Opinion ID: 799751
Heading Depth: 2
Heading Rank: 2

Heading: Disparate impact of uniform reinitialization

Text: 37 The LECs argue that reinitialization fell more harshly on carriers that chose low X-Factors with high sharing obligations for 1996 than on ones that chose high X-Factors. As a result of reinitialization, the low X-Factor carriers lost some of the future benefits of that choice, but were not in a position to recover any of sharing costs that they may have borne because of it. Reinitialization imposed no such asymmetry on companies that had elected a high X-Factor. The LECs' specific complaint is that this was an important aspect of the problem before the Commission, which it was obliged to discuss. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). 38 The Commission argues that it failed to discuss the disparity because the LECs never brought the subject up. It cites § 405 of the Communications Act, 47 U.S.C. § 405, which bars review of an issue on which the Commission ... has been afforded no opportunity to pass, see also United States v. FCC, 707 F.2d 610, 619 (D.C. Cir. 1983), unless the petitioners sought rehearing before the Commission--which the LECs did not. The LECs in turn say they couldn't have afforded the Commission a chance to pass on it; the Commission had never given notice of any intent to order reinitialization. 39 Section 405's no opportunity to pass clause does not in terms exclude instances where the lack of opportunity is due to some fault of the Commission--such as its springing a novelty at the last minute. But we need not sort that out here, because we find no fault in the Commission's procedure. Reinitialization may not have been a subject on which the Commission explicitly elicited comment in its notices for this rulemaking, but the prospect surely brooded over the pro-ceeding. In its 1995 mid-course correction of the price caps it had ordered reinitialization--in a form, in fact, that fell only on those LECs that had chosen a low X-Factor in exchange for greater risk of sharing, and not at all on those that had chosen a high one. Performance Review Order, 10 FCC Rcd at 9069-73, pp 245-54. If the perceived asymmetry was as serious as the LECs now make out, we should have expected them to alert the Commission in this proceeding in advance: If you do a reinitialization, at least avoid the dreadful asymmetry of the 1995 order. No such alert was sounded.