# Petition — United States Independent Telephone Ass'n v. MCI Telecommunications Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1493%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 439 U.S. 980 ## Text ne 7~ Supreme Court, U. & FILED 78-216 | AUG V% 1978 | IN THE L_MICHAEL RODAK, JR., CLERK Supreme Court of the United States Ocroser TERM, 1978 No. 78- UnItep States INDEPENDENT TELEPHONE ASSOCIATION, Petitioner, Vv . MCI TEeLECOMMUNICATIONS Corporation, et al., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Tuomas J. O'REILLY 1150 17th Street, N.W. Washington, D.C. 20036 Counsel for United States Independent Telephone Association Of Counsel: CHADBOURNE, PARKE, Wuiresive & WOLFF 1150 17th Street, N.W. Washington, D.C. 20036 August 7, 1978 Press or Bron S. ApAMs Parintina, Inc., Wasuinoton, D. C. TABLE OF CONTENTS Page ES ae 2 Nei cecctcecbec 2 RU PPUIPTID kc cnc cccnccccccccccccccceccs 3 ee cdceweweceones 3 SSTATMMENT OF THE CaS ..... ccc ccc ccc ccccccccccces 3 Reasons FOR GRANTING THE WRIT .................6. 9 I. Tse Court Betow Has Far OVERSTEPPED THE Bounps or Jupician Review ................-. 10 II. Conriictrine Decisions Are Not Reconcien By ne ahcwaconcesied 13 ee cece ncseacbepwecees 17 TABLE OF AUTHORITIES CasEs: Atchison, Topeka & S.F. R.R. Co. v. Denver N.O.R.R. SN no. co ccwcccbecccececes 7 Burlington Truck Lines v. U.S., 371 U.S. 156 (1972) .. 11 F.C.C. v. Pottsville Broadcasting Co., 309 U.S. 134 ee reins 6anbesésebecceces 10, 11, 13 F.C.C. v. RCA Communications, Inc., 346 U.S. 86 EEE TE See 17 F.C.C. v. Schreiber, 381 U.S. 279 (1965) ............ 11 FPC v. Idaho Power Co., 344 U.S. 17 (1952) ........ 11 FPC v. Transcontinental Gas Pipe Line Corp., 423 U.S. EES RE ll Louisville € Nashville R.R. Co. v. West Coast Co., 198 Tee ec dweccenecess ces 7 li Table of Authorities Continued Page MCI Communications Corp. v. A.T.@T., 496 F.2d 214 OR | Re ey ree 14, 15, 18 SEC v. Chenery, 332 U.S. 194 (1947) ...........008. ll Vermont Yankee Nuclear Power Corp. v. NRDC, 46 _ L.W. 4301; U.S. —— (April 3, 1978) .... passim Washington Utilities & Transportation Com. v. F.C.C., 513 F.2d 1142 (9th Cir. 1975); cert. den. 423 U.S. EE 8s 45 Was ches papar ds bbdebeeundanens 3,4 ADMINISTRATIVE AGENCY PROCEEDINGS: Beil System Tariff Offerings, 46 FCC 2d 413 (1974); aff'd. sub nom. Bell Telephone Company of Penn- sylvania y. I'.C.C., 403 F.2d 1250 (3d Cir. 1974), cert. den., 422 U.S. 1026 (1975) ..........000. 6, 15, 18 Specialized Common Carriers, 29 FCC 2d 870 (1971), recon, den. 31 FCC 2d 1106 (1971) .............. 3,4 STaTUTEs: Communications Act of 1934 Or SE, ck cc ceeec dv acceusewe 3, 10 ns ce dei cvcdeneacean 16 etiote Sie, GF WAC, 6 GIG oo obi viv vc cvncvcics 4, 15, 16 . : ; IN THE Supreme Court of the United States OcToBER TERM, 1978 No. 78- UntTep States INDEPENDENT TELEPHONE ASSOCIATION, Petitioner, vV. MCI TELECOMMUNICATIONS CoRPORATION, e¢ 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 be issued to review the opinions and or- ders of the United States Court of Appeals for the District of Columbia Circuit in this case. ‘ USITA’s interest in this case is that of the approximately 1,600 ‘‘Independent’’ (non-Bell) telephone companies of these United States, which serve about 30 million telephones in over half of the served geographical area of the nation; and which, together with Boll System companies, have constructed and operate the integrated nationwide telephone network. 2 OPINIONS BELOW The opinions of the Court of Appeals in this case, all captioned MCI Telecommunicattons Corp. v. F.C.C., are: 1. July 28, 1977, reported at 561 F.2d 365 (here- in “‘Execunet I”) ; cert. den., 46 U.S.L.W. 3446, — U.S. —— (Jan. 16, 1978); © 2. April 14, 1978, not yet officially reported (here- in ‘“‘Ezxecunet II’’); 3. May 8, 1978, not yet officially reported (here- in “‘Execunet III’’), These three opinions appear as Appendix I, Appendix D, and Appendix E, respectively, in the separately bound appendix to the petition in this case filed this date by American Telephone and Telegraph Company.’ JURISDICTION The judgment of the Court of Appeals was entered on April 14, 1978, and petitions for rehearing and sug- gestions for rehearing en banc were denied on May 8, 1978. Timely motions for stay pending certiorari were denied by the Court of Appeals on May 11, 1978;* and applications for stay were denied by the Court on May 22, 1978. The jurisdiction of the Court is invoked under 28 U.S.C. § 1254(1). *To avoid burdening the court with unnecessarily duplicative material, USITA will adopt the A. T. & T. Appendix and refer to it herein as ‘‘ Pet. App.”’ *The lower court did grant stay pending filing and disposition of application for stay to the Circuit Justice. j 4 3 QUESTION PRESENTED Whether the court below has once more overstepped the bounds of judicial review and ‘‘unjustifiedly [and erroneously] intruded into the administrative proc- ess’’* by judicially ordering (1) continued and ex- panded competition in the provision of long-distance telephone service and (2) the use of existing tele- phone company local exchange facilities in furtherance of that competition, all in the absence of the Con- gressionally mandated public interest findings by the Federal Communications Commission. STATUTES INVOLVED Pertinent provisions of the Communications Act of 1934, as amended * appear as Pet. App. F. STATEMENT OF THE CASE In 1971, acting on representations by applicants for authority to offer ‘‘specialized’’ interstate communi- cations services that the services proposed were not available from existing telephone companies, the F.C.C. established a general policy permitting essentially open entry into “‘the business . . . of providing spe- cialized private or leased line communication services through a microwave transmission facility as distin- guished from public exchange and long distance toll telephone service.’’* This distinction and the scope of *Vermont Yankee Nuclear Power Corp. v. NRDC, 46 U.S.L.W. 4301, 4310, —— U.S. —— (Apri! 3, 1978). °47 U.S.C. 151, et seq. ®* Washington Utilities & Transportation Com. v. F.C.C., 513 F.2d 1142, 1155 (9th Cir. 1975) ; cert. den., 423 U.S. 836 (1975), affirm- ing Specialized Common Carriers, 29 FCC 2d 870 (1971), recon. den, 31 FCC 2d 1106 (1971). 4 authorizations granted by F.C.C. pursuant to Spe- cialized Carriers were well understood by all concerned, including petitioner below, the original specialized carrier, Microwave Communications, Inc. (MCI). In its ‘‘Motion to Strike,’’ filed May 15, 1974 in Wash- ington Utilities, supra, MCI argued: ‘*‘Specialized carriers are not authorized to fur- nish the equivalent [of] ordinary long distance telephone service, and to the best of our knowl- edge this is the first time anyone has ever alleged that they are.’’ Four months later, in September 1974, MCI filed with the Commission a tariff offering metered use service, a service subsequently advertised and promoted by MCI as ‘‘Execunet”. The Execunet tariff was twice re- jected by the Commission as an unauthorized dupli- cation of ordinary long distance telephone service.’ In Ezecunet I, supra, the court below in essence found that although the Commission considered only the services proposed in the application before it, and may have thought it was granting MCI only the au- thority it sought, t.e., to provide only private line ser- vices,” the statute under which the Commission has been operating for over 40 years permits limitations on grants only under the ‘‘terms and conditions” clause of Section 214(c), and only on an adequately sup- ported affirmative finding that the public interest re- < ™MCI Telecommunications Corp., 60 FCC 2d 25 (1976) and Appendix B (letter order, 1975). *In the court’s words, ‘‘We can assume, without deciding, that a service like Execunet was not within the contemplation of the Commission when it made the Specialized Carrier decision’’ Execu- net I, 561 F.2d at 378, Pet. App. 25i. ¢ * 4 = 3 4 5 quires limitations.’ Finding further that the Commis- sion’s Specialized Carrier decision “‘ecannot reasonably be read to have made an affirmative determination that the public convenience and necessity required ‘private line’ restrictions, ”’ the Court below held that MCI’s authorizations were unrestricted."* Next addressing the question of the provision by MCI of ‘‘Execunet?? ser- vice, the court’s words were: “é . . we have not had to consider, and hav considered, whether competition like that st Execunet is in the public interest. That will be the question for the Commission to decide should it elect to continue these proceedings,’’ ™ Execunet I thus “‘reversed and remanded,’’ with ex- pressions of concern and words of caution to the Com- mission that in the court’s view FCC had not so far determined that A T & T should be granted a de jure monopoly in the long distance telephone field, and ponccae pcre draw no public interest inferences rom the fact that another ier’ i would compete in that field."* i Hace o * Execunet I, 561 F.2d at 377, Pet. A i i tT! ; ‘ . App. 23i. Section 214 f the Communications Act (47 U.S.C. 214(.) ), whieh the pening Ai construed, provides in pertinent part that: ‘“‘The Commission shall have power to issue i [of public convenience and necessity] as applied pag my “= — to issue it, or to issue it for a portion or portions of a ine . . . described in the application, or for the partial exer- cise only of such right or privilege, and may attach to the issuance of the certificate such terms and conditions as in its judgment the public convenience and necessity may require.’’ '° Execunet I, 561 F.2d at 379, Pet. App. 28i. " Execunet I, 561 F.2d at 380, Pet. App. 30i. '2 Tid. |, 6 Motions for stay of mandate pursuant to Rule 41(b), Federal Rules of Appellate Procedure, were granted and petitions for certiorari, duly filed by USITA, AT&T, and FCC, were opposed by MCI and Southern Pacific Communications Company”™ on the ground, inter alia, that review by the Court would be prema- ture, since Execunet I ‘‘made no ruling on the lawful- ness of Execunet ... or between authorized and non- authorized services. All these matters are left for the Commission to decide.” * The Court denied certiorari on January 16, 1978 (Mr. Justice Stewart and Mr. Justice Powell were recorded as voting for grant). On February 28, 1978 the Commission, responding to an AT&T ‘‘Petition for Declaratory Order,” held that its earlier interconnection order,” under which Bell System companies were required to interconnect their local exchange facilities with the intercity facili- ties of the specialized carriers, covered only private line services, not long distance telephone service.” In reaching its conclusion, the Commission recognized, as indeed did the Court of Appeals in Execunet I, the ‘‘very different issue’ (from facility authorizations) involved in a Communications Act Section 201(a) in- terconnection proceeding,” where interconnection of 18 The Solicitor General urged granting of the writ, but reserved his position on the merits. 1* Nos. 77-420 et al., SPCC Brief in Opposition, pp. 10-11. ‘S Bell System Tariff Offerings, 46 FCC 2d 413 (1974); aff’d. sub nom. Bell Telephone Company of Pennsylvania v. F.C.C., 403 F.2d 1250 (3d Cir. 1974), cert. den., 422 U.S. 1026 (1975); see also MCI vy, A.T.&T., 496 F.2d 214 (3d Cir. 1974). *® Memorandum Opinion and Order, FCC 78-142, Pet. App. C. 17 Execunet I, 561 F.2d at 378, n.59, Pet. App, 24i-25i. Se nn , f | aR ages Vie BE ae SE eB. PT BI ch Sa x's 7 carrier facilities can only be ordered by the Commission after opportunity for hearing and on an affirmative finding that interconnection is necessary or desirable in the public interest.” Acknowledging, as the Court of Appeals in Execunet I also pointed out, that there had been no hearings on the issue of competition in the long distance telephone field, and finding that there had been neither notice nor opportunity for hearing on the long distance telephone service interconnection issue, the Commission concluded that it was bound by the Third Circuit’s affirmance of the Commission’s interconnection order, specifically that court’s ruling that the order was not overbroad when construed—as the court did—to cover only private line services.” MCI ’s reaction to this FCC ruling took the form of a motion to the Execunet I court ‘‘for an order direct- ing compliance with mandate.’”’ The motion was granted by the court below on April 14, 1978 (“‘Execu- net II my with the order being accompanied by a 22- page opinion by Chief Judge Wright, in which is re- cited “the long series of proceedings and litigation in which MCI has attempted to secure and preserve its as At common law there is no duty on the pa i physically connect its facilities with ‘eae 2 pial Pane Ma Atchison, Topeka & S.F. R.R. Co. v. Denver N.O. R.R. Co 110 U.S. 667 (1884); Louisville & Nashviile R.R. Co. v. West Coast Co., 198 U.S. 483 (1904). The interconnection obligation is thus purely a matter of statute, and arises only on Commission order. **Memorandum Opinion and Order, FCC 78-142, February 28 1978, Pet. App. C. Instructive in this context is the Third Cireuit 's earlier decision in MCI vy. AT&T, supra, n.15, in which the court vacated a district court ordered interconnection because of un- certainty as to what private line services had been authorized by FCC and to accord to the agency the right to first determine the —. a permissible competition between specialized and existing 8 authority to offer Execunet service,’’ the ‘‘almost con- tinuous resistance from AT&T,”’ and the ‘‘thought that this process finally culminated in our Exzecunet deci- sion upholding MCI’s authority to offer Execunet pending further rulemaking by the Commission.”’ * Finding that the Commission’s order “‘. . . twists the issues we contemplated in this case beyond recognition; it deliberately frustrates the purpose of the litigation, the hasis on which it was presented by the parties, and the intended effect of our decree,’’* the court below found that although Ezecunet I ‘‘.. . is not addressed explicitly to the interconnection issue or to A. T .& T.’s obligation to provide interconnection,’’” ‘‘the fact of the matter is that our Ezecunet decision did clearly contemplate—by virtue of A. T. & T.’s representations and actions—that A. T. & T. was required to provide interconnection for Execunet service.’’™ Petitions for rehearing and suggestions for rehear- ing en banc were denied by the court below on May 8, 1978. USITA’s motion for stay pending certiorari was denied on May 11, 1978, with a ten page per curiam (‘‘Execunet III’’) restating the court’s view of MCI’s authority to provide long distance telephone service as unlimited and unrestricted, its view of telephone com- panies interconnection obligations necessarily similarly unbounded, and its determination that MCI’s right to enter and to expand its participation in the long dis- tance telephone service market must be allowed to 20 Execunet II, slip op., p. 3; Pet. App. 2a-3a. *1 Exrecunet II, slip op., p. 16, Pet. App. 15a. 22 Td. at 11, Pet. App. 10a-1la. 23 Td, at 10, Pet. App. 9a. ea ee Ce ee ee ee ee OK cM Oe ei. 9 continue ‘‘. . . until and unless it was fo . . und public interest demanded otherwise.”’ * that the REASONS FOR GRANTING THE WRIT The Commission’s response to the E. date was the institution on February 28, 1978 of s mee ceeding to determine the precise question posed by the court below in its Execunet I opinion, i.e., “‘whether competition like that posed by Execunet is in the publie interest.” ss It is clear, and the court below agrees, that the Commission has not yet affirmatively made that public interest determination. In Execunet II and Ezxecunet III, howey court below (1) has itself authorized that tet ag and (2) has itself ordered existing telephone compa- nies to interconnect their local exchange facilities in furtherance of that competition. In so doing, the lower court has now so far overstepped the permissible bounds of judicial review as t motte 0 warrant summary Indeed, in its trio of Execunet decisions the court below has reriously misread the statutes involved, has usurped the Commission’s authority to determine the public interest in both grants of authority and inter- connection matters, and has precluded responsible ex- ercise of that authority by the agency, all in direct con- flict with the Commission’s statute, the applicable and ** Execunet II, slip op., at 15, Pet. App. 14a. *““In the Matter of MTS and WATS Market Structure’, CC Docket No, 78-72, Notice of I . : ruary 23, 1978, ¢ of Inquiry (FCC 78-144), adopted Feb- ** Execunet I, 561 F.2d at 380, Pet. App. 30i. 10 controlling decisions of the Court and the interconnec- tion decisions of the Third Circuit. I. The Const Below Has Far Overstepped The Bounds Of Judicial Review. That the court below may not have had available to it on April 14, 1978 (the date of Erecunet II) the Court’s April 3, 1978 opinion in Vermon* Yankee Nu- clear Power Corp. v. NRDC (46 U.S.L.W. 4301) does not excuse or justify its flagrant violation of the stand- ard for judicial review of agency action. Here, as in Vermont Yankee, the agency involved has been given broad regulatory authority, in this case over the development of ‘‘. . . a rapid, efficient, Na- tion-wide and world-wide wire and radio communica- tion service with adequate facilities at reasonable charges.’’" Here, as in Vermont Yankee, construction permits and licenses (or certificates of convenience and necessity) must be obtained; and grant by the agency must be based on adequate findings that the public interest, convenience and necessity require or will be served by grant of the authority requested.” And here, as in Vermont Yankee, the decisions below emanate from the Court of Appeals for the District of Colum- bia Circuit and thus ‘‘will serve as precedent for many more proceedings for judicial review of agency actions than would the decision of another Court of Appeals.’’” Even without Vermont Yankee, however, the stand- ard for judicial review has been well established by the Court in a long line of decisions, including F'.C.C. v. ** Communications Act of 1934, See. 1 (47 U.S.C. 151). *8 Thid., Sees, 214, 308-309, ** Vermont Yankee, supra, at 4305, n.14. eee as ae 11 Pottsville Broadcasting Co., 309 U.S. 134, 143 (1940) ; SEC v. Chenery, 332 U.S. 194, 196 (1947): F.C.C. v. Schreiber, 381 U.S. 279, 290 (1965) ; Burlington Truck Lines v U.S., 371 U.S. 156, 169 (1972); and FPC v Transcontinental Gas Pipe Line Corp., 423 U.S. 326 ( 1976). It has been and remains absolutely clear that Judicial review of agency action must be based on the agency’s action and its rationale. Moreover, as the Court held in FPC v. Idaho Power Co., 344 U.S. 17, 20 (1952), the ‘‘function of the reviewing court ends when an error of law is laid bare. At that point the matter goes once more to the Commission for reconsideration.” Further, As Mr. Justice Rehnquist, reviewing T'rans- oe supra, for the Court in Vermont Yankee said: ‘In that case, in determining the proper scope of judicial review of agency action under the Natural Gas Act, we held that while a court may have oec- casion to remand an agency decision because of the adequacy of the record, the agency should nor- mally be allowed to ‘exercise its administrative discretion in deciding how, in light of internal organization considerations, it may best proceed to develop the needed evidence and how its prior decision should be modified in light of such evi- dence as develops.’ ”’ ® Measured by these standards, the decisions below are clearly beyond the pale. For in these decisions the Execunet court first found error in the Commission’s failure to affirmatively find a public interest require- menit to limit its authorizations to MCI—a finding ob- viously impossible in view of the total absence of a record relating to services which MOI had not pro- *° Vermont Yankee, supra, at 4307. 12 posed. Had the court below stopped at that point, its decision could have arguably been said to have com- plied with the judicial review standard, even if its construction of the Commission’s statute were errone- ous. But the court below did not stop with laying bare what it viewed as the Commission’s error of law. Rather, it gratuitously counselled the Commission in Execunet I that it must develop a new record, a record on which a finding could be made that grant of author- ity for services for which authority was not sought could be found to be not in the publie interest. Addi- tionally, the court advised the FCC that no public in- terest inferences should be drawn from the fact that a proposed service would compete in the long distance telephone field; and that the Commission ‘‘must be ever mindful that just as it is not free to create compe- tition for competition’s sake,” it is not free to propa- gate monopoly for monopoly’s sake;’’ and that the test is the public interest, ‘‘not the private financial inter- ests of those who until now have enjoyed the fruits of de facto monopoly.’’™ In Erecunet II, the court below went still farther afield. It decided there that not only had the Commis- sion erred, but that its failure (in the court’s view) to adequately and properly limit MCI to the provision of private line services in fact not only authorized MCI to operate its facilities to provide long distance telephone service (Section 214) but also obligated the existing telephone companies to interconnect their local facilities in order to help MCI compete in that market (Section 201(a)). Moreover, said the court below, the ** Execunet I, 561 F.2d at 380, Pet. App. 30i (footnote omitted). 13 Commission is powerless to stop or contain competition or interconnection in the long distance telephone mar- ket until and unless it finds, after completion of the proceeding instituted in compliance with the Execunet I mandate, that competition adversely affects the pub- lie interest.” Each of these steps beyond the finding of Commis- sion error is, we respectfully submit, an excess of judi- cial activism warranting summary reversal. Vermont Yankee, supra, while specifically and recently directed to the District of Columbia Circuit is not new law. Pottsville Broadcasting, supra, quite clearly drew the distinction between a mandate from court to court and court to an administrative agency, (309 U.S. at 141- 144) and found that the Court of Appeals, when it had ‘laid bare [the] error [of the agency], exhausted the only power which the Congress gave it’? (309 U.S. at 145). In authorizing competition and requiring inter- connections, the court below has ignored the teaching of Pottsville. Both functions are quite clearly vested in the agency, not the court; and as the court’s man- damus to FCC was set aside in Pottsville, so too must the Hwxecunet court’s usurpation of agency functions be reversed here. II. Conflicting Decisions Are Not Reconciled By Nullifying One. The efforts of the Execunet court notwithstanding, there remains an unreconcilable conflict between the Third and District of Columbia Circuits. The treat- ment accorded the Third Circuit’s in-depth exploration and resolution of the interconnection issue by the covrt = Execunet II, slip op., at 15, Pet. App. 14a. MCI has estimated the time required to complete this proceeding to be ‘‘several years’’ (MCI Opposition to Motions for Stay, April 20, 1978). 14 below can only be described as at best, cavalier, and at worst, rendering wholly without meaning the entire Third Cireuit proceeding. In Execunet I, the court distinguished Bell of Penn- sylvania, supra, on the ground that it ‘involved a very different issue, namely whether the Commission had affirmatively determined that it would be 1n the public interest to require A. T. & T. to interconnect with MCI for the purpose of allowing MCI to offer FX and CCSA service. See 47 U.S.C. §201(a) (1970).’’* In Ezecu- net II the lower court ‘‘changed positions as nimbly as if dancing a quadrille,’’** and now finds in the Third Cireuit’s broad construction of Specialized Car- riers, supra, ‘*. .. strong support—not conflicting au- thority—for the similarly broad construction we ac- corded in Exrecunet to Specialized Carrier [sic]....”™ What the Execunet court consistently refuses to acknowledge in either its effort to distinguish or its claim of support is the fact that central to the Third Circuit’s interconnection ruling is the basic question of what competitive services MCI had been authorized by FCC to provide. If MCT is indeed the holder of un- limited authorizations and correspondingly unlimited rights to interconnection, as Execunet II holds, the Third Circuit’s deliberations on the scope of MCI’s au- thorizations were purely academic. The Third Circuit’s opinion in MCI Communications Corp. v. AT&T, 496 F.2d 214 (3d Cir. 1974) is peculiarly pertinent and in- 83 Execunet /, 561 F.2d at 378, n.59; Pet. App. 24i-25i. %* Vermont Yankee, supra, at 4306, quoting Orloff v. Willoughby, 345 U.S. 83, 87 (1953). S Execunet I1, slip op. at 18-19, Pet. App. 17a. 15 structive here. In that case a preliminary injunction requiring specified interconnections had been issued by the District Court. In vacating the injunction, Cireuit Judge Van Dusen, for the court, wrote: ‘Deferral to the FCC under the doctrine of pri- mary jurisdiction is particularly appropriate in this case not simply because of the fact of uncer- tainty concerning the issue of what private line services have been authorized, but also because of the nature of the issue. For a court to resolve this issue results in a judicial determination of the scope of permissible competition between the spe- ctalized carriers, such as MCI, and the existing carriers, such as AT&T. Such a determination, in- volving, as it must, the comparative evaluation of complex, technical, economic and policy factors, as well as consideration of the public interest, should be made, in the first instance by the administrative agency which has been entrusted with the primary responsibility for making such a determination and which has the expertise necessary for the de- velopment of sound regulatory policy.’’ 496 F.2d at 222 (footnote omitted, emphasis supplied). The result of this decision was Bell System Tariff Of- ferings, supra, which was then affirmed in Bell of Pennsylvania, supra. In the ease at bar, FCC did indeed make its deter- mination in the first instarice—that it had affirmatively authorized MCI to offer private line service and only private line services. But in Execunet I and Ezecunet II the court below made new law—an affirmative FCC authorization pursuant to Section 214(a)“ of the *® Section 214(a) (47 U.S.C. 214(a)) provides in part that: ‘No carrier shall undertake the construction of a new line or of an extension of any line, or shall acquire or operate any 16 Communications Act cannot be limited to the author- ity applied for unless FCC conditions its grant pur- sant to a separate and additional public interest finding under Section 214(c), and telephone compa- nies interconnection obligation are measured by that same unlimited standard, not by Section 201(a).” The culmination of the Commission’s ‘deliberations on how to conduct its affairs under this novel and judicially preseribed procedure, following a three month’s freeze on all applications, is a remarkable new routine in which the affirmative finding of public convenience and necessity in each processed applica- tion is conditioned on the outcome of the proceeding instituted by the Commission, in response to Ezxecunet I, to determine whether the public convenience and necessity require competition in the provision of long distance telephone service.” line, or extension thereof, or shall engage in transmission over or by means of such additional or extended line, unless there shall first have been obtained from the Commission a certifi- eate that the present or future public convenience and neces- sity require or will require the construction, or operation, or construction and operation of such additional or extended 7 Of particular concern to the Independents in this context is the apparent elimination of the requirements of Section 201(a) from the statute, and the denial to the Independents of the right to hearing before the Commission on interconnection matters spe- cifieally acknowledged by the Third Cireuit. See Bell of Pennsyl- vania, supra, at 1273, n.3la. °8 How a finding today that the public convenience and necessity require the construction or operation of a new line can be condi- tioned on the outeome of a proceeding to determine whether the publie convenience and necessity require that construction and operation, puzzling at best, is but one result of judicial intrusion into the administrative process. For the Court’s convenient refer- ence, a copy of a typical FCC authorization under the new proce- dure is attached as Exhibit A. 17 Unlike the Third Circuit, the Ezecunet court, re- grettably, did not allow the FCC to conduct the pro- ceeding ordered * by Execunet J and determine in the first instance ‘‘.. . the scope of permissible competition between the specialized carriers, such as MCI, and the existing carriers, such as AT&T.’’ Rather, by the judicial fiat of Execunet IT long distance telephone competition is authorized, and interconnection is re- quired, even in the judicially acknowledged absence of any administrative public interest findings as to either authorization or interconnection, and must be permitted to continue and expand ‘‘until and unless it was found that the public interest demanded other- wise.’’ 40 Thus the conflict between the Third Circuit’s limited to private line decision and the District of Columbia Circuit’s unlimited view remains, and indeed is sharp- ened by Ezxecunet II. The conflict can only be resolved by the Court. CONCLUSION Thus has the court below overstepped the bounds of judicial review and usurped the functions of the F.C.C. Thus has the court below reversed the holding in F.C.C. v. RCA Communications, Inc., 346 U.S. 86, 93 (1953) that ‘‘The Act by its terms prohibits com- petition by those whose entry does not satisfy the ‘public interest’ standard.’’ (Emphasis supplied). And thus has the court below reduced the thorough and a Execunet I may be read as leaving the institution of a pro- ceeding to the Commission’s discretion. Given the Commission’s statutory public interest duty, however, it had no choice but to proceed. © Erecunet 11, slip op. at 15, Pet. App. 14a. 18 careful deliberations of the Third Circuit to a mean- ingless semantic exercise, for the entire interconnec- tion proceeding in that court,” in which the lawfulness of the FCC order requiring interconnection for MCI’s ‘‘presently or hereafter authorized’’ services hinged on its scope, becomes wholly academic if indeed the Execunet court is correct in finding MCI’s authoriza- tions unlimited and telephone company interconnec- tion obligations equally unbounded. For these reasons, the writ should issue to the Court of Appeals for the District of Columbia Circuit, and this case should be 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, WuiresinE & WOLFF 1150 17th Street, N.W. Washington, D.C. 20036 August 7, 1978 ** MCI v. AT&T, supra; Bell Telephone Company of Pennsyl- vania V. F.C.C., 503 F.2d 1250 (3d Cir, 1974). EXHIBIT A la Before the Federal Communications Commission Washington, D.C. 20554 File No. I-T-C-2621 In the Matter of Western Union Internationat, Ino. Application for authority to acquire and operate facilities between New York and Washington, D.C. ORDER AND AUTHORIZATION Adopted: July 28, 1978 Released: August 1, 1978 1, Opon consideration of the above-captioned applica- tion, filed on Oct. 10, 1975 by Western Union International, Inc. (WUI), we find that a grant of said application will serve the public interest, convenience and necessity ; 2. Accordingly, Ir Is Orpgrep, pursuant to Section 0.291 of the Commission’s Rules on Delegations of Authority. That application File No. I-T-C-2621 Is Heresy Granrep, explicitly subject to the following: The authorization of the facilities and services herein shall be subject to pos- sible revocation or modification as a result of any findings, rules, requirements or other actions which may result from or be promulgated by, the proceedings in Common Carrier Docket No. 78-72, ‘‘In the Matter of MTS and WATS Market Structure,’? FCC 78-144 (March 3, 1978) or Com- mon Carrier Docket No. 78-96, ‘‘Regulatory Policies Con- cerning the Provision of Domestic Public Message Serv- ices By Entities Other Than the Western Union Telegraph Co. and Proposed Amendment to Parts 62 and 64 of the Commission’s Rules,” FCC 78-184 (March 28, 1978). The grantee is afforded 30 days from the release of this order to decline this authorization as conditioned. Failure to 2a respond within this period will constitute formal accept- ance of the authorization as conditioned;* and (A) WUI is authorized to: (1) lease from AT&T and operate 11 voice cir- cuits between its operating offices in New York and Washington, D.C.; (2) use said facilities to provide those services WUI was authorized to provide by the Commis- sion’s Order and Authorization adopted April 8, 1964, File No. T-C-1749 et al, as modified by the Commission’s Memorandum Opinion, Order and Authorization adopted Dec. 21, 1967, File No. T-C- 2135 et al, between the United States and over- * Heretofore, when evaluating whether the public convenience and necessity required the construction and operation of proposed new channels of communications, the Commission believed it suffi- cient to consider the application ‘‘as applied for,’’ i.e. limited to those specific classes of service offerings mentioned in the applica- tion or specifically authorized by prior Commission action, How- ever, the Court has recently held that a carrier may introduce new service offerings using existing facilities merely through the filing of appropriate tariffs, unless such use of the facilities has been explicitly restricted based on an adequate public interest determi- nation at the time of authorization. MCI Telecommunications Corporation v, FCC, 561 F.2d 365 (D.C. Cir. 1977). Pursuant to this legal interpretation, it appears that carriers may now enter and compete in various communications markets, including public message service markets as well as competitive markets from which they were previously precluded, employing both their existing facilities and any additional facilities the Commission may author- ize without the requisite limitations based on appropriate public interest fiindings. In order to determine whether the public inter- est. requires any regulatory controls or restrictions on the future market structure for public message telephone and telegraph serv- ices, and if so, the nature of any such restrictions, the Commission has instituted CC Docket Nos, 78-72 and 78-96. Pending the results of those proceedings, we believe the public interest requires that we condition all further facility authorizations on their outcome. 3a seas points WUI is authorized to serve and beyond; (3) subdivide the voice circuits authorized herein in accordance with the Commission’s Memoran- dum Opinion, Report and Order adopted Feb. 13, 1974, Docket No. 18348; (B) The Commission’s temporary authorizations, granted Sept. 19, and Oct. 20, 1975 and expiring Dee. 31, 1978, authorizing the facilities requested in the instant applications, are hereby TeRMINaTep. FeperaL CoMMUNICATIONS CoMMISSION /8/ Joet S. Wrynik for Charles R. Cowan Chief, Facilities & Services Division --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1493%3A1. Public record. Not legal advice.