Virgin Islands Telephone Corp. v. Federal Communications Commission

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 13, 1999 Decided December 21, 1999

No. 98-1575

Virgin Islands Telephone Corporation,
Petitioner

v.

Federal Communications Commission and
United States of America,
Respondents

AT&T Corporation,
Intervenor

On Petition for Review of an Order of the
Federal Communications Commission

Daniel E. Troy argued the cause for petitioner. With him
on the briefs was Carl J. Hartmann, III.

Lisa A. Burns, Counsel, Federal Communications Commis-
sion, argued the cause for respondents. With her on the

brief were Christopher J. Wright, General Counsel, John E.
Ingle, Deputy Associate General Counsel, Joel I. Klein, Assis-
tant Attorney General, U.S. Department of Justice, and Rob-
ert B. Nicholson and Robert J. Wiggers, Attorneys. Daniel M.
Armstrong, Associate General Counsel, Federal Communica-
tions Commission, and Pamela L. Smith, Counsel, entered
appearances.

Gene C. Schaerr, Mark C. Rosenblum, and James J.R.
Talbot were on the brief for intervenor.

Before: Sentelle, Rogers and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: Petitioner, the Virgin Islands Tele-
phone Corporation, is a provider of local telephone service in
the U.S. Virgin Islands. AT&T Submarine Systems, Inc.
("AT&T-SSI"), a wholly-owned subsidiary of intervenor,
AT&T Corporation, constructs and maintains undersea fiber
optic telecommunications cable systems, or, submarine cable
systems. In this appeal, petitioner contends that in granting
AT&T-SSI's application for cable landing rights as a non-
common carrier, the Federal Communications Commission
("Commission") ignored Congress' clear directive in the 1996
Telecommunications Act ("1996 Act") to apply a new regime
for distinguishing between common carrier and private carri-
er services. Petitioner maintains that, under the 1996 Act,
"telecommunications services" is defined in a manner that no
longer permits the Commission to apply the two-part test of
National Association of Regulatory Utility Commissioners v.
FCC, 525 F.2d 630 (D.C. Cir. 1976) ("NARUC I"). In peti-
tioner's view, AT&T-SSI would be offering telecommunica-
tions "to such classes of users as to be effectively available
directly to the public" as defined by the 1996 Act if its
customers used the capacity they bought from AT&T-SSI to
provide service to the public. Because the Commission's
interpretation of an ambiguous new term in the 1996 Act to
mean "essentially" the same thing as "common carrier"--and
thus governed by the NARUC I framework--is reasonable,
we deny the petition.

 I.

AT&T-SSI filed with the Commission an application for
authority to land and operate a submarine cable system
extending between St. Thomas and St. Croix in the Virgin
Islands, pursuant to 47 U.S.C. s 34 (1994).1 In the applica-
tion, AT&T-SSI expressed its intention to sell the capacity to
common carriers on an indefeasible right of use ("IRU")
basis.2 Petitioner and TelefOnica Larga Distancia de Puerto
Rico, Inc. ("TLD"), a long distance service provider in the
U.S. Virgin Islands-Puerto Rico market, filed petitions to
deny AT&T-SSI's application. Petitioner and TLD asserted
that the proposed submarine cable system should be operated
on a common carrier basis and that AT&T-SSI should ac-
cordingly resubmit its application and seek authorization to
construct or operate the proposed system under 47 U.S.C.
s 214.3 Shortly after the petitions to deny were filed, peti-
__________
1 The statute provides, in pertinent part, that "[n]o person shall
land or operate in the United States any submarine cable directly
or indirectly connecting the United States with any foreign country,
... unless a written license to land or operate such cable has been
issued by the President of the United States." 47 U.S.C. s 34.

2 The Commission has previously explained IRU interests as
follows:

An IRU interest in a communications facility is a form of
acquired capital in which the holder possesses an exclusive and
irrevocable right to use the facility and to include its capital
contribution in its rate base, but not the right to control the
facility or, depending on the particular IRU contract, any right
to salvage.

Reevaluation of the Depreciated-Original-Cost Standard in Set-
ting Prices for Conveyances of Capital Interests in Overseas
Communications Facilities Between or Among U.S. Carriers, 8
F.C.C.R. 4173 p 2 n.6 (1993).

3 Section 214(a) provides, in relevant part:

No carrier shall undertake the construction of a new line or of
an extension of any line, or shall acquire or operate any line, or
extension thereof, or shall engage in transmission over or by
means of such additional or extended line, unless and until

tioner filed a petition for a declaratory ruling that the pro-
posed submarine cable system should be operated as a com-
mon carrier facility.

While the AT&T-SSI application was pending, Congress
enacted the Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (codified in scattered sections of 47
U.S.C.) ("1996 Act"). The 1996 Act, among other things,
introduced two new terms, "telecommunications carrier" and
"telecommunications service," and defined them as follows:

The term "telecommunications carrier" means any pro-
vider of telecommunications services, except that such
term does not include aggregators of telecommunications
services (as defined in section 226 of this title). A
telecommunications carrier shall be treated as a common
carrier under this chapter only to the extent that it is
engaged in providing telecommunications services, except
that the Commission shall determine whether the provi-
sion of fixed and mobile satellite service shall be treated
as common carriage.

47 U.S.C. s 153(44) (Supp. III 1997).

The term "telecommunications service" means the offer-
ing of telecommunications for a fee directly to the public,
or to such classes of users as to be effectively available
directly to the public, regardless of the facilities used.

Id. s 153(46). For the purposes of this appeal, the key
aspects of these definitions are that "any provider of telecom-
munications services," except for "aggregators" of such ser-
vices, is designated a "telecommunications carrier" and that
to the extent that a telecommunications carrier is engaged in
providing "telecommunications services," it "shall be treated
as a common carrier." Id. s 153(44). In other words, wheth-
__________
there shall first have been obtained from the Commission a
certificate that the present or future public convenience and
necessity require or will require the construction, or operation,
or construction and operation, of such additional or extended
line.

47 U.S.C. s 214(a).

Er a carrier will be subject to common carrier regulation
pursuant to s 153(44) turns on whether it offers "telecommu-
nications for a fee directly to the public, or to such classes of
users as to be effectively available directly to the public." Id.
s 153(46).

The International Bureau ("Bureau") granted AT&T-SSI's
application for a cable landing license on a non-common
carrier basis. See AT&T Submarine Systems, Inc., 11
F.C.C.R. 14885 p 1 (1996) ("Bureau Order").4 Observing that
"[t]he Commission has not yet addressed the issue of how, if
at all, the 1996 Act's introduction of the concept of a 'telecom-
munications carrier' affects the applicability of NARUC I
standard," id. p 15, the Bureau decided that, in any event,
AT&T-SSI is not a common carrier because it is neither a
"telecommunications carrier" under the 1996 Act nor a "com-
mon carrier" under the NARUC I standard. Id. pp 13-15.

In examining whether AT&T-SSI is a "telecommunications
carrier," or a provider of "telecommunications service," under
the 1996 Act, the Bureau looked to the Commission's inter-
pretation of the term "commercial mobile service," as defined
in the Omnibus Budget Reconciliation Act of 1993, Pub. L.
No. 103-66, Title VI, 107 Stat. 312, 379-401 (codified in
scattered sections of 47 U.S.C.) ("1993 Budget Act"). The
1993 Budget Act defined "commercial mobile service" as "any
mobile service ... that is provided for profit and makes
interconnected service available (A) to the public or (B) to
such classes of eligible users as to be effectively available to a
substantial portion of the public, as specified by regulation by
the Commission." 47 U.S.C. s 332(d)(1). The Commission
subsequently read "available ... to the public" as "offered
without restriction on who may receive it" and declared that
whether a service was available to "such classes of eligible
users as to be effectively available to a substantial portion of
the public" depended on "several relevant factors such as the

__________
4 The Bureau Order disposed of both the petitions to deny
AT&T-SSI's application and the petition for a declaratory ruling
that the proposed facility must be operated on a common carrier
basis. See Bureau Order p 8 n.7.

type, nature, and scope of users for whom the service is
intended." Implementation of Sections 3(n) and 332 of the
Communications Act, Regulatory Treatment of Mobile Ser-
vices, 9 F.C.C.R. 1411 p 265 (1994) ("CMRS Order"). The
Commission also stated that a service will not be considered
"available to the public" or "effectively available to a substan-
tial portion of the public" if it is "provided only for internal
use or only to a specified class of eligible users under the
Commission's Rules." Id.

Noting the similarity in the definitions of the terms "tele-
communications service" and "commercial mobile service," the
Bureau concluded that under the 1996 Act, "whether a service
is effectively available directly to the public depends on the
type, nature, and scope of users for whom the service is
intended and whether it is available to 'a significantly restrict-
ed class of users.' " Bureau Order p 25. The Bureau applied
these criteria to AT&T-SSI's proposed facility and found
that:

AT&T-SSI ... will make available bulk capacity in its
system to a significantly restricted class of users, includ-
ing common carrier cable consortia, common carriers,
and large businesses. Potential users are further limited
because only consortia, common carriers, and large busi-
nesses with capacity in interconnecting cables or other
facilities and, in many cases, operating agreements with
foreign operators, will be able to make use of the cable as
a practical matter.

Id. The Bureau rejected the argument that AT&T-SSI will
be making a service effectively available directly to the public
because AT&T-SSI's customers will use the capacity to pro-
vide a service to the public, noting that "[s]uch an interpreta-
tion is contrary to the plain language of the [1996 Act] by
focusing on the service offerings AT&T-SSI's customers may
make rather than what AT&T-SSI will offer."5 Id. p 26.

__________
5 The Bureau also questioned the assumption that AT&T-SSI's
customers would sell the capacity to the public because some of the
"large businesses [to which the capacity will be made available] ...

Therefore, the Bureau concluded that AT&T-SSI will not be
offering a service "directly to the public, or to such classes of
users to be effectively available directly to the public" and
that, consequently, AT&T-SSI is not a "telecommunications
carrier" providing "telecommunications service" under the
1996 Act. Id. p 29.

The Bureau then considered whether AT&T-SSI should
nevertheless be regulated as a common carrier under
NARUC I. The NARUC I test has two parts: "[W]e must
inquire, first, whether there will be any legal compulsion ...
to serve [the public] indifferently, and if not, second, whether
there are reasons implicit in the nature of [the] operations to
expect an indifferent holding out to the eligible user public."
NARUC I, 525 F.2d at 642. The Commission has subse-
quently interpreted this two-part test to mean that a carrier
has to be regulated as a common carrier if it will "make
capacity available to the public indifferently" or if "the public
interest requires common carrier operation of the proposed
facility." Cable & Wireless, PLC, 12 F.C.C.R. 8516 pp 14-15
(1997). The Bureau, applying the two-part test, decided that
neither prong of the NARUC I standard was applicable to
AT&T-SSI's proposed system and that the proposed system
may thus be offered on a non-common carrier basis. See
Bureau Order p 69. The Bureau added, however, that it
retained "the right to change the regulatory status of the
cable system to common carrier should conditions change in
the future." Id. p 2.

The Commission denied petitioner's application for review,
agreeing with the Bureau that the 1996 Act did not require it
to regulate AT&T-SSI as a common carrier and that "there
are no other public interest reasons for doing so." AT&T
Submarine Systems, Inc., 13 F.C.C.R. 21585 p 1 (1998)
("Commission Order"). In the Commission's view, as it had
previously held in Cable & Wireless, "the term 'telecommuni-
cations carrier' means essentially the same as common carri-
er" and "does not ... introduce a new concept whereby we

__________
would not use the capacity to provide service to the public." Id.
p 26.

must look to the customers' customers to determine the
status of a carrier." Commission Order p 6 (citing Cable &
Wireless p 13). The Commission accordingly proceeded to
apply the traditional NARUC I two-part test to determine
whether AT&T-SSI should be regulated as a common carrier
under the 1996 Act.

First, the Commission asked, under the second part of the
NARUC I test, whether AT&T-SSI "intend[ed] to make
'individualized decisions, whether and on what terms to
serve.' " Id. p 7 (citation omitted). Noting that the Bureau
had found that "AT&T-SSI would have to engage in negotia-
tions with each of its customers on the price and other terms
which would vary depending on the customers' capacity
needs, duration of the contract, and technical specifications,"
id. p 8, the Commission found that AT&T-SSI "will not sell
capacity in the proposed cable indifferently to the public."
Id. The Commission thus concluded that the second part of
the NARUC I test did not require that AT&T-SSI be regu-
lated as a common carrier. See id.

Next, the Commission considered whether, under the first
part of the NARUC I test, "the public interest requires
common carrier operation of the facility." Id. p 9. The
Commission focused its inquiry on whether AT&T-SSI "has
sufficient market power to warrant regulatory treatment as a
common carrier." Id. The Commission concluded that be-
cause "sufficient alternative facilities" to service the St.
Thomas to St. Croix route are available, "AT&T-SSI does not
have market power," Id. p 11, and the first part of the
NARUC I test does not require that AT&T-SSI be regulated
as a common carrier. See id.

II.

Petitioner principally contends that the Commission's deci-
sion to apply the NARUC I test to find that AT&T-SSI does
not offer "telecommunications services" ignored both the
plain language of the 1996 Act and the congressional intent to
replace the traditional NARUC I test with a new statutory
standard that effects a drastic change in the regulatory

regime.6 Further, petitioner maintains that the Commission
has ruled in other contexts that providers offering services
similar to AT&T-SSI's services are "telecommunications car-
riers" under the 1996 Act and that the Commission failed to
follow its own precedent without adequate explanation. We
apply the now familiar standard of review articulated in
Chevron U.S.A. Inc. v. Natural Resources Council, Inc., 467
U.S. 837 (1984).

The parties agree that AT&T-SSI does not sell its capacity
"directly to the public," and hence the question before the
Commission was whether AT&T-SSI's business activities
constitute an "offering of telecommunications ... to such
classes of users as to be effectively available directly to the
public." The first inquiry under Chevron is "whether Con-
gress has directly spoken to the precise question at issue."
Id. at 842. Neither the text nor legislative history of the 1996
Act shows that Congress has decided whether the activities
by AT&T-SSI constitute a "telecommunications service."
The phrase "to such classes of users as to be effectively
available directly to the public" is sufficiently vague and open-
ended to leave the precise issue of how to treat AT&T-SSI
undecided. Taken at face value, the legislative history offers
little additional guidance because it simply states that the
definition of telecommunications service "recogniz[es] the dis-
tinction between common carrier offerings that are provided
to the public ... and private services." H.R. Conf. Rep. No.
104-458, at 115 (1996).

Consequently, petitioner's contention that the Commission
failed to follow what the text of the 1996 Act "unambiguously"
requires is exaggerated. Petitioner claims that "the statuto-
ry language requires ... an examination of the 'class of users'
served by" AT&T-SSI and that the Commission's refusal to
look at the activities of AT&T-SSI's customers thus amount-
ed to a disregard of the statutory directive. Although the
plain language of the statute does not preclude petitioner's

__________
6 Because petitioner does not challenge the substance of the
Commission's NARUC I analysis, we do not reach the question
whether the Commission applied the NARUC I test correctly.

reading, neither does it compel such a result. The phrase
"effectively available directly to the public" can be reasonably
read instead as reflecting the NARUC I court's emphasis that
"carriers need not serve the whole public" to be classified as
common carriers. NARUC I, 525 F.2d at 642 (citation omit-
ted). The court, after stating that "[w]hat appears to be
essential to ... the common carrier concept is that the
carrier 'undertakes to carry for all people indifferently,' " id.
at 641 (citation omitted), stressed that "[t]his does not mean
that a given carrier's services must practically be available to
the entire public." Id. The court then added, "It is not
necessary that a carrier be required to serve all indiscrimi-
nately; it is enough that its practice is, in fact, to do so." Id.
(citation omitted). Given that the statute's distinction be-
tween "directly available to the public" and "effectively avail-
able directly to the public" can be read as reflecting the
NARUC I court's distinction between serving the entire
public and serving only a fraction of the public, it is reason-
able to read the statute as adopting the NARUC I frame-
work. Therefore, petitioner's contention that the statute
requires the Commission to examine AT&T-SSI's customers'
activities to determine AT&T-SSI's status attributes more
determinative force to the language of the statute than is
warranted.

Because the 1996 Act is silent with respect to the issue of
whether AT&T-SSI should be treated as a common carrier,
the question under Chevron becomes "whether the agency's
answer is based on a permissible construction of the statute."
Chevron, 467 U.S. at 843. The Commission construed the
term "telecommunications carrier" by reasoning that it
"means essentially the same as common carrier" and that it
does not "introduce a new concept whereby we must look to
the customers' customers to determine the status of a carri-
er." Commission Order p 6. As support for its conclusion,
the Commission looked to its decision in Cable & Wireless,
where it had concluded that the definition of "telecommunica-
tions services" in the 1996 Act was "intended to clarify that
telecommunications services are common carrier services,"
Cable & Wireless p 13, citing the above-mentioned legislative

history that "the definition of telecommunications service
'recognizes the distinction between common carrier offerings
that are provided to the public ... and private services.' "
Id. (quoting H.R. Conf. Rep. No. 104-458, at 115). Reasoning
from this statement in the legislative history, the Commission
viewed the definition of "telecommunication services," that is,
"the offering of telecommunications for a fee directly to the
public or to such classes of users as to be effectively available
directly to the public," to be essentially a way of restating the
definition of common carrier as clarified by NARUC I.

Although the Commission has not provided a detailed ex-
planation of its interpretation of the statute in the decision
under review, the rationale in Cable & Wireless, on which the
Commission relies, constitutes a permissible construction of
the statute. As discussed, Cable & Wireless based its reading
primarily on the legislative history of the 1996 Act. The
Conference Report stated that the definition of telecommuni-
cations service "recogniz[es] the distinction between common
carrier offerings that are provided to the public ... and
private services." H.R. Conf. Rep. No. 104-458, at 115. This
emphasis on the distinction between the public and the pri-
vate echoes the NARUC I court's discussion of the term
"common carrier." The NARUC I court, in discussing the
concept of "common carrier," stated that "the critical point is
the quasi-public character of the activity involved," NARUC
I, 525 F.2d at 641, and referred to phrases like "a sort of
public trust," "availing themselves of the business of the
public at large," and "the public's business" to elucidate the
concept. Id. at 641-42. In addition, the court used the
phrase "public-private dichotomy" to describe "the distinction
between common carrier and non-common carrier operators."
Id. Although the Commission's decision here did not explicit-
ly make this point, the legislative history that Cable &
Wireless relied on can be reasonably construed as manifesting
Congress' intention to maintain the basic public-private di-
chotomy of NARUC I.

We disagree with petitioner's contention that the Commis-
sion's use of the NARUC I test constitutes a failure to give
meaning to the definition of "telecommunications service." It

is true that the Commission never explained in detail how its
interpretation corresponded to the specific text of the rele-
vant provision.7 However, the Commission implicitly gave
meaning to the statutory language by applying the NARUC I
test. Under the NARUC I test, the key determinant wheth-
er a carrier is a common carrier is "the characteristic of
holding oneself out to serve indiscriminately," NARUC I, 525
F.2d at 642, and whether a carrier is offering services "direct-
ly to the public" or making them "effectively available directly
to the public" is irrelevant for the purpose of determining
one's common carrier status. In other words, under the
Commission's reading of the statute, the emphasis is on the
phrase "to the public" that appears in both "directly to the
public" and "effectively available directly to the public," and
the difference between "directly" and "effectively available
directly" is important merely for the purpose of emphasizing
the proposition that "common carriers need not serve the
whole public." Id. (emphasis added) (citation omitted). This
is a reasonable reading of the statute, and petitioner's re-
peated demand that the Commission articulate an interpreta-
tion of "effectively available directly to the public" that is
separate from "directly to the public" evinces its failure to
comprehend the structure of the NARUC I test and the
Commission's application of it.

To the extent that petitioner's challenge rests on the as-
sumption that if all Congress had intended was to clarify the
phrase "common carrier" it would not have introduced a new
term, it fares no better. First, the two terms, "telecommuni-
cations carrier" and "common carrier" are not necessarily
identical, and, as intervenor AT&T Corporation urges, we
need not decide today what differences, if any, exist between
the two. Second, as the Commission points out in its brief,
the concept of "common carrier" has not been eliminated by
the 1996 Act because "the core provisions of Title II of the

__________
7 Although the Bureau engaged in a textual analysis of sort by
referring to the CMRS Order, the Commission does not seem to
have adopted the Bureau's analysis of the relationship between the
instant case and the CMRS Order. See infra pp. 14-15.

1934 [Communications] Act ... remain in the Act and ad-
dress the duties of 'common carriers.' " The Commission's
theory that Congress attempted to retain the familiar concept
of "common carrier" and yet redefine it in a way that is
clearer thus seems plausible. Whether this is the most
elegant way of providing clarification is, of course, not the
issue.

Finally, petitioner's contention that in granting AT&T-
SSI's application, the Commission departed from its own
precedent without adequate explanation is unpersuasive.
First, petitioner refers to the Commission's rulemaking in
CMRS Order, which interpreted the term "commercial mobile
service" defined by Congress as: "any mobile service ... that
is provided for profit and makes interconnected service avail-
able (A) to the public or (B) to such classes of eligible users as
to be effectively available to a substantial portion of the
public, as specified by regulation by the Commission." 47
U.S.C. s 332(d). Petitioner contends that the Commission's
rulemaking order indicates that it "recognized that by intro-
ducing the new concept of CMRS, Congress intended to alter
the [Commission's] method for determining which carriers
would be subject to common carrier regulation" and "that the
phrase 'effectively available' to the public brought within the
definition of CMRS services reaching the public either direct-
ly or indirectly-like wholesale services." Thus, petitioner
implies that because AT&T-SSI's planned activities with the
proposed cable system can be characterized as wholesale
services, AT&T-SSI, too, should be treated as a common
carrier in this case.

Although petitioner's discussion of the CMRS Order in its
opening brief implies the objection just outlined, petitioner
never explicitly contends that the Commission's decision is
inconsistent with the CMRS Order. Therefore, petitioner
may have waived this particular argument. See Corson &
Gruman Co. v. NLRB, 899 F.2d 47, 50 n.4 (D.C. Cir. 1990)
(per curiam). Even if petitioner has not waived it, it is
meritless. Petitioner's contention that the Commission con-
sidered "effectively available to the public" to include whole-
sale services mischaracterizes the CMRS Order. Nowhere in

that decision is there a statement or suggestion that services
reaching the public indirectly, such as wholesale services, fall
within the meaning of "effectively available to the public."
See CMRS Order pp 65-70. Furthermore, even if petitioner
were correct that the CMRS decision considered wholesale
services to be covered by the phrase "effectively available to
the public," it is unclear why that is inconsistent with the
decision on appeal. Unlike petitioner, who assumes a whole-
saler-retailer distinction throughout its briefs, neither the
Bureau nor the Commission relied on the distinction for its
decision. Instead, the Commission focused on the NARUC I
test of whether there is an offering of "indiscriminate service"
to the public, leaving open the possibility of characterizing a
type of wholesaler as a common carrier. Therefore, a mere
showing that a previous decision characterized a wholesaler
as a common carrier is insufficient to demonstrate an incon-
sistency between the Order and the previous decision.

Petitioner's further contention that the Commission misap-
plied the principle announced in the CMRS Order is to no
avail. Despite the similarities in the language of the provi-
sions considered in the CMRS Order and the Commission
Order, they are not identical: the CMRS Order interpreted
the phrase "effectively available to a substantial portion of the
public," 47 U.S.C. s 332(d)(1), whereas the Commission Or-
der interpreted "effectively available directly to the public."
47 U.S.C. s 153(46). Therefore, the terms of the provisions
by themselves do not compel the Commission to interpret
them in an identical manner.

It is true that the Bureau arrived at its decision, in part, by
drawing an analogy to the definition of "commission mobile
service" as read by the CMRS Order, see Bureau Order
pp 24-25, and the Commission's brief even states that "the
Commission expressly affirmed" the Bureau's discussion of
the CMRS Order. To the extent that the Commission fol-
lowed the analysis provided in the CMRS Order, it may be
argued that the Commission was obliged to apply the CMRS
Order's standard correctly. But, in our view, the Commission
never relied on the CMRS Order. Although the Commission
affirmed the Bureau's decision, it did not adopt the entirety of

the Bureau's rationale. The Bureau's decision was that
AT&T-SSI was neither a telecommunications carrier under
the 1996 Act nor a common carrier under the NARUC I
framework. The two legal authorities--the 1996 Act and
NARUC I--were treated as requiring separate tests, and the
Bureau's decision was based primarily on the fact that the
two tests, independent from each other, led to the same
conclusion. See Bureau Order pp 13, 15. In fact, the Bureau
expressed uncertainty concerning the exact relationship be-
tween the 1996 Act and the NARUC I test. See id. p 15. By
contrast, the Commission harbored no such uncertainty, and
expressly articulated the relationship between the 1996 Act
and the NARUC I test by stating that " 'telecommunications
carrier' means essentially the same as common carrier,"
Commission Order p 6, and then proceeded to apply the
NARUC I test. Therefore, unlike the Bureau, the Commis-
sion never relied on the CMRS Order for its decision in the
first place, and the Commission thus never imposed on itself a
requirement to follow the standard announced in the CMRS
Order.

No more successful is petitioner's contention that the Com-
mission's position is inconsistent with its decisions in Federal-
State Joint Board on Universal Service, 12 F.C.C.R. 87
(1996) ("Universal Service Recommended Decision"), and
Implementation of the Non-Accounting Safeguards of Sec-
tions 271 and 272 of the Communications Act of 1934, as
amended, 11 F.C.C.R. 21905 (1996) ("Non-Accounting Safe-
guards Order"). Again, petitioner's challenges erroneously
rely on the assumption that the Commission's decision turned
on the fact that AT&T-SSI could be characterized as a
wholesaler, when, in fact, no such wholesaler-retailer distinc-
tion is assumed by the Commission.

The source of the confusion is petitioner's failure to distin-
guish between a "recommended decision" and an "order."
Universal Service Recommended Decision stated that whole-
sale carriers' activities "are included in the phrase 'to such
classes of eligible users as to be effectively available to a
substantial portion of the public,' " and that carriers that
"lease capacity to other carriers ... would be considered

carriers that provide ... telecommunications services." Uni-
versal Service Recommended Decision p 788 (quoting 47
U.S.C. s 153(46)). However, such recommendations were not
adopted by the Commission until it released Federal-State
Joint Board on Universal Service, 12 F.C.C.R. 8776 (1997)
("Universal Service Order"). Although the Universal Service
Order adopted most of the recommendations contained in the
Universal Service Recommended Decision, the Commission
rejected the portion of the analysis that petitioner cites.
Instead, the Commission observed that "the definition of
'telecommunications services' ... is intended to encompass
only telecommunications provided on a common carrier ba-
sis," Universal Service Order p 785, and, accordingly, "private
network operators that lease excess capacity on a non-
common carrier basis" are not telecommunications carriers
under the 1996 Act because they are not "common carriers."
Id. p 786. While the Commission acknowledged that common
carriers' customers need not be "end users" and that "[c]om-
mon carrier services include services offered to other carri-
ers," it emphasized that "a carrier may be a common carrier
if it holds itself out to service indifferently all potential users,"
and that "a carrier will not be a common carrier where its
practice is to make individualized decisions in particular cases
whether and on what terms to serve." Id. p 785 (quotations
omitted).

Petitioner's contention that the Commission's Non-
Accounting Safeguards Order is inconsistent with the Com-
mission Order at issue does not work, either.8 The relevant
portions of Non-Accounting Safeguards Order, if anything,
are very similar to the Commission Order. For instance, the
Commission noted in the Non-Accounting Safeguards Order
that "the definition of telecommunications services is intended

__________
8 As the Commission notes, although the Non-Accounting Safe-
guards Order was reconsidered in Implementation of the Non-
Accounting Safeguards of Sections 271 and 272 of the Communica-
tions Act of 1934, as amended, 12 F.C.C.R. 8653 (1997), there was
no reconsideration of the initial position relevant to the instant case.
We focus on the initial order because it contains a more detailed
discussion of the relevant issue.

to clarify that telecommunications services are common carri-
er services." Non-Accounting Safeguards Order p 263. It
also stated that the term "telecommunications service" creat-
ed a distinction between "common and private carriage." Id.
p 265. It did observe that common carrier services "include
wholesale services to other carriers," id. p 263, that "the term
'telecommunications service' was not intended to create a
retail/wholesale distinction," id. p 265, and that "[n]either the
Commission nor the courts ... has construed 'the public' as
limited to end-users of a service." Id. However, none of
these statements is inconsistent with the Commission's grant
of AT&T-SSI's application. Again, the Commission never
relies on a wholesale-retail distinction; the focus of its analy-
sis is on whether AT&T-SSI offered its services indiscrimi-
nately in a way that made it a common carrier under NARUC
I, and the fact that AT&T-SSI could be characterized as a
wholesaler was never dispositive.

Accordingly, we deny the petition for review.