Commission's interpretation of necessary in 47 U.S.C. § 251(c)(6), holding that, 38 [a]s is clear from the Court's judgment in Iowa Utilities Board, a statutory reference to necessary must be construed in a fashion that is consistent with the ordinary and fair meaning of the word, i.e., so as to limit necessary to that which is required to achieve a desired goal. 39 It is significant that GTE Service Corp. applied a definition of necessary — that which is required to achieve a desired goal — that does not foreclose a particular means to an end merely because other means are hypothetically available to achieve the desired end. This is entirely understandable, because a definition of necessary that embraces only a narrow construction in all contexts makes no sense. For example, if a house foundation is weakening due to excess water on the property, and the goal of a home improvement project is to eliminate the water problem, viable solutions might include rebuilding the foundation to make it strong enough to withstand any water, digging around the house to divert water away from the house, or adding sump pumps to the house interior to expel water excesses. A solution is required to achieve the desired goal, thus necessary. None of the solutions is indispensable in the sense that it is absolutely required, because either of the other two might do as well to achieve the desired goal. But the selection of any one of the solutions is necessary to achieve the desired goal. Thus, the solution that is selected is necessary to achieve the desired goal. 40 [C]ourts have frequently interpreted the word `necessary' to mean less than absolutely essential, and have explicitly found that a measure may be `necessary' even though acceptable alternatives have not been exhausted. Natural Res. Def. Council v. Thomas, 838 F.2d 1224, 1236 (D.C.Cir.1988) (citing FTC v. Rockefeller, 591 F.2d 182, 188 (2d Cir.1979) (finding that a subpoena could be necessary to an FTC investigation even though the agency had not pursued reasonably available alternatives)). Context is relevant to the interpretation of the term necessary. The meaning varies with context, Thomas, 838 F.2d at 1237, and a dictionary definition by no means tells us what necessary means in every statutory context. 41 We do not read Iowa Utilities Board or GTE Service Corp. to suggest that necessary has precisely the same meaning in every statutory context, or that context is irrelevant to the meaning of necessary. It is also noteworthy that neither Iowa Utilities Board nor GTE Service Corp. involved the application of the forbearance provision of the 1996 Act. Rather, those cases involved disputes between LECs and new carriers seeking market access. The 1996 Act fundamentally restructures local telephone markets, ending the monopolies that States historically granted to LECs and subjecting incumbent LECs to a host of duties intended to facilitate market entry, including the obligation under 47 U.S.C. § 251(c) to share their networks with competitors. A requesting carrier can obtain such shared access by purchasing local telephone services at wholesale rates for resale to end users, by leasing elements of the incumbent's network on an unbundled basis, and by interconnecting its own facilities with the incumbent's network. 42 In Iowa Utilities Board, the Supreme Court held that the FCC did not adequately consider the necessary and impair standard under § 251(d)(2) when it gave requesting carriers blanket access to incumbent carriers' network elements. The FCC's rule implementing § 251(d)(2) implicitly regarded the necessary standard as having been met regardless of whether the requesting carriers could obtain the disputed proprietary elements from a source other than the incumbent, and it regarded the impairment standard as having been met if an incumbent's failure to provide access to a network element would decrease the quality, or increase the cost, of the service a requesting carrier seeks to offer, compared with providing that service over other unbundled elements in the incumbent LEC's network. The Court held that the FCC could not, consistent with the statute, blind itself to the availability of elements outside the incumbent's network in implementing the necessary and impair standard. The Court also held that the FCC's assumption that any increase in cost (or decrease in quality) imposed by denial of a network element renders access to that element necessary, and causes the failure to provide that element to impair the entrant's ability to furnish its desired services, was simply not in accord with the ordinary and fair meaning of those terms. Rather, the Court held, § 251(d)(2) requires the FCC to determine on a rational basis which network elements must be made available, taking into account the 1996 Act's objectives and giving some substance to the necessary and impair requirements. Similarly, in GTE Service Corp., the court was concerned that a broad[] construction of `necessary' under § 251(c)(6) might result in an unnecessary taking of private property. 205 F.3d at 423 (emphasis in original). 43 We face no such concerns in this case. This case does not involve a dispute between incumbent LECs and their competitors over entry into local markets. Nor does it involve a challenge to an FCC rule that allegedly and impermissibly favors competitors at the expense of LECs. Rather, what is at issue here is a Commission denial of a request that it forebear from enforcing a rule that petitioner claims is not necessary for the protection of consumers. 44 In the instant forbearance context, application of petitioners' definition of necessary would lead to an absurd result, because it is difficult to imagine a regulation whose enforcement is absolutely required or indispensable to protect consumers. Indeed, when counsel for petitioners was questioned about this, he could not give a viable example of a necessary regulation. None. In the forbearance context, we think that it would defy common sense to adopt a construction of necessary that results in a criterion that can never be met. What would follow is that every regulation would, strictly speaking, be not necessary for the protection of consumers. The second prong would be a nullity. The Commission always would be required to forbear from enforcement (provided that the other two prongs of § 10(a) are satisfied). 45 Adopting petitioners' rigid construction of necessary in the forbearance context would result in a further absurdity. Under petitioners' view, the FCC, which is permitted to promulgate regulations which are subject to limited review under an arbitrary and capricious standard, could be required, the very next day, to forbear from enforcement of the same regulations, because the unattainable criterion of necessary cannot be met. In fact, under petitioners' view of § 10(a), the Commission must also forbear from enforcement of all statutory provisions (not only agency regulations) that are not absolutely required or indispensable. We can find no evidence that this is what Congress intended when it enacted § 10(a), especially when petitioners' definition of necessary admits of no obvious applications. 46 This context informs our view of the term necessary here. In this context, we cannot conclude that, in using the term in the forbearance statute, Congress has directly spoken to the precise question at issue. Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. Petitioners cannot prevail under Chevron Step One because the meaning of the term in this statutory context is certainly not plain in the way that petitioners contend. Cf. United States v. Consumer Health Servs. of Am., 108 F.3d 390, 396 (D.C.Cir.1997) (finding that it was not entirely clear what Congress meant by `necessary' in 42 U.S.C. § 1395g(a), and turning to Chevron Step Two). Congress did not speak clearly by using the term necessary in the forbearance statute. Thus, we cannot conclude that necessary clearly means absolutely required or indispensable. 47 Nor can petitioners prevail under Chevron Step Two. On the record at hand, and in light of the deference owed to the agency under Chevron Step Two, we find the Commission's interpretation of necessary eminently reasonable. In the forbearance context, for the reasons already stated, it is reasonable to construe necessary as referring to the existence of a strong connection between what the agency has done by way of regulation and what the agency permissibly sought to achieve with the disputed regulation. In other words, the number portability rules are required to achieve the desired goal of consumer protection. That is essentially the definition of necessary that the Commission embraced and applied in its Order. We therefore find that deference to the agency's reasonable interpretation under Chevron Step Two is appropriate. 48 Under this reasonable interpretation of necessary, the Commission concluded that the second prong of § 10(a), 47 U.S.C. § 160(a) (enforcement ... is not necessary for the protection of consumers), was not satisfied, and that forbearance from the Commission's number portability rules was therefore not justified. We find that this conclusion also satisfies arbitrary and capricious review. Evidence that the rates of switching between wireless carriers are high even without number portability does not demonstrate that number portability is not necessary for the protection of consumers. On the record before the agency, it was reasonable for the FCC to conclude that wireless consumers would switch carriers at even higher rates if they could keep their phone numbers. The current high switching rate does no more than establish that some consumers are willing to pay the additional costs associated with changing numbers in order to change service providers. See Respondent's Br. 26. 49 The simple truth is that having to change phone numbers presents a barrier to switching carriers, even if not a total barrier, since consumers cannot compare and choose between various service plans and options as efficiently. As the Commission reasoned, consumers will find themselves forced to stay with carriers with whom they may be dissatisfied because the cost of giving up their wireless phone number in order to move to another carrier is too high. Order, 17 F.C.C.R. at 14,980. 50 Petitioners also contend that the word protect in the second prong of § 10(a) should be given a strict interpretation, to mean prevent injury, damage, or loss rather than benefit or enhance. Petitioners' Br. 26-28. We do not take this argument seriously, and thus do not dwell on it, because it is obvious that any regulation that frees consumers from staying with carriers with whom they are dissatisfied affords them protection. 51 Finally, petitioners make much of the so-called inconsistency between the Order under review and the Commission's 1999 Temporary Forbearance Order, 14 F.C.C.R. 3092, in which the Commission found the three prongs of § 10(a) satisfied and granted temporary forbearance from enforcement until November 24, 2002. In the forbearance decision at issue here, the Commission examined new record evidence and reached a reasonable conclusion that § 10(a) was not satisfied for the purpose of permanent forbearance. The two orders are perfectly consistent in rejecting permanent forbearance. The Commission's 1999 Temporary Forbearance Order rejected the arguments for permanent forbearance based on the Commission's projection that wireless phones increasingly would become potential substitutes for wireline phones, and that consumers accordingly would become more invested in keeping their wireless phone numbers. Three years later, the Commission's Order confirmed that the predicted trend in fact came to pass and would continue, and again rejected permanent forbearance. There is no inconsistency between the two orders. 52 The Commission reasonably concluded that the second prong of § 10(a), 47 U.S.C. § 160(a), was not satisfied, such that permanent forbearance from the Commission's number portability rules was not justified.