Judges Question Core’s Standing in Oral Arguments on Forbearance Complaint
Core Communications never got past questions about its legal standing in challenging FCC denial of its forbearance petition as the competitor and the agency faced off Tuesday before a three-judge panel of the Court of Appeals for the District of Columbia Circuit. Observers predicted Core will lose, noting that the judges asked few questions about the substance of its complaint. Observers also see the case as largely a sideshow, with the real action to come next month, when the FCC is to address intercarrier compensation rules at its Nov. 4 agenda meeting.
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Acting on a Core mandamus petition, the same court in July gave the FCC until Nov. 5 to explain the statutory basis for a nine-year-old interim compensation scheme for ISP-bound traffic. Its Election Day meeting will see the agency take up the so-called ISP remand and possibly broader changes to intercarrier compensation rules. The FCC has issued no order satisfying a 2002 remand by the court in WorldCom vs. FCC.
At issue in Tuesday’s arguments was whether the FCC properly denied a petition asking that the agency use its forbearance authority under Sect. 10 of the Communications Act to allow Core to replace access charges with reciprocal compensation. The company intended its petition for forbearance to harmonize intercarrier compensation rates for all carriers and to eliminate “regulatory arbitrage,” it said in a pleading to the court.
But Core’s lawyer, Michael Hazzard, spent most of his time in oral arguments answering questions on standing. Judges David Tatel and Stephen Williams repeatedly asked Hazzard to explain why the court even should hear the challenge. Their key question was whether a two-paragraph statement of standing filed in a Core pleading sufficed. “Your view is under our rules your standing is self evident,” Tatel said. “Your view must be … your standing is self evident.”
Williams said repeatedly that the FCC will address the broader issue Core raises in handing down the ISP-remand order. “Your issue depends on the ISP remand order,” Williams said: “It comes back again and again and again to the ISP remand order.” An attorney who watched the oral arguments said later that the court did not seem to feel that Core adequately addressed questions on its standing: “It’s an area where the court has been expanding its rule.”
The FCC said in a pleading that the four and half pages in which Core attempted to make its case did not suffice to justify a grant of forbearance. “In a ‘forbearance’ petition filed with the FCC, petitioner Core sought sudden and sweeping changes to the regulatory landscape for telecommunications,” the agency told the court. “By a single stroke, Core’s 22-page petition sought to transform the system of statutory provisions and rules that governs: (1) intercarrier compensation … and the retail rates that carriers charge to consumers who place interstate long-distance telephone calls.”
Filing in support of the FCC, AT&T, Verizon and various trade groups called Core’s appeal “the latest in a long series of efforts by [Core] to promote its own short-term interest in regulatory arbitrage at the expense of rational, pro-competitive regulation.” The intervening parties termed Core’s petition “in substance, a request for new regulation, not a request for forbearance,” which Core saw as a “means of gaining competitive advantage.”