Opinion ID: 165579
Heading Depth: 3
Heading Rank: 1

Heading: “Sufficient”

Text: Section 254(e) of the Act provides that federal universal service support “should be explicit and sufficient to achieve the purposes of [§ 254].” 47 U.S.C. § 254(e). On remand, the FCC defined “sufficient” in the following terms: “enough federal support to enable states to achieve reasonable comparability of rural and urban rates in high-cost areas served by non-rural carriers.” Order on Remand ¶ 30. The Commission further limited the definition by stating that “non-rural high-cost support should be only as large as necessary to meet the statutory goal.” Id. As explained more fully above, the principle of “reasonable comparability” is but one of seven principles identified by Congress to guide the Commission in drafting policies to preserve and advance universal service. See 47 U.S.C. § 254(b). For instance, Congress also intended that “[q]uality services should be available at just, reasonable, and affordable rates.” Id. § 254(b)(1). As we noted in Qwest I, “[t]he plain text of the statute mandates that the FCC ‘shall’ base its universal policies on the principles listed in § 254(b).” 258 F.3d at 1200. Under the Act, the FCC’s duty is mandatory. Id. However, 22 we posited that while “the FCC must base its policies on the principles, . . . any particular principle can be trumped in the appropriate case. . . . [T]he FCC may exercise its discretion to balance the principles against one another when they conflict, but may not depart from them altogether to achieve some other goal.” Id. Petitioners Qwest and SBC argue that the FCC’s definition is impermissible in that it ignores all but one principle enumerated in § 254(b). We agree. The FCC’s definition of “sufficient” ignores the vast majority of § 254(b) principles by focusing solely on the issue of reasonable comparability in § 254(b)(3). The Commission has not demonstrated in the Order on Remand or the limited record available to this court why reasonable comparability conflicts with or outweighs the principle of affordability, or any other principle for that matter, in this context. The issue is more than semantic. As discussed more fully below, this failure to consider fully the Act’s principles as a whole further undermines the FCC’s definition of “reasonably comparable” and the cost mechanism at issue in this case. The FCC urges that it is justified in defining “sufficient” solely in terms of § 254(b)(3) because “in general the purpose of [the federal non-rural high-cost support] mechanism is to provide enough federal support to enable states to achieve the reasonable comparability of rural and urban rates.” FCC Br. at 61. This explanation is patently unpersuasive. We are troubled by the Commission’s seeming suggestion that other 23 principles, including affordability, do not underlie federal non-rural support mechanisms. Moreover, the Commission can point to no support in the Act or the legislative history that would permit such a construction. Consequently, we will not countenance it here. Petitioners also take issue with the fact that the Commission sought to further limit its definition of “sufficient” by including language intended to cap federal support at levels “only as large as necessary” to meet the statutory goal. Order on Remand ¶ 30. We are not troubled by this language in the abstract. As we explained in our previous decision, excessive subsidization arguably may affect the affordability of telecommunications services, thus violating the principle in § 254(b)(1). Qwest I, 259 F.3d at 1200. The FCC is compelled to balance the § 254(b) principles to the extent they conflict. Id. However, the FCC has failed to demonstrate that its balancing calculus takes into account the full range of principles Congress dictated to guide the Commission in its actions. On remand, the FCC must articulate a definition of “sufficient” that appropriately considers the range of principles identified in the text of the statute. 24