Opinion ID: 503750
Heading Depth: 2
Heading Rank: 2

Heading: The FCC's Failure to Require Filing of the SNFAs Pursuant to Section 211(d)

Text: 32 In the course of its investigation, the FCC never requested AT & T or the BOCs to submit copies of some or all of the SNFAs and evidence of the actual lease charges AT & T paid thereunder, although the FCC did have on file a draft master SNFA from 1983 and an accounting manual setting forth the methods to be used to calculate lease charges. MCI claims that section 211(a) of the Communications Act required the FCC to obtain copies of the SNFAs, and that case law and FCC precedent likewise mandated that course. 33 Section 211 of the Communications Act provides: 34 (a) Every carrier subject to this Act shall file with the Commission copies of all contracts, agreements, or arrangements with other carriers ... in relation to any traffic affected by the provisions of this Act to which it may be a party. 35 (b) The Commission shall have authority to require the filing of any other contracts of any carrier, and shall also have authority to exempt any carrier from submitting copies of such minor contracts as the Commission may determine. 36 47 U.S.C. Sec. 211 (1982). 37 MCI argues that section 211(a) clearly applies to the SNFAs, because AT & T and the BOCs are both carriers within the meaning of the statute, because the SNFAs are undoubtedly agreements, and because they concern traffic affected by the provisions of the Act. In addition, MCI asserts that the FCC has consistently required the filing of intercarrier agreements. Finally, MCI cites Bell Telephone Co. v. FCC, 503 F.2d 1250, 1276-79 (3d Cir.1974), cert. denied, 422 U.S. 1026, 95 S.Ct. 2620, 45 L.Ed.2d 684 (1975), for the proposition that facility lease agreements of precisely the same kind[ ] ... that are at issue here must be filed pursuant to section 211(a). Brief of Petitioner MCI at 20. 38 It is by no means apparent, however, that MCI's contention is correct. The FCC argues in its brief that section 211(a) is designed to enable the Commission to review privately negotiated intercarrier agreements. Brief for FCC at 36. In the FCC's view, section 211(a)'s filing requirement does not encompass court-approved asset-sharing agreements necessitated by an antitrust settlement, which are not agreements ... with other carriers as the phrase is naturally understood. Id. at 36-37. Although this question is not free from doubt, the FCC's reading of the statute is entitled to deference, and MCI has not adduced evidence from the legislative history of section 211 suggesting that the FCC's construction is erroneous. 39 The FCC's position, moreover, is consistent with FCC precedent cited by MCI, as well as with the Third Circuit's decision in Bell Telephone Co. In Bell System Tariff Offerings of Local Distribution Facilities for Use by Other Common Carriers, 46 F.C.C.2d 413, 430-31 (1974), which the Third Circuit affirmed in Bell Telephone Co., the FCC indeed said that intercarrier leases of local facilities had been properly filed under section 211(a). That case, however, involved the permissibility of a privately negotiated lease agreement between two competitors, AT & T and Western Union, in lieu of tariffs, and copies of the leases had in any event been filed without protest by the parties. Similarly, in Exchange Network Facilities for Interstate Access, 71 F.C.C.2d 440, 447 n. 12 (1979), and Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, 84 F.C.C.2d 445, 482 (1982), only privately negotiated contracts were at issue. 8 The FCC's failure to require AT & T or the BOCs to file copies of the SNFAs is thus not inconsistent with its earlier decisions. 9 40 In order to dispose of MCI's claim under section 211(a), however, we need not resolve this dispute. As the FCC notes, MCI is barred from raising this challenge in court because it never presented its argument to the FCC before seeking judicial review. Section 405 of the Communications Act provides in part: 41 The filing of a petition for reconsideration shall not be a condition precedent to judicial review of any [FCC] order, decision, report, or action, except where the party seeking such review ... relies on questions of fact or law upon which the Commission ... has been afforded no opportunity to pass. 42 47 U.S.C. Sec. 405. 43 As MCI concedes, section 405 bars review where an issue was simply not raised before the agency. Reply Brief of Petitioner MCI at 3. In a similar case involving an issue raised for the first time on appeal, we refused to address the merits of the petitioner's argument, saying: 44 We decline to decide this issue, for even if Gencom is correct in its contention that the FCC misread the initial decision, Gencom never raised this issue before the Commission. Gencom's omission deprives us of both an adequate record and the benefit of the FCC's expertise in resolving this issue. 45 .... 46 ... Since Gencom twice eschewed opportunities to raise its objections before the Commission, we hold that it is precluded from doing so for the first time before this court. 47 Gencom Inc. v. FCC, 832 F.2d 171, 187 (D.C.Cir.1987) (emphasis in original); see also Washington Ass'n for Television & Children v. FCC, 712 F.2d 677, 681-83 (D.C.Cir.1983). 48 For the same reason, we offer no final judgment on MCI's contentions with respect to section 211. Although MCI did say, in its Opposition to the Direct Cases submitted by the BOCs, that [t]he Commission's current failure to demand that AT & T and the BOCs file the SNFA service agreements with the necessary cost support is contrary to the public interest, MCI Opposition to Direct Cases at 7, reprinted in J.A. 449, this statement does not refer to section 211, let alone suggest that filing of the SNFAs is mandatory under section 211(a) rather than discretionary under section 211(b). Likewise, in its conclusion, MCI respectfully propose[d] that the Commission require that AT & T buy all of its BOC-provided dedicated transmission and switching under tariff, or under contracts filed with the FCC pursuant to 47 U.S.C. Section 211. MCI Opposition to Direct Cases at 41, J.A. 482. This proposal, however, appears to have been a recommendation that AT & T be required to buy at least some of the equipment leased under the SNFAs, rather than a suggestion that the FCC order the filing of existing SNFAs. Even if appearances are misleading, MCI's request failed to distinguish, once again, between section 211(a) and section 211(b), and thus supplied the FCC with no reason to address the question whether SNFAs had to be filed pursuant to section 211(a). Because MCI neglected to articulate with sufficient specificity in its submissions to the FCC the concerns it voices before this court about the applicability of section 211(a), MCI's challenge under section 211(a) will not be heard on review. 49