Opinion ID: 165579
Heading Depth: 3
Heading Rank: 2

Heading: “Reasonably Comparable”

Text: Section 254(b)(3) of the Act provides that [c]onsumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services . . . that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas. 47 U.S.C. § 254(b)(3) (emphasis added). As noted above, § 254(b)(3) provides a principle on which the FCC is to “base policies for the preservation and advancement of universal service.” Id. § 254(b). In Qwest I, we ordered the FCC to more precisely define “reasonably comparable” in reference to rates charged between rural and urban areas. 258 F.3d at 1202. In its Order on Remand, the FCC defines “reasonably comparable” in terms of a national urban rate benchmark. Order on Remand ¶ 30. For purposes of assessing the efficacy of non-rural support mechanisms, rural rates are presumed “reasonably comparable” if they fall within two standard deviations of the national average urban rate contained in the Wireline Competition Bureau’s (“WCB”) annual rate survey. Id. ¶ 38. The Commission predicated the establishment of an appropriate benchmark on its interpretation of Congress’s intent in drafting the Act. The FCC found it reasonable to assume that Congress was well aware of local rate variance between the states at the time it passed the Act in 1996. Id. ¶ 40. The Commission concedes that even it did not have 25 rural rate data available during that period. Id. However, the FCC again found it reasonable to assume that Congress was aware of the variance in urban rates at the time, on the basis of then available WCB survey information, and that Congress would not have required rural rates to be any closer to a national urban average than other urban rates. Id. Underlying this assumption is the FCC’s determination that Congress considered rural and urban rates reasonably comparable in 1996. Id. ¶ 39. The Commission based its determination that Congress was satisfied with rural and urban rate disparity on its construction of the words “preserve” and “preservation” as they appear in several provisions of the Act. See, e.g., 47 U.S.C. §§ 254(b), (d) & (f). According to the FCC, Congress’s use of these words “indicated its view that the universal service mechanisms that pre-dated the 1996 Act adequately promoted universal service.” Order on Remand ¶ 39. In support, the Commission cites several statements in the Congressional record. Id. n.137. The FCC further contends that had Congress not viewed rates as reasonably comparable it would have expressly directed the Commission and the states to alter the existing structure. Id. ¶ 39. “[T]he 1996 Act is not a model of clarity.” See AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 397 (1999). However, we agree with Petitioners Qwest, SBC, and Vermont that the Commission’s definition of “reasonably comparable” rests on a faulty, and indeed largely unsupported, construction of the Act. As such, we hold that the FCC’s 26 construction of the statute does not deserve deference and is “manifestly contrary to the statute.” Center for Legal Advocacy, 323 F.3d at 1267. We first note that in each instance that Congress employed the words “preserve” or “preservation,” the terms were conjoined with “advance” or “advancement.” See, e.g., 47 U.S.C. §§ 254(b), (d) & (f). Neither “preserve” nor “advance” are defined in the statute. Therefore, we must employ traditional tools of statutory construction to determine their meaning. “Preserve” is primarily defined as “to keep safe from injury, harm, or destruction: PROTECT.” Webster’s Ninth New Collegiate Dictionary 930 (1991). An alternate definition includes the concept of maintenance. Id. Similarly, “preservation” may be defined as “Keeping safe from harm; avoiding injury, destruction, or decay; maintenance. It is not creation, but the saving of that which already exists, and implies the continuance of what previously existed.” Black’s Law Dictionary 1184-85 (6th ed. 1990). In contrast, “advance” is defined as “to bring or move forward” or “to accelerate the growth or progress of.” Webster’s Ninth New Collegiate Dictionary 58 (1991). “Advancement” may be defined as “progression to a higher stage of development.” Id. at 59. The use of the conjunctive “and” in the phrase “preserve and advance universal service,” or “preservation and advancement of universal service,” clearly indicates that the Commission cannot satisfy the statutory mandate by simply doing one or the other. The 27 Commission is charged under the Act with concurrent duties. As verbs, “preserve” and “advance” both take as their object “universal service.” As nouns, “preservation” and “advancement” are modified by the prepositional phrase “of universal service.” The Commission’s construction ultimately fails because it seeks to define separately “universal service” as it applies to each verb or noun. This reading of the statutory language is unnatural. In reference to “preserve” or “preservation,” “universal service” refers to the rate variance arising from the support mechanisms existing in 1996. See Order on Remand ¶ 39. In contrast, “universal service” applied to “advance” or “advancement” refers to evolving rules recognizing changes in markets and technology. Id. To the extent that the latter construct ignores the importance of continuing rate variances and the principles enunciated in § 254(b), we see no justification for this dichotomy in either the plain language of the Act or its statutory history. The FCC’s citation to inconclusive statements in the Congressional Record to support its construction is unavailing. Id. n.137. Having reviewed the body of the Congressional Record relating to the Act, we do not believe that statements by individual senators to the effect that the proposed legislation would not harm existing services can be read to freeze the assessment of reasonable comparability to a speculative variance in rates unknown in 1996 and divined through inferential leaps in logic. 28 “Universal service” is defined in the Act as “an evolving level of telecommunications services,” taking into account those services that are essential to basic needs, subscribed to by a majority of consumers, deployed in networks, and consistent with defined policy goals. 47 U.S.C. § 254(c)(1). Implicit in this definition and the Act is access to these telecommunications services by consumers throughout the nation. Rates cannot be divorced from a consideration of universal service, nor can the variance between rates paid in rural and urban areas. If rates are too high, the essential telecommunications services encompassed by universal service may indeed prove unavailable. Thus, the Commission erred in premising its consideration of the term “preserve” on the disparity of rates existing in 1996 while ignoring its concurrent obligation to advance universal service, a concept that certainly could include a narrowing of the existing gap between urban and rural rates. By designating a comparability benchmark at the national urban average plus two standard deviations, the FCC has ensured that significant variance between rural and urban rates will continue unabated. This assertion is borne out by the Commission’s own data. In 2002, urban rates ranged from $15.65 to $35.19, with an average of $23.38. Utilizing this data, the comparability benchmark is $32.28, or 138% of the nationwide average urban rate. In Qwest I we expressed our concern that a discrepancy of 70-80% between some rural rates and urban rates might impermissibly stretch the boundaries of 29 rate comparability. 258 F.3d at 1201. Under the 2002 data, rural rates falling just below the comparability benchmark may exceed the lowest urban rates by over 100%. Even if such rural rates are compared against the national urban average, we fail to see how they could be deemed reasonably comparable, especially in light of our previous consideration. The Commission explains its selection of two standard deviations as the appropriate benchmark on the basis that it approaches the outer perimeter of the variance in urban rates. As rural rates approach the level of the highest urban rate, the FCC believes closer scrutiny is appropriate. While there is a certain logic to this approach, the benchmark is rendered untenable because of the impermissible statutory construction on which it rests. From this perspective, the Commission’s selection of a comparability benchmark based on two standard deviations appears no less arbitrary than its prior selection of a 135% cost-support benchmark. See id. at 1202-03. On remand, the FCC must define the term “reasonably comparable” in a manner that comports with its concurrent duties to preserve and advance universal service.