Opinion ID: 421797
Heading Depth: 4
Heading Rank: 3

Heading: The Impact of Docket 78-72.

Text: 77 As the parties to the ENFIA Agreement and the FCC contemplated, many of the fundamental issues concerning the propriety of the ENFIA rate structure have now been resolved. In particular, the FCC has concluded that the existing combination of access service compensation arrangements violates Section 202(a) of the Communications Act. Third Report and Order at 19 (footnote omitted), reprinted in 48 Fed.Reg. at 10,326. With respect to the ENFIA rates, the Commission has found: 78 The level of the ENFIA charge has been negotiated to reflect a discount from the MTS access compensation. It was also designed to produce a rate that is higher than the local exchange rate paid by FX and CCSA customers. Since no one has attempted to justify the disparate rates charged for like access services in this proceeding, we must find them to be unlawfully discriminatory. 79 Id. This discrimination problem, the FCC has noted, could not be solved by maintaining the status quo, id. at 32, reprinted in 48 Fed.Reg. at 10,331; accordingly, the Third Report and Order lays the groundwork for a new access charge system designed to eliminate, on a prospective basis, all unjust and unreasonable discrimination among interstate services. 80 Although the Third Report and Order finds discriminatory the entire existing access system, the FCC did not make specific findings concerning the extent to which any of the petitioners were victimized by that discrimination. Counsel for the FCC made clear, moreover, that the Order itself will provide no retrospective cure for the unlawful discrimination the Commission found to exist, Transcript 52, and suggested that the finding of discrimination ... is not one that necessarily impugns the validity of the settlement agreement as an interim procedure for dealing with a difficult problem, id. at 55. Counsel went so far as to argue, in fact, that the Commission has the authority in framing a remedy for ... discrimination ... to confine itself to ... prospective [relief]. Id. at 64. 81 These statements, we believe, represent an overly generous view of the Commission's authority. We have been pointed to nothing in the Communications Act that empowers the Commission to forgive proven violations of the Act's clear prohibitions of unjust, unreasonable, and discriminatory rates. See 47 U.S.C. §§ 206, 209 (1976). And the FCC has expressly acknowledged that challenges to the ENFIA rates in complaint proceedings would be appropriate. Order on Reconsideration at 29 n. 65. Under the unique circumstances of this case, however, this concession from the FCC falls short of according the petitioners a determination to which they are entitled within the scope of this proceeding. The Commission has gone to great lengths to emphasize the interim nature of the rates it approved for Phase II. Now that those interim rates have been found to be part and parcel of an unlawfully discriminatory rate structure, the Commission is obligated to consider whether the petitioners are entitled to retroactive relief. That determination, moreover, must be made on remand in this case, and may not be relegated to independent complaint proceedings. The Commission's approval of the interim ENFIA rates has always been subject to further proceedings; indeed, the FCC stated at the outset that, during the term of the ENFIA Agreement, this proceeding shall remain open and the agreement itself is subject to further Commission order. Acceptance Order, 71 F.C.C.2d at 458-59 (emphasis in original). 82 [229 U.S.App.D.C. 223] For the petitioners who were parties to the ENFIA Agreement, the prospect of such further proceedings appears singularly uncomforting. Not only did those petitioners agree to pay the rates established by the contractual formula, but also the signatories promised to refrain from attacking or challenging the lawfulness of those rates. ENFIA Agreement p 3, reprinted in 43 Fed.Reg. at 59,130. In the oral argument before this court, counsel for the FCC took the position that the signatories had thus waived their rights to retrospective relief. Transcript 52. In positing that refunds would be appropriate only if the ENFIA Agreement had expired, 30 MCI appears to concede the validity of this construction of the contract. On remand, the FCC should consider whether the signatories waived their rights to relief for discriminatory charges produced by the application of the ENFIA Agreement. If not, the Commission also should determine and award the appropriate relief. 83 The situation of the nonsignatories is markedly different. We reject their contention that the FCC could not lawfully apply the rates established by the ENFIA Agreement to carriers who were not parties to the agreement. By its terms, the ENFIA Agreement was intended to produce a generally applicable interim rate; the FCC accepted it as such and properly concluded that the public interest would be served by the continued application of the interim arrangement to all of the OCCs. But, while the nonsignatories were properly subjected to the ENFIA rates on an interim basis, they are not bound by the terms of the ENFIA Agreement itself and have not waived their rights to relief from the discrimination the Commission has found to exist. Since the nonsignatories never agreed to be bound by the interim arrangement, the FCC must have contemplated that a determination in Docket 78-72 that the negotiated rates were unjust, unreasonable, or discriminatory would be followed by a refund order. 31 On remand, therefore, the FCC must evaluate the rates paid by the nonsignatories during the interim period in light of the finding of system-wide discrimination in Docket 78-72 and order appropriate relief. 32 84 Our resolution of this issue, we emphasize, is a limited one confined to the unique circumstances of this case, circumstances that we hope will never be duplicated. We express no view on the question whether provisions for retroactive adjustments are inherent in the very concept of interim rates, and we caution that our opinion should not be read as embracing any such general proposition. 85