Court Opinion

ID: 4583214
Source: CourtListenerOpinion
Date Created: 2020-11-03 16:00:41.176471+00
Date Added: 2024-06-11T13:42:27.234048
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 14, 2020         Decided November 3, 2020

                        No. 19-1164

              COMPTEL, D/B/A INCOMPAS,
                    PETITIONER

                             v.

   FEDERAL COMMUNICATIONS COMMISSION AND UNITED
               STATES OF AMERICA ,
                  RESPONDENTS

        USTELECOM, THE BROADBAND A SSOCIATION,
                     INTERVENOR

                 Consolidated with 19-1202

         On Petitions for Review of an Order of the
          Federal Communications Commission

       David P. Murray argued the cause for petitioner
COMPTEL. With him on the briefs were Thomas Jones, Mia
Guizzetti Hayes, and Samuel H. Eckland.    Angela M.
Kronenberg entered an appearance.

       Enrique Gallardo argued the cause for petitioner
California Public Utilities Commission. With him on the briefs
                                  2

were Arocles Aguilar and Helen M. Mickiewicz. Kimberly
Lippi entered an appearance.

        Thaila Sundaresan, Counsel, Federal Communications
Commission, argued the cause for respondents. With her on
the brief were Michael F. Murray, Deputy Assistant Attorney
General, U.S. Department of Justice, Robert B. Nicholson and
Robert J. Wiggers, Attorneys, Thomas M. Johnson Jr., General
Counsel, Federal Communications Commission, and Richard
K. Welch, Deputy Associate General Counsel. Ashley S.
Boizelle, Deputy General Counsel, Jacob M. Lewis, Associate
General Counsel, and James M. Carr, Counsel, entered
appearances.

      Katherine C. Cooper argued the cause for intervenor
USTelecom in support of respondents. With her on the brief
was Scott H. Angstreich.

       Before: SRINIVASAN , Chief Judge, TATEL, Circuit
Judge, and SILBERMAN, Senior Circuit Judge.

      Opinion for the Court filed by Senior Circuit Judge
SILBERMAN .

    SILBERMAN , Senior Circuit Judge: Local Exchange
Telephone Carriers (hereinafter “incumbents”) at one time had
monopoly positions. In 1996, Congress, in order to foster
competition, obliged incumbents to sell to Competitive Local
Exchange Carriers (hereinafter “insurgents”) their voice
services for resale to customers.1 The maximum rate the

    1
      The Agency and thereby the parties regularly use the acronym
“ILEC” for Incumbent Local Exchange Carriers, and “CLEC” for
Competitive Local Exchange Carriers, but we prefer the use of the
English language and deplore the practice of using acronyms
unknown to the general public. Thus, we use “incumbents” to refer
to what the parties call “ILECs,” and “insurgents” to refer to what the
parties call “CLECs.”
                                  3

incumbents could charge was their wholesale price. Congress
also obliged the incumbents to lease the use of network
elements (called “unbundling”) at cost—in case the insurgents
didn’t want the whole service. But the FCC determined that
incumbents no longer dominated the telecommunications
market because of the plethora of competitor modes of voice
transmission. Accordingly, the FCC exercised its statutory
authority to forbear from enforcing the wholesale pricing
requirement and one element of the unbundling requirement.
The insurgents contest the propriety of the FCC’s forbearance
of the wholesale price requirements. California’s Public Utility
Commission (CPUC) brings a separate challenge to the
forbearance of the unbundling requirement. We reject both
petitions.

                                  I.

     This case involves two statutory provisions related to
legacy wired telephone services (Plain Old Telephone
Service). 2 As noted, the first requirement is for incumbents to
“unbundle” network elements. It requires incumbents to lease
the use of specified elements of their networks—at cost-based
rates—to entrants into local telephone markets, which we refer
to as insurgents. These competitors could then use the leased
network elements in combination with their own facilities to
provide retail services. Of particular importance in this
litigation is a certain type of network element known as Analog
Loops, which are copper wires that provide connections
between the incumbent’s switches and the customer premises.

    Perhaps more significant is the other provision, avoided-
cost resale. This provision requires incumbents to offer
insurgents, at wholesale rates, any telecommunications service
that they offer to customers. The wholesale rate is the retail
rate for the service minus “avoided costs,” which include such
costs as marketing, billing, and collection. These rates are

   2
       See 47 U.S.C. § 251(c)(3)–(c)(4).
                               4

almost exclusively, if not entirely, used by insurgents to
provide legacy Time-Division Multiplexing (TDM) voice
service to business customers. TDM is a method of
transmitting and receiving multiple independent signals over a
common transmission line, and it is the primary technique used
for traditional voice communications over copper wires.3

    The Telecommunications Act vests the Commission with
the unusual authority and responsibility to forbear from
enforcing provisions of the Act and related regulations when
they are no longer necessary for competition, consumer
welfare, or the public interest. Verizon v. FCC, 770 F.3d 961,
964 (D.C. Cir. 2014). The Commission must forbear from
applying a statutory provision or regulation if the Commission
determines:

       (1) enforcement of such regulation or
       provision is not necessary to ensure that the
       charges, practices, classifications, or
       regulations by, for, or in connection with that
       telecommunications            carrier        or
       telecommunications service are just and
       reasonable and are not unjustly or
       unreasonably discriminatory;

       (2) enforcement of such regulation or
       provision is not necessary for the protection
       of consumers; and

       (3) forbearance from applying such provision
       or regulation is consistent with the public
       interest.

   3
     TDM is also used for some voice communications over other
wires, including for some voice communications over fiber.
                               5

47 U.S.C. § 160(a). The public interest element is clarified by
47 U.S.C. § 160(b) which explains that:

       In making the [public interest determination],
       the Commission shall consider whether
       forbearance from enforcing the provision or
       regulation will promote competitive market
       conditions, including the extent to which
       such forbearance will enhance competition
       among providers of telecommunications
       services.

    The Commission’s forbearance authority is further
informed by § 1302(a) which states:

       The Commission . . . shall encourage the
       deployment on a reasonable and timely basis
       of advanced telecommunications capability
       to all Americans . . . by utilizing, in a manner
       consistent with the public interest,
       convenience, and necessity . . . regulatory
       forbearance . . . or other regulating methods
       that remove barriers to infrastructure
       investment.

    USTelecom, a national trade association representing
incumbents, asked the Commission to forbear from enforcing
the unbundling requirement with respect to Analog Loops and
the avoided-cost resale requirement in relation to TDM over
copper wires. USTelecom’s forbearance request was limited to
legacy telecommunications networks. The FCC had already
forborne from many unbundling requirements for next-
generation telecommunications networks, such as those that
use fiber. See, e.g., 2015 USTelecom Forbearance Order, 31
FCC Rcd 6157; Triennial Review Order, 18 FCC Rcd 16978,
16984 ¶ 3 (2003). Similarly, avoided-cost resale requirements
generally do not apply to next-generation voice services, such
as Voice Over Internet Protocol (VoIP)-based services. As
                               6

opposed to TDM, VoIP refers to a method of transmitting and
receiving voice signals through an internet-based connection,
such as receiving voice services through one’s internet provider
directly or through “over-the-top” applications that use the
internet, such as Google Voice, Skype, or Zoom.

    USTelecom’s main argument in support of its forbearance
petition was that the market for voice services had become
highly competitive. It claimed that next-generation voice
service providers had supplanted the incumbents’ offerings and
were the new market leaders. Thus, the statutory requirements
were no longer necessary to discipline prices and were
allegedly harmful because—by allowing insurgents to operate
on incumbents’ legacy networks at reduced rates—the
regulations effectively subsidized insurgents’ TDM copper
offerings and thus slowed the transition to next-generation
networks.

    Several commenters opposed the forbearance petition
before the agency. They argued that the competition for voice
services was neither as significant nor as geographically
widespread as US Telecom had alleged. Some asserted that
business and government customers continue to demand TDM
copper offerings because of its greater reliability due to its
distinctive line-powered feature—unlike other types of voice
services, phones using TDM copper can operate without an
external power source or battery. In this regard, several state
regulators raised concerns about how forbearance would affect
the 9-1-1 system and questioned whether forbearance would
decrease the availability of TDM copper and thus threaten
public safety in emergency situations. Other opponents
asserted that, because forbearance would restore incumbents to
a monopoly position at least in TDM copper, forbearance
would actually discourage incumbents—if not insurgents—
from investing in next-generation networks.

   The Commission granted the requested forbearance from
enforcement of both the unbundling requirement for Analog
                                  7

Loops and wholesale pricing requirement for TDM over
copper.4

    In its Order—actually a Rule—the FCC found that
incumbents face significant and increasing intermodal
competition for voice services. While they once controlled
virtually all of the market for voice services, the promulgation
of new modes of voice communication—including mobile
phones, voice services through cable and fiber providers, and
other VoIP voice services—have created a competitive market.
Mobile phones are now nearly ubiquitous, though they can be
subject to gaps in wireless coverage and rely on batteries to
remain operable. Cable and fiber providers offer voice services
to homes and businesses through their wired connections
instead of through the traditional copper telephone network.
But unlike TDM copper, cable and fiber voice services
generally cannot be used when the power goes out unless there
is a battery back-up. Other “over-the-top” VoIP services, like
Google Phone, Skype, or Zoom, make use of an existing
internet connection to provide voice services, and their
reliability depends on the reliability of the underlying internet
connection.

    Rather than the near-complete monopoly that incumbents
had as recently as 1996, now incumbents account for just 12%
of all voice connections (both wired and mobile voice plans)
and 37% of all wireline telephone connections (the subset of all
voice connections that are physical rather than wireless—e.g.,
TDM copper, cable, and fiber). Lines sold through the
unbundled copper loops account for less than 0.5% of all voice
connections (less than 2% of wireline connections) and resold
lines account for just over 1% of all voice connections (3% of

    4
      The Order only applies to “price cap” incumbents. Price cap
incumbents are those subject to the Commission’s price regulations,
including (prior to forbearance) both provisions at issue in this case.
There are some “non-price-cap” incumbents that serve mostly rural
markets and are unaffected by the Order.
                                   8

wireline connections). Further, the Commission found that
next-generation voice services like mobile phones and Voice
Over Internet Protocol (VoIP) services are rapidly growing,
whereas traditional copper wire voice services are declining in
both market share and in absolute terms.

    The FCC concluded that, given this intermodal
competition, the unbundling and wholesale pricing
requirements are not necessary to maintain just and reasonable
prices or protect consumers (thus addressing the first two
forbearance requirements). The Commission predicted that, in
order to maintain the volume of subscriptions on their copper
networks, incumbents will continue to offer unbundling and
resale at market rates. Separate statutory provisions prohibit
discriminatory charges and require the resale of voice services,
albeit not at regulated prices. 5 And intermodal competition will
discipline prices for consumers and will prevent unreasonable
rates. Accordingly, the Commission found that, if prices were
to rise for insurgents leasing network elements or reselling
voice services, there is no indication that those new rates would
be unreasonable. Even assuming prices for some consumers
would rise a limited extent, consumers would benefit over the
long-term because forbearance would encourage the transition
to next-generation voice services from which all consumers
will benefit.

    Finally, the Commission concluded that forbearance from
the unbundling and the wholesale pricing requirements would
each benefit the public interest (the third requirement) because,
as noted, they will encourage the transition to next-generation
voice services. The FCC reasoned that insurgents would be
induced to invest in their own new facilities.              More
controversial, however, the Commission also concluded that
incumbents would also be induced to similarly invest because
the statutory provisions at issue “trap” the incumbents into

   5
       See, e.g., 47 U.S.C. §§ 201, 202, 214, 251(b)(1).
                                 9

maintaining outdated equipment. Still, the key to the FCC’s
determination is that the statutory provisions impose
unnecessary costs on the incumbents and discourage insurgents
and other potential competitors from investing in their own
facilities-based networks and next-generation services.

    COMPTEL d/b/a/ INCOMPAS (hereinafter “Incompas”)
petitioned to challenge solely the forbearance of the avoided-
cost resale provision. (Incompas is an industry association that
includes insurgents as some of its members.) Whereas the
California Public Utilities Commission (CPUC), California’s
telecommunications regulator, also filed a petition before us
that challenges forbearance of the unbundling provision. These
two cases raising similar but separate challenges were
consolidated. USTelecom intervened in support of the FCC.

                                II.

    Although Incompas challenges only the FCC’s forbearance
of the so-called avoided-cost resale (wholesale) provision, and
CPUC contests the FCC’s forbearance of the unbundling
requirement, the Commission’s analysis of both provisions
focuses on the same market conditions. And both Petitioners’
arguments before us overlap, except that CPUC presents a
safety argument regarding the 9-1-1 system which we are
obliged to deal with separately. Petitioners contend that
somehow it was inappropriate to analyze both requirements in
similar fashion, but we think there is absolutely no merit to this
contention because the concerns that justify the Commission’s
forbearance of the two provisions are essentially the same.

    Petitioners, particularly Incompas, also present a blizzard
of administrative law arguments against the rule. 6 A number of
these assert that the FCC’s Order is inconsistent with its past
decisions or that the government now raises post hoc

   6
       We wonder what happened to the term “brief.”
                              10

arguments. We deal with most of these issues in the final
section of this opinion.

                              ***

     The nub of both Petitioners’ complaints is rather simply
explained. Incumbents, although transitioning to new modes
of voice communication (like fiber, cable, etc.), still maintain
existing copper loops for which there is still some demand.
That is particularly true for governments and certain businesses
that want line-powered redundancy in addition to the more
advanced modalities. The insurgents, who themselves are
gradually introducing new techniques for voice transmission,
want to continue to be able to purchase incumbents’ services
utilizing copper loops at a subsidized rate. Their business
model is, at present, largely based on providing the
aforementioned business and government customers with
phone service over copper loops. (Some insurgents occupy a
rather interesting market niche; they bundle together the
services of various incumbents which are geographically
limited, and sell that bundled product to government and
business customers.)

    Petitioners would have the voice services provided to
business and government customers analyzed as a separate
market. And although insurgents recognize the demand for
voice services over copper is declining, they contend that
incumbents still have market power for that specific service
because it would be too expensive for insurgents to build their
own copper loops—particularly in light of the declining
demand for copper wires. Therefore it is unreasonable (i.e.,
arbitrary and capricious) for the FCC to decline to enforce the
wholesale requirement. But the Commission explained that
“the record does not support a finding that such a narrow
market segment constitutes its own market” because consumers
and businesses of all stripes are turning to next-generation
services. See Order at 18, n.116. Even if forbearance would
disadvantage the market position that insurgents have obtained
                              11

by virtue of the regulation, the FCC’s mandate is to protect
competition, not competitors. Order at 26 & n.170.

     The Commission looked, reasonably in our opinion, at the
whole national market for voice transmission, and the
incumbents’ share of that market is declining rapidly. Indeed,
from the point of view of the incumbents, alarmingly. Far from
the market behemoths the incumbents were in the late 90s, they
look more like the sick men of the voice transmission market.
Their copper wire advantage is of rapidly declining importance.
It is myopic to look at the incumbents’ possession of copper
loops as giving them meaningful market power in the national
voice market. And therefore what earthly economic reason
would justify requiring them to provide their copper wire
services to competitors at a subsidized price?

    To be sure, there are isolated geographic locations where
the competing modes are less robust. And so, the Petitioners
would have the FCC focus on these locations, insisting that the
Commission is obliged to look at market power in every
locality. We think, however, the FCC was quite reasonable to
focus on the national market when making national policy. See
Earthlink, Inc. v. FCC, 462 F.3d 1, 9 (D.C. Cir. 2006) (holding
that the forbearance provision imposes “no particular mode of
market analysis or level of geographic rigor” and that the FCC
is free to “tailor the forbearance inquiry to the situation at
hand”); 2015 USTelecom Forbearance Order, 31 FCC Rcd
6157, 6164 (rejecting a market by market analysis when
analyzing a request for nationwide forbearance of various
regulations of incumbent carriers).

    Even if the Commission is not required to look at every
geographic area, Petitioners contend that the FCC should have
taken a closer look at the Order’s effect on rural areas.
Petitioners note that broadband is not widely available in rural
areas, and thus VoIP voice services—which rely on
broadband—are unable to discipline prices. The FCC replied
that the Order only applies to “price cap” incumbents (see note
                                 12

4, supra) and because rural areas are largely served by non-
price cap incumbents, they are largely unaffected. Incompas
then cries foul, calling this a post hoc rationale, and thus in
violation of Chenery. SEC v. Chenery Corp., 318 U.S. 80, 87–
88 (1943). We disagree. It is fully consistent with Chenery for
the Commission to point to the express limitation of the scope
of its order. While the Commission’s Order did not explicitly
address the availability of broadband in rural areas, it clearly
stated that it only granted forbearance as to “price cap”
incumbents. Order ¶ 9. And the Order explains that the FCC
considered variations in the availability of the modes of voice
services. Order ¶ 49 (noting both the common as well as the
“almost universal” modes of voice communications). The
evidence before the Commission was that 99.4% of the US
population lives in a census block in which at least two mobile
phone providers have LTE coverage.7 See Order ¶ 48, n.160
(citing 2018 Communications Marketplace Report, 33 FCC
Rcd 12558, 12592, Fig. A–29 (2018)).

    In a rulemaking, an agency is not required to respond to
insignificant comments. See Thompson v. Clark, 741 F.2d 401,
408 (D.C. Cir. 1984) (The APA “has never been interpreted to
require the agency to respond to every comment, or to analyse
every issue or alternative raised by the comments, no matter
how insubstantial.”). Given the Order’s limitation to price-cap
incumbents, the concerns expressed by Petitioners concerning
rural areas were insignificant. That those concerns were more
explicitly responded to in the Agency’s brief is perfectly
appropriate. In sum, we think the Commission gave adequate
consideration to service in rural areas.

    As we noted, the Commission justified its forbearance
policy by stating that it would induce incumbents and
insurgents to develop more advanced networks. Although the

    7
     LTE, or Long-Term Evolution, is a mobile voice and broadband
standard. Mobile devices which can access LTE networks are
generally able to both make and receive calls and access the internet.
                               13

incumbents would still be obliged to provide service to
insurgents, that service would no longer be offered at a
regulated price. One can understand why insurgents would be
induced to invest in advanced facilities if the incumbents raise
prices. It is, after all, basic economics that higher prices tend
to encourage shifting to substitutes, particularly more modern
substitutes.

    The Commission insisted, however, § 251(b)(1) would still
apply. It will be recalled, this provision requires incumbents to
offer voice services for resale and prevents unreasonable and
discriminatory pricing. But, as Petitioners point out, relief
under that section—even if it is available—comes ex post after
long delay, whereas the wholesale pricing requirement—
enforced ex ante by the state—is much more effective.

    So we agree with Petitioners that forbearance from the
wholesale requirement will likely increase insurgents’ prices
for TDM over copper loops, but, combined with the declining
importance of those loops, it is only logical the insurgents will
be induced to invest in more advanced facilities and that will
benefit consumers. See 47 U.S.C. § 1302(a) (requiring the
Commission to use its forbearance authority to encourage the
deployment of advanced services).

    A good deal more dubious, however, is the Commission’s
claim that forbearance would induce the incumbents to update
their facilities. The Agency said the existing requirements
“trapped” the incumbents into maintaining copper loops. We
do not understand what the Agency meant. Petitioner’s counsel
at oral argument shrewdly focused his primary objection to that
Commission observation. Counsel noted that “for the last 20
years, the Commission has recognized that avoided-cost resale
does not . . . have any influence on [incumbents’] decisions to
deploy next-generation networks.” We think Petitioner’s
counsel was absolutely correct to object to this puzzling FCC
statement because nothing stops the incumbents from
abandoning copper loops.          Indeed, the Commission’s
                                14

regulations explicitly authorize the incumbents to do just that.8
This bit of confusing language might have suggested a remand,
if it were not for footnote 52 of the Order, which explains that
“Incumbent[s] can relieve themselves of unbundling
requirements by retiring copper.” In other words, the footnote
clarifies the statement in the body concerning the incumbents
being “trapped.” Under these circumstances, we can regard the
“trapped” observation in the body of the Commission’s
opinion—which is not essential to the Commission’s rule—as
careless wording.

                               ***

    Turning to the separate challenge mounted by CPUC—
regarding forbearance from the unbundling requirement—as
we have already noted, the Commission’s reasoning largely
coincides with its justification for forbearing from enforcing
the wholesale requirement. Therefore, it is unnecessary to
reiterate our approval of the Commission’s analysis. CPUC
does, however, make one separate contention that the
abandonment of the unbundling requirement would jeopardize
9-1-1 calls if there were an emergency when the power was out.
There are times when only copper loops—being self-
powered—could conduct 9-1-1 calls. The Commission’s
response in its brief is that it did not “engage in a detailed
discussion about public safety because nothing in the Order will
end TDM service.” And California’s position assumes that
forbearance from the unbundling requirement would lead to the
decline in the availability of copper networks. We agree that is
by no means obvious. As we have observed, that is up to the
decision of the incumbents, who can, if they wish, discontinue
the use of copper networks. California is nevertheless correct
that the FCC’s Order did not explicitly respond to California’s

    8
     47 C.F.R. § 51.333 (providing procedures for the retirement of
copper facilities).
                                15

contention that the Order could have a negative impact on
public safety.

    This omission presents a troubling problem for the FCC, as
we recognized the FCC’s statutory mandate to consider public
safety in a previous case. See 47 U.S.C. § 151; Mozilla Corp.
v. FCC, 940 F.3d 1, 59 (D.C. Cir. 2019). The Commission may
not subsequently assert that public safety issues were redundant
of other issues that were addressed—that would be an off-limits
post hoc rationalization. Mozilla, 940 F.3d at 62. Were it not
for exceptional circumstances, the Commission’s failure to
address public safety considerations—which is an error—
would require a remand.

    However, California has essentially conceded the issue,
which makes a remand pointless. At oral argument, CPUC
ultimately admitted that the Order would not reduce the
availability of line-powered TDM copper.9 And, as the FCC
pointed out in its brief, California is itself migrating its legacy
9-1-1 system to an IP-based communication system. The
California Office of Emergency Services, the very state agency
responsible for emergency preparedness, explained (apparently
shortly before the Commission’s Order issued) that
incorporating next-generation networks would increase the
safety and reliability of California’s 9-1-1 system. CPUC did
not dispute these statements. We would normally not take into
account this non-record information, particularly when the
information is subsequent to the promulgation of the rule.
However, this is an unusual situation, where we actually have
Petitioner’s admission contrary to—or at least severely
undermining—its position in its Brief. In other words, the

    9
     Paradoxically, the other Petitioner, Incompas, argued the Order
would prolong the availability of TDM copper because, by returning
incumbents to a “monopoly” position with regard to TDM copper
and thereby making them more profitable, incumbents would
maintain their legacy services longer than they would without
forbearance.
                                 16

FCC’s error was not prejudicial. See 5 U.S.C. § 706
(instructing us to take “due account . . . of the rule of prejudicial
error.”); see also Nat’l Ass’n of Home Builders v. Defenders of
Wildlife, 551 U.S. 644, 659 (2007). Given that CPUC
effectively conceded that greater consideration of public safety
would not change the outcome, we think a remand on this issue
unnecessary.

                                ***

    Petitioners assert that various findings and modes of
analysis in the Order are inconsistent with past Orders, that
those inconsistencies are unexplained, and thus that the Order
is arbitrary and capricious.10 See Verizon Tel. Co. v. FCC, 570
F.3d 294, 304 (D.C. Cir. 2009); Mo. Public Service Comm’n v.
FERC, 337 F.3d 1066, 1073–74 (D.C. Cir. 2003). Several of
those alleged inconsistencies involve the Commission drawing
different—even directly contrary—conclusions about whether
various statutory provisions are necessary or sufficient to
protect consumers. For example, in the 2005 Qwest Omaha
Order, the Commission did not find § 251(b)(1) resale to be
adequate to protect consumers and so denied forbearance from
the wholesale requirement in the Omaha metropolitan area. 20
FCC Rcd. 19415, 19460 (2005). It would hardly be surprising,
however, that the Commission took different positions over the

    10
      Petitioners raised a series of contentions that the Government’s
brief presents new post hoc arguments not referred to in the
Commission’s Order. See SEC v. Chenery Corp., 318 U.S. 80, 87–
88 (1943). We have recognized the Chenery doctrine applies in
rulemaking. See Mozilla Corp. v. FCC, 940 F.3d 1, 62 (D.C. Cir.
2019). But, as we noted, agencies engaged in rulemaking are obliged
to respond only to significant comments in their concise general
statement of a rule’s basis and purpose. Therefore, an agency brief
can be somewhat broader than its statement accompanying the rule.
In any event, we have examined Petitioner’s post hoc arguments and
do not think they are of significance, other than the ones addressed
above.
                               17

last few decades because the market for voice services and the
relevant technology have changed dramatically. Indeed,
agencies are expected to reevaluate the wisdom of their policies
in response to changing factual circumstances. See Nat’l Cable
& Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967,
981–82 (2005). Here, the FCC explained how the market had
evolved and concluded—we think reasonably—that intermodal
competition is now sufficient to discipline prices. The
Commission need not do more to meet its burden under the
Administrative Procedure Act.

    Much is made of the FCC’s “analytical framework.”
Specifically, it was argued that in the 2010 Qwest Phoenix
Order, the Commission had used a different kind of market
power analysis focused on individual geographic markets
rather than the national market. 25 FCC Rcd. 8622, 8642–43
(2010). We have previously held that the forbearance statutory
provision imposes “no particular mode of market analysis or
level of geographic rigor” in making a forbearance
determination and that the FCC is free to “tailor the forbearance
inquiry to the situation at hand.” Earthlink, 462 F.3d at 9; see
also USTelecom Ass’n v. FCC, 825 F.3d 674, 728 (D.C. Cir.
2016). That’s just what the Commission did here. The
Commission’s key conclusion that intermodal competition will
discipline prices and protect consumers is synonymous with the
conclusion that there is no market power nationally. Notably,
the Qwest Phoenix Order involved a request for forbearance in
a limited geographic area from an otherwise valid regulation,
but this Order involves a challenge to the necessity of the
regulation in the national market. As such, a different scope
and method of analysis is not only reasonable, but to be
expected. In fact, the Commission has already rejected the
argument that Qwest Phoenix constrains its method of analysis
related to requests for forbearance from regulations in the
national market. 2015 USTelecom Forbearance Order, 31
FCC Rcd at 6164.
                                18

    Similarly, Incompas claimed the Commission applied a
new and unexplained “framework” with respect to forbearance
from avoided-cost resale. Incompas argued that the text,
legislative history, and Commission precedent shows that the
avoided-cost resale provision was not intended to facilitate
facilities-based competition, but was intended to be a separate
pro-competitive measure to ensure just and reasonable rates.
But this is all beside the point. The key provision is the
Commission’s forbearance authority. And our precedent and
Commission precedent is clear: the Commission may forbear
to encourage the deployment of next-generation facilities. See
Earthlink, 462 F.3d at 6; U.S. Telecom Ass'n v. FCC, 359 F.3d
554, 579–80 (D.C. Cir. 2004); 47 U.S.C. § 1302(a) (“The
Commission . . . shall encourage the deployment . . . of
advanced telecommunications capability to all Americans). 11

                               ***

   Accordingly, we deny the petitions for review.

   So ordered.

   11
       In addition to the foregoing arguments, the Petitioners have
made a number of other arguments which we have considered and
reject without written opinion.