In re GCC License Corp., No. 21510

Citation2001 SD 32,623 N.W.2d 474
Decision Date14 March 2001
Docket Number No. 21510, No. 21521, No. 21525.
PartiesThe Filing by GCC LICENSE CORPORATION for Designation as an Eligible Telecommunications Carrier.
CourtSouth Dakota Supreme Court

Rolayne Ailts Wiest, Special Assistant Attorney General, Public Utilities Commission, Pierre, SD, Attorney for appellant PUC.

Richard D. Coit, Executive Director, SDITC, Pierre, SD, Attorney for appellant SD Independent Telephone Coalition.

Tamara A. Wilka and Thomas J. Welk of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, SD.

Alex Duarte, U.S. West Communications, Inc., Denver, CO, Attorneys for appellant U.S. West.

Paul S. Swedlund of Gunderson, Palmer, Goodsell & Nelson, Rapid City, SD, Attorneys for appellee GCC.

Mark J. Ayotte and Philip R. Schenkenberg of Briggs and Morgan, St. Paul, MN, Attorneys for appellee GCC.


[¶ 1.] In this appeal, we examine whether the South Dakota Public Utilities Commission erroneously denied a wireless telecommunications company's application to become an eligible telecommunications carrier (ETC). To answer the question, we interpret 47 U.S.C. 214(e)(1), the federal statute governing the requirements for ETC status. The PUC read this statute to require that applicants must presently be providing or offering all enumerated services before ETC designation. On appeal, the circuit court reversed, ruling that federal law only requires applicants to show that they are capable of offering or providing the required services. The court remanded the case to the PUC solely for findings on whether ETC designation in South Dakota rural exchanges is in the public interest. We affirm the circuit court in all respects.


[¶ 2.] The Telecommunications Act of 1996 accomplished the most comprehensive restructuring of telecommunications law since the Communications Act of 1934. Indeed, Congress directed that the 1996 Act, including its provisions on local competition, be inserted into the 1934 Act. Telecommunications Act of 1996 § 1(b), Pub.Law 104-104, 110 Stat. 56. In the main, the Act creates a framework to encourage swift deployment of new technologies, to open telecommunications markets to competition, and to reduce regulation, so that Americans can enjoy lower prices and higher quality services. Id. To attain these goals, Congress sought to end the previously monopolistic local telephone markets in part by prohibiting states from imposing legal obstacles to impede competition. AT & T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 371, 119 S.Ct. 721, 726, 142 L.Ed.2d 835 (1999). "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications services." 47 U.S.C. 253. Congress was so set on removing barriers to entry that it authorized the FCC to preempt any state infringement "to the extent necessary to correct such violation or inconsistency." 47 U.S.C. 253(d). To be legally viable, any state regulation must be administered on a "competitively neutral basis." 47 U.S.C. 253(b).

[¶ 3.] The 1996 Act empowers states to grant certain entities the status of "eligible telecommunications carrier." 47 U.S.C. 214(e).1 One of the benefits of becoming an ETC is the requirement that other carriers make available "public switched network infrastructure, technology, information, and telecommunications facilities and functions" at reasonable prices. 47 U.S.C. 259(a); 47 U.S.C. 259(b). ETCs are eligible to receive federal universal service financial support, but must use such support "only for the provision, maintenance, and upgrading of facilities and services for which the support is intended." 47 U.S.C. 254(e). An ETC is obliged, at the risk of financial sanctions, to serve designated customers at appropriate prices. 47 U.S.C. 214(d). State utility commissions are required to ensure that telephone service providers not exclude areas more costly to serve and those commissions must "determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof...." 47 U.S.C. 214(e)(3).


[¶ 4.] On August 25, 1998, GCC License Corporation, a mobile cellular service provider, and a "common carrier" under federal law, applied for ETC status in all South Dakota counties.2 Intervening to oppose GCC's request were Dakota Telecommunications Group, Inc., South Dakota Independent Telephone Coalition,3 and U.S. West Communications, Inc (now Qwest).4 The hearing took place on December 17-18, 1998.

[¶ 5.] GCC is licensed to provide cellular service throughout South Dakota and has existing signal coverage in 98% of the state. In its application, GCC asserted that it currently provides or is capable of providing all the federally required services within its current mobile cellular offering. It is undisputed that GCC meets the definition of a common carrier, but it does not presently advertise a universal service offering. The latter requirement was not the focus of the case before the PUC. Instead, the dispute centered on the provision of statutorily enumerated support services. GCC admitted that it did not presently provide a universal service offering or a package containing all of the federally required enumerated services. A GCC representative testified that its universal service offering would be "shaped by consumer preferences." GCC assumed that customers would want services and features comparable to those offered by traditional local exchanges, so access could be provided through a "wireless local loop service."5 This wireless local loop would be supported by GCC's existing network infrastructure.6 At the time of its application, GCC was not providing wireless local loop service to any customer in South Dakota.

[¶ 6.] GCC asserted that it could implement a universal service offering immediately upon designation. The PUC, however, was unconvinced of GCC's ability to provide the required services throughout the state. The commission noted that GCC had, at the time of the hearing, applied for ETC status in thirteen states. The PUC emphasized, "GCC admitted that it could not provide service to every location in South Dakota."

[¶ 7.] After the hearing, the commissioners unanimously voted to deny GCC's application. In its findings of fact and conclusions of law, the PUC ruled that "an ETC must be actually offering or providing the services supported by the federal universal support mechanisms throughout the service area before being designated an ETC." It also concluded: "Even if the Commission could grant a company ETC status based on intentions to serve, the Commission finds that GCC has failed to show that its proposed fixed wireless system could be offered to customers throughout South Dakota immediately upon being granted ETC status." GCC appealed to the circuit court under SDCL 1-26-30.2. After reviewing briefs and hearing oral argument, the court entered its own findings of fact and conclusions of law reversing the PUC and remanding the matter solely for a public interest determination for rural service areas. The PUC, SDITC, and Qwest appeal.7


[¶ 8.] In reviewing an agency ruling, we apply the same standard as the circuit court, with no assumption that the court's ultimate decision was correct. Cheyenne River Sioux Tribe Tel. Auth. v. Public Utilities Comm'n, 1999 SD 60, ¶ 12, 595 N.W.2d 604, 608 (citing Appeal of Templeton, 403 N.W.2d 398, 399 (S.D. 1987)). Questions of fact are reviewed with deference under the clearly erroneous standard. Cheyenne River Sioux Tribe, 1999 SD 60, ¶ 12, 595 N.W.2d at 608 (citations omitted). In this instance, our review of the circuit court's fact findings reverts to the PUC's findings because the court's fact findings were based solely on the record before the PUC. Cf. State Div. of Human Rights v. Miller, 349 N.W.2d 42, 46 n. 2 (S.D.1984)

. Questions of law, as well as mixed questions of law and fact, are fully reviewable. Zoss v. United Bldg. Center, Inc., 1997 SD 93, ¶ 6, 566 N.W.2d 840, 843 (citing Permann v. South Dakota Department of Labor, 411 N.W.2d 113 (S.D.1987))(further citations omitted).

D. Requirements for ETC Designation

[¶ 9.] To attain ETC designation, an applicant must: (a) be a common carrier; (b) offer certain supported services prescribed by the FCC in 47 C.F.R. § 54.101(a)(1)-(9);8 (c) advertise the availability of the services and charges using media of general distribution; and (d) request an appropriate designated service area. See 47 U.S.C. 214(e)(1)(A)(B)(emphasis added); 47 U.S.C. 214(e)(2). Additionally, before designating an additional ETC in an area served by a rural telephone company, a state utility commission must find that the designation is in the "public interest." 47 U.S.C. 214(e)(2).

[¶ 10.] In interpreting these requirements, the PUC ruled that the word "offer" in 47 U.S.C. 214(e)(1)(A) requires a carrier to actually be "offering or providing" the enumerated services throughout the service area "before being designated an ETC." Thus, the commission concluded that it "cannot grant a company ETC status based on intentions to serve." The PUC also relied on the use of the present tense of the verb "meets" in 47 U.S.C. 214(e)(2): "the State commission may, in the case of an area served by a rural telephone company ... designate more than one common carrier as an [ETC] ... so long as each additional requesting carrier meets the requirements of paragraph (1)."

[¶ 11.] We interpret statutory provisions to learn the intent of the law. De Smet Ins. Co. of South Dakota v. Gibson, 1996 SD 102, ¶ 7, 552 N.W.2d 98, 100 (citations omitted). Where possible, congressional intent should be gleaned from the plain text of the statute. Id. When statutory language is clear and unambiguous we can simply declare the meaning as...

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