United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 7, 2008 Decided October 31, 2008
No. 07-1381
CORE COMMUNICATIONS, INC.,
PETITIONER
v.
FEDERAL COMMUNICATIONS COMMISSION AND UNITED
STATES OF AMERICA,
RESPONDENTS
VERIZON, ET AL.,
INTERVENORS
On Petition for Review of an Order
of the Federal Communications Commission
Michael B. Hazzard argued the cause for petitioner. With
him on the briefs was Stephanie A. Joyce.
Nandan M. Joshi, Counsel, Federal Communications
Commission, argued the cause for respondents. With him on
the brief were Thomas O. Barnett, Assistant Attorney General,
Robert B. Nicholson and Robert J. Wiggers, Attorneys,
Matthew B. Berry, General Counsel, Federal Communications
Commission, Joseph R. Palmore, Deputy General Counsel,
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Richard K. Welch, Acting Deputy Associate General Counsel,
and Laurence N. Bourne, Counsel.
Bruce A. Olcott and Herbert E. Marks were on the brief
for intervenor State of Hawaii.
Gregory J. Vogt, Richard A. Askoff, Scott H. Angstreich,
Derek T. Ho, Michael E. Glover, Karen Zacharia, Daniel
Mitchell, Karlen J. Reed, Thomas J. Moorman, Joshua
Seidemann, Gary L. Phillips, and Gerald J. Duffy were on the
joint brief for intervenors in support of respondents. Judith L.
Harris and Robert H. Jackson entered appearances.
Before: ROGERS and TATEL, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
WILLIAMS, Senior Circuit Judge: Core Communications,
a competitive local exchange carrier (“LEC”), petitioned the
Federal Communications Commission for “forbearance”
under § 10(c) of the Telecommunications Act of 1996, 47
U.S.C. § 160(c). Specifically it asked the Commission to
forbear from “rate regulation preserved by” § 251(g), from
“rate averaging and rate integration required by” § 254(g),
and, in each case, from “related implementing rules.” In re
Petition of Core Communications, Inc. for Forbearance from
Sections 251(g) and 254(g) of the Communications Act and
Implementing Rules, 22 FCC Rcd 14,118 at 14,118 (2007)
(“Order”). The FCC denied the petition in full. Id. Core now
seeks review of the Order.
We have no occasion to get into the merits; Core has not
shown a basis for Article III standing. Specifically Core has
failed to make clear how the requirements it mentions under
those statutory provisions, or their “related implementing
3
rules,” cause Core any harm. Accordingly, we dismiss Core’s
petition.
* * *
Because the parties in agency cases on direct review will
have had no prior occasion to dispute Article III standing, we
have insisted—to avoid having either to decide standing on an
incomplete record or to order additional submissions—that the
petitioner should, except where standing is self-evident,
“establish its standing by the submission of its arguments and
any affidavits or other evidence appurtenant thereto at the first
appropriate point in the review proceedings.” Sierra Club v.
EPA, 292 F.3d 895, 900 (D.C. Cir. 2002) (emphasis added).
In the absence of a prior motion to dismiss for want of
standing, “the first appropriate point” is “the petitioner’s
opening brief—and not . . . [the] reply to the brief of the
respondent agency.” Id. As we explained, “experience
teaches that full development of the arguments for and against
standing requires the same tried and true adversarial
procedure we use for the presentation of arguments on the
merits.” Id.
Our circuit’s rules restate the requirement:
In cases involving direct review in this court of
administrative actions, the brief of the appellant or
petitioner must set forth the basis for the claim of
standing. . . . When the appellant’s or petitioner’s
standing is not apparent from the administrative record,
the brief must include arguments and evidence
establishing the claim of standing.
Circuit Rule 28(a)(7) (citing Sierra Club, 292 F.3d at 900–
01). What’s more, in an order setting forth the briefing
schedule, we specifically reminded Core of its obligation to
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comply with Sierra Club and Circuit Rule 28(a)(7). Core
Communications, Inc. v. FCC, No. 07-1381 (D.C. Cir. Feb.
28, 2008).
Core did allude to the standing problem in its opening
brief, but it offered only a pair of conclusory assertions—that
Core is subject to (1) “disparate intercarrier competition
[compensation?] regimes preserved by 251(g)” and (2)
“ongoing application of section 254(g)’s rate averaging and
integration rules, which preclude Core from utilizing
differentiated pricing for long distance services and further
chills Core’s entry into rural market areas where incumbents
receive implicit subsidies through this provision.” Core Br.
18.
Core failed to explain how it was being injured by the
application of §§ 251(g) and 254(g). It did not reveal what
services it offered or planned to offer that are or would be
affected by these statutory provisions. Nor, to the extent that
the services might be in markets that Core might enter, did
Core say anything to indicate the seriousness of its plans,
which might range from a gleam in management’s eye to a
well-developed business plan. As a result, the FCC in its
response brief was “left to flail at the unknown in an attempt
to prove the negative.” Sierra Club, 292 F.3d at 901.
Conceivably Core’s reply brief (or even the FCC’s
response, or the combination), might have shown that in fact
standing was “self-evident,” id. at 900, or “apparent from the
administrative record,” Circuit Rule 28(a)(7). They did not;
but they did disclose an invalid theory that seems to lie at the
heart of Core’s idea of its injury.
The FCC observed in its brief that to the extent
“information can be gleaned from other litigation before this
Court and public sources . . . Core is a competitive LEC
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engaged in delivering large quantities of incumbent LEC-
originated Internet-bound dial-up traffic to Internet service
providers.” FCC Br. 21. Core responded in its reply brief and
at oral argument that the Core traffic that the FCC described
would indeed benefit from the forbearance sought in its
petition.
Here’s the attempted logical chain: The Commission,
finding in 2001 that the then-existing “reciprocal
compensation obligations of section 251(b)(5)” gave
competitive LECs such as Core “opportunities for regulatory
arbitrage,” issued an order removing ISP-bound traffic from
those obligations. In re Implementation of the Local
Competition Provisions in the Telecommunications Act of
1996: Intercarrier Compensation for ISP-Bound Traffic, 16
FCC Rcd 9151, 9153–54, ¶¶ 2–3 (2001) (“ISP Remand
Order”). In place of the § 251(b)(5) regime, the ISP Remand
Order imposed both a “bill-and-keep” system, under which
each carrier recovers its costs from its own end-users, and a
set of interim cost-recovery rules to aid in the transition to that
regime. See WorldCom, Inc. v. FCC, 288 F.3d 429, 431 (D.C.
Cir. 2002). In adopting the order, the Commission relied
solely on § 251(g). Id. at 430.
Had matters stopped there, Core’s standing would be
clear. Forbearance from enforcement of rate regulation under
§ 251(g) and “related implementing rules” would remove the
force of the ISP Remand Order, which had been adopted
under § 251(g) precisely to thwart the “regulatory arbitrage”
employed by firms like Core.
But matters did not stop there. An array of firms,
including Core, challenged the ISP Remand Order in this
court, which held unequivocally that § 251(g) did not provide
a legal basis for the order. Id. at 433-34. We nonetheless did
not vacate the ISP Remand Order. Not only did many of the
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order’s challengers themselves favor a bill-and-keep regime,
but there was “a non-trivial likelihood that the Commission
ha[d] authority to elect such a system (perhaps under
§§ 251(b)(5) and 252(d)(B)(i)).” Id. at 434. Accordingly, we
simply remanded the matter to the Commission; the ISP
Remand Order thus entered a kind of regulatory limbo, from
which it has yet to emerge. (We note, however, that we
recently directed the Commission to explain by November 5,
2008 “the legal authority for the [ISP Remand Order].” In re
Core Communications, Inc., 531 F.3d 849, 862 (D.C. Cir.
2008).)
But the passage of time, of course, has not miraculously
pulled the ISP Remand Order back under § 251(g).
Accordingly, removal of rate regulation under § 251(g) and
“related implementing rules” would have no effect on Core.
There remains the possible link between Core’s business
or future business and rate averaging and integration under
§ 254(g). On this issue Core has pointed us to its website,
www.coretel.net, which it says provides links to its “tariffed
local exchange, exchange access, and long distance (i.e.,
‘IXC’) offerings.” Reply Br. 3. While the webpage does
indeed link to an interstate access tariff, there is no indication
that Core provides any service thereunder. At no point—
much less in the opening brief, as required for any element of
standing that is not self-evident—does Core show how its
position, with respect to some specific service, would be
improved by grant of its petition for forbearance from
regulation under § 254(g).
* * *
Core’s petition for review is
Dismissed.