STEVENS URGES APPEAL OF TRO DECISION

Sen. Appropriations Chmn. Stevens (R-Alaska) appears supportive of the FCC’s current model for competitive entry into the telecom marketplace, as he and a few other influential senators are urging the Justice Dept. to appeal the U.S. Appeals Court, D.C., ruling that vacated parts of the FCC’s Triennial Review Order. Meanwhile, nearly 130 House members are writing directly to the President urging the Administration not to appeal the decision (CD March 16 p9). And sources said other letters may be coming in an effort by members and industry to influence the decision of Solicitor Gen. Theodore Olson, who has about 2 months to request a stay of the order and 3 months to decide whether to appeal.

The March 15 letter from Stevens was also signed by others likely to lead the Senate Commerce Committee next year. Sen. Inouye (D-Hawaii), who will likely be the Commerce Committee ranking Democrat (or chairman, depending on the Nov. election), signed the letter, as did Senate Communications Subcommittee Chmn. Burns (R-Mont.). Current Commerce Committee ranking Democrat Hollings (S.C.) also signed the letter.

The letter asks the DoJ (which includes the Solicitor Gen.) to seek a stay before the current rules expire May 3, and appeal the March 2 ruling (CD March 3 p1). The letter said the ruling counters Congress’ intentions for the Telecom Act, specifically citing the delegation of authority to state commissions. The ruling would eliminate competitive telecom choices and potentially cost jobs, the letter said. “At this point, to allow the Bells to offer long distance using the long distance networks while denying the long distance companies comparable access to the Bell networks to provide local service would be patently unfair and anticompetitive,” the letter said. The policy change could cost 70,000 jobs, the letter said, and consumers have saved about $10 billion during the past 2 years because of telecom competition.

Several House members that supported the decision took their case directly to the President. Nearly 130 members have signed a letter circulated by Rep. Buyer (R-Ind.), which said the court’s decision was “fundamentally sound” and FCC rules regarding competitive entry have been rejected 3 times by the courts. “We believe this decision rightly calls on the FCC to end artificial competition and allow true facilities-based competition to flourish,” the letter said. Signers included: Reps. Shimkus (R-Ill.), Boucher (D-Va.), Green (D-Tex.), Bono (R-Cal.), Burr (R-N.C.), Davis (R-Va.) and Goodlatte (R-Va.)

However, the letter didn’t include signatures from House Commerce Committee Chmn. Barton (R-Tex.), ranking Democrat Dingell (Mich.) and Telecom Subcommittee Chmn. Upton (R- Mich.). A Barton spokeswoman said Barton is “supportive” of the court’s rulings and Buyer’s goals regarding the letter. The spokeswoman said Barton is weighing his own options, including the possibility of a letter. Also, an industry source said Dingell and Upton were considering a letter in support of the court’s ruling, as are members of the House Judiciary Committee. Also, Reps. Stupak (D-Mich.) and Rogers (R-Mich.) wrote to FCC Comrs. Adelstein, Copps and Martin to support their decision to appeal the ruling. Last week (CD March 15 p6), House Judiciary Chmn. Sensenbrenner (R-Wis.) and ranking Democrat Conyers (Mich.) also asked the DoJ for an appeal.

One observer said the Stevens letter appeared to incorrectly reference the court’s ruling. Randolph May, Progress & Freedom Foundation dir.-communications policy studies, said the letter referenced Sec. 251(d)(3) of the Telecom Act when it emphasized the need to allow states to “determine the extent of the incumbents obligations to lease their networks.” But May said the court ruling focused on Sec. 251(d)(2), which gave the FCC the ability to determine which UNEs should be made available, not the states. Moreover, May said the letter was “curious” because it went more toward the economic impact of the ruling. “Ultimately there should be an argument to review the case in terms of whether law was interpreted correctly. That argument isn’t in this letter,” May said. However, Russell Frisby, CompTel CEO, said: “The senators outlined the issues very clearly and stated the threat to American consumers if the D.C. Circuit decision isn’t appealed.”

Meanwhile, NARUC told the Solicitor Gen. it was concerned about underlying legal issues raised by the D.C. Circuit’s decision, including its affect on other programs in which federal agencies delegate authority to states. “Certainly it… significantly restricts the options for cooperative federal-state action for all federal agencies,” wrote NARUC Pres. Stan Wise and NARUC Telecom Committee Chmn. Robert Nelson. They also questioned the court’s holding that the FCC couldn’t “subdelegate” authority to the states to make granular impairment findings without “express authority” by Congress: “The D.C. Circuit’s holding that “subdelegation” in a scheme of cooperative federalism requires explicit statutory authority conflicts with controlling Supreme Court precedent… and the decisions of other courts of appeals.” NARUC said the court’s “rigid view of the scope of the FCC’s authority to implement its statutory mandate and the clear distinction in how the Supreme Court and the D.C. Circuit have approached the FCC’s flexibility to implement the Act… weigh decisively in favor of support for certiorari.”

NARUC also urged the Solicitor Gen. to seek a stay of the appeals court decision while the Supreme Court challenge was pending: “Quite apart from the harms that CLECs and the FCC would suffer… entry of a stay… is necessary to avoid uncertainty and irreparable harm to state commissions. Absent a stay, states will be required to devote extraordinary resources to litigating disputes and formulating stop-gap measures that will apply during the pendency of the case in the Supreme Court, with the near certainty that the states will have to address these subjects all over again after the Supreme Court rules.”

Without a stay, the FCC’s unbundling rules will be vacated May 3 and “states will then be required to determine what the consequences are of that vacatur under each of scores of interconnection agreements,” NARUC said: “Incumbents will likely assert that they will have the right immediately to ‘unhook’ competitors and to transition them to higher priced services. Competitors will claim that the matter is governed by ‘change of law’ provisions in interconnection agreements… Whatever the mechanism, the one thing that is clear is that the vacatur of the FCC’s existing rules will mean that each state utility commission will be required to determine the arrangements that will govern in its state pending the Supreme Court decision.”