SBC Communications, Inc. v. F.C.C.

• Citation: 154 F.3d 226
• Decision Date: 04 September 1998
• Docket Number: No. 98-10140,98-10140
• Parties: 1998-2 Trade Cases P 72,256, 13 Communications Reg. (P&F) 458 SBC COMMUNICATIONS, INC.; Southwestern Bell Telephone Company; Southwestern Bell Communications Services, Inc.; Southwestern Bell Communications Services-Texas, Inc.; Southwestern Bell Internet Services, Inc.; Pacific Bell; Pacific Bell Communications; Nevada Bell, Plaintiffs-Appellees, US West Communications, Inc.; Bell Atlantic Corporation, Intervenor Plaintiffs-Appellees, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Defendants-Appellees-Appellants, MCI TELECOMMUNICATIONS CORPORATION; American Telephone & Telegraph Corporation; Association for Local Telecommunications Services; Competitive Telecommunications Association; National Cable Television Association; Sprint Communications Company L P; Telecommunications Resellers Association, Intervenor Defendants-Appellees-Appellants, v. Keith MAYDAK, Movant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 226

154 F.3d 226

1998-2 Trade Cases P 72,256,

13 Communications Reg. (P&F) 458

SBC COMMUNICATIONS, INC.; Southwestern Bell Telephone

Company; Southwestern Bell Communications Services, Inc.;

Southwestern Bell Communications Services-Texas, Inc.;

Southwestern Bell Internet Services, Inc.; Pacific Bell;

Pacific Bell Communications; Nevada Bell, Plaintiffs-Appellees, US West Communications, Inc.; Bell Atlantic Corporation, Intervenor Plaintiffs-Appellees, v. FEDERAL COMMUNICATIONS COMMISSION; United States of

America, Defendants-Appellees-Appellants,

MCI TELECOMMUNICATIONS CORPORATION; American Telephone &

Telegraph Corporation; Association for Local

Telecommunications Services; Competitive Telecommunications

Association; National Cable Television Association; Sprint

Communications Company L P; Telecommunications Resellers

Association, Intervenor Defendants-Appellees-Appellants, v. Keith MAYDAK, Movant-Appellant.

No. 98-10140.

United States Court of Appeals, Fifth Circuit.

Sept. 4, 1998.

Donald L. Flexner, John I. Stewart, Jr., Clifton S. Elgarten, Crowell & Moring, Martin Grambow, Washington, DC, Lonny D. Morrison, Morrison & Shelton, Wichita Falls, TX, James D. Ellis, Southwestern Bell Corp., San Antonio, TX, Laurence Henry Tribe, Harvard Law School, Cambridge, MA, Liam S. Coonan, Richardson, TX, for Plaintiffs-Appellees.

James E. Coleman, Jr., Jeffrey Scott Levinger, Carrington, Coleman, Sloman & Blumenthal, Dallas, TX, for SBC Communications, Inc.

William T. Lake, John Henry Harwood, David M. Sohn, David Graham Gray, Todd Cornelius Zubler, Lloyd Norton Cutler, Matthew Aaron Brill, Wilmer, Cutler & Pickering, Washington, DC, Roy T. Sparkman, Sparkman & Davison, Wichita Falls, TX, Jack M. Weiss, Mark Benjamin Holton, Amy Lynn Neuhardt, Correro, Fishman, Haygood, Phelps, Weiss, Walmsley & Casteix, New Orleans, LA, Robert B. McKenna, Denver, CO, for US West Communications, Inc.

John Thorne, Randal Scot Milch, Bell Atlantic Network Services, Inc., Michael E Glover, Arlington, VA, Richard Gary Taranto, Farr & Taranto, Washington, DC, James B. Williamson, Brown, Prothro & Williamson, Wichita Falls, TX, for Bell Atlantic Corp.

Joel I. Klein, U.S. Dept. of Justice, Mark Bernard Stern, Alisa Beth Klein, Daniel Lee Kaplan, U.S. Dept. of Justice, Civil Div., Appellate Staff, Jacob Matthew Lewis, Washington, DC, Carol Federighi, Office of General Counsel, U.S. Dept. of Justice, Washington, DC, for FCC and United States.

Donald B. Verrilli, Jr., Washington, DC, for MCI Telecommunications Corp., American Tel. & Tel. Corp., Ass'n for Local Telecommunications Services, Competitive Telecommunications Ass'n, National Cable Television Ass'n and Sprint Communications Co. L.P.

Morris Harrell, Michael Vance Powell, Locke, Purnell, Rain & Harrell, Dallas, TX, for MCI Telecommunications Corp., American Tel. & Tel. Corp., Ass'n for Local Telecommunications Services, Competitive Telecommunications Ass'n, National Cable Television Ass'n, Sprint Communications Co. L.P. and Telecommunications Resellers Ass'n "TRA".

Thomas F. O'Neil, III, MCI Telecommunications Corp., Washington, DC, for MCI Telecommunications Corp.

Mark Charles Rosenblum, Basking Ridge, NJ, Ronald David Wells, Dallas, TX, Sidney Katherine Powell, Deborah Ann Pearce-Reggio, Powell & Associates, Dallas, TX, David William Carpenter, Sidley & Austin, Chicago, IL, for American Tel. & Tel. Corp.

Richard J. Metzger, Washington, DC, for Association for Local Telecommunications Services.

Danny E. Adams, Kelley Drye & Warren, Washington, DC, for Competitive Telecommunications Ass'n and Alarm Industry Communications Committee.

Genevieve Morelli, Washington, DC, for Competitive Telecommunications Ass'n.

Daniel Leslie Brenner, National Cable Television Ass'n, Washington, DC, for National Cable Television Ass'n.

David Paul Murray, Willkie, Farr & Gallagher, Washington, DC, for Sprint Communications Co. L.P.

Charles C. Hunter, Hunter & Mow, Washington, DC, for Telecommunications Resellers Ass'n "TRA".

Keith Maydak, East McKeesport, PA, pro se.

Mary A. Keeney, Natural Resources Div., Austin, TX, for Public Utility Com'n of Texas, Amicus Curiae.

Michael Evertsen Ward, Mary Catherine Albert, Swidler & Berlin, Washington, DC, John Jeffrey Mayhook, Vancouver, WA, for GST Telecom, Inc., Hyperion Telecommunications, Inc., ICG Telecom Group, Inc., Logix Communications Corp., KMC Telecom Holdings, Inc. and RCN Telecom Services, Inc., Amicus Curiae.

Michael A. Shaunessy, Bickerstaff, Heath, Smiley, Pollan, Kever & McDaniel, Austin, TX, for Newspaper Ass'n of America, Amicus Curiae.

Edwin J. Hughes, Madison, WI, for States of Alabama, Florida, Georgia, Iowa, Maryland, Massachusetts, Missouri, Montana, New York, Pennsylvania, Rhode Island, Utah, Washington and Wisconsin, Amicus Curiae.

Lawrence G. Malone, Public Serv. Com'n of the State of New York, Albany, NY, for State Public Utility Com'ns of New York and National Ass'n of Regulatory Utility Com'rs, Amicus Curiae.

Mac Barber, Georgia Public Serv. Com'n, Atlanta, GA, for State Public Utility Com'ns of Georgia, Amicus Curiae.

Myra L. Karegianes, Illinois Commerce Com'n, Chicago, IL, for State Public Utility Com'ns of Illinois, Amicus Curiae.

Diane Munns, Iowa Utilities Bd., Des Moines, IA, for State Public Utility Com'ns of Iowa, Amicus Curiae.

Henry James Boynton, Don L. Keskey, Lansing, MI, for State Public Utility Com'ns of Michigan, Amicus Curiae.

George Marion Fleming, Patricia Lee Trantham, Mississippi Public Serv. Com'n Jackson, MS, for State Public Utility Com'ns of Mississippi, Amicus Curiae.

Penny Gail Baker, Missouri Public Serv. Com'n, Jefferson City, MO, for State Public Utility Com'ns of Missouri, Amicus Curiae.

Karen Finstad Hammel, Montana Public Serv. Com'n, Helena, MT, for State Public Utility Com'ns of Montana, Amicus Curiae.

R. Clayton Trotter, Texas Justice Foundation, San Antonio, TX, for Texas Justice Foundation, Inc. Amicus Curiae.

Neal R. Brendel, Kirkpatrick & Lockhart, Pittsburgh, PA, for Khodara Environmental, Inc. on behalf of Eagle Environmental, LP, Amicus Curiae.

Thomas T. Rogers, Austin, TX, for Texas and Southwestern Cattle Raisers Ass'n, Amicus Curiae.

Laurence Michael Gold, Bredhoff & Kaiser, Washington, DC, for Communication Workers of America, Amicus Curiae.

Gerald H. Goldstein, Goldstein, Goldstein & Hilley, San Antonio, TX, for San Antonio Chapter of the American Civil Liberties Union, Amicus Curiae.

Mark E. Newell, James H. Barker, Gary M. Epstein, Latham & Watkins, Washington, DC, for U.S. Tel. Ass'n, Amicus Curiae.

Javier Aguilar, Austin, TX, for States of Texas, Arkansas, Mississippi, South Carolina and South Dakota, Amicus Curiae.

Michael Stephen Varda, Public Serv. Com'n of Wisconsin, Madison, WI, for Public Serv. Com'n of Wisconsin, Amicus Curiae.

Duane W. Luckey, Columbus, OH, for Public Utilities Com'n of Ohio, Amicus Curiae.

Charles D. Gray, James Bradford Ramsay, Washington, DC, for Public Utility Com'n of Oregon and Vermont Dept. of Public Serv., Amicus Curiae.

W. Benny Won, Oregon Dept. of Justice, Salem, OR, for Public Utility Com'n of Oregon, Amicus Curiae.

Sheldon M. Katz, Vermont Dept. of Public Serv. Montpelier, VT, for Vermont Dept. of Public Serv., Amicus Curiae.

Maryanne Reynolds Martin, Bohdan R. Pankiw, Pennsylvania Public Utility Com'n, Harrisburg, PA, for Pennsylvania Public Utility Com'n, Amicus Curiae.

Appeals from the United States District Court for the Northern District of Texas.

Before JOLLY, SMITH and BARKSDALE, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This appeal challenges the constitutionality of a significant part of the Telecommunications Act of 1996. The FCC, the United States, and numerous interested intervenors appeal the district court's determination that §§ 271-75 of the Act, 47 U.S.C. §§ 271-75, are an unconstitutional bill of attainder. Finding the provisions at issue to be nonpunitive in character, we hold that they are not, in fact, a bill of attainder as that term has been defined by the Supreme Court. Because we further hold that the provisions are also consistent with the constitutional requirements of separation of powers, equal protection, and free speech, we reverse the judgment of the district court.

I

As every antitrust law student learns these days, in 1974 the Department of Justice brought a massive, precedent-setting Sherman Act ¹ suit against AT&T. See United States v. AT&T, 461 F.Supp. 1314 (D.D.C.1978). For many years before the suit, most telecommunications equipment and telephone service in the United States--both local and "long distance"--had been provided by AT&T and its corporate affiliates, collectively known as the Bell System. See United States v. AT&T, 552 F.Supp. 131, 222 (D.D.C.1982). Although certain isolated aspects of the Bell System had become the subject of intermittent antitrust actions, consent decrees, and federal legislative intervention dating back to 1949, see generally United States v. AT&T, 552 F.Supp. at 135-38, no broad-based attack on the system itself had ever been launched. In 1974, however, the government changed all that. It alleged, among other things, that the way AT&T used its various state-granted local service monopolies to also monopolize the markets in long distance service and telecommunications equipment was in contravention of § 2 of the Sherman Act. See United States v. AT&T, 461 F.Supp. at 1317-18. AT&T ultimately conceded this assessment, for, after some initial procedural wrangling, it eventually settled with the government in what became known as the AT&T Consent Decree or Modified Final Judgment ("MFJ"). See United States v. AT&T, 552 F.Supp. at 222-234, aff'd sub nom. Maryland v. United States, 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983). Under the MFJ, AT&T was required to divest itself of its twenty-two local exchange subsidiaries, which became known as the Bell Operating Companies or "BOCs." 552 F.Supp. at 223. ² The...