American Tel. & Tel. Co. v. F.C.C.
| Decision Date | 10 November 1987 |
| Docket Number | 85-1386,Nos. 84-1148,s. 84-1148 |
| Citation | 832 F.2d 1285 |
| Parties | AMERICAN TELEPHONE & TELEGRAPH COMPANY, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, GTE Corporation, International Business Machines Corporation, North American Telecommunications Association, Western Union Telegraph Company, United States Telephone Association, MCI Telecommunications Corporation, Bell Operating Companies, Ameritech Operating Companies, et al., National Association of Regulatory Utility Commissioners, Centel Corporation, ROLM Corporation, Roseville Telephone Company, et al., United States Transmission Systems, Inc., Mountain States Telephone and Telegraph Company, et al., United Telephone System, Inc., Teltec Saving Communications Co., et al., American Broadcasting Companies, Inc., Citizens of the State of Florida, Ad Hoc Telecommunication Users Committee, Satellite Business Systems, Department of Public Utility Control of the State of Connecticut, Dow Jones & Company, Inc., Public Service Commission of West Virginia, Aeronautical Radio, Inc., Intervenors. AMERICAN TELEPHONE & TELEGRAPH COMPANY, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, United States Transmission Systems, Inc., GTE Corporation, Ameritech Operating Companies, MCI Telecommunications Corporation, Mountain States Telephone and Telegraph Company, et al., BellSouth Corporation, Bell Operating Companies, Mobile Marine Radio, Inc., Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Michael Boudin, with whom David H. Remes, Christopher T. Curtis, Washington, D.C., J. Richard Devlin, Bedminster, N.J., and Mark C. Rosenblum, Basking Ridge, N.J., were on brief, for petitioner. Howard J. Trienens, Chicago, Ill., Alfred A. Green, New York City, and Judith A. Maynes, New Haven, Conn., also entered appearances for petitioner.
John E. Ingle, Counsel, F.C.C., with whom Jack D. Smith, Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, Linda L. Oliver, Counsel, F.C.C., Catherine G. O'Sullivan and Andrea Limmer, Attys., Dept. of Justice, Washington, D.C., were on brief, for respondents. Bruce E. Fein, Counsel, F.C.C., Barry Grossman, Nancy C. Garrison and Robert B. Nicholson, Atty., Dept. of Justice, Washington, D.C., also entered appearances for respondents.
William J. Byrnes, with whom Michael H. Bader, Kenneth A. Cox, James E. Dunstan and John M. Scorce, Washington, D.C., were on brief, for intervenor MCI Telecommunications Corp., in Nos. 84-1148 and 85-1386. Theodore D. Kramer, Thomas R. Gibbon and Robert Michelson, Washington, D.C., also entered appearances for MCI Telecommunications Corp., in Nos. 84-1148 and 85-1386.
James R. Hobson, Michael B. Fingerhut and Mitchell F. Brecher, Washington, D.C., entered appearances for intervenor GTE Corp., in Nos. 84-1148 and 85-1386.
J. Roger Wollenberg, William T. Lake and Roger M. Witten, Washington, D.C., entered appearances for intervenor IBM Corp., in No. 84-1148.
Albert H. Kramer and Denise Bonn, Washington, D.C., entered appearances for intervenor North American Telecommunications Ass'n, in No. 84-1148.
Arthur H. Simms and Lawrence P. Keller, Washington, D.C., entered appearances for intervenor Western Union Telegraph Co., in No. 84-1148.
Thomas J. O'Reilly, Washington, D.C., entered an appearance for intervenor U.S. Telephone Ass'n, in No. 84-1148.
Thomas Pace, Princeton, N.J., entered an appearance for intervenor Dow Jones & Co., Inc., in No. 84-1148.
Raymond F. Scully, Washington, D.C., entered an appearance for intervenor Bell Operating Companies, in Nos. 84-1148 and 85-1386, Liam S. Coonan, St. Louis, Mo., William C. Sullivan, Topeka, Kan., and Linda S. Legg, St. Louis, Mo., entered appearances for Bell Operating Companies in No. 84-1148, and Alan B. Sternstein and Louise L.M. Tucker, Washington, D.C., entered appearances for Bell Operating Companies in No. 85-1386.
Thomas J. Reiman, Chicago, Ill., Charles R. Cutler and Alfred Winchell Whittaker, Washington, D.C., entered appearances for intervenors Ameritech Operating Companies, et al., in Nos. 84-1148 and 85-1386.
Charles D. Gray and Genevieve Morelli, Washington, D.C., entered appearances for intervenor Nat. Ass'n of Regulatory Utility Com'rs, in No. 84-1148.
Theodore D. Frank, Washington, D.C., entered an appearance for intervenor Centel Corp., in No. 84-1148.
Mary Jo Manning, Washington, D.C., entered an appearance for intervenor ROLM Corp., in No. 84-1148.
Gary C. Tucker, Denver, Colo., Michael L. Glaser and Francis E. Fletcher, Jr., Washington, D.C., entered appearances for intervenors Roseville Telephone Co., et al., in No. 84-1148.
John A. Ligon, Grant S. Lewis and John S. Kinzey, New York City, entered appearances for intervenor U.S. Transmission Systems, Inc., in Nos. 84-1148 and 85-1386.
Robert W. Barker and Robert B. McKenna, Washington, D.C., entered appearances for intervenors Mountain States Telephone & Telegraph Co., et al., in Nos. 84-1148 and 85-1386.
Carolyn C. Hill, Washington, D.C., entered an appearance for intervenor United Telephone System, Inc., in No. 84-1148.
Peter Tannenwald, Washington, D.C., entered an appearance for intervenor Teltec Saving Communications Co., in No. 84-1148.
Joseph M. Kittner, Randolph J. May and Timothy J. Cooney, Washington, D.C., entered appearances for intervenors American Broadcasting Companies, Inc., et al. and Ad Hoc Telecommunications Users Committee, in No. 84-1148.
Jack Shreve, Tallahassee, Fla., and Benjamin H. Dickens, Jr., Washington, D.C., entered appearances for intervenor Citizens of the State of Florida, in No. 84-1148.
Kevin H. Cassidy, New York City, Jeffrey Matsuura, Washington, D.C. and William E. Willis, New York City, entered appearances for intervenor Satellite Business Systems, in No. 84-1148.
William B. Gundling, Hartford, Conn., entered an appearance for intervenor Dept. of Public Utility Control of the State of Connecticut, in No. 84-1148.
John L. Bartlett and Robert J. Butler, Washington, D.C., entered appearances for intervenor Aeronautical Radio, Inc., in No. 84-1148.
John F. Beasley and Vincent L. Sgrosso, Atlanta, Ga., entered appearances for intervenor BellSouth Corp., in No. 85-1386.
Martin W. Bercovici, Washington, D.C., entered an appearance for intervenor Mobile Marine Radio, Inc., in No. 85-1386.
Before BORK and BUCKLEY, Circuit Judges, and EDWARD D. RE, * Chief Judge.
Opinion for the Court filed by Circuit Judge BORK.
American Telephone and Telegraph Company ("AT & T") and its long distance service competitors ("Other Common Carriers" or "OCCs") use the facilities of local telephone companies to originate and terminate interstate calls. Because some local exchanges have not yet converted their facilities to provide equal access to all carriers, AT & T is the only carrier with "premium access" at some locations. The OCCs receive access at these locations which is inferior with respect to the quality of transmission, the connection time, the type of phone that can be used, the quantity of numbers that must be dialed, and with respect to the ability to collect billing information. AT & T challenges several orders in which the Federal Communications Commission set a "discount" rate to be paid by the OCCs for their "non-premium" access. We find that the Commission did not act arbitrarily or capriciously in setting the discount rate and therefore deny AT & T's petition for review.
When the OCCs first entered the long distance service market they paid the local business line rate for access to local facilities. Because this rate was much lower than that charged to AT & T through the divisions of revenue process within the Bell System, and did not include any of the non-traffic sensitive, i.e., fixed, local plan costs that were allocated to interstate commerce, AT & T filed a tariff in which it proposed higher access charges for the OCCs. The proposed "Exchange Network Facilities for Interstate Access" ("ENFIA") tariff was suspended by the Commission because it raised many of the issues that the Commission was attempting to resolve in the comprehensive long distance service market structure rulemaking. See MTS & WATS Market Structure Inquiry, CC Docket No. 78-72, 67 F.C.C.2d 757 (1978) 1 ("Docket No. 78-72"). The Commission, however, encouraged AT & T and the OCCs to negotiate "some sort of a 'rough justice' interim" agreement on access charges pending a decision in Docket No. 78-72. Exchange Network Facilities for Interstate Access, 91 F.C.C.2d 1079, 1081 (1982) ("ENFIA Order After Investigation "), aff'd, MCI Telecomm. Corp., 712 F.2d 517 (D.C.Cir.1983).
After several months of negotiations, AT & T and the OCCs signed an interim settlement agreement ("the ENFIA Agreement") which the Commission accepted in 1979 as "an expeditious and acceptable compromise of differences on matters relating to methodologies, rate levels, and rate components." Exchange Network Facilities for Interstate Access, 71 F.C.C.2d 440, 456 (1979) ("ENFIA Acceptance Order "). The discounted rate element in the access charge which was adopted in the ENFIA Agreement 2 was meant to reflect in part the difference in the quality of access received by AT & T and the OCCs. Exchange Network Facilities for Interstate Access, 90 F.C.C.2d 6, 15, 16 (1982) ("ENFIA Extension Order "). The ENFIA Agreement was a transitional measure intended to remain in effect until the Commission issued a decision in Docket No. 78-72, or for five years, whichever occurred first.
While Docket No. 78-72 was pending before the Commission, AT & T entered into a consent decree pursuant to which it was required to divest itself of its local exchange companies ("Bell Operating Companies" or "BOCs"). See United States v. American Tel. & Tel. Co., 552 F.Supp. 131 (D.D.C.1982) ("Modification of Final Judgment" or "MFJ"), aff'd,...
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