Opinion ID: 421797
Heading Depth: 4
Heading Rank: 2

Heading: The FCC's Statutory Obligations

Text: 68 Although the ENFIA Agreement did not, by its terms, require a determination that the Phase II rates were just, reasonable, and nondiscriminatory, the FCC also must conform to its governing statute. The Communications Act, several of the OCCs argue, imposes on the Commission the obligation to ensure that charges for common carrier services are nondiscriminatory and otherwise just and reasonable, whether those rates are established by tariff or by contract. See 47 U.S.C. §§ 201(b), 202(a) (1976). AT & T, on the other hand, argues that the only statutory requirement governing intercarrier rate agreements is that they be filed with the FCC, 47 U.S.C. § 211(a) (1976), and that there exists no affirmative requirement that agreed rates be shown, like unilateral carrier-initiated rates, to be just, reasonable, and nondiscriminatory. 69 The powers and obligations of the FCC with respect to intercarrier rate agreements have never been authoritatively determined. Sections 201(b) and 202(a) of the Communications Act appear, on their faces, to be fully applicable to rates established by contracts among carriers subject to the Act. 22 But there is no provision in the ... Act expressly authorizing the Commission to regulate (i.e. supervise in the public interest) privately negotiated contracts. 23 Notwithstanding this lack of express authority, the FCC has consistently taken the position that section 211(a), which requires the filing of intercarrier contracts, contemplates Commission supervision of such contracts and implicity authorizes [the FCC] to modify or abrogate carrier-to-carrier contracts as [it] find[s] is consistent with the public interest. 24 In Bell System Tariff Offerings, 25 for example, the Commission noted that, 70 [w]hile Section 211(a) does not specifically invest regulatory authority over ... contracts, it is reasonable to conclude that the provision which requires ... contracts to be filed confers upon the Commission the authority to determine whether the terms and conditions thereof are consistent with the provisions of the Act. 71 46 F.C.C.2d at 431. Under any other reading, the filing requirement would be a meaningless exercise. 26 Indeed, after reviewing a number of other provisions of the Act, the FCC held that it was not only authorized, but obligated, to determine the propriety of the terms and rates of ... [229 U.S.App.D.C. 221] contracts as well as those of ... tariffs. 46 F.C.C.2d at 435. 72 Our research has revealed no authority--in the Communications Act, its legislative history, or in notions of sound public policy--at odds with the FCC's previous assessments of its statutory powers and obligations, but we need not finally resolve the issue to decide this case. We assume, without deciding, that the FCC is both authorized and required to adjudicate challenges to the justness, reasonableness, and nondiscriminatory nature of contractually established rate structures. We need not hold as much since we deal here, not with a run-of-the-mill intercarrier contract, but with a settlement agreement drafted by parties to an ongoing tariff proceeding and approved by the Commission in order to terminate that proceeding and facilitate the comprehensive inquiry undertaken in Docket 78-72. 27 Unlike an ordinary intercarrier contract, this settlement agreement could neither take effect nor be extended absent an exercise of the FCC's statutory authority. To hold that the Commission could breathe life into such an agreement, and conclude its own statutorily required proceeding, in the face of patent unjustness, unreasonableness, or discrimination, would be to flout the mandates of the Communications Act. 73 We hold, therefore, that the FCC could not ignore the OCCs' statutory challenges to the interim rate structure when deciding whether to extend the ENFIA Agreement. But, while the FCC cannot continue in effect charges--established by tariff or by contract--it has determined to be unlawful, rates not yet found to be either just, reasonable, and nondiscriminatory or unjust, unreasonable, or discriminatory can avoid the stigma of unlawfulness, at least during a reasonable interim period in which the FCC is attempting to establish a more permanent rate structure. MCI Telecommunications Corp. v. FCC, 627 F.2d 322, 338 (D.C.Cir.1980). 74 When applied to the Extension Order, these principles compel a decision upholding the FCC's action. We defer to the Commission's judgment that it lacked the data necessary to prescribe just and reasonable rates, and we find that the Commission permissibly exercised its discretion to order its own proceedings, see note 21 supra, in deferring the discrimination question to the Docket 78-72 rulemaking proceeding. 28 While we do not sanction any undue delay in the resolution of the critical issues underlying the ENFIA rates, neither do we find that the FCC acted improperly in tolerating the agreed upon delay experienced in this case. 75 In the context of tariff revisions, we recently indicated that the delay between the filing of revisions by a carrier and the FCC's final decision should be judged under a rule of reason, and that the standard of 'just and reasonable' rates is subverted when the delay continues for several years. MCI Telecommunications Corp., 627 F.2d at 340. In short, [t]he best must not become the enemy of the good, as it does when the FCC delays making any determination while pursuing the perfect tariff. Id. at 341-42. Here, however, the parties and the FCC clearly anticipated from the outset that resolution of the fundamental and complex questions under consideration in Docket 78-72 might take as long as five years. That investigation was proceeding apace and nearing its end when the extension issue was presented to the FCC early in 1982. The Commission, moreover, did not delay[ ] making any determination, but affirmatively decided to continue in effect a [229 U.S.App.D.C. 222] good interim solution rather than to undermine the inquiry designed to establish a more perfect rate structure. Under the unique circumstances of this case, that decision did not contravene the Communications Act. 29 76