Flat Wireless, LLC v. Fed. Commc'ns Comm'n, 18-1271
| Citation | 944 F.3d 927 |
| Decision Date | 10 December 2019 |
| Docket Number | No. 18-1271,C/w 18-1273,18-1271 |
| Parties | FLAT WIRELESS, LLC, Petitioner v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents Cellco Partnership, Doing Business as Verizon Wireless, Intervenor |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Donald J. Evans, Valparaiso, IN, argued the cause for petitioners. With him on the briefs was Keenan P. Adamchak, McLean, VA.
Ashley S. Boizelle, Deputy General Counsel, Federal Communications Commission, argued the cause for respondents. On the brief were Robert B. Nicholson and Robert J. Wiggers, Attorneys, U.S. Department of Justice, Thomas M. Johnson Jr., General Counsel, David M. Gossett, Deputy General Counsel, Richard K. Welch, Assistant General Counsel, and C. Grey Pash Jr., Counsel. Jacob M. Lewis, Associate General Counsel, Federal Communications Commission, and Matthew J. Dunne, Counsel, entered appearances.
David L. Haga, Arlington, VA, argued the cause for intervenor-appellee. With him on the brief was Christopher M. Miller, Washington, DC.
Before: Tatel and Griffith, Circuit Judges, and Silberman, Senior Circuit Judge.
Wireless service providers Flat Wireless and NTCH, Inc. (apparently its full name) challenge the FCC's order approving rates that Verizon offered to Flat for both voice and data roaming. They insist that Flat should not pay Verizon much above Verizon's costs of providing those services. Flat's challenge—NTCH's petition is not properly before us2 —largely runs counter to Commission rules that deliberately eschew cost-based regulation of roaming rates. Flat nonetheless asserts that its challenge is not to the rules themselves but to how the FCC applied the rules to Verizon's proffered rates. Either way, we reject Flat's petition.
We have explained previously that a roaming rate is the charge that wireless provider A pays when its own subscriber travels beyond the range of that provider's network and must use the network of wireless provider B for voice or data services. See NTCH, Inc. v. FCC , 877 F.3d 408, 410 (D.C. Cir. 2017). Voice roaming permits subscribers to make calls when outside their provider's geographic coverage area; data roaming does the same for internet access. Id.
The Commission issued rules (paradoxically, the FCC traditionally calls them orders) in 2007 and 2010 to govern voice roaming,3 and then followed with a similar rule covering data roaming in 2011.4 The Voice Roaming Rules leave it to wireless providers to negotiate voice roaming rates, so long as they offer the service on a "just, reasonable, and non-discriminatory basis." 22 FCC Red. at 15817 ¶ 1; see 47 U.S.C. §§ 201 - 202. The Commission also provided a non-exhaustive list of factors it might consider if it were obliged to resolve disputes over voice roaming. See 25 FCC Red. at 4200-01 ¶¶ 39-40. The Data Roaming Rule similarly permits individual negotiations, requiring that providers offer data roaming service on "commercially reasonable terms and conditions." 26 FCC Red. at 5411 ¶ 1.
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Flat filed a complaint against Verizon with the Commission in 2015 alleging that Verizon's proffered roaming rates (for both voice and data) violated the Commission's rules. Essentially, Flat argued that Verizon's rates are unreasonable because its costs of providing roaming allegedly are far lower than the rates it charges. The Commission refused to consider Verizon's costs in accordance with its regulations and denied Flat's complaint. See In the Matter of Flat Wireless, LLC v. Cellco P'Ship d/b/a/ Verizon Wireless, 33 FCC Red. 7972 (2018). The FCC reiterated that its rules eschewed direct rate regulation in favor of individual negotiations to determine market-driven rates. Id. at 7980. The Commission, in any event, observed that the rates Verizon offered to Flat were within the range of rates that Verizon charges others; [Redacted]. Id. at 7977, 7979. Indeed, the Commission noted that those rates were [Redacted] rates that Verizon itself pays when its own customers roam on other networks. Id. at 7976-77. The Commission also repeated its explanation accompanying the Voice and Data Roaming Rules that relatively high roaming rates will encourage carriers to build out their own networks instead of "piggy-backing" on others. Id. at 7978 n.63.
Flat now petitions this court for review.
Flat's primary contention is that the Commission should have required Verizon to offer roaming rates closer to its costs—an approach Flat says is consistent with the Voice and Data Roaming Rules. The Commission, of course, repeats its rationale for rejecting direct rate regulation and insists that Flat's appeal to costs amounts to a collateral attack on the Voice and Data Roaming Rules. At oral argument, however, Flat's counsel disclaimed any challenge to the rules themselves, claiming that Flat objected merely to how they were applied given current market conditions (i.e., that the roaming market allegedly is non-competitive).
It is obvious to us that the Voice and Data Roaming Rules rejected cost-based regulation and that Flat's challenge, notwithstanding its denial, is largely a collateral attack on those rules. In the 2007 Voice Roaming Rule, the Commission expressly "decline[d] to impose a price cap or any other form of rate regulation " on voice roaming rates. 22 FCC Red. at 15832 ¶ 37 (emphasis added); see id. at 15824 ¶ 18 (). Instead, the Commission opted to allow rates "to be freely determined through negotiations between the carriers based on competitive market forces." Id. at 15824 ¶ 18. The 2010 Voice Roaming Rule sets out a number of factors the Commission may consider when resolving disputes over voice roaming rates. 25 FCC Red. at 4200-01 ¶ 39. Though that list is not "exclusive or exhaustive," any reference to a carrier's costs of providing roaming is conspicuously absent. Id. at 4201 ¶ 40 ; see also 26 FCC Red. at 5452-53 ¶¶ 86-87 (same for Data Roaming Rule).
The 2010 Voice Roaming Rule explicitly notes that the price of voice roaming might be "relatively high" compared to what it would cost a wireless service provider to build out its own network facilities. 25 FCC Red. at 4197 ¶ 32. That "relatively high" price, the Commission reasoned, is a feature, not a bug: high roaming rates may help deter service providers from "piggy-backing" on other networks where they could otherwise improve their own network facilities. See id. ; see also 22 FCC Red. at 15833 ¶ 40. Flat insists that there is no risk of piggy-backing in its case, but the point is that the Voice and Data Roaming Rules contemplate "relatively high" roaming rates approvingly. That posture is at odds with the cost-plus-reasonable-rate-of-return approach Flat advocates. The 2011 Data Roaming Rule makes the same point about piggy-backing, and in it the Commission rejected "a more specific prescriptive regulation of rates requested by some commenters." 26 FCC Red. at 5423 ¶ 21.5
In Flat's view, the Commission should nevertheless consider costs when evaluating roaming rates because the roaming market is less competitive than it once was. The problem for Flat is that the Hobbs Act limits direct challenges to FCC rules to within sixty days after their issuance. See 28 U.S.C. §§ 2344, 2342(1) ; 47 U.S.C. § 402(a). And we have explained that a challenge to a rule otherwise governed by a statutory limitations period ordinarily cannot be raised out-of-time in an adjudication, see Tribune Co. v. FCC, 133 F.3d 61, 68-69 (D.C. Cir. 1998), unless the rule is claimed to conflict with governing statutes or the Constitution. See Weaver v. Fed. Motor Carrier Safety Admin., 744 F.3d 142, 145 (D.C. Cir. 2014) (collecting cases). That means challenges to procedural irregularities, underlying facts, or agency responses to comments in rulemaking must be presented in a timely direct challenge to such a rule. See NLRB Union v. Fed. Labor Relations Auth., 834 F.2d 191, 195-97 (D.C. Cir. 1987) (); cf. U.S. v. Nova Scotia Food Prods. Corp., 568 F.2d 240, 250—53 (2d Cir. 1977) (). If a party later believes that such a rule's underlying factual assumptions are incorrect either because they were originally incorrect or because the facts have changed, the appropriate avenue for relief is a petition for rulemaking. See Tribune Co., 133 F.3d at 68-69. Accordingly, the Commission lawfully declined to reconsider the wisdom of the Voice and Data Roaming Rules in the context of Flat's complaint proceeding.
Putting aside Verizon's costs, the Commission's determination that Verizon's proffered voice roaming rate is not unreasonable, still less discriminatory, is well supported. Verizon offered Flat a rate of [Redacted] for voice roaming. As the Commission observed, Verizon has [Redacted]. That rate also amounts to a [Redacted] from Flat's current voice roaming rate with Verizon of [Redacted]. And Verizon itself pays [Redacted] Verizon's offer thus fell well within the range of rates it has negotiated with numerous other providers.
Flat counters that Verizon's proffered voice roaming rate is unreasonably discriminatory in that Verizon failed to justify charging Flat anything above the very lowest rate that Verizon offers to others. But the Voice Roaming Rules contemplate variations in negotiated rates, see, e.g., 22 FCC Red. at 15834 ¶ 44, and our decisions permit that outcome. Providers are not required to file tariffs listing their rates for wireless voice services, and as a result, we have reasoned that providers do not unreasonably discriminate simply because they charge customers different prices. See Orloff v. FCC, 352...
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...the Hobbs Act grants this court jurisdiction only over "final orders." 28 U.S.C. § 2342(1); see also, e.g., Flat Wireless, LLC v. FCC, 944 F.3d 927, 933 (D.C. Cir. 2019). Similarly, we have held that finality concerns preclude our review of petitions brought under the Federal Power Act that......