Opinion ID: 402072
Heading Depth: 2
Heading Rank: 2

Heading: Commission Reliance on Other Regulatory Tools

Text: 23 WUT charges that without requiring IRCs to file tariffs for their terminal offerings, the Commission will be unable to ensure that the goals of the Unbundling Order are achieved. More precisely, WUT charges that the Commission's stated intention to regulate the IRCs' transmission rates by starting a rate proceeding, if necessary, is inadequate. WUT claims that there has been no rate proceeding involving the IRCs since 1958 and that the records of the IRCs are in such disarray that a rate case would be impracticable. Moreover, WUT claims that given the Commission's alleged unwillingness to address the problem of IRC terminal give-a-ways through its tariff power, it is unreasonable to expect the Commission to use the complaint process and its investigatory powers to police the IRCs. Finally, WUT rejects as fatuous the Commission's suggestion of antitrust law and so-called structural remedies to prevent the IRCs from continuing the subsidization of terminal offerings through excessive transmission charges. 24 The Commission expressly considered and rejected WUT's arguments in the Detariffing Order, 86 F.C.C.2d at 418-20, thereby stating its belief that it will be able to regulate IRC transmission rates adequately without regulating terminal offerings. While WUT might believe that IRC transmission rates could be better controlled if equipment remained tariffed, the Commission has broad discretion to choose which regulatory tools to employ, see A.T. & T. v. FCC, 572 F.2d 17, 26 (2d Cir.), cert. denied, 439 U.S. 875, 99 S.Ct. 213, 58 L.Ed.2d 190 (1978), and its decision must be upheld unless it is irrational, see, e.g., Malrite T.V. v. FCC, 652 F.2d 1140, 1149 (1981); Philadelphia Television Broadcasting Co. v. FCC, 359 F.2d 282, 284 (D.C.Cir.1966). WUT suggests no reason why it will be more difficult to regulate IRC transmission rates without requiring equipment tariffs than to regulate WUT rates in similar circumstances. We cannot accept WUT's claim that the Commission acted irrationally in choosing to employ the same tools to regulate the IRCs that it uses to police WUT. 25 Moreover, WUT recognizes that the Commission may have been relying in part on the structural remedy of WUT's entry into the international telex market in direct competition with the IRCs to force transmission rates down and thereby eliminate the IRC's ability to subsidize equipment give-a-ways. Reply Brief for WUT at 6-7. While this remedy was inchoate at the time in that it required an amendment to section 222 of the Communications Act that would permit WUT to operate internationally, see Western Union International, Inc. v. FCC, 544 F.2d 87 (2d Cir. 1976), cert. denied, 434 U.S. 903, 98 S.Ct. 299, 54 L.Ed.2d 189 (1977), such an amendment was enacted after the briefs in this case were filed, Record Carrier Competition Act of 1981, Pub.L.No. 97-130, amending Communications Act of 1934 § 222, 47 U.S.C. § 222 (1976). If the Commission exercises its power under the new legislation to authorize WUT to operate internationally, something that it has in the past shown an inclination to do, see ITT World Communications Inc. v. FCC, 635 F.2d 32, 45 (2d Cir. 1980); Western Union International, Inc. v. FCC, 572 F.2d 87, WUT will be on precisely the same competitive footing as the IRCs as far as the federal regulations in question are concerned. While the new legislation provides only after-the-fact justification for the Commission's action, the Commission's other explanations are sufficient by themselves to support the Detariffing Order. The new legislation does, however, reinforce our conclusion that a remand in this case would be futile.