At&T Corp. v. Federal Communications Commission

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 15, 2004 Decided June 1, 2004

No. 03-1035

AT&T CORPORATION,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

VERIZON TELEPHONE COMPANIES, ET AL.,

INTERVENORS

–————

On Petition for Review of an Order of the

Federal Communications Commission

–————

Virginia A. Seitz argued the cause for petitioner. With

her on the briefs were David W. Carpenter, David L. Law-

son, Michael J. Hunseder, and Brian T. Fitzpatrick. Mark

C. Rosenblum entered an appearance.

Nandan M. Joshi, Counsel, Federal Communications Com-

mission, argued the cause for respondents. With him on the

Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

2

brief were Robert H. Pate, III, Assistant Attorney General,

U.S. Department of Justice, Catherine G. O’Sullivan and

Nancy C. Garrison, Attorneys, John A. Rogovin, General

Counsel, Federal Communications Commission, Richard K.

Welch, Associate General Counsel, and John E. Ingle, Deputy

Associate General Counsel. Daniel M. Armstrong, James M.

Carr, and Rodger D. Citron, Attorneys, entered appearances.

Scott H. Angstreich argued the cause for intervenors.

With him on the brief were Mark L. Evans, Michael K.

Kellogg, Sean A. Lev, Michael E. Glover, Edward H. Shakin,

Joseph DiBella, James G. Harralson, Robert B. McKenna,

Jr., James D. Ellis, and Gary L. Phillips.

Before: EDWARDS, SENTELLE, and TATEL, Circuit Judges.

Opinion for the Court filed Per Curiam.

Per Curiam: Under § 271 of the Telecommunications Act

of 1996 (the ‘‘Act’’), a Bell Operating Company (‘‘BOC’’) or its

affiliate may apply to the Federal Communications Commis-

sion (‘‘FCC’’ or ‘‘Commission’’) for authorization to provide

interLATA (long-distance) telephone service originating in

any in-region State. 47 U.S.C. § 271(d)(1). The FCC may

grant such authorization if: (1) the BOC demonstrates that it

provides competitors access and interconnection to its local

network pursuant to the ‘‘competitive checklist’’ under 47

U.S.C. § 271(c)(2)(B), (2) the Commission finds that the re-

quested authorization is consistent with the public interest,

and (3) the requested authorization ‘‘will be carried out in

accordance with the requirements of section 272.’’ 47 U.S.C.

§ 271(d)(3). Section 272 adopts regulatory ‘‘safeguards,’’ in-

cluding structural and transactional requirements, nondiscri-

mination provisions, and enforcement mechanisms to deter a

BOC from leveraging its local market power into long-

distance markets. 47 U.S.C. § 272. The Act makes it clear,

however, that the § 272 safeguards ‘‘shall cease to apply TTT

3 years after the date [when a BOC] is authorized to provide

interLATA telecommunications services under section 271(d)

TTT , unless the Commission extends such 3–year period by

rule or order.’’ 47 U.S.C. § 272(f)(1). On December 22,

3

1999, Verizon in New York was the first BOC to obtain FCC

approval to provide long-distance service under § 271.

On December 23, 2002, Verizon reached the automatic

sunset date under § 272(f)(1) with respect to its long-distance

operations in New York. The Commission issued a public

notice on this date stating that ‘‘[t]he provisions of section 272

TTT sunset for Verizon’s operations in New York by operation

of law.’’ Public Notice, Section 272 Sunsets for Verizon in

New York State by Operation of Law on December 23, 2002

Pursuant to Section 272(f)(1), 17 F.C.C.R. 26,864 (2002)

(‘‘Public Notice’’). On this same date, the Commission issued

a Memorandum Opinion and Order, holding that the § 272

safeguards sunset on a state-by-state (not on a BOC-by-BOC)

basis. In the Matter of Section 272 (f)(1) Sunset of the BOC

Separate Affiliate and Related Requirements, 17 F.C.C.R.

26,869, 26,871 (2002) (‘‘Memorandum Opinion and Order’’).

The Commission also noted that, pursuant to prior Notice of

Proposed Rulemaking, In the Matter of Section 272(f)(1)

Sunset of the BOC Separate Affiliate and Related Require-

ments, 17 F.C.C.R. 9916 (2002) (‘‘NPRM’’), the agency still

had under consideration ‘‘possible alternative safeguards for

BOC provision of in-region, interLATA services after sunset

of the 272 structural and related requirements.’’ Memoran-

dum Opinion and Order, 17 F.C.C.R. at 26,869. ‘‘Moreover,’’

the FCC stated, ‘‘we plan to issue a [further] Notice of

Proposed Rulemaking in the coming months to seek comment

on whether there is a continued need for dominant carrier

regulation of BOC in-region, interLATA, domestic, interex-

change telecommunications services provided outside of a

section 272 affiliate. We will take further action to address

these issues in the future as appropriate.’’ Id. at 26,869–70.

In this action, petitioner AT&T Corporation contends that

the FCC acted arbitrarily and violated its duty of reasoned

decisionmaking when it issued a public notice stating that the

§ 272 safeguards sunset for Verizon’s operations in New York

‘‘by operation of law.’’ AT&T argues that the record here

demonstrates that Verizon retains significant market power,

justifying the need for continued application of the § 272

safeguards in New York. Thus, according to AT&T, the FCC

4

was obligated to provide a reasoned explanation for its failure

to extend the § 272 safeguards. We reject these claims.

As the Commission indicated in its public notice, the § 272

safeguards sunset ‘‘by operation of law,’’ not by Commission

action. The FCC’s public notice did not purport to be an

order or rule addressing the continued need for § 272 safe-

guards, and the Act does not require any decision from the

Commission in order for the sunset provision under

§ 272(f)(1) to take effect. Therefore, the Commission was not

obligated to engage in ‘‘reasoned decisionmaking’’ when it

issued the public notice. Finally, AT&T’s claims regarding

the need for alternative safeguards, covering BOC provision

of interLATA services after sunset of the § 272 structural

and related requirements, remain under consideration by the

FCC. Therefore, those claims are not ripe for review. Ac-

cordingly, we dismiss AT&T’s petition for review.

I. BACKGROUND

The regional Bell Operating Companies are incumbent local

exchange carriers (‘‘LECs’’). They control the local tele-

phone networks in several regions throughout the country.

The BOCs came into existence pursuant to the consent decree

resolving the United States’ antitrust suit against AT&T. See

United States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 165

(D.D.C. 1982), aff’d sub nom. Maryland v. United States, 460

U.S. 1001 (1983). The consent decree found that AT&T had

engaged in anti-competitive behavior by using its control of

local networks to impede long-distance competitors’ access to

the local networks. Id. at 162. Long-distance carriers need

such access in order to connect calls from different regions.

The consent decree not only required AT&T to divest from

the BOCs, but also barred BOCs from providing long-distance

telephone services. See id. at 165. See also United States v.

Western Elec. Co., 569 F. Supp. 990, 993–94 (D.D.C. 1983)

(stating that a ‘‘LATA’’ marks boundaries beyond which a

BOC may not carry telephone calls).

5

The Telecommunications Act of 1996 changed this land-

scape by permitting a BOC to apply to the Commission for

authorization to provide interLATA services originating in

any in-region state. 47 U.S.C. § 271(d)(1). As noted above,

the FCC may grant such authorization if: (1) the BOC

demonstrates that it provides competitors access and inter-

connection to its local network pursuant to the ‘‘competitive

checklist’’ under 47 U.S.C. § 271(c)(2)(B), (2) the Commission

finds that the requested authorization is consistent with the

public interest, and (3) the requested authorization ‘‘will be

carried out in accordance with the requirements of section

272.’’ 47 U.S.C. § 271(d)(3). Section 272 adopts regulatory

‘‘safeguards’’ to deter a BOC from leveraging its local market

power into long-distance markets. See 47 U.S.C. § 272. Any

BOC authorized to offer interLATA services must do so only

through a separate affiliate that is subject to certain structur-

al, transactional, and audit requirements. See 47 U.S.C.

§ 272(a)-(e).

More specifically, the separate affiliate is required to ‘‘oper-

ate independently’’ from the BOC, maintain separate books,

records, and accounts, have separate officers and directors,

have separate credit arrangements, and conduct all transac-

tions with the BOC on an arm’s length basis with any such

transactions reduced to writing and available for public in-

spection. 47 U.S.C. § 272(b). The BOC is prohibited from

discriminating in favor of its separate affiliate in the procure-

ment of goods, services, facilities, and information, or in the

establishment of standards. 47 U.S.C. § 272(c)(1). The BOC

must account for all transactions with an affiliate ‘‘in accor-

dance with accounting principles designated or approved by

the Commission.’’ 47 U.S.C. § 272(c)(2). In addition, the

separate affiliate is required to obtain an independent audit

every two years to determine compliance with the require-

ments, the results of which are to be submitted to the

Commission. 47 U.S.C. § 272(d). Section 272(e) prohibits

the BOC from discriminating in favor of an affiliate in the

fulfillment of requests for exchange service or access, the

provision of facilities, services, or information concerning

6

exchange access, or charges for exchange service. 47 U.S.C.

§ 272(e).

The Act provides for the sunset of most of these § 272

safeguards, however. Section 272(f)(1) reads:

The provisions of this section (other than sub-

section (e) of this section) shall cease to apply

with respect to the manufacturing activities or

the interLATA telecommunications services of

any Bell operating company 3 years after the

date such Bell operating company or any Bell

operating company affiliate is authorized to pro-

vide interLATA telecommunications services

under 271(d) of this title, unless the Commission

extends such 3–year period by rule or order.

47 U.S.C. § 272(f)(1). Only the prohibition of discrimination

under § 272(e) is not subject to sunset pursuant to

§ 272(f)(1).

On December 22, 1999, the Commission granted Verizon’s

application under § 271 to provide interLATA services in

New York. See In the Matter of Application by Bell Atlantic

New York for Authorization Under Section 271 of the Com-

munications Act To Provide In–Region, InterLATA Service

in the State of New York, 15 F.C.C.R. 3953 (1999), aff’d sub

nom. AT&T Corp. v. FCC, 220 F.3d 607 (D.C. Cir. 2000). In

June 2000, the Commission approved SBC’s application for

Texas. See In the Matter of Application by SBC Communica-

tions, Inc., Southwestern Bell Telephone Co., and Southwest-

ern Bell Communications Services, Inc., d/b/a/ Southwestern

Bell Long Distance, 15 F.C.C.R. 18,354 (2000). Thereafter,

the Commission granted BOCs’ § 271 applications in Kansas,

Oklahoma, Massachusetts, Connecticut, Pennsylvania, Arkan-

sas, Missouri, Rhode Island, Vermont, Georgia, and Louisi-

ana.

As the § 272(f)(1) sunset date approached for Verizon’s

New York long-distance operations, the Commission initiated

a rulemaking regarding the separate affiliate and related

requirements. See NPRM, 17 F.C.C.R. at 9916. The Com-

mission solicited views from interested parties concerning:

7

(1) whether the structural safeguards estab-

lished in section 272 should be extended by the

Commission, despite the three-year sunset pro-

vision in the statute; and

(2) whether any alternative safeguards should

be put in place in states where the statutory

requirements have sunset.

Id. at 9917. The Commission also invited comment on

‘‘whether, and if so, under what conditions, the structural and

nondiscrimination safeguards established in section 272

should be extended by the Commission either generally or

with respect to specific states.’’ Id. AT&T submitted com-

ments urging the Commission to extend the § 272 safeguards

for at least another three years, alleging that the BOCs

continued to retain significant market power in all markets.

In the Matter of Section 272(f)(1) Sunset of the BOC Separate

Affiliate and Related Requirements, WC Docket No. 02–112,

Comments of AT&T Corp. at 10–11, Joint Appendix (‘‘J.A.’’)

74–75. Several BOCs and state utility commissions also

submitted comments in response to the NPRM.

On December 23, 2002, the Commission issued a public

notice, which reads:

The provisions of section 272 (other than section

272(e)) of the Communications Act of 1934, as

amended (the Act), applicable to BOC provision of

in-region, interLATA telecommunications services

sunset for Verizon’s operations in New York by

operation of law as provided in section 272(f)(1),

effective December 23, 2002.

Section 272 of the Act requires BOCs to provide in-

region, interLATA telecommunications services

through separate corporate affiliates, subject to cer-

tain safeguards. 47 U.S.C. § 272(a)(2). Section

272(f)(1) provides that the provisions in section 272

(other than section 272(e)) expire three years after a

BOC or BOC affiliate is authorized under section

271 to provide in-region, interLATA services, unless

the Commission extends such 3–year period by rule

or order. 47 U.S.C. § 272(f)(1).

8

The Commission granted its first section 271 author-

ization for BOC provision of in-region interLATA

services to Verizon for New York State in an order

released on December 22, 1999. Pursuant to section

272(f)(1), section 272 (other than section 272(e)) sun-

sets by operation of law for Verizon in New York

State, effective December 23, 2002.

Public Notice, 17 F.C.C.R. at 26,864. Two Commissioners

dissented, arguing that ‘‘Congress clearly gave the Commis-

sion the charge to determine whether these structural, ac-

counting, and auditing safeguards remain necessary to pre-

vent anti-competitive discrimination in the market. Yet the

Commission has neglected to consider whether there is a

need for these or alternative safeguards.’’ Id. at 26,866

(Commissioners Jonathan S. Adelstein and Michael J. Copps,

dissenting). Another Commissioner stated concern ‘‘that the

Commission’s decision to summarily allow the section 272

requirements to sunset was made through a public notice

rather than a Commission order responding to questions

raised on the record.’’ Id. at 26,868 (Commissioner Kevin J.

Martin, concurring).

On the same day, the Commission released a Memorandum

Opinion and Order, holding that the § 272 safeguards sunset

on a state-by-state basis. Memorandum Opinion and Order,

17 F.C.C.R. at 26,871. That order also stated:

We continue to review the broader issues in this

proceeding as well as related issues concerning

incumbent independent LEC provision of in-

region, interexchange service before the Com-

mission in a separate proceeding. Moreover,

we plan to issue a Notice of Proposed Rulemak-

ing in the coming months to seek comment on

whether there is a continued need for dominant

carrier regulation of BOC in-region, interLATA,

domestic, interexchange telecommunications

services provided outside of a section 272 sepa-

rate affiliate. We will take further action to

9

address these issues in the future as appropri-

ate.

Id. at 26,869. Two Commissioners dissented from the Memo-

randum Opinion and Order. Id. at 26,881 (Commissioners

Adelstein and Copps, dissenting in part). Commissioner

Martin issued a concurring statement expressing his concern

over the Commission’s failure to respond to the questions

raised in the record. Id. at 26,883 (Commissioner Martin,

concurring).

AT&T now petitions this court for review, claiming that the

Commission was obligated to provide a reasoned explanation

of its decision to allow the § 272 safeguards to sunset in New

York and to respond to the comments and evidence it solic-

ited in its Notice of Proposed Rulemaking.

II. ANALYSIS

There are three principal issues in this case: (1) whether

the FCC was obligated under § 272(f)(1) to issue a reviewable

decision as to whether to allow the § 272 safeguards to sunset

in New York; (2) whether the agency’s December 23, 2002,

Public Notice reflected a final agency action not to extend the

protections of § 272 in New York; and (3) whether the

agency’s December 23, 2002, Memorandum Opinion and

Order, holding that § 272(f)(1) provides for state-by-state

sunset, and deferring judgment on ‘‘alternative safeguards for

BOC provision of in-region, interLATA services after sunset

of the § 272 structural and related requirements,’’ see 17

F.C.C.R. at 26,689, is ripe for review on the latter point.

A. The Commission Was Not Obligated to Issue a Re-

viewable Decision

Section 272(f)(1) clearly states that, after three years, the

safeguards of § 272 ‘‘shall cease to apply’’ ‘‘unless the Com-

mission extends’’ the protections by rule or order. 47 U.S.C.

§ 272(f)(1). AT&T argues that, under this provision, the

FCC was obligated to provide a reasoned explanation of ‘‘its

decision’’ to allow the § 272 safeguards to sunset. See Peti-

tioner’s Br. at 25. Implicit in this argument is the assump-

tion that the FCC was obligated to make a decision. In

other words, AT&T suggests that because the Commission

has the authority to extend the requirements of § 272, it

10

necessarily must reach a decision not to extend the protec-

tions of § 272 if the sunset provision is allowed to take effect.

The FCC argues, in turn, that it was not required to say

anything in the face of the sunset provision in § 272(f)(1).

Thus, under the Commission’s view, if the agency said noth-

ing, the protections afforded by the § 272 requirements

would cease by operation of law. See Respondent’s Br. at 47.

The FCC has the better of this argument. The FCC has

the statutory authority to extend the requirements of § 272,

but it does not follow that the agency must explain inaction

which effectively results in the non-extension of the § 272

safeguards. The opening words of § 272(f)(1) are: ‘‘The

provisions of this section (other than subsection (e) of this

section) shall cease to apply TTT ’’ These words clearly

indicate that Congress intended for the statute’s protections

to expire by operation of law on a date certain. There is

nothing in the statutory provision that requires the Commis-

sion to consider whether to allow the sunset provision to go

into effect.

AT&T argues that ‘‘there is a substantial question whether

§ 272(f)(1) is an unconstitutional delegation of legislative pow-

er,’’ because any FCC decision to extend the protections of

§ 272 would admit of no ‘‘intelligible principle to which the

person or body authorized to [act] is directed to conform.’’

Petitioner’s Reply Br. at 8 (quoting Whitman v. Am. Truck-

ing Ass’ns, Inc., 531 U.S. 457, 472 (2001)). This argument,

however, rests on a faulty premise. AT&T incorrectly as-

sumes that the decision whether to sunset the § 272 safe-

guards lies with the FCC. This is simply wrong. Congress

made the decision to extinguish the protections of § 272 by

operation of law. Congress did not ‘‘delegate’’ this decision

to the Commission.

Any decision by the FCC to extend or not to extend the

protections of § 272 is a matter entirely separate from Con-

gress’s decision to sunset the statutory provision. The main

point here is that the § 272 safeguards expired by ‘‘operation

of law,’’ not by decision of the FCC.

11

We also note that the legislative history of the Act does not

support AT&T’s arguments in this case. The Senate bill

included provisions to impose separate subsidiary require-

ments and other safeguards on the activities of Bell compa-

nies in the provision of interLATA services. The bill included

a provision allowing the FCC to grant exceptions to the

separate subsidiary requirements upon a showing that grant-

ing such an exception would be ‘‘necessary for the public

interest, convenience, and necessity.’’ See S. REP. NO. 104–23,

at 24 (1995). The Senate Committee noted that the exception

should only be used whenever a requirement ‘‘is not neces-

sary to protect consumers or to prevent anti-competitive

behavior.’’ Id. The Senate bill did not contain a sunset

provision; it merely delegated discretion to the FCC to grant

exceptions to the separate affiliate requirements by applying

the ‘‘public interest’’ standard. The House bill included an

18–month sunset provision for the separate subsidiary re-

quirements, and did not include a provision permitting the

FCC to extend the requirements at the end of 18 months.

See H.R. REP. NO. 104–223, at 7 (1995). The bill that was

ultimately adopted reflected a compromise between the Sen-

ate and House versions:

The conference agreement adopts the Senate

provisions with several modificationsTTTT The

conferees deleted the Senate provisions provid-

ing for Commission exceptions to the require-

ments of this section. Instead, the conferees

adopted a three year ‘‘sunset’’ of the separate

affiliate requirement for interLATA services

and manufacturing activitiesTTTT In any case,

the Commission is given authority to extend the

separate affiliate requirement by rule or order.

H.R. CONF. REP. NO. 104–458, at 152 (1996). The Conference

Report makes it clear that ‘‘the conferees adopted a three

year ‘sunset’ of the separate affiliate requirement.’’ Id. Con-

gress did not leave the decision to the Commission.

Even more telling are the provisions of the Act in which

Congress is clear when it means to require the agency to

weigh qualitative standards before a sunset provision may

12

take effect. Two good examples are found in 47 U.S.C.

§ 273(d)(6) and 47 U.S.C. § 549(e), in which Congress ex-

pressly provided that the requirements of the statute would

sunset ‘‘when the Commission determines’’ that certain crite-

ria have been satisfied. There is no such qualifying language

in § 272(f)(1). The absence of such language supports the

Commission’s position that the § 272 safeguards sunset by

operation of law.

B. The Public Notice Is Not a Final, Reviewable Agency

Decision

AT&T attempts to overcome the problem that the FCC

was not obligated to issue a reviewable decision as to whether

to allow the § 272 safeguards to sunset in New York by

arguing that the agency’s December 23, 2003, Public Notice

was just such a decision. AT&T argues further that this

‘‘decision’’ is presumptively reviewable and that it is arbitrary

for want of reasoned explanation. The problem with AT&T’s

position is that it incorrectly assumes that the Public Notice

was something more than a ‘‘public notice.’’

The disputed notice merely says that

[t]he provisions of section 272 TTT sunset for

Verizon’s operations in New York by operation

of law. TTT Section 272(f)(1) provides that the

provisions in section 272 TTT expire three years

after a BOC or BOC affiliate is authorized

under section 271 to provide in-region, inter-

LATA services, unless the Commission extends

such 3–year period by rule or order.

Public Notice, 17 F.C.C.R. at 26,864 (emphasis added). That

is all. The dissenting Commissioners argued that the Public

Notice was a ‘‘decision’’ on the question whether to extend the

protections of § 272. Id. at 26,866 (Commissioners Adelstein

and Copps, dissenting). But that is not what the Public

Notice says. Indeed, the record indicates that the Commis-

sion has reserved judgment on whether to extend the protec-

tions of § 272 or institute new structural protections. See

NPRM, 17 F.C.C.R. at 9917; In the Matter of Section

272(f)(1) Sunset of the BOC Separate Affiliate and Related

13

Requirements, 2000 Biennial Regulatory Review Separate

Affiliate Requirements of Section 64.1903 of the Commis-

sion’s Rules, Further Notice of Proposed Rulemaking, 18

F.C.C.R. 10,914, 10,914 (2003).

AT&T contends that the Public Notice in this case cannot

be squared with the FCC’s action in In the Matter of Request

for Extension of the Sunset Date of the Structural, Nondis-

crimination, and Other Behavioral Safeguards Governing

Bell Operating Company Provision of In–Region, Inter-

LATA Information Services,15 F.C.C.R. 3267 (2000). That

action addressed § 272(f)(2), which sunsets § 272 safeguards

applying to a BOC’s provision of interLATA information

services four years after the effective date of the Act. See 47

U.S.C. § 272(f)(2). AT&T argues that, ‘‘[w]hen [the sunset]

date approached, and in response to a petition to extend the

safeguards [of § 272(f)(2)], the FCC issued an order that

rejected the petition and provided at least some rationale for

its decision.’’ Petitioner’s Br. at 19 n.39. AT&T claims that

the FCC was required to do no less here.

The fact that the Commission issued an order in the earlier

instance does not necessarily dictate that it was required to

so here. Even if that decision were taken to be precedent,

AT&T could not successfully rely on it as it did not file a

petition to extend the safeguards in this case. AT&T did file

comments on the Commission’s NPRM, but these comments

did not specifically petition to extend the protections of § 272

in New York before the sunset date. Rather, AT&T sought a

nationwide extension of the § 272 protections to all BOCs for

an additional three years. See Comments of AT&T at 7, J.A.

71. The FCC’s rulemaking proceeding, to which AT&T

submitted these comments, is still ongoing.

So we need not decide here whether the FCC is obligated

to respond to a petition to extend the § 272 safeguards if one

is filed, and, if so, what the standard of review would be.

AT&T did file a petition to extend the § 272 safeguards for

BOC provision of in-region interLATA services in Texas, see

Petition of AT&T Corp., In the Matter of Extension of

Section 272 Obligations of Southwestern Bell Telephone Co.

14

in the State of Texas, WC Docket No. 02–112, J.A. 433–58,

and the FCC issued a public notice there stating that ‘‘the

provisions of section 272 TTT applicable to BOC provision of

in-region, interLATA telecommunications services sunset for

SBC’s operations in Texas by operation of law as provided in

section 272(f)(1).’’ Public Notice, Section 272 Sunsets for SBC

in the State of Texas by Operation of Law on June 30, 2003

Pursuant to Section 272(f)(1), 18 F.C.C.R. 13,566 (2003).

AT&T has challenged this notice in a separate petition for

review, so the issue will be addressed in due course.

C. Finality and Ripeness

AT&T’s principal concern in this case is that safeguards of

the sort previously in place under § 272 are still necessary to

detect and deter BOCs’ leveraging of market power in con-

nection with their provision of in-region, interLATA services.

There is no doubt that this issue remains a matter of some

concern to the Commission, because the FCC said as much in

its December 23, 2002, Memorandum Opinion and Order.

However, the Commission deferred judgment on ‘‘alternative

safeguards for BOC provision of in-region, interLATA ser-

vices after sunset of the § 272 structural and related require-

ments’’ pending further review of the matter in ongoing

rulemaking proceedings. See 17 F.C.C.R. at 26,869.

An administrative action must be ‘‘final’’ in order to be

reviewable. See FTC v. Standard Oil Co., 449 U.S. 232, 246

(1980) (declining to review issuance of a complaint by the

FTC against a company because it was not final agency

action); Bethlehem Steel Corp. v. EPA, 669 F.2d 903, 910 (3rd

Cir. 1982) (holding that an EPA notice of noncompliance

triggering further proceedings was not final and therefore not

reviewable). Because the FCC has reserved judgment on

whether safeguards of the sort previously in place under

§ 272 are still necessary, there is no apparent final agency

action on this matter. The issue is not quite so simple,

however, because AT&T maintains that the Commission’s

failure to act before the § 272 safeguards sunset was agency

action sufficient to satisfy the finality requirement. We need

15

not quibble over this, however, because it is clear that, no

matter how the case is characterized, the issue regarding

‘‘alternative safeguards’’ is not ripe for review.

The ripeness doctrine aims to balance a petitioner’s interest

in prompt consideration of allegedly unlawful agency action

against the agency’s interest in crystallizing its policy before

that policy is subject to review and the court’s interests in

avoiding unnecessary adjudication and in deciding issues in a

concrete setting. City of Houston v. Dep’t of Housing &

Urban Dev., 24 F.3d 1421, 1430 (D.C. Cir. 1994) (citing Eagle-

Picher Indus. v. EPA, 759 F.2d 905, 915 (D.C. Cir.1985)).

Here, the issue of whether the FCC should adopt § 272–type

safeguards is unfit for review, because the matter is still

under consideration in ongoing rulemaking proceedings.

This case does not pose a situation in which statutory protec-

tions have expired and the agency has stated that it will not

give consideration to extending the protections or adopting

alternative protections. Quite the contrary, in the Memoran-

dum Opinion and Order, the Commission promised to take

further action to address the issues raised by AT&T.

It is also noteworthy here that, after the Public Notice was

issued, the Commission issued a Further Notice of Proposed

Rulemaking, inviting comment on the ‘‘appropriate classifica-

tion of Bell Operating Companies’ (BOCs) and incumbent

independent local exchange carriers’ (independent LECs)

provision of in-region interstate and international interex-

change telecommunications services,’’ including ‘‘how changes

to the competitive landscape within the interexchange market

should affect this classification and on what approach is

appropriate for BOCs and independent LECs, if and when

these carriers may provide in-region, interexchange services

outside of a separate affiliate.’’ 18 F.C.C.R. at 10,914. The

Commission invited comments on, inter alia, ‘‘if and when’’ a

BOC can provide interLATA services outside of a separate

affiliate. To ask if a BOC can provide interLATA services

outside of a separate affiliate is to consider the possibility that

separate affiliate requirements continue to be necessary.

Therefore, it remains an open question as to whether the

16

Commission will adopt alternative safeguards covering BOCs

authorized to provide in-region, interLATA service.

On this record, it is clear that both the Commission and the

court will benefit from postponing review of whether safe-

guards are necessary for BOCs’ provision of interLATA

services until the policy in question has crystallized into a

more definite form.

III. CONCLUSION

For the foregoing reasons, we dismiss the petition for

review.