Court chides FCC for delay on intercarrier compensation proceeding.
Swatting aside claims that the FCC had, again, violated the Regulatory Flexibility Act (RFA), the U.S. Court of Appeals for the D.C. Circuit has upheld the Commission’s Intermodal Number Portability order. That order was initially adopted by the agency in 2003, but then set aside by the Court in 2005 because of RFA problems. A couple of years later, the Commission finally got around to addressing those RFA problems, and the Court has now approved that second effort.
But in so doing, the Court has signaled its impatience with the FCC’s slow-motion deliberations in the related intercarrier compensation (ICC) proceeding.
The RFA is a legacy of the Reagan era. It requires federal agencies to analyze the impact of new rules on small businesses. The theory is that, by forcing an agency to review and articulate the impact of its rules on the Little Guys, the RFA may prevent, or at least discourage, unnecessarily burdensome regulations.
As a practical matter, though, the RFA provides little help in most situations. The agency is ordinarily accorded substantial deference by the courts. That’s even truer when it comes to compliance with the RFA’s requirements, which the D.C. Circuit has characterized as “purely procedural” – and by that the court seems to mean that, as long as the FCC jumps through the limited number of hoops set out in the RFA, the FCC can expect to insulate itself from pretty much any RFA-based appeal. (While the Court did send the 2003 number portability order back to the Commission on RFA grounds, that was because the FCC had declined to perform any RFA analysis at all. The FCC said it thought that its 2003 order was exempt from the RFA. Nice try.)
In its most recent decision reviewing the FCC’s three-years-in-the-making RFA analysis, the Court had no trouble concluding that that analysis passed muster. The Court confirmed that the FCC touched all the bases required by the statute, and that its analysis was neither arbitrary nor capricious. So even though small carriers will be subjected to significantly increased costs as a result of the number portability system imposed by the Commission – a result which the RFA was intended to discourage, if possible – that system has now survived judicial review.
Having won this one, the Commission may be emboldened to increase the regulatory load on wireline carriers. On May 13, the FCC is scheduled to consider a possible reduction in the maximum allowable time for porting numbers – a reduction which would likely be burdensome for wireline carriers. Since the Court did not have any problem with the new burdens imposed by its prior intermodal number portability requirements, the Commission may reasonably figure that similar, or even greater, burdens can be heaped on without fear of reversal. We will likely see that come into play shortly.
But the Court didn’t let the Commission off scot free. In rejecting the argument that porting imposes disproportionate transport costs on small carriers, the Court explicitly relied on the FCC’s assurances that it will be addressing transport costs more broadly in the long-pending ICC proceeding. This may put some heat on the FCC to get that proceeding going again, particularly because the Court pointedly observed that “[w]e assume the Commission will complete its work [on ICC] soon. If not, an appropriate party may of course file a petition for mandamus.” Essentially, the Court was inviting parties to seek “mandamus”, i.e., a special writ by which parties may seek relief from “unreasonable delay” by an agency. Such an invitation is music to the ears of parties who would otherwise have to cool their heels, waiting for years for the FCC to act. As recently as 2008, a party sought and obtained from this very Court, an order requiring the FCC to rule on ICC for ISP-bound traffic.
So while the FCC may currently lack the set of permanent Commissioners needed to properly address the ICC proceeding (a proceeding that has dragged on for over eight years already), the Court has clearly signaled that it is running out of patience. Optimists might figure that the FCC may feel the need to take up the ICC proceeding even before the new Commissioners are seated. However, if history is any predictor, we suspect that the FCC will have to be further pushed into action, kicking and screaming.