Petition — Rosner v. United States

No. 77- |

IN THE

Supreme Court of the United States

OctToBerR TERM, 1977

VT AZV

ST

Unitep States INDEPENDENT TELEPHONE ASSOCIATION,

Petitioner,

Ve

MCI TELECOMMUNICATIONS CORPORATION, et al.,

Respondents.

eeeeetieneennted

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

-

THomas J. O’REILLY

1150 17th Street, N.W.

Washington, D.C. 20036

Counsel for United States

Independent Telephone

Association

Of Counsel:

CHADBOURNE, PARKE,

WuiresineE & Wo.Lrr

1150 17th Street, N.W.

Washington, D.C. 20036

September 16, 1977

— —————

Press or Bron S. ADAMS PRINTING, INC., WASHINGTON, D. C.

| Supreme Court, U. &

FILED

SEP 16 1977

ne ee a enone

ahd

TABLE OF CONTENTS

Page

i Me od eeu au nehecew ones 2

i ee eh od ee ae amies 2

SD oon pve peedéeweuans cceeebneaness 2

Re is ie haes eeueRnenekas 2

eS Br Te GI gn i vc dvescccuscessanescs« 3

A. Before The-Federal Communications Commission 3

ee ehuutanee tu 5

Reasons For Grantine THe WRIT ...............-. 6

I. Tuere Is A CLEAR Anp Direct Conriict BETWEEN

1 RR EYE RS Pp aI haa alee RIE ae a 6

Il. THe Court Betow Oversteprep THE Bounps OF

I ae a ed 11

Ill. Tae Decision Betow Wov.ip Have INCREDIBLE

I Da S00 kh ee ha 14

NIE ea Oe ee ee ee ee 17

TABLE OF AUTHORITIES

CasEs:

ATT v. FCC, 539 F.2d 767 (D.C. Cir. 1976) ....... 10

Bell Telephone Company of Pennsylvania v. FCC, 503

F.2d 1250 (3d Cir. 1974); cert. den. 422 U.S. 1026

I ade a enh oa a ele a leee a le ae ei ated 8,9

Burlington Truck Lines v. U.S., 371 U.S. 156 (1972). 11

FCC v. RCA Communications, Inc., 346 U.S. 86 (1953) 38

MCI Communications Corp. v. AT&T, 496 F.2d 214

OS a a a aly 11

Nader v. FCC, 520 F.2d 182 (D.C. Cir. 1975) ........ 10

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367

DE SachG eG Mee sole el ceceEe ied dedi agent 11

SEC v. Chenery Corp., 332 U.S. 194 (1947) ......... 11

il Table of Authorities Continued

Page

Washington Utilities & Transportation Com. v. FCC,

: 513 F.2d 1142 (9th Cir. 1975); cert. den. 423 US.

Perr oe 4,7

ADMINISTRATIVE AGENCY PROCEEDINGS:

MCI. 18 FCC 2d 953 (1969); recon. den., 21 FCC 2d

ey rr reer rer re 3, 15

MCI Telecommunications Corporation (Execunet), 60 _

BOS BA TB (ISTE) .nn cc ccccccccceccccvcsecs passim

Specialized Common Carriers, 29 FCC 2d 870 (1971); _

recon. den. 31 FCC 2d 1106 (1971) ......... passim

STATUTES:

Communieations Act of 1934

Section 1, 47 U.S.C. $1SL ..... ccc cece cceeecces 17

Section 214, 47 U.S.C. $214 ........ ee ceeeeeees 5, 16

MISCELLANEOUS:

Statement of FCC Chairman Wiley, House Hearings,

94th Cong., lst Sess. 46, March 11, 1975 ........ 16

IN THE

Supreme Court of the United States

OcToBER TERM, 1977

No. 77-

Unitep States INDEPENDENT TELEPHONE ASSOCIATION,

Petitioner,

Vv.

MCI TELECOMMUNICATIONS CoRPORATION, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

Petitioner United States Independent Telephone

Association (USITA) * respectfully prays that a writ

of certiorari issue to the United States Court of Ap-

peals for the District of Columbia Circuit to review

the July 28, 1977 decision of that court in this case.

* United States Independent Telephone Association (USITA) is

the national trade association of the approximately 1,600 ‘‘Inde-

pendent’’ (not owned by or affiliated with the American Telephone

& Telegraph Company) telephone companies in this nation, com-

panies that serve over half the served geographical area of the

country with over 28 million telephones and almost $23 billion in

telephone plant.

2

JUDGMENT BELOW

The July 28, 1977 decision of the Court of Appeals,

not yet officially reported, appears as Appendix A to

the American Telephone & Telegraph Company

(AT&T) petition for certiorari in this case.’ The deci-

sion of the Federal Communications Commission

(FCC), reversed and remanded by the court below, is

reported at 60 FCC 2d 25 (1976), and appears as

Appendix B.

JURISDICTION

The judgment of the Court of Appeals was entered

on the same date as its opinion. Timely motions for stay

of mandate pursuant to Rule 41(b), Federal Rules

of Appellate Procedure, filed by USITA, AT&T, and

FCC, were granted by order entered August 22, 1977.

This petition, filed within the 30-day period pre-

seribed by Rule 41(b), invokes the jurisdiction of this

Court under 28 U.S.C. § 1254(1).

QUESTION PRESENTED

Whether the Court of Appeals erred in holding that

FCC authorizations to a new class of carriers to pro-

vide ‘‘specialized’’ common carrier communications

services conferred unlimited authority to provide all

common carrier services.

STATUTES INVOLVED

The pertinent provisions of the Communications

Act involved in this case appear as Appendix C.

2 To avoid burdening the Court with duplicative documents, peti-

tioner USITA will herein adopt and refer to the AT&T Appendix

as ‘‘Pet. App.”’

3

STATEMENT OF THE CASE

A. Before The Federal Communications Commission.

In 1969, after evidentiary hearing, FCC granted

authorization to Microwave Communications, Ine.

(MCT) to construct a microwave radio line between

Chitago, Illinois and St. Louis, Missouri for the pur-

pose of offering ‘‘specialized’’ private line common

carrier communications services, represented to be not

then offered by or available from existing common

carriers.*

In 1970, having received a substantial number of

applications for authority to construct microwave fa-

cilities for the rendition of ‘‘specialized”’ services, FCC

elected to proceed by general rulemaking, rather than

considering each of the pending applications on its in-

dividual merits. This proceeding culminated in the

Commission’s 1971 Specialized Carriers decision,‘ in

which FCC found and determined, as a matter of gen-

eral policy, that the public interest would be served

by the creation of a new class of ‘‘specialized”’ carriers,

whose applications would be routinely processed and

approved under the new general policy, without re-

quiring specific publie interest findings in each case.

Promulgation of this general policy essentially per-

mitted open entry into ‘‘[t]he business . . . of provid-

ing specialized private or leased line communication

services through a microwave transmission facility as

distinguished from publie exchange and long distance

*MCI, 18 FCC 2d 953 (1969); recon. den., 21 FCC 2d 190

(1970).

* Specialized Common Carriers, 29 FCC 2d 870 (1971); recon.

den. 31 FCC 2d 1106 (1971).

+

toll telephone service.*’* Numerous applications by

MCI and other specialized carriers were granted under

this general policy of open entry, and many microwave

facilities were constructed and put in operation.

In 1975, allegedly pursuant to a 1974 tariff filing

offering ‘‘metered use serviee.’’ MCI began marketing

a communieations service it called ‘‘Execunet.’’ With

Execunet, a customer dials an ordinary exchange tele-

phone call to an MCT facility, dials his customer code,

and then dials the telephone company area code and

telephone number of any telephone in any distant city

served by MCI. On completion of the Execunet tele-

phone call, the customer is billed a per-minute toll

eharge. Connection and monthly minimum charges are

also involved in Execunet service.

After an exchange of correspondence among FCC,

AT&T, and MCT, the FCC issued a letter order on

Tuly 2. 1975 ° finding Exeeunet to be not ‘‘specialized”’

hut an unauthorized switched public message telephone

service.” Following further proceedings before the

Commission in 1976, including the filing of comments

and reply comments and the holding of oral argument

hefore the Commission en bane, the FCC issued an ex-

tensive oninion.® again finding Exeeunet to he herond

‘ Washington Utilities & Transportation Com. v. FCC, 513 F.2d

1142. 1155 (9th Cir, 1975); cert. den. 423 U.S. 836 (1975).

® This order is Appendix B to the FCC’s July 13, 1976 Order

(G0 FCC 2d 25; Pet. App. 70b-75b).

™MCI sought judicial review of the 1975 letter order, but the

case was held in abeyance to afford the Commission an opportunity

to consider MCI arguments first presented to the court.

60 FCC 2d 25 (1976) ; Pet. App. 1b-61b.

— ee ee eed

;

i

4)

MCI’s authorizations. Essential to the Commission’s

conclusion were its findings (1) that MCT had sought

and had been granted authority to provide private

line services only; and (2) that MCI’s Execunet serv-

ice had all of the essential characteristics of message

telephone service, but none of the characteristics of

private line service.

B. In the Court Below.

Although the MCT petition for review of the 1975

FCC letter order was held in abeyance, its motion for

stay of that order was initially granted by the court

below. Stay was subsequently modified to permit MCI

to continue serving existing Execunet customers, but

not to expand the service to new customers or new loca-

tions. The court below, in its July 28, 1977 decision,

considered both the 1975 letter order and the 1976 in-

depth opinion issued by the FCC.

The court below began its analysis of the FCC action

by characterizing it as ‘‘represent[ing] a substantial

departure from prior administrative practice.’’* In

the court’s view, FCC authorizations to provide com-

mon carrier communications services are necessarily

unlimited unless expressly and affirmatively restricted,

and FCC’s power to restrict its grants is found ex-

elusively in Section 214(c) of the Communications

Act.”

The basie rationale of the lower court’s opinion is

found not in its text, but in the final two sentences of

® Slip. op., p. 16; Pet. App. 16a.

Slip. op., pp. 24-28; Pet. App. 24a-28a. Section 214(c) (47

U.S.C. 214) empowers the FCC to grant certificates ‘‘as applied

for’’ or in part, and to attach terms and conditions to its grants.

Pet. App. 7c.

6

its footnote 59 * where, after reviewing decisions from

other circuits involving the validity and scope of the

FCC Specialized Carriers decision, the court below

concludes:

‘Bell Telephone therefore stands for the proposi-

tion that the Commission in Specialized Carriers

decided at least that specialized carriers could pro-

vide all private line services. However, one cannot

reason from this proposition to its converse—that

specialized carriers may offer only private line

services—yet the converse is the issue relevant un-

der § 214(¢) as we explain in text.’’”

REASONS FOR GRANTING THE WRIT

In its ingenious and innovative opinion, the court

below has:

1) rendered a decision in irreconcilable conflict

with decisions of other circuits in specialized ear-

rier proceedings ;

2) overstepped the permissible bounds of judicial

review; and

3) created a significant Federal question concern-

ing the validity of thousands of FCC authoriza-

tions under what the Commission believed was

long and well established FCC policy and prac-

tice.

I. There Is A Clear And Direct Conflict Between Circuits.

The FCC’s Specialized Carrier decision has been the

subject of exhaustive serutiny by both the Ninth and

" Slip. op., p. 27; Pet. App. 26a.

12 Ibid.

7

the Third Circuits. In each case, the reviewing court

experienced no difficulty in concluding that specialized

carriers were authorized to offer private line services

but were not authorized to provide plain old message

telephone service. Thus the holding of the court be-

low that specialized carriers are free to offer plain old

message telephone service is in clear and direct con-

flict with at least the holdings of the other two circuits.

In Washington Utilities & Transportation Commis-

sion Vv. FCC,” at issue was the basic legality of the

Commission’s ©pectalized Carrier decision. Necessarily

essential to resolution of that basic issue was the scope

of the FCC’s order establishing the new class of spe-

cialized carriers, and whether the Commission’s con-

clusion that construction of facilities by the new car-

riers was required by the public convenience and neces-

sity was adequately supported.

That the Washington Commission court fully and

clearly understand the scope of the FCC order is

readily apparent from its succinct definition of spe-

cialized services:

‘*The business involved is that of providing spe-

cialized private or leased line communications

services ... as distinguished from public exchanze

and long distance toll telephone service’’ (empha-

sis supplied).

Similarlv clear and unambiguous is the court’s analysis

of the FCC’s findings in support of the Commission’s

13513 F.2d 1142 (9th Cir. 1975) ; cert. den. 423 U.S. 836 (1975).

#513 F.2d at 1155. That this distinction was widely understood

by all concerned is evident from representations made to this Court

in oppositions to petitions for certiorari in both the Ninth and the

Third circuit cases. Pet. App. 125b-141b.

ee SSSSSaSaSaSaQ£0 he

8

ultimate public convenience and necessity conclusion.

Applying the standards established by this Court in

FCC v. RCA Communications Inc., * the Ninth Cireuit

upheld the Commission’s findings that a public need

and demand for specialized services existed, and that

because of the small and limited portion of the com-

munications market that would be opened to competi-

tion from the new class of specialized carriers, existing

earriers would not be adversely affected. Inasmuch as

the record before the Commission and the public inter-

est findings before the court were clearly limited to

specia zed services. had the court considered the Com-

mission’s decision to purport to authorize all services,

without limit, summary reversal would have been ap-

nropriate.

The scope of the FCC Specialized Carrier decision

was subjected to even more detailed scrutiny by the

Third Cireuit in Bell Telephone Company of Penn-

sylvania v. FCC,* where the basic issue before the

eourt was whether the furnishing of communication

services known as ‘‘FX” (foreign exchange) and

“OCSA’’ (common control switching arrangement)

was within the authorization granted to specialized

earriers. In rejecting the contention by telephone com-

panies that provision of FX and CCSA services by the

specialized carriers was an unwarranted enlargement

of the scope of the Commission’s Specialized Carrier

decision, the Bell Telephone court, taking as its cri-

terion the category of services classified as private line

bv the Commission, found FX and CCSA to be within

the private line category and therefore authorized by

15 346 U.S. 86 (1953).

6 503 F.2d 1250 (3d Cir. 1974) ; cert. den., 422 U.S. 1026 (1975).

9

the Commission’s Specialized Carrier decision. Again

here, as in the Ninth Circuit decision, the court found

the Commission’s analysis of the limited market impact

of the new specialized carriers persuasive as to the

scope of the authorizations granted.

The meticulous and thorough review by the Third

Circuit of the parameters of private line service, and

its conclusion that FX and CCSA services fell within

those parameters, lend themselves to no other logical

conclusion but that the category of private line services

establishes the boundary beyond which specialized car-

riers are not authorized to operate. Were this not so,

i.e., had the specialized carriers authorizations included

both private line and all other services (e.g., message

toll telephone), then the entire rationale of the Third

Cireuit decision and its meticulous delineation of the

limited private line service category is unnecessary

and without meaning.

Indeed, the Third Circuit’s rejection of contentions

that the FCC order before it on review was vague and

overbroad is singularly enlightening on this point. Ac-

cording to the court, although the FCC order ‘‘on its

face ... gives little guidance as to the types of serv-

ices that AT&T will be required to provide [to MCT]

‘hereafter’ ’’ (503 F.2d at 1273), the court concluded

that read in context, ‘‘the FCC has required AT&T to

provide to the specialized carriers those (interconnec-

tron) elements of private line services which AT&T

supplies to its affiliates and furnishes to customers

through its Long Lines Department”’ (Ibid. at 1273-

1274) (emphasis supplied). .

Not only have the Ninth and Third Circuits had

occasion to review the scope of the FCC’s Specialized

ee

10

Carrier decision, but so too has the District of Colum-

bia Circuit itself. Only a year ago, in AT&T v. FCC,"

the D.C. Circuit affirmed an FCC decision authorizing

U.S. Transmission Systems (a subsidiary of Interna-

tional Telephone & Telegraph Co.) to construct a

microwave system for the purpose of offering special-

ized services. Noting with approval both the Ninth and

Third Cireuit decisions, and specifically recognizing

that the issue before both courts was the scope of the

Specialized Carriers decision, the D.C. Cireuit acknowl-

edged the Commission’s decision in Specialized Car-

riers to be ‘‘that the public interest, convenience and

necessity would be served by permitting specialized

common carriers to provide a full range of private line

communications services... .’’*

Given the in-depth analysis of Specialized Carriers

by the Ninth and Third Cireuits, and the D.C. Cir-

cuit’s own iterated acknowledgment of what that de-

cision authorized, the direct conflict among circuits is

apparent. The footnote effort by the court below to

avoid this clear conflict by asserting that the issues in

other cases were different is patently erroneous; and

with deference, the asserted inability to reason from

the scope of the grant itself to its obvious limitation

approaches sophism. It is quite clear that contrary to

the court’s impression that the Commission’s Execunet

decision represented a departure from prior admin-

17 539 F.2d 767 (D.C. Cir. 1976).

18539 F.2d at 773-774. See also Nader v. FCC, 520 F.2d 182

(D.C, Cir. 1975) where the court (at 187) recognized that ‘‘MTS

and WATS are essentially monopoly services ... . AT&T's [other]

interstate revenue acerues from private line service .... Unlike

MTS and WATS, several specialized carriers, including MCI, com-

pete with AT&T in this part of the market.’’

11

istrative practice, the Commission’s decision here was

wholly consistent with its own and with judicial con-

struction of its Specialized Carrier decision since 1971.

II. The Court Below Overstepped The Bounds Of Judicial Review.

It is axiomatic that judicial review of agency action

must be based on the agency’s action and its rationale,

not on what a reviewing court thinks the agency should

have done or said.” Equally well settled is the corollary

to this axiom, /.¢., that the reviewing court may not sub-

stitute its opinion as to what the agency decision

should have been for what the agency itself decided.”

In the case below, however, the court’s result-oriented

decision has substituted its own judgment for that of

the Commission, summarily discarded the Commis-

sion’s rationale for its action, devised its own theory

of what the agency should have done, and declined to

accord even the normal deference to an agency's inter-

pretation of its own decisions” simply because the

FCC did not do or say what the court thought it should

*® Burlington Truck Lines v. U.S., 371 U.S. 156, 169 (1972). SEC

v. Chenery Corp., 332 U.S. 194, 196 (1947).

2° See Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969).

21 Slip op., p. 30, n.67; Pet. App. 29a; cf. MCI Communications

Corp. v. AT&T, 496 F.2d 214 (3d Cir. 1974), where the court

vacated a district court ruling ordering provision of AT&T facili-

ties to MCI, pointing out that under the primary jurisdiction doc-

trine it was for FCC, not the court, to determine ‘‘exactly what

private line services had been authorized by the FCC’’ (496 F.2d

at 222). And as this Court coneluded in Chenery, supra,

‘*The Commis-ion’s conc)usion here rests squarely in that area

where administrative judgments are entitled to the greatest

amount of weight by appellate courts. It is the product of

administrative experience, appreciation of the complexities of

the problem. realization of the statutory policies. and respon-

sible treatment of the uncontested facts’’ (332 U.S. at 209).

12

have done or said, or did not reach the result that the

court below thought proper.

Underlying the court’s novel approach to the FCC’s

Section 214 certification authority and its procedures,

an approach original with the court, appears to be a

new theory that all grants of certificates of public

convenience and necessity by the Commission are and

must be unlimited, unless affirmatively restricted.

Curiously, the court below finds support for its theory

not in what the Commission itself did or said in Spe-

cialized Carriers, but in its own selected excerpts from

a Commission staff report in Specialized Carriers,

which the Court erroneously construes as relating to

services not before the Commission in that ease.”

But as the court itself acknowledges, ‘‘We can as-

sume, without deciding, that a service like Execunet

was not within the contemplation of the Commission

when it made the Specialized Carrier decision.’’ ®

Adoption by the Commission of the staff report, ad-

verted to by the court below,” itself demonstrates that

the area of contemplation of both the Commission and

its staff were identical, and that the staff comments

selected by the court below necessarily related to the

service offerings before the Commission in Specialized

Carriers, not to some other undefined services not

there considered.

Equally flawed are the efforts by the court below to

find support for its conclusions in its own theories of

the import of ‘‘instruments of authorization”’ and of

the meaning of the Commission's nondecision in FCC

Docket No. 19117, theories apparently underlying the

2 Slip op., p. 29; Pet. App. 28a.

25 Slip op., p. 27; Pet. App. 26a.

** Slip op., p. 29, n.64; Pet. App. 28a.

13

court’s conclusion that past Commission practice rec-

ognized the court’s new affirmative restriction doc-

trine.”

Whatever the import of ‘‘instruments of authoriza-

tion’’ at other times or in other services (the instru-

ment itself is a preprinted form (FCC Form 462-B),

on which little if anything other than radio specifica-

tions are typed or computer printed), it is clear be-

yond question here that the Commission itself, all par-

ties to its proceedings, and the Ninth, Third and Dis-

trict of Columbia Circuits all considered the Special-

ized Carrier decision as having clearly established the

limited parameters of all instruments of authoriza-

tion issued pursuant to that decision. In short, spe-

ecialized carriers were authorized to provide private

line and only private line services.

With regard to FCC Docket No. 19117, what the

court below appears to have overlooked is that the

stated purpose of that proceeding was to equalize the

competitive position of the new specialized entrants,

who required certification, with that of the existing

carriers having existing facilities. It is quite clear

that the purpose of Docket No. 19117 was not to author-

ize specialized carriers to provide message toll tele-

phone service. nor did termination of the Docket No.

19117 proceeding without decision have that result.

Moreover, a nondecision can hardly be said to estab-

lish a pattern of prior administrative practice.

Thus it is clear that in substituting its own conclu-

sion and constructing its own ingenious rationale in

this case, the court below has not only exceeded all

limits of judicial review, but its own conclusion and

rationale are creviously in error.

2° Slip op., pp. 16-17, Pet. App. 16a.

14

III. The Decision Below Would Have Incredible Consequences.

If the court below is correct, the FCC has unwitting-

ly ereated and issued thousands of authorizations to

over 30 new telephone companies in the past seven

years, in each case without the slightest attention to

or consideration of whether the public interest, con-

venience and necessity require or would be served by

its action. Indeed, the absence of a single public in-

terest finding in support of the establishment of 30

new United States telephone companies would strong-

lv suggest the invalidity of all of these authorizations,

if indeed unlimited as the court below found.” Yet

affirmance of these now judicially found to be un-

limited grants, econcededly without administrative or

judicial consideration of the public interest,” is the

result of the court’s holding that absent specific affir-

mative action by the Commission prohibiting the offer-

ing of services not contemplated by the Commission

and for which authority was not sought by the appli-

eant, all grants are unlimited.

That there is something fundamentally wrong with

this result, particularly in this ease, is further evi-

denced by the fact that before, during, and after Spe-

cialized Carriers, MCI and other specialized carriers

repeatedly and emphatically advised the Commission

that the services for which they sought authorization

were new, innovative, and not available from already

existing carriers.* MCT itself, in fact, repeatedly as-

°° That 30 new telephone companies serving this country are not

required by the public interest, convenience and necessity is a

matter worthy of judicial notice.

** Slip. op., p. 32; Pet. App. 31a.

** Quite serious questions of misrepresentation are raised by the

original assertion, on the basis of which the FCC general policy

15

sured the Commission and the courts that it did not

seek to enter the switched voice service and provide

long distance toll telephone service (MTS). As the

Commission found,

“‘According to MCI, the ‘real distinction which

delineates MCI service from anything provided

today by existing common carriers is ... the

manner in which a customer may utilize it [MCT

service] in order to provide a customized intra-

company point-to-point communications system

..’’’ (Specialized Carriers, supra, at 874).

Again, in its briefs in the original MCI ease (18 FCC

2d 953 (1969)), MCI asserted in support of its re-

quested authorization that ‘‘MCI will not provide a

toll exchange telephone service.’’ Again ‘‘MCTI em-

phasizes that it is not seeking to become a public tele-

phone exchange company” (Ibid.). And ‘‘MCT would

was adopted, that specialized carriers proposed to offer services not

available from existing carriers (see Specialized Carriers, supra).

Having secured authorization for the purpose of offering new

specialized services, the specialized carriers next shifted to the

assertion that they should be allowed to offer all private line services

then available from existing carriers. This gambit having been suc-

cessful (see Bell Telephone, supra), the specialized carriers now

assert that they are authorized to provide plain old telephone

service, a service neither new, nor not available from existing car-

riers, nor specialized, nor private line. Surely, after-thought expan-

sion of authorization by ingenious advocacy does not and can not

meet the standard of public interest, convenience and necessity pre-

scribed by the Communications Act of 1934. And it is undisputed

and indeed indisputable that the FCC has never found that the

publie interest requires the provision of plain old telephone service

by specialized carriers. Thus, either the Commission is naive be-

yond belief. or it is the victim of serious misrepresentation by

applicants for its authorizations. In either event, however, not even

MCI claims affirmative authorization by the Commission to offer

message toll telephone service.

16

not offer public telephone exchange services, that is,

MCI customers would not use MCT facilities to call any

member of the general public’? (Jbid.) (Pet. App.

107b-110b).

Similar representations (or misrepresentations)

were made to the courts that reviewed the Specialized

Carrier decision (supra, n.14). Surely, the Commis-

sion (and the courts) are entitled to rely, as indeed

they did *® to substantial degree, on representations

made by applicants: and when applications are

eranted ‘‘as applied for,’’** it approaches the absurd

to require, as would the court below, that the Commis-

sion also affirmatively find a negative, with support

in a nonexistent record, that it is not in the public

interest to grant authority not only not requested but

expressly disclaimed.

If the Commission is to carry out effectively and

efficiently its affirmative statutory mandate, 1.e., ‘‘to

make available .. . to all of the people of the United

States a rapid, efficient. Nation-wide and world-wide

wire and radio communication service with adequate

2?In the six years sinee the Specialized Carrier decision, the

Commission has consistently and repeatedly expressed its convic-

tion that it had authorized specialized carriers to provide only

private line services” These expressions are found not only in its

decisions, but in public utterances and in representations to the

Congress (see, ¢.9., Statement of FCC Chairman Wiley, Honse

Hearings, 94th Cong., Ist Sess. 46, March 11, 1975—‘‘the competi-

tion we have introduced has been in the private line and not the

message toll service’’). And as shown above, the private line only

scone of Specialized Carriers has been recognized by the Ninth

Cireuit, twice by the Third Cireuit, and twice by the District of

Columbia Cirenit. Thus if the Execunet case indeed involved a

departure from past practice, the cornerstone of the opinion below,

that departure was by MCI and the court below, not by FCC.

°’ Section 214/e) ; Pet. App. 7c.

17

facilities at reasonable charges,’’™ the Commission

must be able to make the affirmative finding required

by its Section 214 on the basis of the application before

it, t.e., that the public convenience and necessity re-

quire the construction or operation of the applied for

interstate facilities for the purposes designated by the

applicant. To require, as would the court below, the

development of a record covering all services not ap-

plied for, in support of a nonstatutory, negative pub-

lic interest finding not only stands the statute on its

head but is tantamount to a reversal of the Court’s

landmark decision in RCA, supra, for under that de-

cision it is the Commission’s charge to regulate entry,

not non-entry, into the field of common carrier com-

munications.

CONCLUSION

For the reasons assigned, a writ of certiorari should

issue to the Court of Appeals for the District of Co-

lumbia Circuit, and this case set for plenary review.

Respectfully submitted,

Tuomas J. O'REILLY

1150 17th Street, N.W.

Washington, D.C. 20036

Counsel for United States

Independent Telephone

Association

Of Counsel:

CHADBOURNE, PARKE,

Wuitesive & WoLrr

1150 17th Street, N.W.

Washington, D.C. 20036

** Communications Act, Sec. 1; 47 U.S.C. § 151.