Opinion ID: 308796
Heading Depth: 1
Heading Rank: 3

Heading: the connecting carriers

Text: 49 Several telephone companies have argued that since they are connecting carriers within the Act (47 U.S.C. Sec. 152(b)(2) (1970)), they should be exempt from the rules here under consideration. They urge that they are primarily engaged in local exchange telephone service, a communications service exclusively subject to state regulation and expressly exempt from federal supervision (see 47 U.S.C. Secs. 152(b), 221(b) (1970)). The Act (47 U.S.C. Sec. 152(b)(4) (1970)), however, specifically makes applicable to connecting carriers, i. e., carriers engaged in interstate or foreign communication solely through physical connection with licensed carriers, the provisions of sections 201 to 205. These sections generally give the Commission jurisdiction over the connecting carrier's services, charges and practices which are a part of the uninterrupted and indivisible national system of telephone service. Cf. United States v. Southwestern Cable Co., 392 U.S. 157, 169, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). In view of the Commission's overall responsibility and broadly construed authority to insure adequate and efficient telephone service at reasonable rates, the same considerations which prompted the maximum separation regulations (47 C.F.R. Secs. 64.702(b), (c)(1), (2), (3) & (d)) which we have found properly within the authority of the Commission with respect to its licensees should govern here. The connecting carriers are indisputably a necessary part of the national telephone network. See General Tel. Co. of Cal. v. FCC, 134 U.S.App.D.C. 116, 413 F.2d 390, 402, cert. denied, 396 U.S. 888, 90 S.Ct. 173, 24 L.Ed.2d 163 (1969). The de minimis argument of the connecting carriers is answered in part at least by the exemption of those connecting carriers whose annual revenues do not exceed $1,000,000 (see note 7 supra). 50 The argument made by the connecting carriers that their data processing subsidiaries are local and in any event do not constitute interstate communications so as to be within the jurisdiction of the FCC is persuasive but is now academic in view of our voiding 47 C.F.R. Secs. 64.702(c)(4) & (5). To the extent that such non-communication and intra-state service poses a threat to efficient interstate telephone service at reasonable rates, the maximum separation provisions of the regulations already approved in Part II(a) of this opinion should a fortiori provide public protection. The fact that no actual abuse has been shown as we have already indicated does not oust the Commission of its rule-making role. 51 In summary, we hold that rules 64.702(b), (c)(1), (2), (3) & (d) are valid, but that rules 64.702(c)(4) & (5) are beyond the jurisdictional authority of the Federal Communications Commission.