Opinion ID: 397828
Heading Depth: 2
Heading Rank: 3

Heading: The Formula Decision

Text: 16 After reviewing the comments generated by its Notice, the Commission issued its order of January 7, 1980. Regulation of Domestic Public Message Service, 75 F.C.C.2d 345 (1980) (hereinafter Formula). In that portion pertinent to this appeal, the Commission first reiterated its belief that PMS and other, subsequent, FCC decisions had significantly affected the nature of the working relationship between WU and the IRCs. 6 Because the previously static nature of that relationship had been the primary premise underlying the Commission's prescription of the 1976 formula, the Commission concluded that a reexamination of that formula in light of changing market conditions was warranted. Formula, 75 F.C.C.2d at 358. 17 In this reexamination the Commission determined, at the outset, that the current formula had not accomplished its established objectives. The FCC had expected that the formula would stimulate price and service quality competition among the IRCs. Id. at 365. Instead, the Commission found that the formula had had little positive impact on the IRCs' actions 7 and, in fact, had acted as a barrier to price competition. 8 Moreover, the Commission concluded that whatever the impact of the present formula, the significance of its role would be diminished by the new market conditions. Id. at 366. For these reasons the Commission declared the current formula not in the public interest. 18 In spite of this declaration, the Commission declined to prescribe a new formula. It explained that there was simply not enough information to allow the Commission to prescribe a replacement ... formula at this time because of the vastly changed circumstances which the industry will face after our actions today and in the wake of our Domestic PMS decision. Id. at 370. Moreover, the Commission refused as well to apply the current formula to Graphnet. Neither the statute 9 nor the public interest, it concluded, required such action. Instead, citing the need for a transitional period, the Commission ordered that the current formula remain in effect pending its further order, and designated a nine-month period in which the affected carriers were to negotiate new agreements for the distribution of unrouted outbound international message traffic. Agreements reached would be subject to Commission evaluation and approval under the just, reasonable, equitable and in the public interest standard. Id. at 370-71; 47 U.S.C. § 222(e)(3) (1976). If no agreements were reached at the end of the designated period, the Commission would itself take appropriate steps to revise the formula. Accordingly, the Commission directed the staff of the Common Carrier Bureau to prepare and submit its proposed method of distribution as soon as possible after the close of that same nine-month period. Id. at 378.