Court Opinion

ID: 8899735
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:52:34.58164+00
Date Added: 2024-06-11T17:07:45.204821
License: Public Domain

GARTH, Circuit Judge
(dissenting):
The majority’s resolution of this petition for review has, in my view, dangerously limited the scope of judicial scrutiny of administrative decisions. The administrative agency’s interpretation of the contracts at issue here was based solely upon principles of contract construction and not agency expertise. In according deference to the Federal Communications Commission’s interpretation of these contracts, I believe the majority has given the agency virtually unreviewable power in matters of law, a power denied to federal district courts, although courts are presumably expert in such matters. Reason compels no such abdication of our appellate function, nor does it require substitution of our normal de novo standard of review for the standard employed by the majority.
I.
As stated by the majority (Majority Op. at 348-351), the matters in issue here follow directly from the Federal Communications Commission’s (FCC) order dated April 23, 1974 which this Court affirmed in Bell Telephone Co. of Pennsylvania v. F.C.C., 503 F.2d 1250 (3d Cir. 1974), cert. denied, 423 U.S. 886, 96 S.Ct. 163, 46 L.Ed.2d 118 (1975). That order required the American Telephone and Telegraph Company (AT&T) and the Bell System Operating Companies (Bell) to furnish specialized common carriers,1 including Western Union, with interconnection facilities pursuant to tariffs for foreign exchange (FX) and common control switching arrangement (CCSA)2 services. However, the April 23, 1974 order provided that the Bell Companies could not abrogate Western Union’s existing contractual rights through the adoption of tariffs. Therefore, interconnection facilities would be available to Western Union for FX and CCSA services at contract rate if these facilities were covered by the Bell-Western Union exchange of facilities contracts, and would otherwise be available at tariff rate.
Thereafter, Western Union requested that the Bell Companies furnish interconnection facilities for FX, CCSA, and domestic satellite communication services at the lower contract rates. The Bell Companies refused, claiming that these facilities were only available under tariffs. As a result Western Union filed complaints with the FCC against AT&T and the Bell Companies. It is these complaints that give rise to this petition for review.
I am in complete accord with the majority’s statement that our review of the FCC orders at issue here is governed by section 10(e) of the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A). That section states in pertinent part:
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning and applicability of the terms of an agency action. The reviewing court shall—
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law, .
However, I believe § 706(2)(A) does not create a single standard of review applica*357ble to all situations. The phrase “arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law” is worded in the disjunctive, thereby providing alternative tests for scrutinizing agency action. While the standard of arbitrary, capricious, and abuse of discretion is appropriate in some instances, Congress has required the reviewing court to “decide all relevant questions of law” and thereafter to set aside agency determinations “not in accordance with law.” The APA thus recognizes a basic postulate of our system of appellate jurisprudence — that while deference must be accorded to judgments of lower tribunals based upon factors within their special knowledge or experience, an appellate court is entrusted with plenary, de novo review of all questions of law. Consequently, I believe a determination of the appropriate APA standard of review can only be made after examining the type of agency action presented in this petition.
The FCC characterized the FX-CCSA issue as purely a question of contract construction — whether “the Bell-Western Union exchange of facilities contracts cover the leasing of interconnection facilities to be used in furnishing FX-CCSA services.” 53 F.C.C.2d 1045 (1975). Moreover, in resolving this legal problem the FCC relied solely upon principles of contract law. Paragraph 16 of the Memorandum Opinion and Order of June 24, 1975 states:
16. Foreign exchange (FX) service involves the connection of a pure private line service to a local exchange service, and CCSA service is a switched private line service involving the connection of various private line services through AT&T’s Common Control Switching Arrangements (CCSA). For Western Union to provide FX and CCSA service it is necessary in either case to connect Western Union’s private line services with Bell services. Thus the controlling provision in the contracts is Section 3(d) which státes, in pertinent part, that “Connection of Western Union private line services with Telephone Company services shall be allowed only under the tariffs of the Telephone Company . . . .” The purpose of this provision is to define those situations in which Western Union services utilizing facilities obtained under the contracts, may be connected to Bell services. Since this provision references the applicable telephone company tariffs, the question before us is whether the cross reference to the applicable tariffs is to be made as of the time of contracting (e. g., January 1, 1970) or as of the date the interconnection of services is to be made. The law is well settled that all parts or sections of a contract must be given effect, force and meaning, if possible, and if it can fairly and reasonably be done; and that a construction rendering a provision or term meaningless or superfluous should be avoided,11 If there were no Section 3(d) in the contract, then the terms and conditions governing the connection of Bell services with the services of other common carriers would be found in the then effective applicable Bell System customer tariffs. If the cross reference to the applicable telephone company tariffs is meant to be to the then effective tariff provisions, then Section 3(d) would be superfluous. Therefore, in order to give meaning to Section 3(d), we conclude that the cross reference to applicable telephone company tariffs is to be made as of the time of contracting (e. g., January 1, 1970). Since the telephone company tariffs, at that time, did not allow Western Union to interconnect its private line services with Bell’s services for the purpose of providing its own FX and CCSA services, we conclude that Western Union may not obtain under the contracts, facilities which would be used in the provision of FX and CCSA services. Western Union may, of course, obtain such facilities pursuant to Bell tar*358iffs on file with this Commission, in the same manner and at the same rates as other common carriers offering FX and CCSA type services.12 (Footnote 12 omitted) (Emphasis added.)
53 F.C.C.2d at 1051.
The second issue concerning the availability of interconnection facilities under the contracts for domestic satellite services also presented a purely legal question — whether Western Union in accepting domestic satellite authorization waived any rights under the contracts. Paragraphs 9 and 10 of the Memorandum Opinion and Order of October 16, 1974 capsulize the FCC’s analysis:
9. Western Union also sought authorization from the Commission to provide its own domestic satellite communications. These applications were also granted subject to the condition that the facilities would be operated in accordance with Commission policies adopted in the Second Report and Order, 35 FCC2d 844 (1972), and “all rules and policies subsequently made applicable to domestic satellite communications. . . .” Western Union Telegraph Co., 38 FCC2d 1197, 1199 (1973). Western Union willingly accepted such a conditional grant.
10. Both Bell and Western Union willingly and knowingly accepted their domestic satellite authorizations subject to the explicit condition that tariffs, not private contracts, would be filed setting forth the charges, classifications, regulations and practices applicable to such facilities. AT&T, 42 FCC2d 654, 659 (1973). Bell System Tariff Offerings, 46 FCC2d 413, 437. We held that such tariffs were “the most appropriate means by which to achieve our objective that these facilities [should] be provided to other satellite carriers on ‘reasonable and non-discriminatory conditions.’ ” AT&T, 42 FCC2d 654, 659 (1973).4 Bell and Western Union thus agreed to waive any rights, if any existed, to obtain such facilities by any means other than a tariff. Neither can now allege a right to such facilities under any contracts. “When an applicant accepts a government permit which is subject to certain conditions, he cannot later assert alleged rights which the permit required him to surrender in order to receive it.” Capital Telephone Company v. Federal Communications Commission, 162 U.S.App.D.C. 192, 498 F.2d 734, slip op. 11, No. 72-1715, D.C.Cir., 1974. [498 F.2d 734, 740], (Emphasis added.)
49 F.C.C.2d 321, 323 (1974). On reconsideration of this opinion and order the FCC further expanded upon its waiver theory still relying upon the precise terms of the satellite grant (see p. 361, infra). 53 F.C. C.2d at 1052-55.
The majority regards this issue of waiver as a factual determination (Majority Op. at 354) which is again subject to the “arbitrary, capricious, and abuse of discretion” standard. I cannot agree. The Commission itself has predicated Western Union’s “waiver” solely upon the precise terms of its grant of domestic satellite authorization. Thus, in holding that Western Union “waived” its contract rights, the FCC relied upon no factual determination and did not go outside the exact terms of the grant. Nor did the question of Western Union’s knowing and willing relinquishment of any rights under its contracts involve the FCC’s interpretation of its own prior actions. For “waiver” looks to the knowledge and conduct of Western Union at the time of accepting the grant and not to the FCC’s subsequent interpretation of its own intent in authorizing the grant. Thus, while I acknowledge that deference is accorded to an agency’s interpretation of its own actions or agreements where the issue may involve the meaning of that particular action or agreement, I see no basis for “deference” when the issue for determination necessarily arises from the knowledge, conduct, and intent of third parties such as Western Union here.
Since the waiver here involves neither factual conclusions, nor interpretation requiring agency expertise, I find no basis for applying an “arbitrary or capricious” standard which is traditionally applied in such circumstances. Rather, here “. . . where the only evidence as to waiver is a writing, its construction and interpretation *359and whether or not it constitutes a waiver is a question of law for the court.” Hanover Construction Co. v. Fehr, 392 Pa. 199, 139 A.2d 656, 658 (1958); Griffin v. United States of America, 500 F.2d 1059, 1072 (3d Cir. 1974); Crabb v. Commissioner of Internal Revenue, 121 F.2d 1015 (5th Cir. 1941). Hence the appropriate APA standard to be applied here is the standard of “not in accordance with law,” a standard which requires a plenary, de novo review of the documents in question.
Applying strictly legal principles, the FCC concluded that the Bell-Western Union contracts did not extend to facilities for FX and CCSA services and that Western Union waived any contract rights with respect to domestic satellite services. In reviewing decisions that are grounded upon principles of contract law, their “validity must likewise be judged on that basis. The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.” S.E.C. v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 459, 87 L.Ed. 626 (1943); Texas Gas Corp. v. Shell Oil Co., 363 U.S. 263, 270, 80 S.Ct. 1122, 4 L.Ed.2d 1208 (1960). Hence, I conceive of our function as being one of reviewing the FCC’s application of strictly legal precepts to the Bell-Western Union controversy.
However, the majority evidently does not share in this view. Instead the majority has characterized the matter before us as
. an agency’s resort to general legal precepts in determining a matter within the ambit of its expertise . Certainly this controversy falls with the ambit of the FCC’s expertise. These agreements involve complex, sophisticated, and rapidly-evolving communications technology. . . . Moreover, the agreements implicate questions of national regulatory policy. .
Majority Op. at 355. Although the FCC does exercise special competence with respect to the many decisions entrusted to it under the Federal Communications Act, 47 U.S.C. § 151 et seq., I know of no reason to conclude that this competence extends to the subject of contract construction — an area that has traditionally been considered within the special province of a court’s expertise. Moreover, even if the FCC had special ability in such matters, its decisions here were predicated solely on the basis of contract law and not upon any expertise or policy considerations. Thus, the possibility that this controversy falls within the special competence of the FCC is irrelevant to our consideration since “[t]he grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.” S.E.C. v. Chenery Corp., supra at 87, 63 S.Ct. at 459. Hence, I believe our review is strictly limited to the FCC’s application of contract principles to the issues presented.
Our initial inquiry as to the appropriate APA standard for review of the FCC orders presented here may be further refined as follows: Which of the § 706(2)(A) standards —“arbitrary, capricious, an abuse of discretion” or “not in accordance with law”— must we apply in reviewing agency decisions that are based exclusively upon principles of contract law? This is by no means a question of first impression. In a similar context, this Court, without even discussing its scope of review, considered de novo the Federal Power Commission’s interpretation of a clause in a contract for the sale of natural gas. Shell Oil Co. v. F.P.C., 263 F.2d 223 (3d Cir. 1959). Our plenary review of the contract in Shell Oil Co. resulted in a petition for certiorari which the Supreme Court granted, having been “particularly moved to do so by the contention . that the Court of Appeals exceeded the appropriate scope of judicial review of the Commission’s determination.” Texas Gas Corp. v. Shell Oil Co., 363 U.S. 263, 268, 80 S.Ct. 1122, 1126, 4 L.Ed.2d 1208 (1960).
The Supreme Court analyzed the challenge to this Court’s review of the F.P.C. contract interpretation as follows:
We may assume with the petitioners that the Court of Appeals did not treat the Commission’s order as one which it was required to accept if reasonably supported in the record, and instead con*360sidered that it could examine de novo the question of the proper interpretation to be given the Shell “favored nation” clause. The petitioners’ argument that the Court of Appeals exceeded the allowable limits of judicial review is based upon the premise that the Commission’s interpretation of the “favored nation” clause reflects the application of its expert knowledge and judgment to a highly technical field, so that the Court of Appeals was required to accept the Commission’s interpretation if it had “ ‘warrant in the record’ and a ‘reasonable basis in law,’ ” citing Unemployment Compensation Comm’n v. Aragon, 329 U.S. 143, 153-154 [67 S.Ct. 245, 250, 91 L.Ed. 136], But the record nowhere discloses that the Commission arrived at its interpretation of the “favored nation” clause on the basis of specialized knowledge gained from experience in the regulation of the natural gas business, or upon the basis of any trade practice concerning “favored nation” clauses. On the contrary the opinions of the examiner and the Commission show that both treated the question as one to be determined simply by the application of ordinary rules of contract construction.
363 U.S. at 268-69, 80 S.Ct. at 1126. I can find no difference between the standard of review actually applied by the majority here and the position urged by the petitioners upon the Supreme Court in Texas Gas Corp., supra. Therefore, the Supreme Court’s total rejection of the petitioner’s argument in Texas Gas Corp. and its affirmance of this Court’s standard of de novo review,3 makes, in my view, the majority’s position here untenable.
Confronted with precisely the same question as we are here as to the appropriate standard for review of an agency’s contract interpretation, the Supreme Court stated:
“The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.” Securities & Exchange Comm’n v. Chenery Corp., 318 U.S. 80, 87 [63 S.Ct. 454, 459, 87 L.Ed. 626]. Therefore, since the Commission professed to dispose of the case solely upon its view of the result called for by the application of canons of contract construction employed by the courts, and did not in any wise rely on matters within its special competence, the Court of Appeals was fully justified in making its own independent determination of the correct application of the governing principles. See Federal Communications Comm’n v. RCA Communications, Inc., 346 U.S. 86, 91 [73 S.Ct. 998, 97 L.Ed. 1470], There applies here what the Court said in Chenery: “Since the decision of the Commission was explicitly based upon the applicability of principles [of contract interpretation] announced by courts, its validity must likewise be. judged on that basis.” 318 U.S., at page 87 [63 S.Ct. [454] at page 459].
363 U.S. at 270, 80 S.Ct. at 1126-1127. Thus, where an administrative agency’s construction of a contract was based solely upon legal principles, the Supreme Court held that this Court “was fully justified in making its own independent determination of the correct application of the governing principles.” Id. at 270, 80 S.Ct. at 1127. Furthermore, I suggest that de novo consideration of an agency’s resolution of legal issues is not only “justified” but mandated by the APA. For § 706 requires that “the reviewing court . . . decide all relevant questions of law. . . .” Thus, this Court’s position with respect to the proper standard of review in Shell Oil Company v. F.P.C. as approved by the Supreme Court in Texas Gas Corp. and the very terms of the APA are, in my view, dispositive of the issue presented here.
Reason, in addition to controlling authority, argues against any other conclusion here. The scope of appellate review of agency actions reflects to varying degrees *361the limited competence of an appellate tribunal to pass upon matters that involve specialized knowledge and important policy considerations. In such matters deference must be shown to the administrative agency specially created by Congress to make decisions based upon expertise. However, when, as here, an agency relies upon strictly legal principles to resolve a controversy, an appellate court is at least equally capable, and probably more capable, of applying the legal precepts involved. Moreover, when a district court in an identical situation resolves questions of contract law, this Court engages in de novo consideration of the issues. Thus, I perceive no basis which requires this Court to give special consideration to the application of legal principles by an administrative agency. Indeed, I believe the very opposite is called for.
Nor am I in the least persuaded by the two cases cited by the majority in support of its view that deference should be accorded to the FCC’s interpretation of the contract questions at issue here. In Manufacturers Light and Heat Co. v. F.P.C., 374 F.2d 88 (3d Cir. 1967) (per curiam), this Court granted “substantial weight to the expert judgment of the Commission” in the interpretation of a settlement agreement which had béen confirmed by the F.P.C. in a rate proceeding as to which the F.P.C. was itself a party. The issue of how refunds under the agreement should be properly allocated implicated the special knowledge of the F.P.C., and therefore this Court properly concluded that the F.P.C.’s judgment should “not be lightly regarded.” Id. at 89.
Furthermore, the majority’s reliance upon North Atlantic Westbound Freight Assoc, v. Federal Maritime Comm’n, 130 U.S.App.D.C. 122, 397 F.2d 683 (1968) {per curiam), is also inapposite. There, with respect to judicial review of conference agreements in the maritime freight industry, the Court of Appeals stated:
Certainly where underlying issues of fact or policy are involved an agency’s interpretation of agreements is due judicial respect and deference. . . . Specifically in regard to conference agreements, the Commission is to be given “reasonable leeway in delineating the scope” of these agreements. .
397 F.2d at 685. However, here, there is no suggestion that the FCC’s interpretation of the Bell-Western Union contracts was based upon underlying issues of fact or policy. Nor are these Bell-Western Union contracts analogous to the industry-wide conference agreements at issue in North Atlantic Westbound Freight Assoc. Thus, I can only conclude that the majority’s reliance upon these cases is completely misplaced.
Summarizing my view, since the FCC orders before us were decided strictly upon legal principles, I believe our task under the APA is to determine whether these agency actions are “in accordance with law.” 5 U.S.C. § 706(2)(A). In resolving such legal questions, our scope of review is both plenary and de novo. Since the APA does not suggest but requires that we “decide all relevant questions of law,” I can find no authority for the majority’s assertion that agency determinations of legal questions must be accorded special consideration or deference. Therefore, I believe this Court is required to engage in an independent review of the FCC’s decisions concerning the availability of interconnection facilities for Western Union’s FX, CCSA, and domestic satellite services.
II.
Based upon a de novo review of the legal issues presented, see Part I, supra, I believe the FCC’s interpretation of the Bell-Western Union contracts is unwarranted and tortured. As explainedfby the majority, see Majority Op. at 349-350, the thrust of the FCC’s decision is found in Paragraph 16 of the Memorandum Opinion and Order of June 24, 1975, 53 F.C.C.2d 1045 (1975). See p. 357 supra. There the FCC concluded that Section 3(d) “define[d] those situations in which Western Union services utilizing facilities obtained under the contracts, may be connected to Bell services.” In “order to give meaning to Section 3(d),” the FCC *362construed this provision as allowing for the connection of Western Union services utilizing contract facilities to only those Bell services for which tariffs existed as of the time of contracting, January 1, 1970. Therefore, under the Commission’s analysis, the facilities necessary for Western Union’s FX and CCSA services were not available under the contracts since Bell tariffs in existence on January 1, 1970 did not allow for the connection of Western Union services with Bell FX and CCSA services.
I begin my analysis of these contracts with section 2, which describes the general undertaking of the parties. Under section 2 each party agreed to “lease to the other . circuits and certain related facilities, to be operated by the lessee as part of or in connection with its plant . . .in furnishing communication service to the public." (Emphasis added.) App. 86-87; 110-111. FX and CCSA, two particular types of private line services, clearly constitute a type of “communication service to the public.”
The only explicit limitation placed upon the uses for which facilities subject to the contracts could be put is found in section 3. Under section 3(a),
. circuits leased to the Telegraph Company [Western Union] hereunder may be used only in providing its common carrier communications services for which such circuits are suitable. (Emphasis added.)
App. 87, 112. Here, Western Union sought to lease contract facilities to furnish FX and CCSA services, both of which are “common carrier communications services.” Furthermore, the f^CC implicitly recognized the “suitability” of these facilities for Western Union’s private line services when it concluded:
. from a purely technical or operational viewpoint, it appears that the circuits and related facilities specified in the contracts provide the capability for Western Union to access Bell’s exchange and CCSA switching equipment, thus making it physically possible for Western Union to use contract facilities for its own FX and CCSA services.
53 F.C.C.2d at 1050.
Sections 2 and 3 of the contracts thus indicate the parties’ intentions to permit the leasing of all facilities so long as they were used for common carrier communications services and the facilities were suitable for this purpose. The parties, sophisticated corporations in the communications industry, placed no limitation on the particular type of communications services for which the facilities could be used. Nor do I believe that section 3(d), which the Commission relied on, imposes any such limitations.
Section 3(d) simply provides for the connection of Western Union services with Bell services:
Connection of Western Union private line services with Telephone Company services shall be allowed only under the tariffs of the Telephone Company and consistent with the terms and conditions of such tariffs applicable to the connection of Western Union provided services with services of the Telephone Company. No such connection shall at any time be made in any jurisdiction except as duly authorized by tariffs in force and effect.
App. 89. Whereas the other portions of the contracts provide that facilities will be available at contract rate, this section provides that tariff, rather than contract rate, shall govern the interconnection of services. There is no indication that this section was intended to freeze the types of services for which facilities under the contracts could be used. Moreover, the last sentence of the section, ignored by both the FCC and the majority here, further supports my interpretation. That sentence states: “No such connection shall at any time be made in any jurisdiction except as duly authorized by tariffs in force and effect.” This specification that connection was only to be made at “tariffs in force and effect” constitutes an implicit recognition that the services subject to tariff as well as the amount of the tariff were subject to change. Thus, it would seem that only the tariffs “in force and effect” at any particular time are rele*363vant to the question of whether Western Union and Bell services may be connected under section 3(d).
Nor does such a construction render section 3(d) superfluous as the FCC suggests. The provision represents agreement by the parties that the services offered by each may be connected, and it establishes the rate which governs such connection. Such a provision is both meaningful and significant. Whether, in the absence of such a provision, the services could be connected at the prevailing tariffs is irrelevant to parties’ desire to reduce this matter to writing and thereby avoid a possible area of dispute.
In concluding that the FCC erred in its interpretation of the Bell-Western Union contracts, I see no need to reach or decide Western Union’s arguments concerning the parol evidence rule or the Commission’s strict construction of the contracts. Hence, I would conclude based upon a de novo review that the facilities necessary for Western Union’s FX and CCSA services are available under the Bell-Western Union contracts.
III.
Exercising an independent judgment as to the second issue presented — whether acceptance of domestic satellite authorization constituted a waiver of any rights under the contracts — I cannot agree with the FCC’s decision. As previously stated, pp. 357-358, supra, the FCC concluded that Western Union had waived its rights, if any existed, under the Bell-Western Union contracts in accepting its satellite authorization. In reaching this determination the Commission relied upon the condition in the Western Union satellite authorization that the facilities be operated in accordance with the Second Report and Order, 35 F.C.C.2d 844 (1972) and “all rules and policies subsequently made applicable to domestic satellite communications.” Thereafter the FCC decided that tariffs were the “most appropriate means” to achieve the availability of facilities on non-discriminatory terms. Based upon Western Union’s conditional grant, the Commission concluded that it had “willingly and knowingly accepted [its] domestic satellite authorizations subject to the explicit condition that tariffs, not private contracts” would apply to interconnection facilities. 49 F.C.C.2d at 323.
In denying reconsideration of the October 16, 1974 domestic satellite communication decision, the Commission altered its analysis. Although still relying upon the conditional satellite authorization, the Commission stated:
As to whether such condition placed Western Union on actual notice of the nature of the interconnection requirement we find it difficult to believe that as an established common carrier Western Union would not anticipate, either at the time of our Second Report and Reconsideration Orders or at the time its authorization was granted, that we might reach the determination after appropriate consideration of AT&T’s applications and interconnection proposal that tariffs, rather than private contracts, would be the most appropriate means to assure the realization of our access and interconnection policy objectives which stressed the goal of “reasonable and non-discriminatory” interconnection. In light of the foregoing and Section 203 of the Communications Act, we deem Western Union’s claim of lack of notice to be untenable.
53 F.C.C.2d at 1054. This shift, from concluding that Western Union “willingly and knowingly” accepted its authorization subject to tariffs to concluding that Western Union must have “anticipate[d]” the tariff policy, in and of itself suggests the slippery quality of the FCC’s reasoning. Moreover, when the FCC decisions concerning domestic satellite communications are read in light of Western Union’s satellite authorization, I believe the commission’s finding of a knowing and voluntary waiver cannot be sustained.
The Commission’s Second Report and Order, 35 F.C.C.2d 844 (1972), provides the starting point for analyzing the issue presented here. There the Commission *364stated with respect to domestic satellite communications:
. we will require existing terrestrial carriers seeking domestic satellite authorizations to submit for commission approval, prior to action on their applications, a description of the kinds of interconnection arrangements they will make available to other satellite systems and/or earth station licensees .
35. F.C.C.2d at 856. This policy was designed to accomplish the Commission’s “objective of assuring that all carriers providing retail interstate services have access at non-discriminatory terms and conditions to local loop and interchange facilities as necessary for the purpose of originating and terminating such interstate services to their customers.” Id.
Thereafter, Western Union applied for satellite communication authorization. The FCC granted Western Union the right to construct three satellites subject to certain terms and conditions. As specified in that order the Commission required that “these facilities should be operated in accordance with all Commission policies adopted in Docket No. 16495 [Second Report and Order] and all rules and policies subsequently made applicable to domestic satellite communications.” Western Union Telegraph Co., 38 F.C.C.2d 1197, 1199 (1973).
The Commission’s major policy pronouncement with respect to satellite communications came one year after the Second Report and Order in the grant of satellite authorization to AT&T. In this proceeding the FCC rejected AT&T’s proposal that it furnish interconnection facilities to other satellite service carriers, “on a negotiated contract basis.” American Telephone & Telegraph Co., 42 F.C.C.2d 654 (1973). Instead the Commission determined that “the filing of tariff schedules rather than the negotiation of private contracts is the most appropriate means by which to achieve our objective that these facilities shall be provided to other satellite carriers on ‘reasonable and non-discriminatory conditions.’ ” Id. at 659.
The question presented here is whether Western Union, in accepting its satellite authorization, waived any rights that might exist under the Bell-Western Union contracts and consequently became bound by the tariff rate. In accepting the satellite authorization, Western Union became subject to the Commission’s general policies with respect to satellite communication set forth in the Second Report and Order, 35 F.C.C.2d 844 (1972). In this report the Commission sought to ensure satellite communication carriers “access at non-discriminatory terms and conditions to local loop and interchange facilities . . . .” Id. at 856. However, the Commission did not express any opinion as to whether contract or tariff rates should govern the lease of such facilities.
Nor should Western Union have assumed that only tariff rates would be consistent with non-discriminatory terms. For the leasing of interconnection facilities under contracts as well as tariffs had long been an accepted practice in the communications industry, a practice which this Court subsequently upheld in Bell Telephone Co. of Pennsylvania v. F.C.C., supra.
Thus, nothing in the Second Report announced in 1972 apprised Western Union that its acceptance of satellite authorization was in any way conditioned upon abandonment of its rights under the Bell-Western Union contracts.
Moreover, Western Union’s satellite authorization was granted on the further condition that the facilities “be operated in accordance with ... all rules and policies subsequently made applicable to domestic satellite communications . . . .” (Emphasis added.) The question then presented is whether acceptance of authorization under such terms constituted a “. . voluntary or intentional relinquishment of a known right.” Royal Air Properties, Inc. v. Smith, 333 F.2d 568, 571 (9th Cir. 1964). The grant by its terms refers only to the operations of facilities used in satellite communications ; it makes no reference to existing interconnection rights of Western Union, a significant mat*365ter which the majority has seen fit to ignore. Thus, there is no basis in the language to conclude that Western Union’s acceptance of this grant constituted a “voluntary or intentional” abandonment of any rights that might exist under the Bell-Western Union contracts.
Consequently, I would hold that the Commission erred in concluding that Western Union waived any existing rights to interconnection facilities under the Bell contracts. Such a holding necessarily obviates any consideration on my part of Western Union’s second argument that the conditional grant of satellite authorization constituted an unlawful expansion of the Commission’s regulatory powers.
IV.
Based upon a de novo review of the two legal issues presented, I believe the FCC erred in its interpretation of the Bell-Western Union contracts and the Western Union domestic satellite authorization. Accordingly, I dissent and would grant the petition for review which the majority has denied.

. See Bell Telephone Co. of Pennsylvania v. F.C.C., 503 F.2d at 1254 n.3, where this Court stated:
A “specialized” common carrier is a carrier that does not provide the full range of communications services contemplated by the Communications Act, 47 U.S.C. § 151 et seq. For the purposes of this opinion, the phrase “specialized common carrier” shall refer to carriers who specialize in “private line services.”
“Private line service” provides the large-scale telephone customer with full-time private circuits for the transmission of communications between locations specified by the customer. The service operates to give the customer continuous communication without requiring the carrier to establish a new connection for each call or message.

. See Majority Op. at n.l.

 E. g., Meighan v. Finn, 146 F.2d 594 (2nd Cir. 1944), affirmed 325 U.S. 300, 65 S.Ct. 1147, 89 L.Ed. 1624 (1945); United Artists Corporation v. Strand Productions, 216 F.2d 305 (9th Cir. 1954); Ludwig Honold Manufacturing Company v. Fletcher, 405 F.2d 1123 (3rd Cir. 1969); Gillentine v. McKeand, 426 F.2d 717 (1st Cir. 1970); see also 17A C.J.S. Contracts § 297; Williston, Ch. 22, § 619; Restatement of Contracts § 236.

. Although the Supreme Court affirmed this Court’s standard of review, it reached a different interpretation of the contract clause at issue. Hence the Supreme Court reversed this Court’s decision on the merits.