The 10th U.S. Appeals Court, Denver, once again remanded the FCC’...

court ruled: “The FCC relied on an erroneous, or incomplete, construction of [Sec. 254 of the Telecom Act] in defining statutory terms and crafting the funding mechanism for non- rural, high-cost support. That construction of the statute is fatal to the cost support mechanism at issue in this case.” The court upheld one part of the FCC’s order that created a mechanism to encourage states to implement their own universal service programs, an area the court found lacking in 2001. The court acted on appeals filed by Qwest, SBC and the Vt. Public Service Board. The original remand found the FCC didn’t adequately define terms, including “reasonably comparable” and “sufficient” and didn’t properly justify the 135% benchmark that determined eligibility for universal service funding. The court last week concluded the FCC still has “failed to reasonably define these terms.” The court also criticized the FCC’s effort to justify its eligibility benchmark: “The Commission established a cost benchmark of two standard deviations above the national average cost per line… We did intimate [in the first remand] that we would be inclined to affirm the FCC’s cost-based funding mechanism if it indeed resulted in reasonably comparable rates. However, we expected the Commission to return to us with empirical findings supporting this conclusion… Once again, we find no evidence in the record before us to support the FCC’s pairings of rates to costs in this context. In other words, the FCC based the… cost benchmark on a finding that rates were reasonably comparable, without empirically demonstrating a relationship between the costs and rates surveyed in this context.” The court turned down petitioners’ request for a deadline of no more than 180 days for the FCC to act on the 2nd remand, saying such a deadline would be “an extraordinary remedy.” The Coalition for Equitable & Affordable Rural Service (CLEAR), which has been working for legislation to change the way the FCC treats nonrural, high-cost carriers, said it hoped the FCC “will give greater consideration to the needs of high-cost rural areas in all of the 50 states, not just a lucky few.” The last time the court remanded the rules, “the FCC ignored the court’s guidance and reaffirmed its unfair, unlawful approach,” a CLEAR spokesman said Mon.