Southwestern Bell Telephone Co. v. F.C.C., s. 97-3389

• Decision Date: 04 December 1998
• Docket Number: 97-3576,Nos. 97-3389,97-3663 and 97-4106,s. 97-3389
• Citation: 153 F.3d 597
• Parties: SOUTHWESTERN BELL TELEPHONE COMPANY, Petitioner, Ameritech Corporation; Time Warner Communications Holdings; US Telephone Association; GTE Service Corporation; GTE Alaska, Incorporated; GTE Arkansas, Incorporated; GTE California, Incorporated; GTE Florida, Incorporated; GTE Midwest, Incorporated; GTE South, Incorporated; GTE Southwest, Incorporated; GTE North, Incorporated; GTE Northwest, Incorporated; GTE Hawaiian Telephone Company, Incorporated; GTE West Coast, Incorporated; Contel of Minnesota, Inc.; Contel of the South, Inc.; Association for Local Telecommunications Services; Bell Atlantic-Maryland, Inc.; Bell Atlantic-Washington, D.C., Inc.; Bell Atlantic-West Virginia, Inc.; Bell Atlantic-New Jersey, Inc.; Bell Atlantic-Delaware, Inc.; Bell Atlantic-Pennsylvania, Inc.; Bell Atlantic-Virginia, Inc.; New York Telephone Company; New England Telephone and Telegraph Company; Independent Telephone and Telecommunications Alliance, Intervenors on Appeal, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Respondents, American Telephone and Telegraph Company; Telecommunications Resellers Association; MCI Telecommunications Corporation; LBC Communications, Inc.; Worldcom, Inc.; Competitive Telecommunications Association, Intervenors on Appeal. US WEST, INC., Petitioner, Southwestern Bell Telephone Company, Intervenor on Appeal, Ameritech Corporation; Time Warner Communications Holdings, Inc.; US Telephone Association; Ameritech Corporation; Time Warner Communications Holdings, Inc.; Association for Local Tele-communications Services; GTE Service Corporation; GTE Alaska, Incorporated; GTE Arkansas, Incorporated; GTE California, Incorporated; GTE Florida, Incorporated; GTE Midwest, Incorporated; GTE Southwest, Incorporated; GTE South, Incorporated; GTE North, Incorporated; GTE Northwest, Incorporated; GTE Hawaiian Telephone Company, Incorporated; GTE West Coast, Incorporated; Contel of Minnesota, Inc.; Contel of the South, Inc.; Bell Atlantic-Washington, D.C.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 597

153 F.3d 597

SOUTHWESTERN BELL TELEPHONE COMPANY, Petitioner,

Ameritech Corporation; Time Warner Communications Holdings;

US Telephone Association; GTE Service Corporation; GTE

Alaska, Incorporated; GTE Arkansas, Incorporated; GTE

California, Incorporated; GTE Florida, Incorporated; GTE

Midwest, Incorporated; GTE South, Incorporated; GTE

Southwest, Incorporated; GTE North, Incorporated; GTE

Northwest, Incorporated; GTE Hawaiian Telephone Company,

Incorporated; GTE West Coast, Incorporated; Contel of

Minnesota, Inc.; Contel of the South, Inc.; Association

for Local Telecommunications Services; Bell

Atlantic-Maryland, Inc.; Bell Atlantic-Washington, D.C.,

Inc.; Bell Atlantic-West Virginia, Inc.; Bell Atlantic-New

Jersey, Inc.; Bell Atlantic-Delaware, Inc.; Bell

Atlantic-Pennsylvania, Inc.; Bell Atlantic-Virginia, Inc.;

New York Telephone Company; New England Telephone and Telegraph Company; Independent Telephone and Telecommunications Alliance, Intervenors on Appeal, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America,

Respondents,

American Telephone and Telegraph Company;

Telecommunications Resellers Association; MCI

Telecommunications Corporation; LBC Communications, Inc.;

Worldcom, Inc.; Competitive Telecommunications Association,

Intervenors on Appeal.

US WEST, INC., Petitioner,

Southwestern Bell Telephone Company, Intervenor on Appeal,

Ameritech Corporation; Time Warner Communications Holdings,

Inc.; US Telephone Association; Ameritech Corporation;

Time Warner Communications Holdings, Inc.; Association for

Local Tele-communications Services; GTE Service

Corporation; GTE Alaska, Incorporated; GTE Arkansas,

Incorporated; GTE California, Incorporated; GTE Florida,

Incorporated; GTE Midwest, Incorporated; GTE Southwest,

Incorporated; GTE South, Incorporated; GTE North,

Incorporated; GTE Northwest, Incorporated; GTE Hawaiian

Telephone Company, Incorporated; GTE West Coast,

Incorporated; Contel of Minnesota, Inc.; Contel of the

South, Inc.; Bell Atlantic-Washington, D.C., Inc.; Bell

Atlantic-West Virginia, Inc.; Bell Atlantic-New Jersey,

Inc.; Bell Atlantic-Maryland, Inc.; Bell

Atlantic-Delaware, Inc.; Bell Atlantic-Pennsylvania, Inc.;

Bell Atlantic-Virginia, Inc.; New York Telephone Company;

New England Telephone and Telegraph Company; Independent

Telephone and Telecommunications Alliance, Intervenors on Appeal, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America,

Respondents,

American Telephone and Telegraph Company;

Telecommunications Resellers Association; MCI

Telecommunications Corporation; LBC Communications, Inc.;

Worldcom, Inc.; Competitive Telecommunications Association,

Intervenors on Appeal.

AMERITECH CORPORATION, Petitioner,

Time Warner Communications Holdings, Inc.; US Telephone

Association; Association for Local Telecommunications

Services; Southwestern Bell Telephone Company; GTE Service

Corporation; GTE Alaska, Incorporated; GTE Arkansas,

Incorporated; GTE California, Incorporated; GTE Florida,

Incorporated; GTE Midwest, Incorporated; GTE South,

Incorporated; GTE Southwest, Incorporated; GTE North,

Incorporated; GTE Northwest, Incorporated; GTE Hawaiian

Telephone Company, Incorporated; GTE West Coast,

Incorporated; Contel of Minnesota, Inc.; Contel of the

South, Inc.; Bell Atlantic-Washington, D.C., Inc.; Bell

Atlantic-West Virginia, Inc.; Bell Atlantic-New Jersey,

Inc.; Bell Atlantic-Maryland, Inc.; Bell

Atlantic-Delaware, Inc.; Bell Atlantic-Pennsylvania, Inc.;

Bell Atlantic-Virginia, Inc.; New York Telephone Company;

New England Telephone and Telegraph Company; Independent

Telephone and Telecommunications Alliance, Intervenors on Appeal, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America,

Respondents,

American Telephone and Telegraph Company;

Telecommunications Resellers Association; MCI

Tele-communications Corporation; LBC Communications, Inc.;

Worldcom, Inc.; Competitive Telecommunications Association,

Intervenors on Appeal,

SOUTHERN NEW ENGLAND TELEPHONE COMPANY, Petitioner,

Independent Telephone and Tele-communications Alliance;

Ameritech Corporation; Time Warner Communications Holdings,

Inc.; US Telephone Association; Association for Local

Telecommunications Services; Southwestern Bell Telephone

Company; GTE Service Corporation; GTE Alaska,

Incorporated; GTE Arkansas, Incorporated; GTE California,

Incorporated; GTE Florida, Incorporated; GTE Midwest,

Incorporated; GTE South, Incorporated; GTE Southwest,

Incorporated; GTE North, Incorporated; GTE Northwest,

Incorporated; GTE Hawaiian Telephone Company, Incorporated;

GTE West Coast, Incorporated; Contel of Minnesota, Inc.;

Contel of the South, Inc.; Bell Atlantic-Washington, D.C.,

Inc.; Bell Atlantic-West Virginia, Inc.; Bell Atlantic-New

Jersey, Inc.; Bell Atlantic-Maryland, Inc.; Bell

Atlantic-Delaware, Inc.; Bell Atlantic-Pennsylvania, Inc.;

Bell Atlantic-Virginia,"Virginia, Inc.; New York Telephone

Company; New England Telephone and Telegraph Company, Intervenors on Appeal, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America,

Respondents,

American Telephone and Telegraph Company;

Telecommunications Resellers Association; MCI

Tele-communications Corporation; LBC Communications, Inc.;

Worldcom, Inc.; Competitive Telecommunications Association,

Intervenors on Appeal.

Nos. 97-3389, 97-3576, 97-3663 and 97-4106.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 15, 1998.

Decided Aug. 10, 1998.

Rehearing Denied Dec. 4, 1998.

William T. Lake, Washington, DC, argued (John H. Harwood II, David Sohn, Todd Zubler, Dan L. Poole, Robert B. McKenna, Theodore A. Livingston, John E. Muench, Christian F. Binnig, Gary Feinerman, Kenneth S. Geller, Donald M. Falk, Kelly R. Welsh, John T. Lenahan, Madelyn M. DeMatteo, Alfred J. Brunetti, Robert M. Lynch, Durward D. Dupre, Michael J. Zpevak, Thomas A. Pajda, Darryl W. Howard, Patricia Diaz Dennis, David F. Brown, Stephen B. Higgins, James W. Erwin, Edward D. Young III, Michael E. Glover, James G. Pachulski, William P. Barr, Ward W. Wueste, Jr., M. Edward Whelan, Paul T. Cappuccio, Steven G. Bradbury, Patrick F. Philbin, Thomas B. Weaver, Jordan B. Cherrick, Mary McDermott, Linda Kent, Keith Townsend and Hance Haney, on the brief), for Petitioner.

James M. Carr, Washington, DC, argued (Joel I Klein, Catherine G. O'Sullivan, Nancy C. Garrison, Christopher J. Wright, Daniel M. Armstrong and John E. Ingle, on the brief), for Respondents.

Peter D. Keisler, Chicago, IL, argued (David W. Carpenter, Daniel Meron, Mark C. Rosenblum and Roy E. Hoffinger, on the brief), for Intervenors.

Before BOWMAN, ¹ WOLLMAN, and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

Pursuant to 47 U.S.C. § 402(a) (1994) and 28 U.S.C. § 2342(1) (1994), various incumbent local exchange carriers (incumbent LECs) ² petition for review of the Federal Communication Commission's (FCC's) Third Order on Reconsideration and Further Notice of Proposed Rulemaking, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96-98, 12 FCC Rcd. 12460 (Aug. 18, 1997) (Third Order on Reconsideration). The consolidated petitions challenge both the FCC's determination that shared transport constitutes a network element as defined by 47 U.S.C.A. § 153(29) (West Supp.1998), and the FCC's determination that incumbent LECs must make shared transport available to new entrants on an unbundled basis pursuant to 47 U.S.C.A. § 251(c)(3), (d)(2). We affirm the FCC's order and deny the consolidated petitions for review.

I.

In 1996, Congress amended the Communications Act of 1934 with the purpose of fostering competition in both the interexchange and local exchange markets. See Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56 (to be codified as amended in scattered sections of Title 47, United States Code) (the Act). ³ The issues presented in this case relate to the Act's local competition provisions. The Act requires incumbent LECs to allow new entrants access to their networks in three different ways. Specifically, a LEC must (1) permit requesting competitors to interconnect with the LEC's local network, (2) provide competitors with access to individual elements of its network on an unbundled basis, and (3) allow competitors to purchase its telecommunications services for resale. 47 U.S.C.A. § 251(c)(2)-(4). Together, these duties regarding interconnection unbundled access, and resale are intended to provide would-be competitors with realistic opportunities to enter the market for local exchange service.

The issues presented in the consolidated petitions for review pertain to the incumbent LECs' duties regarding unbundled access. Section 251(c)(3) requires incumbent LECs to provide new entrants with "nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory." (emphasis added). The Act defines "network element" as follows:

The term "network element" means a facility or equipment used in the provision of a telecommunications service. Such term also includes features, functions, and capabilities that are provided by means of such facility or equipment, including subscriber numbers, databases, signaling systems, and information sufficient for billing and collection or used in the transmission, routing, or other provision of a telecommunications service.

47 U.S.C.A. § 153(29).

Although Congress defined the term "network element" in the Act, it invested the FCC with the authority to determine which network elements should be made available to new entrants on an unbundled basis. See 47 U.S.C.A. § 251(d)(2). Section 251(d)(2) limits the FCC's authority in this regard only insofar as it requires the FCC to consider two factors "at a minimum" as it makes this decision. These factors are whether "access to such network elements as are proprietary in nature is necessary," and whether "the failure to provide access...