Alascom, Inc. v. F.C.C.

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Citation727 F.2d 1212
Docket Number81-1556 and 82-1871,82-2001,Nos. 82-1907,s. 82-1907
PartiesALASCOM, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, ISA Communications Services, Inc., Intervenor. PEOPLE OF the STATE OF CALIFORNIA and the Public Utilities Commission of the State of California, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, ISA Communications Services, Inc., Intervenor. NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Southern Pacific Communications Co., ISA Communications Services, Inc., GTE Telenet Communications Corporation, Satellite Business Systems, U.S. Telephone and Telegraph Corporation, Tymnet Inc., MCI Telecommunications Corporation, Intervenors. NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, ISA Communications Services, Inc., Intervenor.
Decision Date17 February 1984

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

Peter G. Fairchild, Sacramento, Cal., with whom J. Calvin Simpson, San Francisco, Cal., was on brief, for People of State of Cal. and the Public Utilities Com'n of State of Cal., petitioners in No. 82-2001.

Alan Y. Naftalin, Washington, D.C., with whom Margot Smiley Humphrey and Gregory C. Staple, Washington, D.C., were on brief, for Alascom, Inc., petitioner in 82-1907.

Paul Rodgers, Charles D. Gray and Deborah A. Dupont, Washington, D.C., were on brief for National Ass'n of Regulatory Utility Com'rs, petitioner in 81-1556 and 82-1871.

John E. Ingle, Deputy Associate Gen. Counsel, F.C.C., Washington, D.C., with whom Bruce Fein, Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, and Lisa B. Margolis, Counsel, F.C.C., Andrea Limmer and Barry Grossman, Attys., Dept. of Justice, Washington, D.C., were on brief, for respondents. Stephen A. Sharp, Counsel, F.C.C., Marion L. Jetton, John J. Powers, III, and Stephen F. Ross, Attys., Dept. of Justice, Washington, D.C., also entered appearances for respondents.

Richard M. Singer, Washington, D.C., F. Thomas Tuttle, Kevin H. Cassidy, J. Manning

Lee, McLean, Va., and Jeffrey H. Matsuura were on brief for intervenor, Satellite Business Systems. Harold David Cohen and Jack N. Goodman, Washington, D.C., also entered appearances for intervenor.

Stephen R. Bell, Paul J. Sinderbrand, Philip M. Walker and Donald Ward, Washington, D.C., were on joint brief for intervenors, Tymnet, Inc. and GTE Telenet Communications Corp.

David D. Kradell, Hayward D. Fisk, Carlisle, Pa., R. Michael Senkowski and John W. Hunter, Washington, D.C., entered appearances for intervenor, ISA Communications Services, Inc.

Daniel A. Huber, Washington, D.C., entered an appearance for intervenor, Southern Pacific Communications Co.

Peter M. Andersen, New York City, entered an appearance for intervenor, U.S. Tel. and Tel. Corp.

Kenneth A. Cox, Washington, D.C., Philip S. Nyborg, Arlington, Va., Ruth S. Baker-Battist, William J. Byrnes, John M. Pelkey, and Michael H. Bader, Washington, D.C., entered appearances for intervenor, MCI Telecommunications Corp.

Before TAMM and GINSBURG, Circuit Judges, and BAZELON, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge BAZELON.

BAZELON, Senior Circuit Judge.

This case involves a decision of the Federal Communications Commission (FCC) to reallocate radio spectrum for use in connection with a new communications common carrier service, Digital Electronic Message Service (DEMS). 1 DEMS is a nationwide system for the "high-speed, end-to-end, two-way transmission of digitally encoded information," 2 and was designed primarily to meet the need of business and government organizations for electronic document distribution, computer data transfer, and teleconferencing services between widely dispersed offices located in major U.S. cities. 3 DEMS systems will consist of both an intercity transmission component and a local distribution component. Satellites and terrestrial microwave facilities, both of which have been available for some time, will be used to broadcast intercity transmissions. The local distribution component, known as the Digital Termination System (DTS), was the subject of the rulemaking presented to this court for review.

As originally proposed by the Xerox Corporation (Xerox), 4 the DTS is comprised of user stations, "local nodes," and "city nodes," which carry information in both directions between a subscriber's premises and an intercity satellite earth station or microwave network. The user station is a microwave radio station, or "transceiver," with an antenna located on the customer's roof. The user station sends or receives information to or from another microwave station, the "local node," which serves a number of users. Messages are then relayed via microwave between the local node and yet a third microwave station, the "city node." The city node acts as a central switching point for intracity communications among nodes, as well as for interconnections with satellites and microwave networks for intercity communications.

After considering the comments filed by twenty-nine parties and the reply comments of eleven parties, the FCC concluded that a reallocation of spectrum for DTS advanced the public interest. The Commission found unanimously that "[t]he services to be provided over DTS offer the potential for satisfying digital communications needs that are presently unmet as well as providing a competitive alternative to monopoly carriers providing existing local distribution services." 5 Accordingly, the Commission reallocated to use for DTS and internodal links 130 MHz in the 10.6 GHz band, a lightly used spectrum previously dedicated to privately operated mobile radio services, 6 and adopted limited technical specifications and regulations governing the construction and operation of DTS. 7

Although none of the parties before this court contests the FCC's decision to allocate spectrum for use by DTS, several other aspects of the DTS Order have been challenged as unlawful. First, petitioners National Association of Regulatory Utility Commissioners (NARUC) 8 and the State of California and the Public Utilities Commission of the State of California (California) contend that the Order's expression of intent to preempt state regulation of DTS and DEMS that is inconsistent with federal policy and regulations exceeded the scope of the FCC's statutory jurisdiction and violated the Communications Act of 1934. 9 Second, NARUC and Alascom, Inc. (Alascom) maintain that the Order was arbitrary and capricious in that it failed to address the impact which "by-pass" of the existing telephone network by DEMS carriers would have upon revenues now used to support rural telephone service. Finally, Alascom argues that the Order arbitrarily and capriciously failed to exclude Alaska from the DEMS proceedings. The FCC and intervenors 10 contend both that the issues presented by petitioners are not ripe for judicial review and that the decisions announced in the Order were a reasonable exercise of the Commission's discretion. Because we agree that none of the issues raised by petitioners represents a concrete controversy now ripe for consideration by this court, we dismiss the petitions without reaching their merits.

I. THE RIPENESS STANDARD

The purpose of the ripeness doctrine is "to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." 11 Ripeness is determined by evaluating "both the fitness of the issue for judicial decision and the hardship to the parties of withholding court consideration." 12

If no substantial hardship to the parties will result from deferral, a court generally will review an order only when it can be tested in a concrete factual setting. Judicial appraisal of a question stands "on a much surer footing in the context of a specific application ... than could be the case in the framework of the generalized challenge." 13 If, however, "the issue tendered is a purely legal one," 14 in which no further facts need be developed to facilitate a proper judicial decision, a final agency action 15 may be fit for judicial review even though it has never been applied or enforced by the agency in a concrete setting.

A case may lack ripeness, however, even when it involves a final agency action presenting a purely legal question. 16 The second prong of the ripeness test requires that the contested action impose an impact on the parties "sufficiently direct and immediate as to render the issue appropriate for judicial review at this stage." 17 In Abbott Laboratories v. Gardner, 18 the Supreme Court found such an impact where an agency action imposed on the parties a serious dilemma: " 'Either they must comply with every time requirement and incur the costs of changing over their promotional material and labeling or they must follow their present course and risk prosecution.' " 19 The mere potential for future injury, however, is insufficient to render an issue ripe for review. For example, in Toilet Goods Association v. Gardner, 20 the Court found unfit for review a challenge to a regulation authorizing an agency to suspend the certification of any person refusing to permit agency inspections. Although the case involved final agency action and presented the purely legal question of the statutory authority of the Food and Drug Commission, 21 the Court declined review of the regulation because no specific...

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