Sprint Corp. v. F.C.C.

• Citation: 331 F.3d 952
• Decision Date: 17 June 2003
• Docket Number: No. 02-1129.,02-1129.
• Parties: SPRINT CORPORATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents. SBC Communications, Inc., et al., Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

331 F.3d 952

SPRINT CORPORATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents.

SBC Communications, Inc., et al., Intervenors.

No. 02-1129.

United States Court of Appeals, District of Columbia Circuit.

Argued April 4, 2003.

Decided June 17, 2003.

On Petition for Review of Orders of the Federal Communications Commission.

Michael Deuel Sullivan argued the cause for petitioner Sprint Corporation and intervenor Cingular Wireless. With him on the briefs were L. Charles Keller, Luisa L. Lancetti, L. Andrew Tollin and Carol L. Tacker. Jay C. Keithley entered an appearance.

James M. Carr, Counsel, Federal Communications Commission, argued the cause for respondents. With him on the brief were R. Hewitt Pate, Acting Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Robert J. Wiggers, Attorneys, John A. Rogovin, Acting General Counsel, Federal Communications Commission, John E. Ingle, Deputy Associate General Counsel, and Pamela L. Smith, Counsel. Stewart A. Block, Counsel, entered an appearance.

Helen M. Mickiewicz argued the cause for intervenors People of the State of California and California Public Utilities Commission. With her on the brief was Gary M. Cohen.

Before: SENTELLE, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

This petition for review of three orders of the Federal Communications Commission arises out of the Commission's efforts to regulate the creation of telephone area codes and the allocation of telephone numbers in an equitable manner that will conserve numbering resources in the United States. See Report & Order & Further Notice of Proposed Rulemaking, In re Numbering Res. Optimization, 15 F.C.C.R. 7574, 2000 WL 339808 (2000) ("First Order"); Second Report & Order, Order on Reconsideration in CC Docket No. 96-98 and CC Docket 99-200 & Second Further Notice of Proposed Rulemaking in CC Docket No. 99-200, In re Numbering Res. Optimization, 16 F.C.C.R. 306, 2000 WL 1886294 (2000) ("Second Order"); Third Report & Order & Second Order on Reconsideration in CC Docket No. 96-98 and CC Docket No. 99-200, In re Numbering Res. Optimization, 17 F.C.C.R. 252, 2001 WL 1658101 (2001)("Third Order"); see also Notice of Proposed Rulemaking, In re Numbering Res. Optimization, 14 F.C.C.R. 10,322, 1999 WL 345558 (1999) ("NPRM"). At issue are the Commission's decisions to (1) lift the ban on specialized overlay area codes and consider state applications for specialized overlays on a case-by-case basis; (2) authorize states to implement rationing of telephone numbers in limited circumstances; and (3) delegate some auditing authority to the states.

Sprint Corporation, joined by intervenor Cingular Wireless LLC (together, "Sprint"), challenges the Commission's decision to lift the ban on specialized overlays as contrary to law and arbitrary and capricious in view of the Commission's continuing view that the practice is discriminatory and the lack of relevant changed circumstances justifying the practice. We hold that this challenge is not ripe for judicial review, for Sprint's contentions are intertwined with how the Commission might exercise its discretion in the future. In the meantime, Sprint is free to conduct its business as it sees fit as the Commission's decision to lift the ban does not require Sprint to do or refrain from doing anything. We therefore dismiss that part of the petition as unripe. In addition, Sprint Corporation alone challenges the Commission's decisions on rationing, as contrary to Commission rules, and on auditing, as contrary to preemption of state authority. We hold that these challenges are unpersuasive and deny the remainder of the petition.

I.

The telephone numbering system for North America, the North American Numbering Plan ("NANP"), was established in the 1940s by AT&T and created the familiar ten-digit dialing pattern for all telephone numbers, with the first three digits commonly known as the area code, and the second three digits referred to as the central office code or exchange. Third Order, 17 F.C.C.R. at 254 & n. 1. After years of private arrangements for allocation of numbers (by the local telephone companies and a private corporation called Bellcore, see NPRM, 14 F.C.C.R. at 10,330; see also In re Admin. of the North Am. Numbering Plan, 11 F.C.C.R. 2588, 2593-94, 1995 WL 418759 (1995)), Congress, as part of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996), amended the Communications Act, 47 U.S.C. §§ 151 et seq., to vest exclusive authority in the Commission over all aspects of numbering administration in the United States, with authority to delegate that authority to state commissions or other entities, 47 U.S.C. § 251(e)(1). Coincidently, a "numbering crisis" began to emerge in the United States with the proliferation of fax machines, modems, and wireless telephones, all demanding numbers. See New York v. FCC, 267 F.3d 91, 94 (2d Cir.2001). Simultaneously, with the rise of competition in local telephone services multiple service providers required the allocation of large blocks of telephone numbers in order to be able to serve potential new customers. See NPRM, 14 F.C.C.R. at 10,325. Traditionally, each telephone service provider would be given at least one central office code with approximately 10,000 telephone numbers in each area code to allocate to new customers. Id. at 10,324-25, 10,331. With the new demands, the "exhaustion" of area codes, i.e., the allocation of all available central office codes, rapidly increased. Id. at 10,325, 10,331-32. To provide "area code relief" upon exhaustion of an area code, the Commission identified three alternatives that the states could adopt: (1) split the old area code geographically, with approximately half of the existing phone numbers allocated to a new area code; (2) create a new "overlay" area code that is geographically coextensive with the old area code, with all new phone numbers assigned to the new overlay code; or (3) readjust area code boundaries. Id. at 10,424. Each alternative might result in significant costs for consumers and telephone service providers. Id. at 10,332-34.

With the threat of exhaustion of all available area codes before 2010 and the enormous costs of conversion to an eleven digit system (preliminary estimates placing the cost at between $50 and $150 billion, id. at 10,326 n. 8), the Commission turned its attention to ways to "conserve" numbering resources, id. at 10,326. Beginning in 2000, the Commission issued three orders designed "to slow the rate of number exhaust[ion] ... and to prolong the life of the [NANP]." Id. at 10,324; see First Order, 15 F.C.C.R. at 7578. Among the key conservation actions called for by the Commission was "thousands-block number pooling," in which service providers are allocated numbers in batches of 1,000, rather than 10,000, in order to reduce inefficient allocation of numbers and control requests. Second Order, 16 F.C.C.R. at 322. Another key action was requiring service providers to demonstrate their need before additional numbers are allocated in order to end abuse of "stockpiling" unused numbers. Id. at 314-15. Of the various other actions aimed at conservation, only three are challenged by Sprint. The first challenge involves "specialized overlay" area codes, in which area codes are restricted for the exclusive use of certain types of technologies or services (e.g., wireless telephones). Id. at 359. The Commission had banned specialized overlays in 1995 and decided to reconsider its decision in 1999. Id. at 359-60; NPRM, 14 F.C.C.R. at 10,431. Under the new regime, the Commission could approve on a case-by-case basis, upon consideration of a series of factors, a new overlay area code that would be available (either temporarily or permanently) for certain kinds of telecommunications services or technologies. Third Order, 17 F.C.C.R. at 285-94. The second challenge involves "rationing." The Commission delegated authority to state commissions to ration the distribution of central office codes when the area code without rationing would be exhausted before an area code relief plan could be implemented; rationing can be used only where a state has ordered specific area code relief and established an implementation date, and the industry has been unable to agree on a rationing plan. See In re Petition for Declaratory Ruling & Request for Expedited Action on the July 15, 1997 Order of the Pa. Pub. Util. Comm'n Regarding Area Codes 412, 610, 215, and 717, 13 F.C.C.R. 19,009, 19,025-26, 1998 WL 664423 (1998) ("Pennsylvania Numbering Order"); see also Second Order, 16 F.C.C.R. at 333-34. The third challenge involves the scope of audits under state law pursuant to the Commission's delegation of authority. Second Order, 16 F.C.C.R. at 344-50; Third Order, 17 F.C.C.R. at 294-300.

II.

The Commission contends, as a threshold matter, that Sprint's challenge to its decision to lift the ban on specialized overlays is not ripe for review because the Commission has yet to authorize any overlays and that Sprint lacks standing to challenge it. According to the Commission, in light of the discretionary and case-by-case nature of its decision on specialized overlays, the need for additional facts with respect to any particular specialized overlay that the Commission might approve, and the lack of any hardship to Sprint from the Commission's decision to consider possible specialized overlays in the future, there is no need for the courts to address Sprint's challenge now. Sprint responds that the only issues it raises are legal issues, that the Commission's decision is final and binding, and that it would suffer hardship were judicial review delayed because this may be the only meaningful opportunity for judicial review if area code relief is urgently needed and an overlay is implemented before the court...