Opinion ID: 799751
Heading Depth: 2
Heading Rank: 1

Heading: Devaluation of 1986-95 and 1991-95 averages

Text: 11 First, in choosing a point within the range of reasonableness, the FCC determined that it was reasonable to place less weight on two lowest averages, the ones for 1986-95 and 1991-95. It said that the first, 1986-95, is heavily influenced by the improbably low 1986 estimate of-0.5 percent. Id. at 16,697, p 139. But the Commission gave no reason for condemning the 1986 estimate as improbable, and mere divergence from the other numbers does not justify such a conclusion. See Thomas H. Wonnacott & Ronald J. Wonnacott, Introductory Statistics for Business and Economics 497 (2d ed. 1977). The FCC invokes our cases upholding the elimination of outlying data points, but in them the agency explained why the outliers were unreliable or their use inappropriate. See Bell Atlantic Tel. Cos. v. FCC, 79 F.3d 1195, 1202 (D.C. Cir. 1996) (study indicated outlier erroneous); Association of Oil Pipe Lines v. FERC, 83 F.3d 1424, 1434 (D.C. Cir. 1996) (skewed data distribution required outlier elimination to avoid windfall profits to many oil pipelines). 12 As to the 1991-95 average, the Commission said it was the one most affected by the low 1992 estimate, which it in turn diagnosed as an artifact of a one-year jump in the measured productivity of the national economy as economic activity increased, rather than a change in the growth rate of LEC productivity or input prices. 1997 Order, 12 FCC Rcd at 16,697, p 139. This is mystifying. If the productivity component of the X-Factor is to reflect the difference between LEC and overall productivity growth, a proposition that is built into the Commission's formula, see 1997 Order, 12 FCC Rcd at 16,785, there seems no reason to slight a datum because its anomalous character stems from the unusual magnitude of the second term rather than of the first.