People v. Fed Communications Comm'n

• Decision Date: 01 August 2000
• Docket Number: Docket No. 99-4205
• Citation: 267 F.3d 91
• Parties: (2nd Cir. 2001) PEOPLE OF THE STATE OF NEW YORK & PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK, PETITIONER, v. FEDERAL COMMUNICATIONS COMMISSION, RESPONDENT, MCI WORLDCOM, INC., BELL ATLANTIC, AIRTOUCH PAGING, US WEST, INC., NEW YORK STATE CONSUMER PROTECTION BOARD, AT&T CORPORATION, THE CITY OF NEW YORK, MISSOURI PUBLIC SERVICE COMMISSION & CONSUMER FEDERATION OF AMERICA, INTERVENORS
• Court: U.S. Court of Appeals — Second Circuit

Page 91

267 F.3d 91 (2nd Cir. 2001)

PEOPLE OF THE STATE OF NEW YORK & PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK, PETITIONER, v. FEDERAL COMMUNICATIONS COMMISSION, RESPONDENT, MCI WORLDCOM, INC., BELL ATLANTIC, AIRTOUCH PAGING, US WEST, INC., NEW YORK STATE CONSUMER PROTECTION BOARD, AT&T CORPORATION, THE CITY OF NEW YORK, MISSOURI PUBLIC SERVICE COMMISSION & CONSUMER FEDERATION OF AMERICA, INTERVENORS.

Docket No. 99-4205

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2000

Argued: January 24, 2001

Decided September 28, 2001

The People of the State of New York and the Public Service Commission of the State of New York petition this Court for review of two orders of the Federal Communications Commission, dated August 8, 1996 and October 21, 1999. The first order requires all consumers in areas implementing overlay area codes to use 10-digit dialing for local calls and the second denies a waiver to New York, which would exempt New York City from the 10-digit dialing requirement.

PETITION DENIED.

Carl F. Patka, Assistant Counsel to the Public Service Commission of the State of New York, Albany, New York (Lawrence G. Malone, General Counsel to the Public Service Commission of the State of New York, of counsel), for Petitioner.

Pamela L. Smith, Federal Communications Commission, Washington, District of Columbia (Christopher J. Wright, General Counsel, John E. Ingle, Deputy Associate General Counsel, Federal Communications Commission, Washington, D.C., Joel I. Klein, Assistant Attorney General, Catherine G. O'Sullivan, Nancy C. Garrison, United States Department of Justice, Washington, D.C., of counsel), for Respondent.

James F. Warden, Jr., New York State Consumer Protection Board, Albany, New York, for Intervenor New York State Consumer Protection Board.

James H. Bolin, Jr., At&t Corporation, Basking Ridge, New Jersey (Mark C. Rosenblum, Roy E. Hoffinger, At&t Corporation, Basking Ridge, New Jersey, David W. Carpenter, Peter D. Keisler, James P. Young, Sidley & Austin, Washington, District of Columbia, of counsel), for Intervenors AT & T Corporation, Mci WorldCom, Inc., and US West, Inc.

Edward F.X. Hart, of counsel to the Corporation Counsel of the City of New York, New York, New York (Michael D. Hess, Corporation Counsel of the City of New York, Leonard Koerner, Bruce Regal, of counsel),for Intervenor City of New York.

Mark N. Cooper, Ph.D., pro se, Consumer Federation of America, Silver Springs, Maryland, for Intervenor Consumer Federation of America.

William D. Smith, Bell Atlantic, New York, New York, for Intervenor Bell Atlantic.

Carl W. Northrop, Paul, Hastings, Janofsky & Walker, Washington, District of Columbia, for Intervenor Airtouch Paging.

Philip V. Permut, Kelley Drye & Warren, Washington, District of Columbia, for Intervenor Paging Network, Inc.

Marc Poston, Missouri Public Service Commission, Jefferson City, Missouri, for Intervenor Missouri Public Service Commission.

Before: Parker, Sack, and Katzmann, Circuit Judges.

Parker, Circuit Judge

While we hail improvements in technology, we often mourn the resulting loss of simplicity in our lives. So too with the increase in communications options. Because of the addition of fax machines, modems, cellular telephones and pagers to the traditional landline telephone, we are forced to overcome an ongoing shortage of telephone numbers. This shortage has necessitated the addition of area codes to many populous areas, including New York City, an addition causing anxiety for many. ¹

In the controversy before us, New York State and the New York Public Service Commission (collectively, the "NYPSC" or "New York") challenge the authority of the Federal Communications Commission ("FCC" or "the Commission") to promulgate a rule, 47 C.F.R. § 52.19 (2000), delegating to States the authority to choose which type of area code relief to implement, and requiring mandatory ten-digit dialing for all local calls in areas implementing overlay area code relief, promulgated in Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, 11 F.C.C.R. 19,392 (August 8, 1996) ("Second Order"). Additionally, the NYPSC challenges the FCC's refusal to grant a waiver from this rule for New York City. See Implementation of the Local Competition Provisions of the Telecomm. Act of 1996, 18 Communications Reg. (P&F) 333, 1999 WL 961570 (October 21, 1999) ("Third Order") (denying New York's renewed petition for expedited waiver of 47 C.F.R. § 52.19(c)(3)(ii)). Because we conclude that the FCC was within its power to promulgate the challenged rule, and that the FCC acted within its discretion in denying the waiver for New York City, we affirm the FCC's decisions and deny the NYPSC's petition. ²

I. BACKGROUND

A. The North American Numbering Plan

The North American Numbering Plan ("NANP") is the basic numbering scheme that permits telecommunications service within the United States and its territories, Canada, Bermuda and many Caribbean nations. See 47 C.F.R. § 52.5(c); see also Admin. of the N. Am. Numbering Plan, 11 F.C.C.R. 2588, ¶ 3 (July 13, 1995) ("NANP R&O"). Under the NANP, telephone numbers are ten digits in length: the first three digits are called the numbering plan area ("NPA" or "area") code, the second three are called the central office code, or prefix, and the final four digits are the individual line numbers. See id. ¶¶ 8-9. The NANP was developed by AT&T and Bell Laboratories in the 1940s in order to standardize telephone dialing and to ensure the development of an integrated nationwide telephone network. See id., ¶ 8. The result was the current system of dialing seven digits within an area and three- digit area codes. At the time of the NANP's development, the number of digits required to place a call varied with the size of the community. To ease the transition to seven-digit local numbers, the central office codes (the first three digits of a local call) were the first three letters of a word followed by the individual line number. As the numbers were quickly exhausted using this method, this system was replaced by the "2-5 system" which employed two letters and five numbers-- e.g., "PEnnsylvania 6-5000." Eventually, this system too had to be replaced, this time by an "all-number" seven-digit dialing system for local calls. As with the current ten-digit dialing controversy, seven-digit dialing, imposed in the early 1960's, met with opposition, and groups such as the "Anti-Digit Dialing League" and the "Committee of Ten Million to Oppose All-Number Calling" sprouted. See Romero, Now You Need an Area Code.

For over 40 years, AT&T administered this plan (the NANP), but ceased its administration in 1984 at divestiture. See NANP R&O, ¶ 10. Currently, the NANP is administered by NeuStar, Inc., a private company based in Washington. See Romero, Now You Need an Area Code.

B. Area Code Relief

Area code relief is the process by which central office codes are made available when there are few or no unassigned central office codes remaining in an existing area code and, often, a new area code is introduced. See Third Order, ¶ 5 n.32. A new area code is assigned when almost all of the central office codes within an area code are consumed.

There are three methods to implement area code relief. See 47 C.F.R. § 52.19 (2000). The first, a geographic area code split, occurs when there is a central office code shortage in one area and that area is then split into two or more geographic parts. See id. § 52.19(c)(1). The second, a boundary realignment, "occurs when the boundary lines between two adjacent area codes are shifted to allow the transfer of some central office codes from an area code for which central office codes remain unassigned to an area code for which few or no central office codes are left for assignment." Id. § 52.19(c)(2). The third method, an area code overlay, "occurs when a new area code is introduced to serve the same geographic area as an existing area code." Id. § 52.19(c)(3). The NYPSC's choice to implement the third method, an area code overlay, for the City of New York, has sparked the current controversy.

C. The Telecommunications Act of 1996

In 1996, Congress enacted the Telecommunications Act of 1996, ("the Act" or "the 1996 Act"), which amended the Communications Act of 1934, 47 U.S.C. § 151 et seq. See Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56 (1996). The 1996 Act is "an [a]ct to promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies." Id. The Act "fundamentally restructures local telephone markets. States may no longer enforce laws that impede competition, and incumbent [local exchange carriers or "LECs"] are subject to a host of duties intended to facilitate market entry." AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371 (1999). "Most important, Congress ended the States' longstanding practice of granting and maintaining local exchange monopolies." Id. at 405 (Thomas, J., concurring in part, dissenting in part); see also 47 U.S.C. § 253(a) (2001). To achieve the goal of opening the local telephone markets to competition, Congress enacted section 251 of the Act, entitled "Interconnection," which imposes several obligations on incumbent LECs to allow access to their networks by competitors. 47 U.S.C. § 251 (2001). This section includes a provision entitled "Numbering Administration," which is the subject of this appeal. This subsection provides, in relevant part:

The Commission shall create or designate one or more impartial entities to administer telecommunications numbering and to make such numbers available on an equitable basis. The Commission shall have exclusive jurisdiction over those portions of the North American Numbering Plan that pertain to the United States. Nothing in this...