Opinion ID: 421797
Heading Depth: 4
Heading Rank: 1

Heading: The FCC's Obligations Under the ENFIA Agreement

Text: 62 Under the terms of the ENFIA Agreement, the negotiated settlement would expire at the end of Phase I unless the FCC determines that it is reasonable and in the public interest to implement Phase II. ENFIA Agreement p 11, reprinted in 43 Fed.Reg. at 59,131-32. The accompanying tariff purported to require even more of the FCC; it provided that the Phase II rates would go into effect if the FCC determines the rates are in the public interest. Illustrative Tariff 18, reprinted in J.A. 223. Several petitioners rely, in part, on this contractual language to support their claims that the FCC failed to make the determinations required in order properly to extend the ENFIA Agreement. The FCC, they argue, could not conclude that the implementation of Phase II would serve the public interest without first finding the rates established for that period by the negotiated formula to be just, reasonable, and nondiscriminatory. Were we to accept this enumeration of the duties imposed on the Commission by the signatories to the ENFIA Agreement, we would be forced to invalidate the Extension Order since it was not accompanied by pronouncements on the cost basis of the rates, the effect of the rates on competition, or the comparability of the contract rates and the charges imposed for like services. 17 63 We have concluded, however, that the FCC's more limited conception of the contractually established conditions precedent to the implementation of Phase II should govern. As interpreted by the Commission in 1979, an extension decision could legitimately rest on a simple finding that it is reasonable and in the public interest to continue the agreement. Acceptance Order, 71 F.C.C.2d at 447. This construction was reiterated in 1982, when the FCC declared that the contract required only an assessment of the usefulness of the agreement and the formula it establishes as an interim mechanism ... pending a more [229 U.S.App.D.C. 219] permanent resolution of the access charge issue for all interstate services in Docket 78-72. Extension Order, 90 F.C.C.2d at 9. The FCC's reasonable evaluation of the scope of the obligations imposed on it by the ENFIA Agreement is entitled to considerable deference, 18 and we have found no persuasive evidence that the parties intended a more painstaking examination of the public interest. 19 64 The adequacy of the Commission's public interest determination under this interpretation of the ENFIA Agreement cannot be gainsaid. As the Commission found, the need for an interim rate had not yet been eliminated, the negotiated formula had proved to be an acceptable compromise for three years, no more satisfactory solution was available, and an attempt to establish an alternative interim rate system would have disrupted the market and undermined the comprehensive Docket 78-72 rulemaking proceeding. Extension Order, 90 F.C.C.2d at 9-13. The petitioners have made only perfunctory attempts to cast doubt on these findings, and we are convinced that the ENFIA Agreement continued to represent a useful interim mechanism, the need for which fully satisfied the contractually specified public interest standard. 65 This conclusion regarding the public interest determination required by the ENFIA Agreement does not fully exhaust the contract-based challenges to the Extension Order. MCI presses the independent claim that the ENFIA Agreement was based on the FCC's representations that it would act expeditiously to eliminate the discrimination between like services produced by the negotiated settlement, and that Phase II could not commence while that discrimination persisted. In support of this argument, MCI points to the parties' recommendation that the FCC should quickly resolve the discrimination issue, ENFIA Agreement p 5, reprinted in 43 Fed. at 59,131, and the Commission's commitment to study the matter, Acceptance Order, 71 F.C.C.2d at 444, 456-57. 66 We believe, however, that MCI's self-serving assertion that it would not have signed the ENFIA Agreement if it had known that Phase II might be implemented despite the pendency of the discrimination issue may properly be ignored. 20 Not only did the FCC make no express promise to resolve the discrimination issue within three years, but also it plainly stated, in discussing possible resolutions of the discrimination problem, that [t]he parties' precatory language is ... not binding on us. Acceptance Order, 71 F.C.C.2d at 456 n. 30. MCI's unilateral hopes or expectations cannot limit the Commission's discretion to order the proceedings before it in the manner it deems most conducive to the effective discharge of its responsibilities. 21 As a result, [229 U.S.App.D.C. 220] MCI's discrimination argument, like the contract-based public interest claims advanced by its fellow OCCs, must be rejected. 67