Appeals of 10th Circuit USF/Intercarrier Compensation Decision Should Continue, States Participants Say

DALLAS -- Parties within state utility commissions and elsewhere opposed to the 10th U.S. Circuit Court of Appeals’ decision upholding the FCC 2011 USF/intercarrier compensation order (CD May 27 p1 ) should continue exploring options for appealing that decision even though available options have a low probability of succeeding, industry panelists said at the NARUC meeting. Those options include requesting an en banc review by the entire 10th Circuit or an appeal to the Supreme Court, said NARUC Counsel Brad Ramsay.

There have already been two petitions for an en banc 10th Circuit review, but the odds are against the court granting a rehearing because the original three-judge panel that heard the case circulated the decision to all judges on the court, Ramsay said. If the 10th Circuit denies the en banc petitions, parties can then appeal to the Supreme Court. There’s a low probability that the court would agree to hear the case, because it receives 7,000-10,000 petitions a year and hears only about 80 cases, Ramsay said. Appealing parties can boost the probability of getting a Supreme Court hearing by encouraging “as many amicus briefs as possible,” he said.

The decision was a clear loss for state public utility commissions, said former Comptel CEO Earl Comstock, a lawyer with Eckert Seamans. The 10th Circuit ruling effectively eroded the states’ role in Communications Act sections 251 and 254, which in turn will erode the efficacy of both sections, he said: “You can’t take away all of the states’ role and have a statute that makes sense.” Comstock suggested any appeal to the Supreme Court should be very specific, perhaps focusing on one or two issues. The 10th Circuit case consolidated 31 separate petitions for review of the FCC order, meaning the 10th Circuit didn’t have a chance to drill down on any one particular issue, Comstock said.

The 10th Circuit ruling effectively ignored the states’ argument that the FCC disregarded due process in issuing the order, said NASUCA Counsel David Bergmann. The decision “encourages the FCC to ignore the due process concerns of people outside the Beltway,” he said. The state commissions are unlikely to find relief through state legislatures, many of which have enacted legislation restricting the commissions’ authority, Bergmann said.

NTCA Senior Vice President-Policy Mike Romano said he believes the 10th Circuit’s ruling does not entirely negate the states’ role on USF and intercarrier compensation, noting instances where states have retained limited authorities on issues like setting the terms and conditions of intercarrier compensation deals. NTCA is also continuing to work with the FCC to clarify the order’s impact, he said.

Vermont Public Service Board member John Burke, a member of the NARUC Telecom Committee, said he believes the 10th Circuit ruling is also a loss for Congress. If the 10th Circuit is going to give the FCC the level of deference shown in its USF/intercarrier compensation decision, “doesn’t Congress have a problem too?” he said. “How do they know when they pass something that it’s really going to have any effect?” (jphillips@warren-news.com)