Associated Press v. FCC

• Decision Date: 12 July 1971
• Docket Number: 23841-23843.,23839,No. 23833,23836,23833
• Citation: 448 F.2d 1095
• Parties: The ASSOCIATED PRESS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors. AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA, Inc., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors. AIR TRANSPORT ASSOCIATION OF AMERICA et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., Bethlehem Steel Corporation, et al., American Telephone and Telegraph Co., Intervenors. AMERICAN TRUCKING ASSOCIATIONS, Inc., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors. AERONAUTICAL RADIO, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors. NATIONAL ASSOCIATION OF MOTOR BUS OWNERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

448 F.2d 1095 (1971)

The ASSOCIATED PRESS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors.

AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA, Inc., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors.

AIR TRANSPORT ASSOCIATION OF AMERICA et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., Bethlehem Steel Corporation, et al., American Telephone and Telegraph Co., Intervenors.

AMERICAN TRUCKING ASSOCIATIONS, Inc., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors.

AERONAUTICAL RADIO, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors.

NATIONAL ASSOCIATION OF MOTOR BUS OWNERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American Telephone and Telegraph Co., Intervenors.

Nos. 23833, 23836, 23839, 23841-23843.

United States Court of Appeals, District of Columbia Circuit.

Argued October 23, 1970.

Decided July 12, 1971.

As Amended July 15, 1971.

Mr. Donald C. Beelar, Washington, D. C., with whom Mr. John L. Bartlett, Washington, D. C., was on the brief, for petitioner in No. 23,833.

Mr. Arthur Scheiner, Washington, D. C., with whom Mr. Richard A. Solomon, Washington, D. C., was on the brief, for petitioner in No. 23,836.

Mr. William E. Miller, Washington, D. C., with whom Messrs. James E. Landry, Herbert E. Forrest, Charles R. Cutler, John L. Bartlett, Charles F. McErlean, Jr., Chicago, Ill., Calvin Davison and Stephen L. Babcock, Washington, D. C., were on the brief, for petitioners in Nos. 23,839 and 23,842. Mr. James F. Reilly, Washington, D. C., also entered an appearance for petitioners in No. 23,839 and 23,842.

Mr. Edward J. Kuhlmann, Counsel, Federal Communications Commission, with whom Messrs. Henry Geller, General Counsel at the time the brief was filed, John H. Conlin, Associate General Counsel, and Katrina Renouf, Counsel, Federal Communications Commission, were on the brief, for respondents. Mrs. Lenore G. Ehrig, Counsel, Federal Communications Commission, also entered an appearance for respondent, Federal Communications Commission. Mr. Howard E. Shapiro, Atty., Department of Justice, also entered an appearance for respondent, United States of America.

Mr. Melvin Richter, Washington, D. C., with whom Mr. Jack Werner, Washington, D. C., was on the brief, for intervenor The Western Union Telegraph Company. Mr. Harold L. Talisman and Mr. Sidney Goldman, Washington, D. C., also entered an appearance for intervenor, The Western Union Telegraph Company.

Mr. Hugh B. Cox, Washington, D. C., with whom Messrs. E. Edward Bruce, Washington, D. C., Harold J. Cohen and Alfred A. Green, New York City, were on the brief, for intervenor, American Telephone and Telegraph Company.

Mr. Richard P. Taylor, Washington, D. C., was on the brief for petitioner in No. 23,843.

Messrs. Jeremiah Courtney and Arthur Blooston, Washington, D. C., entered appearances for petitioner in No. 23,841 and intervenors, Bethlehem Steel Corporation, et al. in No. 23,839.

Before ROBINSON, MacKINNON and ROBB, Circuit Judges.

ROBB, Circuit Judge:

The petitioners challenge two orders¹ of the Federal Communications Commission, designating for hearing and investigation a revised tariff submitted by the American Telephone and Telegraph Company (AT&T) on October 1, 1969. The tariff, filed pursuant to Sec. 203 of the Communications Act of 1934,² proposed increased rates for a private line service known as TELPAK. The petitioners are users of the TELPAK service. AT&T and The Western Union Telegraph Company, a competitor of AT&T, have intervened in support of the orders.

By the two orders the Commission, pursuant to Sec. 204 of the Act,³ (1) ordered an investigation and hearing as to the lawfulness of the proposed tariff; (2) suspended the effective date of the tariff for three months and (3) provided that AT&T must keep accurate account of all amounts received by reason of the increased rates pending completion of the hearing. Attacking the orders on several grounds the petitioners contend that the Commission was required to reject the proposed tariff. We think the orders must be sustained.

The challenged tariff proposed increased rates for TELPAK C and D. TELPAK is a private line service offered to large-volume users such as the petitioners in this case. When first offered by AT&T in 1961, TELPAK consisted of four distinct categories of service: TELPAK A, B, C, and D, respectively offering 12, 24, 60 and 240 equivalent voice circuits. A Commission investigation of the rates resulted in a decision in 1964 holding (1) that the TELPAK A and B rates were discriminatory and not justified by competitive necessity and (2) that the TELPAK C and D rates were apparently justified by competitive necessity but that a further investigation should be made to determine whether these rates were compensatory. 38 F. C.C. 370 (1964); 37 F.C.C. 1111 (1964); 38 F.C.C. 761 (1965). On review this court sustained the Commission's decision. American Trucking Associations, Inc. v. FCC, 126 U.S.App.D.C. 236, 377 F.2d 121 (1966), cert. denied, 386 U.S. 943, 87 S.Ct. 973, 17 L.Ed.2d 874 (1967).

After this court decided the American Trucking Associations case the Commission in 1966 incorporated the issue whether the existing TELPAK C and D rates were lawful into the AT&T General Rate Investigation, Docket No. 16258. 7 F.C.C.2d 30; A. 7. The Commission pointed out that the purpose of that investigation was "among other things, to deal with variations in the level of earnings of different classes of service and not with individual rate components within rate classifications." 7 F.C.C.2d at 31; A. 8. However, the Commission ordered AT&T to submit additional cost data as to TELPAK C and D; and the Commission recognized that such data "may be accompanied by proposed changes in those rates". Continuing, the Commission said "We do not wish such specific rate issues to become part of the more general issues of Docket No. 16258. Accordingly, when such tariff filings are made, if need therefor arises, it is expected that those issues will be examined in a separate docket." 7 F.C.C.2d at 31; A. 8.

On January 9, 1967 AT&T submitted to the Commission and distributed to all parties in Docket No. 16258 cost data and new rate proposals for TELPAK C and D. The proposed rates were at the levels now challenged by the petitioners. In submitting these rates AT&T stated:

we propose that these rate changes for TELPAK C and D should not become effective until the latter part of 1967. It is expected that additional supporting detail will be furnished at the time revised tariff schedules are filed.

* * * * * *

Respondents AT&T and the Associated Bell System Companies recognize, of course, the difficulties that present TELPAK customers will encounter in evaluating their communications requirements and in restructuring their communications networks, in light of the rate increases proposed in this statement and of the elimination of TELPAK A and B. These customers should be afforded adequate time to make the necessary rearrangements. A. 22, 24-25.

Thirteen months later, on February 1, 1968, AT&T filed tariff revisions embodying the rates proposed on January 9, 1967. These rates were to become effective April 1, 1968, but on March 13, 1968 AT&T asked special permission from the Commission to withdraw the proposed revisions. Explaining its request AT&T stated:

It is our view that the TELPAK rate levels embodied in our tariff revisions filed on February 1, 1968 are fully justified by the relevant cost and market considerations referred to in our Transmittal No. 10001. Nevertheless, we recognize that the impact on our customers of these proposed changes is, in many cases, very substantial, and that in some cases customers have indicated that required rearrangements cannot be made by April 1.

In the circumstances we propose to withdraw the tariff revisions now scheduled to become effective April 1, 1968 and to file a new set of revisions which will provide for a lesser increase in the level of TELPAK rates. We believe that in any Commission investigation it will be demonstrated that TELPAK rates should be established at substantially the level of those which were filed to become effective April 1, 1968. The proposed new revisions will constitute an intermediate step in achieving that level. AT&T Application No. 643; A. 134.

On March 14, 1968 the Commission granted AT&T's request. Special Permission No. 5258.

On March 25, 1968 AT&T withdrew the TELPAK tariff proposed on February 1, 1968 and filed "interim" rates to become effective June 1, 1968. The "interim" rates were lower than those proposed on February 1, 1968 and withdrawn, but higher than the rates then existing. On April 10, 1968 the Commission, pursuant to 47 U.S.C. § 204, suspended the proposed "interim" rates for three months, making them effective September 1, 1968. A. 170 (noted, 12 F.C.C.2d 1028). At the same time the Commission instituted an investigation, Docket No. 18128, into the lawfulness of the rates. The Commission stated:

We are suspending the proposed tariff schedules to the full extent of our statutory authority on the basis of the considerations recited above. This means that the schedules will become effective September 1, 1968. Moreover, it should clearly be understood by the TELPAK users, that, in the event a complete hearing record indicates that increases in the

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