United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 20, 1998 Decided April 28, 1998
No. 97-1071
Telecommunications Resellers Association, et al.,
Petitioners
v.
Federal Communications Commission and
United States of America,
Respondents
Bell Atlantic NYNEX Mobile, Inc., et al.,
Intervenors
On Petition for Review of an Order of the
Federal Communications Commission
Lewis J. Paper argued the cause and filed the briefs for
petitioners.
Nancy L. Kiefer, Counsel, Federal Communications Com-
mission, argued the cause for respondents, with whom Joel I.
Klein, Assistant Attorney General, U.S. Department of Jus-
tice, Catherine G. O'Sullivan and Nancy C. Garrison, Attor-
neys, Daniel M. Armstrong, Associate General Counsel, Fed-
eral Communications Commission, and John E. Ingle, Deputy
Associate General Counsel, were on the brief. Roberta L.
Cook, Counsel, entered an appearance.
Before: Edwards, Chief Judge, Wald and Rogers, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: An association of cellular resellers
and two of its members seek review of a Federal Communica-
tions Commission ("Commission" or "FCC") order denying
reconsideration of an earlier order that deferred resolution of
their rights to request and receive interconnection with cellu-
lar carriers. We deny the petition for review.
I.
Companies that seek to sell cellular phone service to con-
sumers must access the national Public Switched Telephone
Network ("PSTN") 1 in order to route calls within the United
States. A cellular carrier can access the PSTN by "intercon-
necting" (establishing a physical connection) with either a
local telephone company ("local exchange carrier" or "LEC")
or another cellular carrier that is itself interconnected with an
LEC. Alternatively, a cellular reseller can subscribe to
another carrier's cellular service and then resell that service
to the public, with or without adding value. See Interconnec-
tion & Resale Obligations Pertaining to Commercial Mobile
Radio Servs., 10 F.C.C.R. 10666, 10694-95 (1995). Cellular
resellers achieve greater flexibility to enhance services or
reduce costs by interconnecting, and thus cellular resellers
seek to establish their right to request and receive intercon-
nection with other cellular carriers. This petition for review
concerns whether the Commission has unjustifiably deferred
its recognition and delineation of these rights.
__________
1 The PSTN is the standard network for telecommunications, a
grand amalgam of the interconnected networks of local phone
companies across the country.
The Omnibus Budget Reconciliation Act of 1993 ("Budget
Act"), Pub. L. No. 103-66, 107 Stat. 312, provides the statuto-
ry basis for cellular resellers' claim to interconnection rights.
In section 6002(b)(2) of the Budget Act, Congress amended
section 332 of the Communications Act of 1934 ("Communica-
tions Act"), 47 U.S.C.A. ss 151-614 (West 1991 & Supp.
1998), to read, in part: "Upon reasonable request of any
person providing commercial mobile service, the Commission
shall order a common carrier to establish physical connections
with such service pursuant to the provisions of section 201 of
[the Communications Act]." Id. s 332(c)(1)(B). Section 201
of the Communications Act reads, in relevant part:
It shall be the duty of every common carrier engaged in
interstate or foreign communication by wire or radio to
furnish such communication service upon reasonable re-
quest therefor; and, in accordance with the orders of the
Commission, in cases where the Commission, after op-
portunity for hearing, finds such action necessary or
desirable in the public interest, to establish physical
connections with other carriers....
Id. s 201(a).
In section 6002(d)(3)(C) of the Budget Act, Congress also
directed the Commission to "issue such other regulations as
are necessary to implement the amendments made by [sec-
tion 6002(b)(2)]" within one year of the enactment of the
Budget Act. Budget Act s 6002(d)(3)(C). Accordingly, the
Commission released a Notice of Proposed Rulemaking on
October 8, 1993. See Implementation of Sections 3(n) & 332
of the Communications Act, 8 F.C.C.R. 7988 (1993). The
Commission requested comment on "proposals that would (1)
address the definitional issues raised by the Budget Act; (2)
identify various services ... affected by the new legislation
and describe the potential regulatory treatment thereof; and
(3) delineate the provisions ... of the Communications Act
that will be applied to commercial mobile services and those
provisions that ... will be forborne." Id. at 7988.
After receiving comments from interested parties, the
Commission released its Second Report and Order on March
7, 1994. See Implementation of Sections 3(n) & 332 of the
Communications Act, 9 F.C.C.R. 1411 (1994). In this report,
the Commission revised its rules to implement the changes
effected by the Budget Act. The Commission did not, howev-
er, resolve every issue related to these changes. Of particu-
lar note, the Commission reserved the question whether to
require commercial mobile radio service ("CMRS") 2 provid-
ers (including cellular carriers) "to provide interconnection to
other carriers." Id. at 1499. The Commission explained:
"Because the comments on this issue are so conflicting and
the complexities of the issue warrant further examination in
the record, we have decided to explore this issue in a Notice
of Inquiry." Id. Thus, on July 1, 1994, the Commission
released a Notice of Proposed Rulemaking and Notice of
Inquiry beginning a separate proceeding to investigate this
issue and others. See Equal Access & Interconnection Obli-
gations Pertaining to Commercial Mobile Radio Servs., 9
F.C.C.R. 5408, 5458-69 (1994).
Among the parties objecting to the Commission's decision
to examine further the rights of those who sought intercon-
nection with cellular carriers and other CMRS providers were
petitioners Cellular Service, Inc. ("CSI") and ComTech, Inc.
("ComTech"), two cellular resellers, and the Telecommunica-
tions Resellers Association ("TRA") 3, a trade association that
represents cellular resellers and resellers of other wireless
__________
2 CMRS refers to radio communication service that is provided
for profit and that is made available either to the public or to a class
that represents a substantial portion of the public, as specified by
the Commission. See 47 U.S.C.A. ss 153(27), 332(d)(1) (West Supp.
1998).
3 The party that represented TRA's interest before the agency
and initially before the court was the National Wireless Resellers
Association ("NWRA"), but NWRA merged with TRA and assigned
to TRA its interest in the matter after joining CSI and ComTech in
filing this petition for review. For clarity's sake, this opinion refers
only to TRA, although the actions before the agency attributed to
TRA were taken in the names of NWRA and NWRA's predecessor,
the National Cellular Resellers Association.
communications services. These three parties filed adminis-
trative petitions on May 19, 1994, asking the Commission to
reconsider its Second Report and Order. CSI and ComTech
argued that further inquiry was unnecessary and that the
relevant statutory language and Commission precedents re-
quired that the Commission immediately "recognize the right
of cellular resellers to interconnect with the facilities of the
FCC-licensed cellular carriers and ... require that intercon-
nection be made available under reasonable terms and condi-
tions." TRA contended that section 6002(d)(3)(C) of the
Budget Act required the Commission to issue regulations
implementing its provisions no later than August 10, 1994,
and that the "plain meaning" of the Budget Act "requires the
Commission to order all common carriers to interconnect
with CMRS providers." 4
The Commission did not respond to the petitions for recon-
sideration for quite some time, even after a request for
immediate disposition made on January 19, 1996. CSI and
ComTech thereafter filed a petition for mandamus in this
court on April 9, 1996. The court denied this petition on
August 28, 1996, "in light of the ... Commission's representa-
tion that it will resolve petitioners' Petition for Reconsidera-
tion 'during or promptly after August 1996.' " In re Cellular
Serv. Inc., No. 96-1110 (D.C. Cir. Aug. 28, 1996) (order
denying mandamus). After the Commission failed to abide
by this condition, on November 14, 1996, CSI and ComTech,
joined this time by TRA, filed a renewed petition for manda-
mus.
On December 20, 1996, before this court ruled on the
renewed petition for mandamus, the Commission released its
decision denying the petitions for reconsideration,5 which by
__________
4 Although they did not agree with the separate rulemaking
proceeding following the Commission's Notice of Inquiry, these
parties also filed comments under this separate proceeding, which is
still ongoing before the Commission.
5 The Commission actually received fifteen petitions for recon-
sideration, but its December 20, 1996, decision dealt only with those
filed by CSI, ComTech, and TRA.
that time had languished for more than two-and-a-half years.
See Implementation of Sections 3(n) & 332 of the Communi-
cations Act, 11 F.C.C.R. 19729, 19736 (1996). First, the
Commission denied that the Budget Act required it to issue
any particular regulations by August 10, 1994: "Since Section
6002(d)(3)(C) grants the Commission discretion to issue such
regulations 'as are necessary' to implement the amendments
to Section 332, by its plain language, it does not require that
the Commission adopt rules implementing every statutory
change." Id. at 19733. Furthermore, the Commission ex-
plained, nothing in the Budget Act grants cellular resellers
"an absolute right to interconnection" with CMRS providers,
for any such right is subject to the Commission's authority to
decide when interconnection is "necessary or desirable in the
public interest." Id. at 19734 (quoting 47 U.S.C. s 201(a)
(1994)). Finally, the Commission found good reason why it
should defer final resolution of the issue to a later proceeding,
given the complexity of the issues and cellular resellers'
continuing "opportunity to file fact-specific complaints con-
cerning CMRS-to-CMRS interconnection disputes, should
such disputes arise." Id. at 19734-35. The Commission saw
no need, at this point, to provide the "interim relief" of
"recognizing explicitly the right of cellular resellers to inter-
connect with licensed cellular carriers." Id. at 19735-36.
II.
CSI, ComTech, and TRA petition for review of the Com-
mission's order of December 20, 1996, which reaffirmed its
earlier decision to examine cellular resellers' interconnection
rights in a separate proceeding. The court reviews orders of
the Commission under the arbitrary-or-capricious standard of
the Administrative Procedure Act, see 5 U.S.C. s 706(2)(A)
(1994); Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983), and the Commission has
broad discretion to manage its docket as it sees fit under this
standard: "Absent some unreasonable delay or significant
prejudice to the parties, the Commission cannot be said to
abuse its discretion merely by adopting procedures and time-
tables which it considers necessary to effective treatment of
complex and difficult problems." GTE Serv. Corp. v. FCC,
782 F.2d 263, 273-74 (D.C. Cir. 1986); see also 47 U.S.C.
s 154(j) (1994). Although the Commission's delay in consid-
ering the substantive issue has been significant and troubling,
it has not been so unreasonable that the court could take the
drastic step of directing the Commission as to matters of
docket management.
Petitioners make three basic arguments in an attempt to
show that the Commission's delay was arbitrary and capri-
cious. First, petitioners contend that the Commission's ex-
planation of its decision to postpone resolution of the inter-
connection issue was inadequate because it failed to reconcile
that decision with its own and this court's precedents that
address when a request for interconnection is "reasonable."
See, e.g., Public Util. Comm'n of Tex. v. FCC, 886 F.2d 1325,
1330-31, 1336 (D.C. Cir. 1989); Hush-A-Phone Corp. v.
United States, 238 F.2d 266, 269 (D.C. Cir. 1956); AT&T, 60
F.C.C.2d 939, 943 (1976). The Commission, however, did not
decide that it would deviate from these precedents, just that
it needed to develop a more thorough record and analysis
before resolving the issue. In the order under review, the
Commission only had to justify its decision to defer resolution
of the interconnection issue; thus, it had no need to address
the substantive precedents stressed by petitioners.
Second, petitioners contend that the substantive issue was
so clear that the Commission had no legal basis upon which to
delay resolution, and thus that the delay was arbitrary and
capricious. To the contrary, the merits of the issue are not
nearly clear enough to warrant substantive intervention by
the court. Petitioners' contention hinges on the language of
section 332 of the Communications Act, as amended by the
Budget Act. Section 332 provides: "Upon reasonable request
of any person providing commercial mobile service, the Com-
mission shall order a common carrier to establish physical
connections with such service pursuant to the provisions of
section 201 of [the Communications Act]." 47 U.S.C.A.
s 332(c)(1)(B) (West Supp. 1998). Thus, petitioners claim,
any such "reasonable request" must be honored. Petitioners
discount the import of the phrase "pursuant to the provisions
of section 201 of [the Communications Act]," but this lan-
guage is the key to the analysis. Section 201 requires
interconnection only "in accordance with the orders of the
Commission, in cases where the Commission, after opportuni-
ty for hearing, finds such action necessary or desirable in the
public interest." 47 U.S.C. s 201(a). The Commission has
the authority to issue general rules on when interconnection
will be "in the public interest" under section 201, and hence
when it will be required under section 332. Although the
Commission may ultimately agree with petitioners on the
nature of their interconnection rights, the relevant statutory
provisions do not represent a directive to do so clear enough
for the court to intercede while the Commission considers the
issue in an ongoing proceeding. See Telecommunications
Research & Action Ctr. v. FCC, 750 F.2d 70, 79 (D.C. Cir.
1984); Public Citizen Health Research Group v. FDA, 740
F.2d 21, 28-33 (D.C. Cir. 1984).
Third, petitioners contend that the Commission's delay in
settling the issue is contrary to law, because section
6002(d)(3)(C) of the Budget Act directs the Commission to
"issue such other regulations as are necessary to implement
the amendments made by [section 6002(b)(2)]" within one
year of its enactment. Budget Act s 6002(d)(3)(C). Under
the Commission's reading, this language provides no deadline
for issuing rules regarding the interconnection issue because
such rules were not "necessary" to implement the amend-
ments to the Communications Act. This reading is reason-
able. See Implementation of Sections 3(n) & 332 of the
Communications Act, 11 F.C.C.R. at 19733. There is noth-
ing in section 6002(d)(3)(C) or elsewhere that would give the
court a basis upon which to grant the petition for review.6
__________
6 We also find unpersuasive petitioners' related contention that
the Commission's position that regulations on the interconnection
issue were not "necessary" under section 6002(d)(3)(C) is undercut
by its decision to begin a rulemaking proceeding on that issue. It is
consistent for the Commission in its discretion to begin such a
rulemaking proceeding, even though section 6002(b) may not re-
quire it.
III.
After oral argument, the court requested the Commission
to submit a timetable of when it expected to finish the
proceeding, and also to show cause why the court should not
allow petitioners to amend their complaint to request a writ of
mandamus. In response, the Commission represented that
"[l]itigation counsel anticipate that the Commission will adopt
a final order before the end of the calendar year." The
Commission would not (or could not) commit to any firm
deadline, however, emphasizing the competing demands on
the Commission's scarce resources. As petitioners suggest in
their response, the Commission's response is doubly trou-
bling, for the Commission not only fails to establish a firm
deadline, but also fails to make any predictions in its own
name: whether "[l]itigation counsel anticipate" an imminent
end to the proceedings has at best indirect bearing on what
the Commission will actually do.
By October of this year, five years will have passed since
the Commission issued its original notice of proposed rule-
making on the interconnection issue. This delay is already
dismaying, cf. Midwest Gas Users Ass'n v. FERC, 833 F.2d
341, 359 (D.C. Cir. 1987), and the Commission's assurances
inspire limited confidence that the end is near. The court
denied CSI and ComTech's petition for mandamus because
the Commission indicated it would resolve their petition for
reconsideration "during or promptly after August 1996." In
re Cellular Serv. Inc., No. 96-1110 (D.C. Cir. Aug. 28, 1996)
(internal quotation marks omitted). The Commission indeed
resolved the petition for reconsideration, but it still has not
resolved the substantive issue of primary concern to petition-
ers. Petitioners assert that their businesses are suffering as
a result; in particular, without interconnection rights, they
lose the benefit of the hundreds of thousands of dollars they
have spent to develop a specialized switch to interconnect
with both cellular carriers and LECs. The Commission does
not suggest to the contrary.
The petition for review, however, asks only that the court
review the Commission's order reaffirming its earlier decision
to consider the interconnection issue in a separate proceed-
ing, and that order was not arbitrary or capricious. See
supra Part II. Our denial of the petition for review should
not be interpreted to suggest how the court would address a
future petition for mandamus and is without prejudice to
petitioners' ability to file another petition for mandamus.