Opinion ID: 6345095
Heading Depth: 2
Heading Rank: 2

Heading: Inteliquent’s Data

Text: We now turn to Inteliquent’s arguments against the reasonableness of the rate cap. First, Inteliquent claims the FCC ignored the company’s data and failed to explain its reason for doing so. In fact, however, the Commission acknowledged Inteliquent’s submission and pointed out flaws that undermined the utility of the study Inteliquent submitted. First, the study was based upon rates Inteliquent charged but 11 did not include rates charged by any other carrier; therefore, it did not demonstrate that Inteliquent’s rates were representative of tandem switch service providers generally. Second, the study produced a weighted national average of rates rather than a weighted national average of costs, which provided the FCC little if any assistance in setting a rate cap above providers’ costs. Although Inteliquent argues those rates reflected costs at one time, the Commission responds, correctly, that the incumbent providers’ rates Inteliquent relies upon have not been exclusively cost-based since 1990: “those cost studies are almost three decades old and, given the generally declining costs of providing telecommunications service . . . almost certainly overstate carriers’ current costs.” In short, the FCC did not ignore Inteliquent’s submission; the Commission considered Inteliquent’s data and reasonably explained its decision not to rely upon it. Citing Radio-Television News Directors Association v. FCC, 184 F.3d 872, 887 n.20 (D.C. Cir. 1999), Inteliquent next argues that even if its data were old and possibly flawed, the FCC could not disregard them because it had no more recent or more credible data to support its rate decision. It is true the Commission may not disregard relevant evidence, but here Inteliquent’s evidence was not relevant to the agency’s goals of reducing arbitrage and encouraging the adoption of lower cost technology. Indeed, Radio-Television supports this conclusion because the study we there faulted the FCC for ignoring directly laid out the potential costs of the challenged rule. See id. Here, by contrast, Inteliquent’s study was not nearly so relevant; instead, as the Commission pointed out, being old and outdated, it was only weakly related to the current costs of providing tandem switch services. Most important, Inteliquent never suggested how its rate data could be used to calculate costs, even old costs; instead, it 12 argues in its reply brief for the first time that the Commission could have used some unspecified means to calculate providers’ costs from the rate data it submitted and then used that information to adjust USTelecom’s proposed rate cap. The FCC was not required to make a complicated, perhaps impossible, adjustment to USTelecom’s proposal. Instead, the Commission was required only to explain why Inteliquent’s submission did not bear upon the problems the Order sought to address, which is what it did. Inteliquent next argues the FCC may not dismiss as dated a study aggregating and weighting the “current rates for tandem services” because they are still the lawful rates and presumably, therefore, still just and reasonable. But the FCC did not approve the prior benchmark rates because they were the uniquely reasonable rates; the Commission approved them because it found those rates were within the zone of reasonable rates. See WorldCom, Inc. v. FCC, 238 F.3d 449, 462 (D.C. Cir. 2001) (“The relevant question is ‘whether the agency’s numbers are within a “zone of reasonableness,” not whether its numbers are precisely right.’” (quoting Hercules Inc. v. EPA, 598 F.2d 91, 107-08 (D.C. Cir. 1978))). That does not mean a lower rate could not also be within the zone of reasonableness. Put another way, Inteliquent’s argument would be a reason to reject the Commission’s rate cap only if the FCC had previously determined each rate in Inteliquent’s study was the lowest just and reasonable rate. Because Inteliquent has made no such showing, its arguments about its data submission do not show the Commission’s rate cap is arbitrary and capricious.