Court Opinion

ID: 2747313
Source: CourtListenerOpinion
Date Created: 2014-10-31 15:01:19.781905+00
Date Added: 2024-06-11T10:15:19.231587
License: Public Domain

United States Court of Appeals
       FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 5, 2014               Decided October 31, 2014

                            No. 13-1220

                     VERIZON AND AT&T, INC.,
                           PETITIONERS

                                  v.
           FEDERAL COMMUNICATIONS COMMISSION AND
               UNITED STATES OF AMERICA,
                        RESPONDENTS

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

     Helgi C. Walker argued the cause for petitioners. With her
on the briefs were Gary L. Phillips, Bennett L. Ross, Brett A.
Shumate, Michael E. Glover, and Christopher M. Miller.
Christopher M. Heimann entered an appearance.

     Richard K. Welch, Deputy Associate General Counsel,
Federal Communications Commission, argued the cause for
respondents. With him on the brief were William J. Baer,
Assistant Attorney General, U.S. Department of Justice, Robert
B. Nicholson and Nickolai G. Levin, Attorneys, Jonathan B.
Sallet, General Counsel, Federal Communications Commission,
Jacob M. Lewis, Associate General Counsel, and Laurel R.
Bergold, Counsel.
                                2

    Before: TATEL and BROWN, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.

    Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.

      SILBERMAN, Senior Circuit Judge: Petitioners Verizon and
AT&T appeal the FCC’s denial of their petition to forbear from
applying the requirement that incumbent price cap carriers
maintain a Uniform System of Accounts. The Commission
insists that the statutory preconditions for section 10 forbearance
are not met, nor was its refusal arbitrary and capricious. We
agree that the FCC’s interpretation and application of section 10
are permissible and deny the petition for review.

                                    I.

      Congress has required the FCC to establish rules
prescribing a Uniform System of Accounts for use by telephone
companies since 1935. Earlier rules were designed to facilitate
rate determinations in the traditional monopoly model: expenses
were aggregated and classified not by the particular activities or
services, but rather according to the organization that incurred
them.         P ETER W . HUBER ET AL. , FEDERAL
TELECOMMUNICATIONS LAW § 2.2.2.9. (2d ed. 2014). The FCC
collected company-wide financial and operating data in a world
where a monopolized industry provided only two basic services
– local and long distance. The Commission adopted a new
accounting system in 1986 – Part 32 – to respond to the
introduction of competition and new services. The FCC made
clear that Part 32 obligations were imposed only on incumbent
local exchange carriers (those that operated exclusively within
their local service area prior to the 1996 Act). Petitioners AT&T
and Verizon are incumbent LECs subject to price cap regulation.
                                3

(Price cap regulation governs a broader class of carriers than just
incumbent LECs even though Part 32 applies only to incumbent
LECs). The FCC classifies incumbent LECs as “dominant” on
the basis of market power (encompassing market share and
control of network facilities), which in most markets in the
nineties, “amounted to a distinction between AT&T and
everyone else.” MCI Telecomms. Corp. v. Am. Tel. & Tel. Co.,
512 U.S. 218, 221 (1994).

      This “new” Uniform System of Accounts was designed to
complement the then-existing rate structure governing
incumbent LECs, rate of return regulation. LECs reported their
costs to establish a rate base and the Commission set prices that
allowed LECs to earn a formulated rate of return. This way if
a LEC spent money on, for example, a new operating plant, it
had a right to charge enough to recover those expenditures. Part
32 was integral to this regime because it allowed the FCC to
determine the costs of specific services; the accounting rules are
specifically tailored to the telecommunications industry and
require carriers to maintain 170 cost and revenue accounts
setting forth disaggregate and geographically-specific data. The
Commission relied upon the detailed cost data reflected in Part
32 accounts to set rates on the basis of cost estimates (derived
from past costs).

     Although Part 32 incorporated certain elements of GAAP,
the two accounting systems are considerably different in terms
of both content and purpose. Part 32 is tailored for disclosure to
regulators, whereas GAAP is geared towards disclosure to
investors. GAAP provides for much more flexibility than Part
32 because it is a set of accounting principles, concepts, and
standards (as opposed to detailed cost accounting rules) pursuant
to which a company can determine its own system of accounts,
which will necessarily vary from carrier to carrier.
                                  4

      The data underlying Part 32 was also used by incumbent
LECs to comply with rules requiring that they divide their costs
and revenues in a specified manner. For example, Part 64’s cost
assignment rules require that carriers directly assign or allocate
their investments, expenses, and revenues between regulated and
non-regulated activities. Part 36 then requires carriers to
separate regulated investment, expenses, and revenues between
the interstate and intrastate jurisdictions. Incumbent LECs also
submitted raw Part 32 data in the form of Automated Reporting
Management Information System (MIS) Reports that they were
required to file annually.1

     In the early 1990s, the Commission abandoned rate of
return regulation, recognizing that a too-high rate of return could
prompt perverse incentives and induce inefficiencies. The
Commission adopted price cap regulation in its place. Under the
new regime, the Commission sets a maximum price and the firm
selects rates at or below the cap. Nat’l Rural Telecom Ass’n v.
F.C.C., 988 F.2d 174, 178 (D.C. Cir. 1993).

      The rate-setting framework requires carriers to file tariffs
that establish the rates, terms, and conditions of interstate
services. Interstate access rates are the most commonly-filed
tariff, and the FCC is charged with ensuring these rates are just
and reasonable.2 The tariff filing scheme is “the heart of the
common-carrier section of the Communications Act” and is
symbiotic with price cap regulation: in switching to price cap,
the FCC modified the tariff review process to set a ceiling on the
1
 The parties refer to this with a peculiar acronym, ARMIS, which
sounds like a Defense Department system. We will use the shorter
well-known acronym MIS – Management Information Systems –
understanding that they are automated.
2
 Interstate access rates are for services that provide LECs with access
to local networks at the originating or terminating ends of a long-
distance call.
                                 5

interstate access rates LECs can charge. MCI Telecomms.
Corp., 512 U.S. at 229.

      Interstate access rates are set for different groups of service
categories known as baskets. When a LEC files interstate access
rates that are at or below a basket’s price cap and within
specified pricing bands for service categories in that basket, the
FCC presumes such rates are reasonable and reviews the tariff
pursuant to “streamlined” procedures. LEC Price Cap Order, 5
FCC Rcd 6786, 6788 ¶ 11 (1990). Such rates generally will
become effective without suspension and investigation under
section 204. But rates filed above the cap or price band have a
strong likelihood of suspension, and they will be subjected to a
more searching review. Once the tariff is suspended and set for
investigation, the FCC dispenses with the presumption of
reasonableness and the burden is imposed on the carrier to show
its rates are just and reasonable. In addition, the FCC may
challenge and investigate a carrier’s rates at any time upon its
own initiative or receipt of a complaint, and if it finds that a
tariff is unlawful, the FCC may prescribe a new rate. Finally,
any party may submit a section 208 complaint challenging even
presumptively reasonable price cap rates.

      The shift from rate-of-return to price cap regulation
undoubtedly obviated some of the need to maintain detailed cost
accounts because the Commission no longer sets rates based
primarily on costs. The extent to which Part 32 remains relevant
is the essential issue before us.

     To further the deregulatory aims underlying the 1996
overhaul of the Communications Act, Congress provided the
FCC with the unusual authority to forbear from enforcing
provisions of the Act as well as its own regulations. See 47
U.S.C. § 160. Section 10(a) provides that the Commission shall
forbear from applying any provision or rule “to a
telecommunications carrier or telecommunications service, or
                                6

class [thereof]” if the Commission finds that: (1) enforcement is
not necessary to ensure that charges and practices are just,
reasonable and non-discriminatory, (2) enforcement “is not
necessary for the protection of consumers,” and (3) forbearance
“is consistent with the public interest.” Then, fleshing out the
concept of “public interest,” the Act states in section 10(b) that
in evaluating the public interest “the Commission shall consider
whether forbearance from enforcing the provision or regulation
will promote competitive market conditions” – and if the
Commission determines that such forbearance will promote
competition among providers of telecommunications services
that determination shall be a basis for a Commission finding that
forbearance is in the public interest.

       Section 10(c) provides that any carrier may submit a
petition for forbearance. Such a request “shall be deemed
granted” unless the Commission denies the petition for failure
to meet section 10(a)’s three conditions within one year (subject
to a ninety-day extension) of receiving the request. The three
conditions of § 10(a) are conjunctive and the Commission can
“properly deny a petition for forbearance if it finds that any one
of the three prongs is unsatisfied.” See Cellular Telecomms. &
Internet Ass’n v. F.C.C., 330 F.3d 502, 509 (D.C. Cir. 2003). It
should be apparent, however, that there is a great deal of overlap
in the three factors. Factor number one seems to focus on other
customers and factor two on the broad consumer population.
But it is hard to imagine any action that would enhance
competition satisfying the public interest that actually would not
also satisfy the first two factors. On the other hand, it might be
that a proposed forbearance that would not injure competition
among providers could still somehow be prejudicial to
consumers.

     Petitioners Verizon and AT&T have long argued that, in
light of the existing price cap regime, the Commission’s
accounting rules are unnecessary and have used the vehicle of
                                 7

section 10 to chip away at specific accounting rules. In a trilogy
of 2008 orders, the FCC granted incumbent LECs’ petitions for
forbearance from cost assignment rules and certain MIS
Reports. The Commission’s first Order granting AT&T
forbearance from cost assignment rules (and associated MIS
reporting requirements) was conditioned on, inter alia, requiring
AT&T to retain and provide Part 32 data upon request,
implement a method of preserving the integrity, for both costs
and revenues, of its accounting system, and submit a detailed
compliance plan. In the second Order, the Commission
provided forbearance from MIS service quality and
infrastructure filing requirements to AT&T, Verizon and Qwest,
and extended the same conditional forbearance from cost
assignment rules (previously granted to AT&T) to Verizon and
Qwest. Finally, in the third Order, the Commission granted
forbearance to Qwest, AT&T and Verizon from filing certain
financial-themed MIS Reports on the condition that the carriers
continue to file certain pole attachment data publicly with the
Commission. In sum, the Commission’s grants of forbearance
were conditioned upon the continued application of Part 32 to
Verizon, AT&T, and Qwest in all three Orders, and its decisions
to dispense with filing requirements did not affect the obligation
to maintain the underlying Part 32 data.

      This brings us to the instant petition. USTelecom sought
relief from a myriad of statutory and rule provisions, including
application of the entire Part 32 to all incumbent price cap
carriers.3 USTelecom also made two separate requests for
partial forbearance for all price cap carriers from (1) specific
Part 32 rules containing property record requirements and (2)
cost assignment rules (which had already been granted to
AT&T, Verizon, and Qwest). USTelecom and petitioners

3
USTelecom is petitioners’ trade association and represents incumbent
LECs. Verizon Br. at 9.
                                   8

argued Part 32 no longer serves any current federal need when
applied to incumbent, price cap LECs. And, they claimed, the
burden and expense associated with keeping two sets of
regulatory and financial accounting books actually distorts an
increasingly competitive marketplace for telecommunication
services; the costs of Part 32 compliance are imposed solely on
incumbent LECs. In the weeks preceding the already-extended
deadline when the petition would be deemed granted,
USTelecom filed a number of ex parte submissions, two of
which set forth proposed terms for what they called “voluntary
commitments” or “conditions for” forbearance.4 Although the
parties use the terms “partial” and “conditional”
interchangeably, these are two distinct types of forbearance;
partial forbearance is a request for the FCC to forbear from
applying a subset of a group of regulations, whereas conditional
forbearance is a request for across-the-board forbearance subject
to enumerated conditions.

     The Commission granted partial, conditional, or complete
forbearance from 126 of 141 challenged rules. The FCC did not,
however, grant the global request to forbear from applying Part
32 to incumbent price cap carriers because it found that
USTelecom had failed to carry its burden of proof on each of the
three prongs of section 10. USTelecom Order, 28 FCC Rcd
7627, 7630 ¶ 2 (2013). Verizon and AT&T petition for review
of the USTelecom Order.

4
 The April 18 ex parte letter offered that incumbent price cap carriers
would (1) continue filing pole attachment information and develop
methods to replicate necessary pole attachment data for filing
purposes, (2) commit to track transactions subject to section 272(e)(3),
and the May 3 ex parte letter added that the carriers would (3) limit
increases to the cost input to the FCC pole attachment rate formulae
for three years, and (4) retain the ability to provide financial data
depicting existing Part 32 account structures for five years.
                                9

                                    II.

     Petitioners insist that the switch to price cap regulation has
rendered Part 32 useless, and section 10 therefore requires the
FCC to forebear from applying it to incumbent price cap
carriers. Even if section 10 does not require complete
forbearance according to petitioners, the FCC’s decision not to
grant partial forbearance is arbitrary and capricious. Petitioners
further argue the Commission did not explain its selective
enforcement of Part 32 accounting rules (which only apply to
incumbent price cap carriers) and ignored the costs of
complying with Part 32.

      The Commission of course argues that it reasonably denied
USTelecom’s petition. The FCC maintains that it is not required,
under its own rules, to address petitioners’ ex parte conditional
or partial forbearance requests that were not contained in the
original forbearance petition as to the general requirement of
Part 32 cost data. And the Commission asserts a current, federal
need to regulate (1) pole attachment rates which are based on
costs, as well as (2) incumbent price cap carriers’ interstate
access rates, which the FCC has a statutory duty to ensure are
just, reasonable, and nondiscriminatory. We are told that Part
32 is needed to comply with section 254(k)’s prohibition on
cross subsidization and section 273(e)(3)’s requirement that
price cap LECs properly record their imputation costs. The
Commission explains that GAAP does not provide the requisite
cost data because it is merely a non-industry specific set of
principles that does not meet the Commission’s need for detailed
cost information that is uniform across carriers. The FCC
contends, moreover, that petitioners did not show that their
(unsubstantiated) costs of compliance outweighed the benefits
provided by Part 32’s retention. Finally, the Commission
maintains that Part 32 is necessary only for incumbent LECs so
                                 10

they do not use their control over wholesale network facilities to
impede competition or charge unreasonable rates.5

                                      A.

      At oral argument, petitioners asserted that when the
Commission determines whether to grant forbearance under
section 10 it is engaged, under the APA, in an adjudication
rather than a rulemaking. We take it the petitioners, by so
arguing, were attempting to avoid our cases holding that review
of an agency’s denial of a rulemaking “is evaluated with a
deference so broad as to make the process akin to non-
reviewability.” Cellnet Commc’n, Inc. v. F.C.C., 965 F.2d 1106,
1111 (D.C. Cir. 1992). Although parties have taken different
positions before the Commission as to the proper designation of
section 10 procedures, the FCC, while suggesting they appear
like rulemaking, has avoided conclusively deciding the issue.
Procedural Forbearance Order, 24 FCC Rcd 9543, 9554 ¶ 2
(2009).
      Early on, in passing, we described a pre-section 10
forbearance petition as a request for a rulemaking. Am. Tel. &
Tel. v. F.C.C., 978 F.2d 727, 730-31 (D.C. Cir. 1992). Our
characterization was adopted and expanded to an entire category
of FCC forbearance orders by the Supreme Court. MCI
Telecomms.Corp., 512 U.S. at 220-21 (describing the FCC’s
earlier forbearance orders as “a series of rules”). Actually, it
should be obvious that a section 10 forbearance petition is a
request for a rulemaking, since it seeks a modification of a rule

5
 Although petitioners claim it is unfair to impose Part 32 data
requirements only on incumbent carriers, suggesting that new entrants
such as wireless carriers have altered the marketplace (paradoxically
those new entrants are primarily petitioners’ own affiliates), they do
not squarely challenge the Commission’s prior determination that
incumbents have market power. Of course, that would be possible in
the upcoming rulemaking.
                                 11

which has only future effect. Bowen v. Georgetown Univ.
Hosp., 488 U.S. 204, 216 (1988) (Scalia, J. concurring).
Nevertheless, since Congress has provided specific criteria that
must govern the Commission’s consideration of a section 10
petition the FCC’s discretion is somewhat more limited than
would be true in the more typical rulemaking request.
      More contentious is the question as to which party has the
burden of proof. Verizon and AT&T claim that since the statute
reads the FCC “shall” grant forbearance if the conditions are
met, the burden is on the Commission.6 Faced with the same
issue, the Tenth Circuit concluded that since the statute was
silent on the question, under Chevron, the Commission’s
interpretation – that the burden is on the petitioner – should
prevail. Qwest Corp. v. F.C.C., 689 F.3d 1214, 1226 (10th Cir.
2012). We agree.7
                                      B.

    Petitioners substantive challenge, essentially, is that Part 32
accounting rules, which are costly to maintain, are no longer
“necessary” within the meaning of section 10(a)(1) and (2) and
6
  The FCC insists that the legal question of burden of proof is not
properly before us because no party raised the argument at the agency
level. See 47 U.S.C. § 405(a) (exhaustion requirement). However,
petitioners are not required to raise “futile” arguments before the
agency, and the FCC has decisively allocated the burden of proof to
the party seeking forbearance in its Forbearance Procedures Order
and applied that rule in the USTelecom Order. See Omnipoint Corp.
v. F.C.C., 78 F.3d 620, 635 (D.C. Cir. 1996).
7
 Section 7(c) of the APA places the burden of proof on the proponent
of a rule or order, but that section governs formal rulemaking (or
adjudication). 5 U.S.C. § 556(d). We do not normally think of burden
of proof as applying to an informal rulemaking, yet the logic of
section 7(c) seems to apply equally to this unique type of informal
rulemaking.
                                    12

are therefore no longer in the public interest (3). We have held
that the Commission’s definition of necessary – that there is a
strong connection between the rule in question and the agency’s
purpose – is one to which we defer. Cellular Telecomms., 330
F.3d at 512. But the Commission itself has stated that it must
have a “current need” to maintain a statutory requirement or a
challenged regulation. AT&T Cost Assignment Forbearance
Order, 23 FCC Rcd 7302, 7313-14 ¶ 20 (2008). Petitioners
insist that there is no longer such a current need because the
Commission’s introduction of price cap access rates replaced the
old cost of service methodology.

      Putting aside for a moment the question of whether the
price cap regimen has generally made unnecessary Part 32 data,
petitioners concede that the rates for pole attachments (any
attachment by a cable television system or telecommunications
service provider to a pole, duct, conduit or right-of-way owned
or controlled by a utility or LEC which is required to grant such
access) are still based on costs; there is no price cap for pole
attachment rates.8 Initial rates are established through private
negotiations between a pole attacher and the carrier. Although
neither the statute nor the FCC’s implementing rules explicitly
require submission of Part 32 data, negotiating parties rely on
cost data contained in Part 32 to set rates, and in the event there
is a dispute, to form the basis of allegations in a complaint. It
follows, in adjudicating disputed pole attachment rates, the FCC
relies on Part 32 cost data to determine whether the rate is
reasonable – if the rate reflects actual costs, and if not, to set a
lawful rate. There are currently eight section 224 complaints
pending before the FCC.9 Apart from the adjudicatory process,
8
    See 47 U.S.C. § 224(a)(4), (d)(1), (f)(1); 47 C.F.R. § 1.1404.
9
  Petitioners legitimately pointed out in their briefing that there was
only one pending section 224 complaint because, prior to oral
argument, the Commission had not updated its website. Enforcement
Bureau - Market Disputes Resolution Division Pending Formal
                                  13

the Commission uses (and has recently used) data derived from
Part 32 to modify the formula that parties use to calculate pole
attachment rates. See USTelecom Order, 28 FCC Rcd at 7659
¶ 64.

      Petitioners insist that Part 32 is unnecessary because the
FCC has other informational sources available that allow it to
comply with its statutory duties to ensure that pole attachment
rates are just and reasonable – primarily GAAP.10

      But petitioners concede that certain expense categories
under Part 32 do not have a “precise corollary under GAAP” and
there are “significant” differences in the two treatments of
certain pole attachment expenses. The FCC asserts that as a
result of this disjunction, GAAP accounting would actually
increase the rate price cap carriers charge for pole attachments.
USTelecom Order, 28 FCC Rcd at 7659-60 ¶ 65. Although
petitioners claim that pole attachment rates based on GAAP-
derived data could decline under appropriate circumstances, they
do not dispute that they also could increase. Nor does the sparse
record before us contain evidence as to how (or in what
direction) transitioning to GAAP would result in rate distortions.
In any event, petitioners admit, relying on GAAP would require
carriers to develop new methods to replicate the pole attachment
cost data. So, we think petitioners’ argument that the FCC must
rely on its price cap regimen for the setting of pole attachment
rates is rather weak and easily rejected.

     Perhaps recognizing the weakness of their claim regarding

Complaints, http://www.FCC.GOV/encyclopedia/eb-pending-formal-an
d-pole-action-complaints (last updated Sep. 15, 2014).
10
  Petitioners do not fully develop how the pole attachment cost data it
provides to the Commission (as a condition of the FCC’s earlier
forbearance from filing MIS Report 43-01) varies from Part 32 data.
                                 14

pole attachment rates, petitioners submitted an ex parte letter
suggesting, inter alia, a partial forbearance – Part 32 data would
be required only for pole attachment rates. The Commission,
however, declined to consider a proposal submitted so late
because it had insufficient time to evaluate it. We have
previously said that the FCC is not obliged to consider late-filed
proposals. Feature Group IP West, LLC v. F.C.C., 424 Fed.
App’x. 7, 10 (D.C. Cir. 2011).11 And although the Commission
has, on occasion, sua sponte ordered partial forbearance, AT&T
Cost Assignment Forbearance Order, 23 FCC Rcd at 7318 ¶ 28;
USTelecom Order, 28 FCC Rcd at 7360 ¶ 2, there is surely no
obligation for the Commission to do so.

                                      C.

      We turn to the more important question of whether Part 32
accounting data is still needed to ensure that access rates of
incumbent LECs are “just and reasonable” within the meaning
of section 10(a)(1). The Commission claims it needs that data
both to evaluate existing price cap access rates, to determine
whether they are adequate, but also to deal with complaints that
a particular rate is discriminatory even if under the price cap
rate. Petitioners assert that the Commission itself has said that
it did not anticipate altering those rates, AT&T Cost Assignment
Forbearance Order, 23 FCC Rcd at 7313 ¶ 19, and that actually
there have been no complaints and subsequent requests for Part
32 data since the price cap regimen was instituted. As the
Commission noted however, there was in fact one recent
complaint which was not adjudicated only because the tariff was
withdrawn.

11
   Parties may cite unpublished opinions “as precedent.” See D.C. CIR
R. 32.1(b)(1); but see D.C. CIR. R. 36(e)(2) (“[P]anel’s decision to
issue an unpublished disposition means that the panel sees no
precedential value in that disposition.”). We cite Feature Group for
its persuasive authority, and adopt its dicta as a holding.
                                15

      Still, petitioners argue that if the Commission were to
forbear – excuse petitioners from maintaining Part 32 data – and
a complaint was filed a carrier could either submit GAAP data
to substantiate the reasonableness of the rates or could even
recreate Part 32 data. We think the Commission’s response is
reasonable. As we noted earlier, GAAP is designed for investors
not regulators and to recreate Part 32 data to meet a complaint
would take too long. Although the Commission admits that it
has not sought Part 32 data from an incumbent carrier for the
purposes of investigating a tariff since the price cap regimen was
instituted, it points out that the very existence of the data
constitutes a deterrent to the institution of discriminatory rates.

      To be sure the current need for Part 32 data – outside pole
attachment rates – appears marginal. If the Commission were
insisting that the incumbent carriers maintain Part 32 data
merely as a competitive handicap, that would surely be
illegitimate. But we have no reason to doubt the FCC’s good
faith. Therefore, the Commission is entitled to deference as to its
purpose.

      We have consistently deferred to the Commission’s
forbearance decisions, Cellular Telecomms., 330 F.3d at 510
(“[A] measure may be ‘necessary’ even though acceptable
alternatives have not been exhausted.”); Earthlink, Inc. v.
F.C.C., 462 F.3d 1, 8 (D.C. Cir. 2006) (FCC’s forbearance
analysis may vary under the circumstances and can be made
“with an eye to the future”); In re Core Commc’ns, Inc., 455
F.3d 267, 282 (D.C. Cir. 2006) (“[A]gency’s predictive
judgments about areas that are within the agency’s field of
discretion and expertise are entitled to particularly deferential
review.”); Feature Grp. IP West, 424 F. App’x 7; M2Z
Networks, Inc. v. F.C.C., 558 F.3d 554 (D.C. Cir. 2009); Qwest
Corp. v. F.C.C., 482 F.3d 471 (D.C. Cir. 2007); MCI
WorldCom, Inc. v. F.C.C., 209 F.3d 760 (D.C. Cir. 2000),
except in cases where the Commission deviated without
                                16

explanation from its past decisions, Verizon Tel. Cos. v. F.C.C.,
570 F.3d 294 (D.C. Cir. 2009); AT&T Inc. v. F.C.C., 452 F.3d
830 (2006); AT&T Corp. v. F.C.C., 236 F.3d 729 (D.C. Cir.
2001), or did not discuss section 10's criteria at all, Verizon Tel.
Cos. v. F.C.C., 374 F.3d 1229 (D.C. Cir. 2004). Since we think
that the FCC reasonably concluded that it continued to need Part
32 data to ensure that access rates were not discriminatory – we
defer once more – therefore, it is unnecessary for us to consider
factors two and three of subsection 10(a).

                                  ***

     We are also told that the Commission plans to consider the
continuing need for Part 32 data in a pending rulemaking. We
have held that the Commission cannot defend against the
forbearance petition by pointing to an upcoming rulemaking
(such a scenario is not implicated here). AT&T Corp., 236 F.3d
at 738. On the other hand, that does not mean that
considerations that were relevant to the forbearance petition
would not have continuing relevance in the ordinary rulemaking.
It may well be that petitioners’ contention that Part 32 data is no
longer justified by the expense will prove more compelling.12

     The petition for review is denied.
                                                       So ordered.

12
  Cost data presented by petitioners was sparse. See Petition of
USTelecom for Forbearance, WC Docket No. 12-61 at 40 (Feb. 16,
2012) (USTelecom estimating “millions of dollars” spent on
maintaining two separate sets of books); Ex Parte Letter from
USTelecom to FCC, WC Docket No. 12-61 at 13 (Apr. 18, 2013)
(AT&T noting that it is “difficult to quantify all the costs of
compliance” and estimating $18 to $24 million in annual costs); Oral
Arg. (26:15-27:00) (AT&T spends almost $24 million a year simply
to modify accounting programs to match up with Part 32). The record
lacks any information about petitioner Verizon’s cost of compliance.