Opinion ID: 503750
Heading Depth: 4
Heading Rank: 4

Heading: SNFAs Are Transitional Devices

Text: 71 The FCC's fourth reason for finding that no unreasonable or unjust discrimination exists is, like the third, stated in an offhand manner in a footnote: 72 Our decision is buttressed by the fact that, by the terms of the [court-approved antitrust settlement], SNFAs are temporary transitional mechanisms which must be terminated by 1991. The record indicates that AT & T and the BOCs have already terminated a number of these agreements, which seems to indicate that neither party to the contracts perceives them to be especially beneficial. 73 Id. at p 59, n. 98, J.A. 802. 74 Once again, however, the FCC's reasoning is not compelling. First, nothing in the Plan of Reorganization approved by the District Court requires that the SNFAs be terminated in 1991. The Plan states that AT & T and the BOCs will cease sharing facilities as promptly as is reasonably feasible, but it establishes no timetable. J.A. 42. In its brief to this court, AT & T claims that all of the SNFAs will be terminated no later than 1991, Supplemental Brief of Intervenor AT & T at 2, but this statement of intention does not have the status of a legal obligation. 75 Second, the fact that many SNFAs have already been discontinued may suggest, as the FCC says, that those agreements were not especially beneficial. But the termination of some unprofitable leases does not imply that those SNFAs that have been kept alive do not confer an unreasonable or unjust advantage on AT & T vis-a-vis other interexchange carriers. 76 Third, the FCC notes in its brief that this court has upheld FCC decisions allowing carriers to charge possibly discriminatory rates as part of a transitional mechanism to shift from one type of nondiscriminatory rate structure to another, in order to preserv[e] the efficient operation of the interstate telephone network during the interim. National Ass'n of Regulatory Utility Comm'rs v. FCC, 737 F.2d 1095, 1135-36 (D.C.Cir.1984), cert. denied, 469 U.S. 1227, 105 S.Ct. 1224, 84 L.Ed.2d 364 (1985); see also Western Union Tel. Co. v. FCC, 815 F.2d 1495, 1505 (D.C.Cir.1987). Both of the cases cited by the FCC, however, involved the gradual implementation of large rate increases to avoid disruption in service while carriers adjusted to the new rates. Furthermore, the FCC has not found that the concerns that motivated those decisions are in evidence in this case. The resultant disparities in those cases, moreover, declined over a period of months; they did not, as here, continue for up to eight years. Finally, it warrants repeating that the reasonableness of transitional rate disparities turns on their magnitude as well as their duration. In the two cases cited by the FCC, the amount of the disparity was known to the FCC, which adjudged it reasonable in light of the harms that might well flow from sudden rate increases. In this case, the FCC has not gathered the information necessary to measure whatever disparity exists between SNFA charges and correlative elements of the special access tariffs. It is therefore not yet in a position to declare those temporary disparities reasonable and just.