TR Daily FCC Raises Standing, Timeliness in Defending Facilities Retirements Order
Monday, December 3, 2018

FCC Raises Standing, Timeliness in Defending Facilities Retirements Order

The Greenlining Institute and other public interest advocates seeking to overturn the FCC’s 2017 order on service discontinuation and facilities retirement have not established standing for their court challenge, they failed to identify claims related to the order’s repeal of requirements for notifying retail customers and state governments in a timely fashion, and other challenged aspects of the Commission decision were “procedurally proper,” “reasonable,” and “reasonably explained,” the FCC and the Department of Justice said in a brief filed with the U.S. Court of Appeals for the Ninth Circuit on Friday.

The case (“Greenlining Institute et al. v FCC,” case 17-73283) involves a November 2017 FCC order that, in addition to repealing the requirement for direct notice to retail customers and state governments, also eliminated the “de facto retirement” rule and the “functional test” rule adopted by the Democratic-controlled FCC in 2015. The Greenlining Institute, Public Knowledge, The Utility Reform Network (TURN), and the National Association of State Utility Consumer Advocates have argued that last year’s order was arbitrary and capricious and violated the Administrative Procedure Act (TR Daily, Sept. 27).

In their brief, the FCC and Department of Justice said, “The petitioners fail to carry their burden to demonstrate Article III standing. Their claim of ‘associational’ standing — supported by only a single, unsubstantiated sentence in their brief — is insufficient. They also fail to identify any individual member who could show the required elements of standing as to any one (let alone all) of the petitioners’ claims. Accordingly, as the record now stands, the Court should dismiss the petition for review for lack of jurisdiction, without reaching any of the petitioners’ claims on the merits.” If the petitioners were to “establish standing to bring one or more of their claims, those claims uniformly fail,” the FCC and DoJ said. They said that the FCC’s determination to rely on tariffs and service agreement to determine what constitutes a service was reasonable. “Likewise, the Commission reasonably understood ‘Carterfone’ to support placing the burden of adapting third-party devices, when a carrier’s network technology and standards change, on the makers and users of those devices,” they added.

They continued, “The Commission’s decision was procedurally proper. The agency routinely and appropriately issues declaratory rulings to ‘remov[e] uncertainty,’ 47 C.F.R. § 1.2, such as the confusion that the functional test engendered concerning when discontinuance applications are required. And because the Declaratory Ruling was an adjudication, the Commission was free to adopt it without adhering to the APA’s notice-and-comment requirements, which apply only to rulemakings. See 5 U.S.C. §§ 553, 554. Even if the Declaratory Ruling could be considered a rulemaking, the Commission’s revised interpretation of ‘service’ in Section 214(a) was at most an ‘interpretive rule,’ not a ‘legislative’ one — meaning the APA’s notice-and-comment requirements would still not apply. The Commission’s procedure, moreover, caused the petitioners no harm; they presented all arguments on which they now rely in challenging the Declaratory Ruling in their multiple responses to the FCC’s ‘Request for Comment.’”

They also defended the repeal of the de facto retirement rule as “likewise reasonable and reasonably explained. The Commission rationally deemed the rule unnecessary when there was no practical way to require carriers to give notice of qualifying network breakdowns ahead of time, and when incumbent carriers have incentives to keep customers well informed without need for an FCC-imposed notice requirement.” Regarding the repeal of the requirement for direct notice to retail customers and state governments, the FCC and DoJ said, “Regardless of the petitioners’ standing, this Court lacks jurisdiction to review the Commission’s repeal of the retail customer and state government direct notice rules. A petition for review must ‘specify the order or part thereof to be reviewed.’ Fed. R. App. P. 15(a)(2)(C). The original petition for review here designated the three paragraphs repealing the de facto retirement rule as the sole portion of the Order challenged. And the petitioners’ mediation statement reaffirmed this case’s narrow scope. Only months after the statutory window for review petitions closed did the petitioners raise the Commission’s repeal of the copper retirement direct notice rules. Because the statutory window for challenging FCC orders is jurisdictional, the supplemental petition for review raising the copper retirement direct notice issues should be dismissed.

“In any event, the FCC’s repeal of the direct notice rules was sound. The Commission reasonably determined that the predicted benefits of mandating direct notice to retail customers had not come to pass, and it reasonably explained its decision to repeal that rule as unnecessary. The Commission likewise sensibly explained why the state government direct notice rule is not needed. Among other things, as to both the retail customer and state government direct notice rules, the Commission observed that many states can and have adopted their own, state-level notice rules, which the Order does not preempt,” they continued.

“Finally, neither the petitioners nor their supporting amicus curiae has overcome the strong presumption of regularity that attaches to agency decisionmaking. The Commission solicited comment on the Combined Order, gave the public ample time to respond, and addressed the public input it received. Although two of the three commissioners who voted to adopt the Combined Order dissented from the Commission’s earlier technology transitions orders, that does not show prejudgment. It is not inappropriate for agency decisionmakers to hold existing policy preferences or approach a proceeding with preconceptions regarding the proper application of relevant law; that is a routine feature of the administrative process,” they added. —Lynn Stanton, [email protected]


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