Opinion ID: 382674
Heading Depth: 2
Heading Rank: 1

Heading: jurisdiction

Text: 17 Intervenor Rochester Telephone Corporation, a publicly-owned, independent telephone company serving the Rochester, New York exchange area, argues that the FCC exercise of jurisdiction violated section 2(b)(1) of the Communications Act, 47 U.S.C. § 152(b)(1). Neither NYT nor the PSC made this argument. 18 The Act, after stating that the provisions of this chapter shall apply to all interstate and foreign communication by wire or radio, 47 U.S.C. § 152(a), provides that 19 nothing in this chapter shall be construed to apply or to give the Commission jurisdiction with respect to (1) charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communication service by wire or radio of any carrier, .... 20 47 U.S.C. § 152(b) (emphasis added). Section 221 of the statute adds that 21 nothing in this chapter shall be construed to apply, or to give the Commission jurisdiction, with respect to charges, classifications, practices, services, facilities, or regulations for or in connection with wire, mobile, or point-to-point radio telephone exchange service, ... even though a portion of such exchange service constitutes interstate or foreign communication, in any case where such matters are subject to regulation by a State commission or by local governmental authority. 22 47 U.S.C. § 221(b). This latter provision, however, is intended only to cover the situation in which a local carrier serves a single multi-state exchange area, so that such carrier is assured whatever degree of freedom section 2(b) provides from federal regulation for unistate carriers. North Carolina Utilities Commission v. FCC, 537 F.2d 787, 795 (4th Cir.), cert. denied, 429 U.S. 1027, 97 S.Ct. 651, 50 L.Ed.2d 631 (1976). 23 Rochester Telephone argues that, both factually and legally, the local exchange part of FX and CCSA service is separable and, therefore, falls outside FCC jurisdiction and within state regulation. 47 U.S.C. §§ 152(b), 221(b). Rochester points to a series of the FCC's own opinions dealing peripherally with FX in which the FCC held that regulatory jurisdiction over FX service was divided, with federal jurisdiction over the interstate portion and state jurisdiction over the local exchange service. See, e. g., Southern Pacific Communications Co., 67 F.C.C.2d 1569, 1575 n.9 (1978); Southern Pacific Communications Co., 61 F.C.C.2d 144, 146-47 (1976); MCA Telecommunications Corp., 61 F.C.C.2d 131, 134 n.12 (1976). The FCC described FX as 24 private line service which gives the customer access to a distant local exchange but does not include the local exchange service as part of its offering of service. The private line carrier may procure local exchange service as an agent for his FX customer, but he does not offer the use of exchange facilities as a part of his FX service. 25 Id. at 134. 26 But the FCC did state in one prior decision, when discussing interstate versus intrastate services, that (w)hile the States clearly have the authority to regulate the local exchange service pursuant to Sections 2(b) and 221(b), they cannot in so doing block interstate commerce by prohibiting interstate access to foreign exchanges or by discriminating against or among interstate services. American Telephone & Telegraph Co., 56 F.C.C.2d 14, 20 n.5 (1975), aff'd sub nom. California v. FCC, 567 F.2d 84 (D.C.Cir.1977), cert. denied, 434 U.S. 1010, 98 S.Ct. 721, 54 L.Ed.2d 753 (1978) (emphasis added). The FCC thus reserved its ability to regulate local exchange service in situations in which there is discrimination against interstate services. Although subsequent FCC cases do not mention this reservation, which supports the exercise of jurisdiction here, the MCI Telecommunications Corp. opinion does cite to the AT&T case, 61 F.C.C.2d at 133 nn.7 & 9. 27 In any event, the FCC is not barred from overruling past precedents when it decides that a previously declared rule is no longer sound or appropriate. See K. Davis, Administrative Law Treatise § 17.07, at 526-28 (1958). The agency explains its reason for the change: the authority to impose a charge of this nature on interstate users clearly extends beyond the realm of actions contemplated by our policy of deferring to state ratemaking jurisdiction, 76 F.C.C.2d at 354. Adequate explanation and reasoned analysis have been held sufficient to support departure by administrative agencies from their precedents. See Sirbo Holdings, Inc. v. Commissioner, 476 F.2d 981, 987 (2d Cir. 1973); Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971); K. Davis, Administrative Law of the Seventies § 17.07-4, at 413-17 (1976). In addition, if the exercise of jurisdiction by the FCC represents a change in its rules, the agency presaged this change in AT&T with its caveat about discrimination against interstate service. Cf. NLRB v. Kobritz, 193 F.2d 8, 13 (1st Cir. 1951) (upholding an NLRB departure from a policy of declining to assert jurisdiction, on the ground that the Board had jurisdiction all the time). The FCC's own construction of its enabling statute, even if it is a changing one, is entitled to deference from the courts. Diamond International Corp. v. FCC, 627 F.2d 489, at 492-93 (D.C.Cir.1980). 28 We believe that the general thrust of the statute and of the cases support FCC jurisdiction. The Act defines wire communication as the transmission of ... sounds of all kinds by aid of wire, cable, or other like connection between the points of origin and reception of such transmission, including all instrumentalities, facilities, apparatus, and services ... incidental to such transmission. 47 U.S.C. § 153(a) (emphasis added). It is no less logical to classify the individual telephone line as the point of reception in FX or CCSA systems than to define the local exchange service as that point. Even those FCC cases treating FX under the bifurcated jurisdictional view contain support for the assertion of jurisdiction because they note that this Commission's jurisdiction over interstate communications does not end at the local switchboard, it continues to the transmission's ultimate destination. Southern Pacific Communications, 61 F.C.C.2d at 146. The key to jurisdiction is the nature of the communication itself rather than the physical location of the technology. United States v. Southwestern Cable Co., 392 U.S. 157, 168-69, 88 S.Ct. 1994, 2000-2001, 20 L.Ed.2d 1001 (1968); General Telephone Co. v. FCC, 413 F.2d 390, 401 (D.C.Cir.), cert. denied, 396 U.S. 888, 90 S.Ct. 173, 24 L.Ed.2d 163 (1969). The calls for which the NYT-PSC surcharge is imposed clearly go from one state to another. 29 In North Carolina Utilities Commission v. FCC the court stated: 30 We have no doubt that the provisions of section 2(b) (47 U.S.C. § 152(b)) deprive the Commission of regulatory power over local services, facilities and disputes that in their nature and effect are separable from and do not substantially affect the conduct or development of interstate communications. But beyond that, we are not persuaded that section 2(b) sanctions any state regulation, formally restrictive only of intrastate communication, that in effect encroaches substantially upon the Commission's authority under sections 201 through 205. 31 537 F.2d at 793 (footnote omitted) (emphasis added). Even if the local exchange service is separable technologically and in terms of cost assessment from the dedicated private line in FX and CCSA service, there is no doubt that the NYT surcharge on interstate FX/CCSA users, ranging up to 1600% higher than the charge for comparable service to intrastate users, substantially affects the conduct or development of interstate communication and encroaches upon FCC authority. See Diamond International Corp. v. FCC, at 493 (citing the FCC order at issue here). Accordingly, we uphold the FCC's assertion of jurisdiction here.