Opposition Brief — SBC Communications, Inc. v. Federal Communications Commission

b) 7 Dee 18 1996

Nos. 98-652 and 98-65

In the Supreme Court of the Gnited States

OCTOBER TERM, 1998

SBC COMMUNICATIONS INC., ET AL., PETITIONERS

Uv.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

BELL ATLANTIC CORP., PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE

FEDERAL COMMUNICATIONS COMMISSION

IN OPPOSITION

SETH P. WAXMAN

Solicitor General

Counsel of Re cord

JOEL I. KLEIN

Assistant Attorney General

PHILIP D. BARTZ

CHRISTOPHER J. WRIGHT Acting Assistant Attorney

General Counsel Ge neral

JOHN E. INGLE MARK B. STERN

Deputy Assistant General JACOB M. LEW IS

Counsel ALISA B. KLEIN

DANIEL L. KAPLAN

DANAJ. MARTIN

Attorneys

Federal Communications

Commissicn

Wash ington, PAG. 20554

Department of Justice

Washington, DA " 20580-0001

(202) 514-2217

QUESTION PRESENTED

Whether certain provisions of the Telecommunica-

tions Act of 1996 applicable to the activities of the Bell

Operating Companies (47 U.S.C. 271-275) constitute

“bills of attainder,” violate separation of powers princi-

ples, or deny those companies the equal protection of

the laws.

(I)

WR VES ORNS eR Ba a a raies

pi Bs RE PE eee BAS CEE TRL RENNES SORE, RE TS

TABLE OF CONTENTS

Opinions below ........ccsssssecsessesees pubeneassninntmiainiteenetiit

Jurisdiction

i RANE NET ESM scubsitibhaiacahutitiniiieta

I Siistaccisicditasiciidahianisieisitcns dadibilibtiiniaianisd

Conclusion

TABLE OF AUTHORITIES

Cases:

Alaska Airlines, Inc. v. Brock, 480 U.S. 678

RIED asesictiipithiacetdideamniabeinsisibicoadiiiskissmnibd os cskoisint es

GENOA) cstiieusesnisaicindubesccbbclaituanisasohiaerduiinttmmibbingtiatsnticcossetetahec.

BellSouth Corp. v. FCC, 144 F.3d 58 (D.C. Cir.

GONE SietlicnnedibiissshcnpdiniaNaiatieiniashionasbiapebibdbutisisioninicisioniais-

Board of Governors v. Agnew, 329 U.S. 441

LBA F salstiedidebiasapusihctanacernuintninnisiitdassatibihasbadicaiunssaansois dass

Cummings v. Missouri, 71 U.S. (4 Wall.) 277

[RAPUEP sclehisecinesasinaseetciniiecadirsaheitncabbddalchienassumiiintiabicosasshass.

Datdridge v. Williams, 397 U.S. 471 fe. RST

DeVeau v. Braisted, 363 U.S. 144 2, See ER eat sentee

Erb v. Morasch, 177 U.S. 584 (1900) cecccccceccossosce.ce.--.....

FCC v. Beach Communications, Inc., 508 U.S. 307

RIOT) stansitantcapininiapsiedbuaticetboaipincinsiadeuiaderbuiekie cabins acid,

FCC v. National Citizens Comm. for Broadcasting,

ne te BEE COE; Hain d tilctansidabaaidicomiaicsak se.

Flemming v. Nestor, 363 U.S. 603 (1960) c.ccccccssecsoesess-.

Fresno Rifle & Pistol Club, Inc. v. Van de Kamp,

965 F.2d 723 (Sth Cir. 1992) ......ccecscccscasccnssceesceseceeccecescees

Garland, Ex parte, 71 U.S. (4 Wall.) 333 (1866) ............

Hawker v. New York, 170 U.S. 189 EIRENE <ssesiticthsisadiinins

Maine Cent. R.R. v. Brotherhood of Maintenance

of Way Employees, 813 F.2d 484 (1st Cir.), cert.

Genied, 484 U.S. 825 (1987) ...ceccccccesecossececercsoeveseseocese..

(III)

SOCPOSHETEOROEESE ESS EE CESSES CCD ESOSS ESOS ER SSESSOESEOESESES

cece 20

pense 11

IV

Cases—Continued: Page

Morey v. Doud, 354 U.S. 45 (1957) 20

New Orleans v. Dukes, 427 U.S. 297 (1976) 20

Nixon v. Administrator of Gen. Servs., 483 U.S.

425 (1977) 8, 15, 16, 20, 22

North American Co. v. SEC, 397 U.S. 686 (1946) .......00+ 9

Pennsylvania v. Wheeling and Belmont Bridge,

59 U.S. (18 How.) 421 (1855) seh 21

Pierce v. Carskadon, 83 U.S. (16 Wall.) 234 (1872) ......... fe)

Plaut v. Spendthrift Farm, Inc., 514 U.S. 211

(1995) 8, 16, 20, 21, 22

Regional Rail Reorgan valle Act Cases, 419 US.

102 (1974) . 15

Robertson v. Seattle Audubon Soc’y, 503 US.

429 (1992) 21

SBC Communications Inc., In re Application of,

2 F.C.C.R. 8625 (1997), aff’d, 138 F.3d 410 (D.C.

Cir. 1998) .... 6

SBC Communications, Inc. v. FCC, 138 F.2d 410

(D.C. Cir. 1998) nn — 30,98

Selective Serv. Sys. v. Minnesota Pub. Interest

Research Group, 468 U.S. 841 (1984) Sciladiaiaisgnin 8, 12

Turner Broadcasting Sys. v. FCC, 512 U.S. 622

(REID ssassescissstcintasasasincinisisneceancnsveiathicataibininighiincdiiniidaainiiminnetiit 9

United Nuclear Corp. v. Cannon, 553 F. Supp. 1220

CORTE, CED sssecissicsctecnsidccesienssibsssnthiitataiciiatietpdlnihatabinabinesiccions 16

United States v. AT&T Co., 552 F. Supp. 131

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

States, 46g U. A BE CD bcd ciahanibnih ennai 2,3

United States v. AT&T Co., 524 F.Supp. 1336

CED.BIE. 4: MEAD isicescssenienectnipnnehbliinnibihalahaiacstintaviniibailchinnbnsianatitiios 2

United States v. Brown, 381 U.S. 437 (1965) ........cccccsoeee 9,12

United States v. GTE Corp., 603 F. Supp. 730

CELA I AG. SRG) - scinccimbitcnnncepiianiinpianianntnaiasiinny ana 20

United States v. Lovett, 328 U.S. 303 (1946) .........00 9, 12, 22

United States v. Western Elec. Co., 569 F.

Supp. 90 (D.D.C. 1988) .......c.cscssssseses : ‘ 3

:

:

;

:

:

7

V

Cases—Continued: Page

United States v. Western Elec. Co., 969

F.2d 1231 (D.C. Cir. 1992), cert. denied, 507 U.S.

2 EE tO Mente et MP ne ON HEN Tae CDRS SO A et SPR 8

Constitution, statutes and rule:

U.S. Const.:

MUI: 5 ccnisctisisihisniessninecttanigeabssnsiabinlctsichinsnacdianlgittinabaiticigenehs 7

Amend. V (Due Process Clause) ........-cscccccssscsscessosessecessesere 17

Art. I, § 9, Cl. 3 (Bill of Attainder Clause) .......sc.cs00 passim

Banking Act of 1983:

SF Gy Bat Sr eins Se IND (scsi sectsncacinntitaniinstsisacciscccenls Leads 11

BU Ee Wi ie FO. dicinbecibcsinlcdendepicisasdcindieacais canines 11

Bank Holding Company Act of 1956, 12 U.S.C.

SEDUCE ssncicatsiestahciceipinniuealeidicineadacisinagninbszdlacboascinstnssick cause 11

Credit Union Membership Access Act of 1998,

Pub. 1. No. 105-219, 112 Stat: 918 c.cccciciccisecsosccoccsecsecossecks 11

Communications Act of 1934, as amended by the

Telecommunications Act of 1996, 47 U.S.C. 151 et

DOU: cap sces-eviciincticsns diciiptatactlahlaainsitplinasihaninabipbageeenssaiaieassissiataons passim

47 U.S.C. 153(4) (Supp. IT 1996) .......cccccccccscsrscerssesscess 4, 13,17

47 U.S.C. 153(4)(B) (Supp. IT 1996) .........cccscccsserscssesesesesees 4

OE RASA Beet Dishes shelchatdiisilnnsdisbasucbactondinsdelccaraciiacens 4

EE Siti SAPO IET icichstssadamnsibegiinhebiaaaceiccten diene 4

OT CATA Bee, tccncihsaacmicce ania 4

OFT skeds OR IEE Widestnihcchldaaiancditasncakieaadddcte at ece tata” 10

BU VaR Edd. eiiinceaaasisitcdiloaicinninireiicd 5, 6, 7, 8, 13

OT a ie a 5, 14

GF Ta TaEs, OTR) 5tcitisicctnirncc inadiinaks Renae le ics 5, 14

GF Ticats Ie MEI? cence ekacoemakadeaitabbindinecs taiewie ee 5, 14

Oe Wika An Bet ED. souscissninicoaedaniiaciaassiaaiebiicanomaimae nie 5

GF SETA ced PED Sctetichcdituaaiatbcoibichiinsasene eae 5

OE Gee ID sescctackasencsiunictabedictaprnniciatamslig act reales 6

Ot UBAA Sty wniascisnnddoocbiamu ee 5, 13

Bo OR ef 1 5 ANP RIE pete yk Oy eran cies “ANA Spee 5

Os. Canta: SEALANT G) secpsvasincehaasoctbastbicadeckesiamelesatnie ces 13

WEF CIARA TET Acstesstnssviseicenenacniibias capone 6, 10, 14, 20, 23, 24

ME lads, CATE an Sitnacncictecidihucbaacdatsiin, soda eieiditiaannee wists 5, 14

VI

Statutes and rule—Continued: Page

BER FE, REPRE Aa EE eset Sk OUT ER OE 5, 14

ete Tek |: | Pee a Ree wears Ae ae | 5

GE RETA 4 TRAIL) ccvevlincetinisittmasontacinenntgibialinindesiiieas dean 5

Bit ok . Peer senduishntntininaiginliiaangabiteidabdaieminiaaall 6,14

OT UGE ateavicliinitiiininadiieaie nme 6, 7, 13, 14, 19

FE CF Ae TR itcceentccthiitibiiieieiaticainiaiacaiicitea haat al eta 6

Gr A TRO cccicacecthtiincidintenitianthibibiiinciiaiteme 6

GE CARA s. BE sccttaccccninicnincatinencslcthntsiitisdamels iui cise eatin 6

BR Cem | | a en ee en kets nan 6

Gi Vie GED cctecenttatsancnsecitintiinnedinieiniaiademtciih 23

BF CRA. GUD cimtidascrneceneinseensiiccinleitniltiaiaiatiil titties 23

Federal Credit Union Act, 12 U.S.C. 1759 .....c.ccccccccsccsecsseses 11

Telecommunications Act of 1996, Pub. L. No.

oN ht} ere ee ee ee On passim

Po) ee eee 4

B GRMAN TD, EDD Dhak BED ccctcisccisininsntnhtcttieetiins 21, 23, 24

Saag. CR. HE, MATE) scenisscsssocsecceenssennisitneseheseitiiinihendtitaiinitiiveesinasnits 7

Miscellaneous:

Competitive Status of the Bell Operating Companies:

Hearing Before the Subcomm. on Telecomm., Con-

sumer Protection, and Fin. of the House Comm.

on Energy and Commerce, 99th Cong., 2d Sess.

(T3GG) .....ccccccsassssescsossosssccoseesenssssssessessenenstesssesosnenenssessesesescensssens 19

141 Cong. Rec. (daily ed. June 12, 1995):

$0. ESB ES cccssarsonsssosscnssenstsnsonstannenseustsiunsinenapibiiiedsbadigngsenbateinassiean 11

Bi TSE BGS cassecenssssssesescesszsnecesonmnsnnnesnssehinndsnsnstminssasepaiedieienitveasneants 1]

FCC, Telecommunications Indus. Rev.: 1997

(CCE. TIES) . ceccccsnccctasesipinsistanstssninantnapnatiiuintiistipiapebemasetinddduiansses il

H.R. Rep. No. 208, 104th Cong., Ist Sess. (1995) .........000 18

H.R. Rep. No. 204, 104th Cong., Ist Sess. (1995) .........c00+ 10

H.R. Rep. No. 559, 103d Cong., 2d Sess. (1994) ........... 10, 17, 18

H.R. Rep. No. 850 102 Cong., 2d Sess. (1992) ......cccscecesseees 19

Telecommunications Policy Act (Part Il): Hearings

Before the Subcomm. on Telecomm. & Fin. of the

House Comm. on Energy and Commerce, 101st

CONG... BE BOGS. CIBGU) cnncsesssericsinivictannmittinntiintonaiinins 10

Vil

Miscellaneous—Continued: Page

The Role of the Department of Justice: Hearing

Before the House Comm. on the Judiciary, 104th

Cong., Ist Sess. (1995)

.. Tribe, American Constitutional Law (2d ed.

19R8)

Jn the Supreme Court of the Gnited States

OCTOBER TERM, 1998

No. 98-652

SBC COMMUNICATIONS INC., ET AL., PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

No. 98-653

BELL ATLANTIC CORP., PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE

FEDERAL COMMUNICATIONS COMMISSION

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-53a')

is reported at 154 F.3d 226. The opinion of the district

court (Pet. App. 54a-73a) is reported at 981 F. Supp.

996.

‘ “SBC Pet.” refers to the petition for a writ of certiorari in No.

98-652; “Bell Atl. Pet.” refers to the petition in No. 98-653. “Pet.

~

App.” refers to the appendix to the petition in No. 98-652. (The ap-

pendices to the petitions are identical.)

(1)

2

JURISDICTION

The judgment of the court of appeals was entered on

September 4, 1998. The petition for a writ of certiorari

in No. 98-652 was filed on October 19, 1998, and the pe-

tition for a writ of certiorari in No. 98-653 was filed on

October 20, 1998. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

1. For many years, most telephone service in the

United States—both local and long-distance—was pro-

vided by AT&T and its corporate affiliates, collectively

known as the Bell System. In 1974, the United States

sued AT&T under the Sherman Act, alleging, among

other things, that the Bell System had improperly used

its monopoly power in local markets to impede com-

petition in the long-distance market. See United States

v. AT&T Co., 524 F. Supp. 1836 (D.D.C. 1981). In 1982,

to settle that lawsuit, AT&T entered into a consent

decree—which became known as the Modification of

Final Judgment, or MFJ—that required it to divest its

local exchange operations. The newly independent Bell

Operating Companies (BOCs) continued to provide

monopoly local exchange service in their respective

regions, while AT&T continued to provide nationwide

long-distance service. The BOCs were initially grouped

into seven corporate entities known as “Regional Bell

Operating Corpanies.” See United States v. AT&T

Co., 552 F. Supp. 181 (D.D.C. 1982), aff'd sub nom.

Maryland v. United States, 460 U.S. 1001 (1983). After

recent mergers, that number now stands at five: Bell

Atlantic, BellSouth, SBC Communications, Ameritech,

and U S WEST.

The consent decree, overseen for many years by the

federal district court in Washington, D.C., prohibited

the BOCs from providing long-distance telephone ser-

vice, manufacturing telecommunications equipment,

and providing information services. In approving the

restriction on long-aistance service,’ the dist.ict court

explained that a BOC, if permitted to enter the long-

distance market, could use its monopoly control over

local bottleneck facilities (throvgh which all calls must

pass) to impede long-distance competition in two princi-

pal ways: The BOC could subject competitors to dis-

criminatory terms of access te the iocal network, and it

could cross-subsidize its own long-distance operations

with its monopoly local revenues. AT&T Co., 552 F.

Supp. at 187-188, 223. The court cited related concerns

in approving the restrictions on information services

and equipment manufacturing. See id. at 189-191.

2. The Telecommunications Act of 1996 (1996 Act),

Pub. L. No. 104-104, 110 Stat. 56, comprehensively

overhauled the regulation of all telephone markets. In

the “local competition” provisions of the Act, 47 U.S.C.

251 et seq., Congress sought to open local markets to

full competition for the first time by requiring all

incumbent local exchange carriers (LECs), including

2 The district court divided the Bell Companies’ collective ;,eo-

graphical regions into approximately 160 exchange areas, known

as “local access and transport areas” or “LATAs.” See United

States v. Western Elec. Co., 569 F. Supp. 990 (D.D.C. 1983). The

relevant restriction in the consent decree permitted the BOCs to

provide telephone service “only between points within a single

LATA, providing what is, basically, the traditional local telephone

service.” United States v. Western Elec. Co., 969 F.2d 1231, 1233

(D.C. Cir. 1992), cert. denied, 507 U.S. 951 (1998). For ease of

exposition, we refer to inter-LATA calls in the vernacular: us

“long-distance calls.” Such calls should not be confused with the

somewhat larger category of “toll calls,” which includes some

intra-LATA calls that the decree permitted the Bell Companies to

carry.

+

the BOCs, to make their networks and services avail-

able to new entrants in three distinct but complemen-

tary ways. See 47 U.S.C. 251(¢)(2)-(4). First, Section

251(c)(2) requires the incumbents to “interconnect”

their networks with those of other carriers, and to do so

“on rates, terms, and conditions that are just, reason-

able, and nondiscriminatory.” Second, Section 251(¢)(3)

entitles potential competitors to lease elements of an

incumbent’s network, again at “just, reasonable, and

nondiscriminatory” rates, terms, and conditions. Fi-

nally, Section 251(c)(4) gives potential competitors a

right to buy an incumbent LEC’s retail services “at

wholesale rates” and then to resell them to end users.

Several important issues concerning those local compe-

tition provisions are now pending before this Court in

AT&T Corp. v. Iowa Utilities Board, No. 97-826 (ar-

gued Oct. 13, 1998), and consolidated cases.

Congress also enacted a set of provisions—applicable

to the BOCs and “any successor or assign” (47 U.S.C.

153(4)(B) (Supp. II 1996))—that “as a whole relieves the

BOCs of several of the burdens imposed by the MFJ,

particularly by prescribing * * * a method whereby

the BOCs can achieve a long-sought-after presence in

the long-distance market.” BellSouth Corp. v. FCC,

144 F.3d 58, 66 (D.C. Cir. 1998) (emphasis in original).

The most basic of those provisions is Section 601(a) of

the 1996 Act, 110 Stat. 145, which terminates the

prospective effect of the AT&T consent decree. In

place of the decree, Congress created a transitional

regulatory framework governing the BOCs’ entry into

certain new markets, both to ensure orderly progress

towards full and fair competition in telecommunications

and to give the BOCs a strong incentive to facilitate the

realization of that goal.

5

Section 271 addresses BOC entry into the long-

distance market. That provision automatically entitles

all BOCs to provide, for the first time, “out-of-region”

long-distance services: 7.¢., long-distance services

originating outside the States in which a BOC was

authorized to provide local telephone service on the

date of the statute’s enactment. 47 U.S.C. 271(b)(2), (i)

Section 271 also introduces a procedure under which

the BOCs may apply to the FCC for authorization to

provide, also for the first time, full long-distance tele-

phone service to customers within their “in-region”

States. After “consult[ing]’ with the relevant state

public utility commission, and after both “consulting”

with the Department of Justice and giving “substantial

weight” to its views, the FCC is to grant a BOC’s in-

region long-distance application if it finds the following

(47 U.S.C. 271(d)): (1) that the BOC has satisfied certain

statutory requirements designed to open its local ex-

change market to competition (47 U.S.C. 271(c)); (2)

that, for an interim period, the BOC will conduct its

long-distance operations in accordance with the struc-

tural separation requirements of 47 U.S.C. 272;* and (3)

$ Section 271 also provides that the BOCs may immediately

provide, to customers located anywhere in the country, “inciden-

tal” long-distance services, 47 U.S.C. 271(b)(3), including audio and

video programming and commercial mobile services, “gateway

information services” linking local customers to information ser-

vice clearinghouses, and centralized signaling services. See

47 U.S.C. 271(g).

‘ The interim provisions of Section 272 require the BOCs to set

up separate affiliates if they wish to engage in manufacturing,

origination of most non-incidental in-region long-distance services,

or long-distance information services other than electronic publish-

ing or alarm monitoring. 47 U.S.C. 272(a) and (b); see also 47

U.S.C. 272(f) (sunset).

Leet aR ey Pe OE ER OE ee =~“ EE Cine ec mt ng on ter re > ce er ee ea rer = me et rr a a a RE I I rt rn re on Es ee

6

that granting the application would serve “the public

interest, convenience, and necessity” (47 U.S.C.

271(d)(3)).

Section 273 separately authorizes a BOC to manufac-

ture and provide telecommunications equipment once

the FCC has found that the BOC has satisfied the

conditions set forth in Section 271 for providing in-

region long-distance service. Finally, Sections 274 and

275 impose short-term restrictions on the BOCs’ elec-

tronic publishing and alarm monitoring services. Under

Section 274, a BOC or BOC affiliate may not, until Feb-

ruary 8, 2000, disseminate electronic publishing by

means of the BOC’s basic telephone service, except

through a “separated affiliate” or joint venture.

47 U.S.C. 274(a), 274(g)(2). Section 275 requires BOCs

that were not providing alarm monitoring services as of

November 30, 1995, to wait until February 8, 2001, to

begin doing so. 47 U.S.C. 275(a).

3. Petitioner SBC Communications Inc., through its

wholly-owned subsidiaries (Southwestern Bell Tele-

phone Company, Pacific Bell, and Nevada Bell), pro-

vides local telephone service to customers in Texas,

Missouri, Oklahoma, Arkansas, Kansas, Nevada, and

California. In April 1997, SBC filed an application

under Section 271 to provide in-region long-distance

telephone service in Oklahoma. The FCC denied the

application on the ground that SBC had not satisfied

Section 271’s threshold competitive requirements. In

re Application of SBC Commun. Inc., 12 F.C.C.R. 8685

(1997), aff'd, 138 F.3d 410 (D.C. Cir. 1998).

Six days after the FCC’s decision, SBC, along with

its wholly-owned BOC subsidiaries and several other

affiliates, filed this suit in the United States District

Court for the Northern District of Texas, challenging

the constitutionality of Sections 271 through 275. A

7

number of interested parties ultimately intervened. On

December 31, 1997, the district court held that the

challenged provisions were unconstitutional bills of

attainder. Pet. App. 73a. In a subsequent order, the

court stayed its decision pending appeal. Jd. at 76a-77a.

The court of appeals reversed. The court first held

that the challenged provisions of the 1996 Act are not

“bills of attainder” because they do not “punish” the

BOCs. E.g., Pet. App. 3la-35a. The court also rejected

petitioners’ claims that the challenged provisions vio-

late the separation-of-powers doctrine (id. at 35a-39a)

and equal protection principles (id. at 39a).’ Judge

Smith, dissenting, would have invalidated the chal-

lenged provisions as bills of attainder. Jd. at 41a-53a.

ARGUMENT

To date, two courts of appeals have ruled on the

BOCs’ bill-of-attainder challenge to the 1996 Act: the

Fifth Circuit below, and the District of Columbia

Circuit in BellSouth Corp. v. FCC, 144 F.3d 58 (1998).

Those two courts reached the same conclusion. In

BellSouth, the D.C. Circuit rejected many of the same

arguments that petitioners present here, upheld the

constitutionality of Section 274, and observed that the

BOCs’ constitutional claims were “somewhat under-

mined by § 274’s placement in an Act that as a whole

relieves the BOCs of several of the burdens imposed by

the MFJ, particularly by prescribing in § 271 a method

whereby the BOCs can achieve a long-sought-after

presence in the long-distance market.” Id. at 66 (em-

® The court of appeals also rejected a First Amendment chal-

lenge limited to Section 274. Pet. App. 40a (following BellSouth,

144 F.3d at 67-71). Petitioners have not sought this Court’s review

of that holding, and they have thus waived any First Amendment

challenge. Sup. Ct. R. 14(1)(a).

8

phasis in original). The BOCs recently challenged Sec-

tion 271 itself before another panel of the D.C. Circuit,

and that case is pending. See BellSouth Corp. v. FCC,

No. 98-1019 (D.C. Cir.) (argued Sept. 25, 1998). Unless

and until petitioners persuade some court of appeals to

depart from the current consensus, there is no need for

this Court to consider petitioners’ attack on integral

provisions of an intricate legislative compromise that

they themselves once supported (see Pet. App. 33a-

30a).

1. A statute is a “bill of attainder” within the mean-

ing of the constitutional prohibition only if it both

applies with specificity and imposes punishment. £.g.,

Selective Serv. Sys. v. Minnesota Pub. Interest Re-

search Group, 468 U.S. 841, 851 (1984). Those two ele-

ments are distinct: no regulation, no matter how

specific, is a bill of “attainder” unless it is actually

“punitive.” See, e.g., Plaut v. Spendthrift Farm, Inc.,

514 US. 211, 239 n.9 (1995); Nixon v. Administrator of

Gen. Servs., 483 U.S. 425, 472-473 (1977); BellSouth, 144

F.3d at 64.

This Court employs a common-sense approach in

determining what constitutes a “punitive” law for

attainder purposes, focusing on “whether the chal-

lenged statute falls within the historical meaning

of legislative punishment,” on “whether the statute,

viewed in terms of the type and severity of burdens

imposed, reasonably can be said to further nonpunitive

legislative purposes,” and on “whether the legislative

record evinces a congressional intent to punish.” See

Selective Serv. Sys., 468 U.S. at 852 (internal quotation

marks omitted). “[OJnly the clearest proof could suffice

to establish the unconstitutionality of a statute on such

a ground.” Flemming v. Nestor, 363 U.S. 603, 617

(1960); see also Selective Serv., 468 U.S. at 855-856 n.15.

The flaw in petitioners’ bill-of-attainder challenge here

is simple: nothing in the challenged provisions can

plausibly be characterized as “punishment.”

a. This Court has invalidated statutes as “bills of

attainder” only five times in this Nation’s history. In

each of those cases, the legislature had imposed puni-

tive disabilities on adherents of a despised political

movement (either the Confederacy or the Communist

Party) that was “thought to present a threat to the

national security.” United States v. Brown, 381 U.S.

437, 453 (1965); see also Cummings v. Missouri, 71 U.S.

(4 Wall.) 277 (1866); Ex parte Garland, 71 U.S. (4 Wall.)

333 (1866); Pierce v. Carskadon, 83 U.S. (16 Wall.) 234

(1872); United States v. Lovett, 328 U.S. 303 (1946). In

each of those cases, the Court invalidated the legisla-

tion upon determining that the sanctions at issue—

reflecting a “judgment censuring or condemning” indi-

viduals for their politics (Brown, 381 U.S. at 453-

454)—were not reasonably related to a legitimate non-

punitive purpose. See, e.g., id. at 454-455; Lovett, 328

US. at 314; Cummings, 71 U.S. at 319-320; Garland, 71

U.S. at 377-378; see also Hawker v. New York, 170 U.S.

189, 198 (1898) (discussing Cummings and Garland).

Nothing about the provisions at issue here resembles

the legislation struck down in those five cases. Business

regulations based on corporate economic power and

incentives, unlike sanctions based on an individual’s

political affiliation, are a legal commonplace. See, ¢.g.,

Turner Broadcasting Sys. v. FCC, 512 U.S. 622, 664

(1994). They rest not on a desire to “punish” the regu-

lated corporations, but on a recognition of the objective

dangers posed by monopoly power. See North Ameri-

can Co. v. SEC, 327 U.S. 686, 711 (1946).

Here, Congress recognized that the local exchange

remains a crucial bottleneck facility for long-distance

10

and other services; that the BOCs “provide over 80% of

local telephone service in the United States” (H.R. Rep.

No. 204, 104th Cong., Ist Sess., Pt. 1, at 49 (1995)); and

that, as under the consent decree, the distinctive geo-

graphical and demographic characteristics of the BOCs’

markets justified competitive protections for those

markets that were not needed elsewhere (see pp. 17-20,

infra). Thus, at the same time that it released the

BOCs from the prospective effect of the consent decree,

Congress enacted Sections 271 through 275, both to

give the BOCs incentives to open their monopoly mar-

kets to robust competition and, for a transitional period,

to preserve a level playing field in the long-distance and

other markets. See SBC Communications Inc. v. FCC,

138 F.3d 410, 412-413 (D.C. Cir. 1998); BellSouth, 144

F.3d at 65-66, 70; Pet. App. 7a. As a former FCC chair-

man told Congress, such restrictions were needed “not

because the BOCs are venal,” but because, in the

absence of such provisions, “they would be following

the natural instincts of rational businessmen” in using

their monopoly power to defeat competition. Telecom-

munications Policy Act (Part I): Hearings Before the

Subcomm. on Telecomm. & Fin. of the House Comm.

on Energy and Commerce, 101st Cong., 2d Sess. 426

(1990) (testimony of Richard E. Wiley); accord H.R.

Rep. No. 559, 103d Cong., 2d Sess., Pt. 1, at 50 (1994)

(“as [the consent decree court] has stated, the line-of-

business restrictions themselves are not punitive in

nature, but are prophylactic measures”) (internal

quotation marks omitted).°

6 Petitioners suggest that the market-opening provisions of

Sections 251 and 252 suffice to ensure local competition. See SBC

Pet. 6-7, 20-21 n.8. That argument is without merit. While

Sections 251 and 252 establish a general framework for opening

11

Those regulatory provisions are thus no more “puni-

tive” in character than the many other statutes that

exclude certain corporations from particular lines of

business to protect competition or promote other

economic goals. See BellSouth, 144 F.3d at 65.’ Such

line-of-business restrictions have never been thought to

implicate the Bill of Attainder Clause, and for good

reason: they do not “fall[] within the historical meaning

local markets to competition, Congress recognized that those pro-

visions would not achieve full competition overnight. See, e.g., 141

Cong. Rec. 88138 (daily ed. June 12, 1995) (remarks of Sen.

Kerrey); id. at S8161 (letter from State Attorneys General). In-

deed, the FCC's most recent industry survey shows that the in-

cumbent LECs have retained control of approximately 97.5% of all

local exchange revenues. See FCC, Telecommunications Indus.

Rev.: 1997, Tab. 4 (Oct. 1998) (lodged with this Court in No. 97-

826). Congress recognized that, by linking removal of the remain-

ing line-of-business restrictions to tka development of local com-

petition, the challenged provisions would give the BOCs an impor-

tant economic incentive to facilitate the process of opening their

traditional monopoly markets to full competition.

7 Eg., FCC v. National Citizens Comm. for Broadcasting, 436

U.S. 775 (1978) (affirming FCC regulation proscribing cross-

ownership of television station and newspaper in same market);

Banking Act of 1933, 12 U.S.C. 24 (Seventh) (prohibiting banks

from underwriting or issuing securities); Bank Holding Company

Act, 12 U.S.C. 1843(a)(2) (prohibiting bank holding companies, with

certain exceptions, from acquiring or retaining “direct or indirect

ownership or control of any voting shares of any company which is

not a bank or bank holding company”); see also Board of Governors

v. Agnew, 329 U.S. 441, 449 (1947) (upholding Section 32 of the

Banking Act of 1933, which prohibits a partner or employee of a

firm primarily engaged in securities underwriting from being a

director of a national bank); Federal Credit Union Act, 12 U.S.C.

1759 (restricting federal credit union membership to groups having

a common bond of association or occupation, or groups within a

well-defined community); Credit Union Membership Access Act,

Pub. L. No. 105-219, 112 Stat. 913.

12

of legislative punishment,” and they obviously “can be

said to further nonpunitive legislative purposes.”

Selective Serv. Sys., 468 U.S. at 852; see also Brown, 381

U.S. at 453-454 (distinguishing the Banking Act of 1933,

which rested on a “general knowledge of human psy-

chology,” from laws “censuring or condemning” indi-

viduals “thought to present a threat to the national

security”). Indeed, petitioners cite no case in which any

court has invalidated, as “punishment,” any restriction

on a corporation’s entry into any kind of market, let

alone entry by corporations as heavily regulated as

those here. That fact, together with the very abun-

dance of line-of-business restrictions throughout the

national economy, belies petitioners’ suggestion (e.g.,

SBC Pet. 15, 23-24) that there could be something in-

herently or historically “punitive” about such restric-

tions.

Despite petitioners’ efforts to equate the two (e.g.,

SBC Pet. 14-15), therefore, economic regulation of this

kind is a far cry from legislation designed to punish

flesh-and-blood members of vilified political groups by

prohibiting them from “practicing a profession” (Lovett,

328 U.S. at 315) The challenged provisions do not, of

course, prohibit anyone from practicing any profession,”

* In any event, even provisions that do prohibit individuals

from practicing a profession are permissible “‘when the nonpuni-

tive aims of an apparently prophylactic measure have seemed

sufficiently clear and convincing.” BellSouth, 144 F.3d at 65

(quoting L. Tribe, American Constitutional Law § 10-5, at 655 (2d

ed. 198%), in turn citing Hawker, 170 U.S. at 196, and DeVeau v.

Braisted, 363 U.S. 144 (1960)). “The question in each case where

unpleasant consequences are brought to bear upon an individual

for prior conduct, is whether the legislative aim was to punish that

individual for past activity, or whether the restriction of the

13

nor do they target disfavored political ideologies. In-

deed, the challenged regulations do not specifically

apply to any particular group of corporate managers or

directors. For example, if a BOC were to sell off its

network to some other company (say, GTE), that new

company, as the “successor or assign” of the BOC (47

U.S.C. 153(4) (Supp. II 1996)), would be no less subject

than the BOC itself to the in-region long-distance

restrictions of Section 271. Conversely, when a BOC

acquires an independent LEC, the 1996 Act does not

prohibit the BOC from providing full in-region long-

distance service in the newly acquired LEC’s local

service area (except in States that the BOC itself

served before 1996). See 47 U.S.C. 271(i)(1). Those

facts further confirm (if further confirmation were

necessary) that Congress treated the BOCs differently

from other companies because of the nature of the

regional markets they serve (see pp. 17-20, infra), not

because of any desire to “punish” them for misconduct.

b. Petitioners’ characterization of the challenged

provisions as “punishment” is particularly implausible

for an independent reason as well. As the D.C. Circuit

recently observed in rejecting the BOCs’ bill-of-

attainder challenge to Section 274, the 1996 Act “as a

whole relieves the BOCs of several of the burdens

imposed by the MFJ, particularly by prescribing in

§ 271 a method whereby the BOCs can achieve a long-

sought-after presence in the long-distance market.”

BellSouth, 144 F.3d at 66 (emphasis in original). Even

apart from the benefits the BOCs derive from a defined

statutory procedure for full entry into in-region long-

distance markets, see ibid., the challenfed provisions

individual comes about as a relevant incident to a regulation of a

present situation.” Flemming, 363 U.S. at 614 (citation omitted).

14

immediately entitle the BOCs to provide, for the first

time, long-distance service to customers outside their

local service regions, 47 U.S.C. 271(a) and (b)(2); to

provide “incidental” long-distance services to custom-

ers anywhere in the country, 47 U.S.C. 271(b)(3); and to

play a significantly greater role in activities related to

the manufacture of telecommunications equipment,

47 U.S.C. 273.

Indeed, the BOCs themselves have recognized that

enactment of the challenged provisions, together with

the termination of the consent decree, represents a net

benefit for them. As the court of appeals explained

(Pet. App. 33a-35a), the BOCs actively supported the

Act while it was pending in Congress—not, of course,

because they benefited from the local competition

provisions (see pp. 3-4, swpra), but because they very

much benefited from the replacement of the consent

decree with the new provisions of Sections 271 through

275. As this Court has indicated, legislation cannot be

said to “punish” its subjects unless, at a bare minimum,

it “depriv[es}” them of “rights * * * previously en-

joyed.” Cummings, 71 U.S. at 320. The most impor-

tant provision challenged here—Section 271—does not

even meet that threshold requirement. See also Bell-

South, 144 F.3d at 66 (upholding the short-term pro-

visions of Section 274 (see p. 6, supra) even though they

reimpose certain electronic publishing restrictions that

had recently been removed from the MF J).

ce. Because they cannot plausibly characterize the

challenged provisions as “punitive,” petitioners devote

much of their discussion to the previsions’ specificity, as

though specificity alone could convert a nonpunitive

statute into a bill of attainder. But that approach erro-

neously conflates two distinct issues. The need to show

specificity and the need to show punitiveness are sepa-

15

rate requirements for any bill-of-attainder challenge,

and there is “no warrant in the precedents for treating

Congress’s specification of the BOCs by name as a

material clement in the punishment analysis.” Bell-

South, 144 F.3d at 64 (emphasis added).

Indeed, much of petitioners’ argument reads as

though this Court had never decided Nixon v. Admin-

istrator of General Services, 433 U.S. 425 (1977). That

case involved the constitutionality of a statute enacted

shortly after President Nixon’s resignation, in response

to an agreement he signed regarding the disposition of

his presidential records. Jd. at 432. The statute over-

rode the agreement and established rules governing

disposition of the records. The statute applied to no

other records and repeatedly referred to the former

President by name. Id. at 433-434. The “essence” of

President Nixon’s constitutional challenge to that

statute, like the essence of petitioners’ arguments here,

was that “the Constitution is offended whenever a law

imposes undesired consequences on an individual or on

a class that is not defined at a proper level of general-

ity.” Id. at 469-470.

The Court rejected that challenge and upheld the

statute. It explained that President Nixon’s expansive

interpretation of the Bill of Attainder Clause “would

cripple the very prccess of legislating, for any individ-

ual or group that is made the subject of adverse legisla-

tion can complain that the lawmakers could and should

have defined the relevant affected class at a greater

level of generality.” 433 U.S. at 470. The Court

observed that a variety of other valid statutes “also

single out identifiable members of groups to bear

burdens or disqualifications”; for example, in the Re-

gional Rail Reorganization Act Cases, 419 U.S. 102

(1974); the Court had upheld the “transfer of rail pro-

16

perties of eight railroad companies to [a] Government-

organized corporation.” 433 U.S. at 471 n.34. In sum,

the Court concluded, just as “mere underinclusiveness

is not fatal to the validity of a law under the equal

protection component of the Fifth Amendment * * *

even if the law disadvantages an individual or identifi-

able members of a group,” neither does “the mere

specificity of alaw * * * call into play the Bill of

Attainder Clause.” Jd. at 471 n.33.

In Plaut v. Spendthrift Farm, Inc., 514 U.S. 211

(1995), the Court revisited this area and reaffirmed the

central holding of Nixon and similar cases. A valid bill-

of-attainder challenge, the Court explained, “requires

not merely ‘singling out’ but also punishment.” Id. at

239 n.9 (emphasis in original). In the absence of punish-

ment, Congress may legislate not just with great

specificity, but may in fact “legislate a legitimate class

of one.” Jbid. (internal quotation marks omitted). That

principle is fatal to petitioners’ bill-of-attainder claim

here.’

* The lower courts have also repeatedly rejected bill-of-

attainder challenges to regulatory statutes directed at named

entities. See, eg., Fresno Rifle & Pistol Club, Inc. v. Van de

Kamp, 965 F.2d 723, 728 (9th Cir. 1992) (rejecting bill-of-attainder

challenge to California statute barring specific brands of assault

weapons because “|t]he type of economic punishment about which

{the weapons’ manufacturers] complain is not of the type

‘traditionally judged to be prohibited by the Bill of Attainder

Clause’”) (quoting Nixon, 433 U.S. at 475); United Nuclear Corp.

v. Cannon, 555 F. Supp. 1220, 1226-1228 (D.R.I. 1982) (rejecting

bill-of-attainder challenge to Rhode Island statute requiring spe-

cific nuclear power company to post $10 million decontamination

bond); see also Nixon, 433 U.S. at 479-472 & nn. 33, 34; Maine

Cent. R.R. Co. v. Brotherland of Maintenance of Way Employees,

813 F.2d 484, 488-491 (1st Cir.), cert. denied, 484 U.S. 825 (1987).

17

2. Petitioners challenge, on a variety of grounds, the

substance of Congress’s distinction between the local-

exchange progeny of the Bell System (and “any succes-

sor or assign,” 47 U.S.C. 153(4)), and the so-called

“independent” local exchange carriers. As discussed,

that challenge cannot help petitioners’ bill-of-attainder

claim, because they cannot meet their independent

burden of showing that the provisions themselves are

“punitive.” See BellSouth, 144 F.3d at 67 (“the differ-

ential treatment of the BOCs and non-BOCs is neither

suggestive of punitive purpose nor particularly suspi-

cious”). Petitioners thus alternatively challenge the

distinction under equal protection and separation of

powers principles. As the court of appeals observed,

however, the challenged provisions do “not even argua-

bly” violate those principles. Pet. App. 41a.

a. It has long been settled that federal regulation of

ordinary economic activity is consistent with the equal

protection component of the Due Process Clause so long

as there is a rational basis for any challenged classifica-

tion. See, e.g., FCC v. Beach Communications, Inc.,

508 U.S. 307, 313 (1993); Dandridge v. Williams, 397

U.S. 471, 484-485 (1970). The provisions challenged

here easily meet that test. See Pet. App. 39a.

The provisions establish transitional entry proce-

dures for the companies that had previously been

barred, under the AT&T consent decree, from the long-

distance and related markets. As the House Energy

and Commerce Committee explained, the statute “natu-

rally focuses on the BOCs and their affiliates, because

they uniquely [we]re seeking release from restrictions

imposed under the MF J.” H.R. Rep. No. 559, supra, Pt.

1, at 50. Indeed, other LECs, including Cincinnati Bell,

Southern New England Telephone, and Sprint, had

already begun to provide long-distance service. See

18

USTA C.A. Br. 3-5. It was entirely rational for Con-

gress to distinguish between companies that it was

admitting into the long-distance market for the first

time and companies that had always been free to

provide long-distance service.

Congress also reasonably found that the BOCs’

monopoly power continued to pose unique concerns for

the development of competition, and that those con-

cerns justified the creation of a transitional regulatory

scheme in place of the restrictions of the now-vacated

consent decree. As the House Judiciary Committee ex-

plained, “the Bells alone exercise immense local ex-

change monopoly power concentrated throughout a

vast geographical region; the local exchange operations

of even the Bells’ closest runners-up are widely dis-

persed.” H.R. Rep. No. 559, supra, Pt. 2, at 93."° For

example, whereas “the BOCs are regions of contiguous

states which together sefve almost all of the large

population centers in the country,” H.R. Rep. No. 203,

104th Cong., Ist Sess., Pt. 1, at 32 (1995), “GTE serves

less than three percent of America’s urban markets,”

and its operations are chiefly located in “widely dis-

persed small- and medium-sized cities and suburban

and rural territory.” Jd. at 31. For that reason, wit-

nesses told Congress, special legislation was needed to

protect competition only in traditional BOC markets:

“The potential incentive and ability of a BOC, which

10 In evaluating the BOCs’ market power, Congress appropri-

ately took into account the fact that no BOC operates independ-

ently, because each is wholly owned and operated by a regional

conglomerate (of which there were seven at the time of enactment,

and of which there are now only five). See p. 2, supra. SBC’s

effort to compare the market power of a hypothetically divested

Nevada Bell with that of other local exchange carriers (Pet. 21 n.9)

is thus without merit.

PIR PON Ee LOND HAT ET ae APE

19

controls nearly one-seventh of the country, to dis-

advantage a competing interexchange competitor, is far

greater than for other companies that offer both local

and interexchange service.” The Role of the Depart-

ment of Justice: Hearing Before the House Comm. on

the Judiciary, 104th Cong., Ist Sess. 66 (1995) (testi-

mony of then-Assistant Attorney General Bingaman);"

see also BellSouth, 144 F.3d at 67 (“the differential

treatment of the BOCs and non-BOCs” in Section 274 is

“quite reasonable”).

Finally, the distinction Congress drew—between the

corporate successors to the Bell System monopoly and

the “independent” telephone companies—was of course

the same distinction drawn for many years by the dis-

trict court that had entered the AT&T and GTE con-

sent decrees. See pp. 2-3, supra (discussing basis for

decree restrictions). For example, in approving GTE’s

acquisition of Sprint over objections that GTE should

be subject to the same type of restrictions imposed on

1 See also ibid. (“Even GTE, the largest of the independent

companies, generally serves non-urban areas, and its local opera-

tions are geographically dispersed. That is why the BOCs were

subject to the line-of-business restrictions while GTE was allowed

to offer long distance services through a separate subsidiary.”). A

variety of witnesses emphasized the importance of this distinction.

See, eg., H.R. Rep. No. 850, 102d Cong., 2d Sess, at 93 (1992)

(quoting testimony of Professor Monaghan) (“As courts have

found, each of the RBOCs has market power significantly greater

than the only other comparably sized local exchange carrier, in

that GTE’s widely dispersed exchanges are primarily rural and

suburban in character and otherwise differ from the RBOCs.”)

(footnotes omitted); Competitive Status of the Bell Operating

Companies: Hearing Before the Subcomm. on Telecomm., Con-

sumer Protection, and Fin. of the House Comm. on Energy and

Commerce, 99th Cong., 2d Sess. 86 (1986) (testimony of then-

Assistant Attorney General Douglas H. Ginsburg) (similar).

20

the BOCs by the AT&T Consent Decree, the district

court explained: “Each of the regional [Bell] companies

has a very strong, dominant position in local

telecommunications in the area in which it serves;

GTE’s operations, by contrast, are widely scattered.”

United States v. GTE Corp., 603 F. Supp. 730, 737

(D.D.C. 1984). Congress’s rationale in enacting

Sections 271 through 275 was no less reasonable.”

b. Petitioners further argue (SBC Pet. 26; Bell Atl.

Pet. 17-23) that the 1996 Act violates separation-of-

powers principles because it alters the prospective

2 Petitioner Bell Atlantic contends (Pet. 24-28) that economic

legislation cannot identify regulated parties by name without

violating equal protection guarantees. That argument is irreconcil-

able with modern equal protection principles, as the court of ap-

peals recognized (Pet. App. 39a). See, e.g., New Orieams v. Dukes,

27 U.S. 297, 306 (1976) (upholding legislation making special

provision for two vendors as against other vendors and overruling

Morey v. Doud, 354 U.S. 457 (1957), “the only case in last half

century to invalidate a wholly economic regulation so on equal

protection grounds”); Maine Cent. R.R., 813 F.2d at 488-491

(refusing to apply heightened scrutiny to legislation “‘select[ing] a

single person for adverse treatment,” and holding that, under this

Court’s precedent, a “classification does not become irrational or

unconstitutional solely because it is specific”); see also Plaut, 514

U.S. at 239 & n.9 (discussed at pp. 21-22, infra); Nixon, 433 U.S. at

471 & n.33; Erb v. Morasch, 177 U.S. 584, 586-587 (1900). Bell

Atlantic’s reliance (Pet. 27) on the government’s brief in opposition

to certiorari in Atonio v. Wards Cove Packing Co., 513 U.S. 809

(1994) (denying certiorari), is similarly without merit. Aftonio

involved the validity of a provision in a civil rights statute that

provided “the plaintiffs in one pending case with significantly less

protection against discrimination * * * than the plaintiffs in any

other pending case.” 98-1767 U.S. Br. in Opp. at 8. The govern-

ment’s filing expressly distinguished the civil rights legislation at

issue there from a provision (such as the ones challenged here) that

is “solely an economic regulation.” Jbid.

21

equitable terms of the AT&T consent decree—albeit,

“as a whole,” to the benefit of the BOCs themselves

(BellSouth, 144 F.3d at 66). As an initial matter, that

argument conspicuously ignores the fact that the only

provision of the 1996 Act that directly addresses the

consent decree is Section 601(a)(1), 110 Stat. 143, which

terminates the decree’s prospective effect. Petitioners

obviously do not object to that provision. In any event,

even if we place that anomaly to one side (see pp. 23-24,

infra), petitioners’ separation-of-powers argument is

without merit.

As the court of appeals explained, “Congress may

change the law underlying ongoing equitable relief,

even if * * * the change is specifically targeted at and

limited in applicability to a particular injunction, and

even if the change results in the necessary lifting of

that injunction.” Pet. App. 36a (emphasis omitted).

That proposition is firmly rooted in this Court’s prece-

dents. In Pennsylvania v. Wheeling and Belmont

Bridge, 59 U.S. (18 How.) 421, 429, 431-482 (1855), the

Court upheld a law declaring a particular bridge to be a

lawful post road despite a judicial decree to the con-

trary. Similarly, in Robertson v. Seattle Audubon

Society, 503 U.S. 429 (1992), the Court upheld a statute

changing the law that governed two expressly named,

pending lawsuits. Finally, in Plaut, while invalidating a

statute that “retroactively command[ed] the federal

courts to reopen final judgments” (514 U.S. at 219 (em-

phasis added)), the Court took care to reaffirm the

constitutionality of provisions, like those at issue in

Wheeling Bridge and here, that merely “alter[] the

prospective effect of injunctions entered by Article III

courts” (id. at 232 (emphasis added)).

Plaut also refutes petitioners’ “not-too-well-defined

argument” (Pet. App. 38a) that the specificity of the

22

challenged provisions could somehow offend separation-

of-powers principles even if it does not violate the Bill

of Attainder Clause. The problem with the statute at

issue in Plaut, the Court held,

consists not of the Legislature’s acting in a par-

ticularized and hence (according to the concur-

rence) nonlegislative fashion; but rather of the

Legislature’s nullifying prior, authoritative judicial

action. It makes no difference whatever to that

separation-of-powers violation that it is in gross

rather than particularized * * *, or that it is not

accompanied by an ‘almost’ violation of the Bill of

Attainder Clause, or an ‘almost’ violation of any

other constitutional provision.

514 U.S. at 239. Specificity itself, the Court reaffirmed,

does not make a statute unconstitutional: “While leg-

islatures usually act through laws of general applicabil-

ity, that is by no means their only legitimate mode of

action.” Jd. at 239 n.9. Finally, Plaut forecloses the

distinction, reasserted here by Bell Atiantice (Pet. 26),

between statutes conferring benefits on designated

individuals and those imposing burdens on them. The

Court explained (514 U.S. at 239 n.9): “Even laws that

impose a duty or liability upon a single individual or

firm are not on that account invalid—or else we would

not have the extensive jurisprudence that we do con-

cerning the Bill of Attainder Clause, including cases

which say that it requires not merely ‘singling out’ but

also punishment, see, e.g., (Lovett, 328 U.S. at 315-318],

and a case which says that Congress may legislate ‘a

legitimate class of one,’ [Nixon, 433 U.S. at 472].” See

also Maine Cent. R.R. Co., 8138 F.2d at 488-491 (dis-

cussed in note 12, supra).

23

3. Bell Atlantic (Pet. 28) encourages the Court to

“take the whole case and decide, as well, the severabil-

ity of the Special Provisions.” In fact, that severability

issue need never be decided, because the provisions at

issue are constitutional. If that were not the case,

however, and if those provisions were invalidated, the

severability question would indeed become exception-

ally urgent.

Invalidation of Sections 271 through 275 would

plainly require invalidation of the cther major provision

of the 1996 Act applicable specifically to the Bell Com-

panies: Section 601(a)(1), which prospectively termi-

nates the effect of the AT&T consent decree. See 110

Stat. 143. That provision and Sections 271 through 275

were enacted together as inextricably related compo-

nents of “a hard-fought compromise on a massive issue

of public policy which, in the end, contained both good

and bad elements for the BOCs.” Pet. App. 33a; SBC

Communications, 138 F.3d at 412 (content of 1996 Act

“was the subject of great debate,” and “[t]he end prod-

uct was a compromise between the competing fac-

tions”). Petitioners cannot plausibly contend (ef. Bell.

Atl. Pet. 29) that it would effectuate congressional

intent to lop off only the portions of that “hard-fought

compromise” that the BOCs dislike. See BellSouth, 144

F.3d at 66 n.8." Indeed, if petitioners really believe that

18 In passing, Bell Atlantic cites Section 708 of the Communica-

tions Act of 1934, 47 U.S.C. 608, which provides as a general

matter that invalidation of one provision of the Act shall not affect

“the remainder of the Act.” See Bell Atl. Pet. 28. (As codified, the

word “Act” appears as “chapter”—Chapter 5 of Title 47—which

essentially encompasses the Communications Act. See 47 U.S.C.

609.) Bell Atlantic had good reason to give Section 708 only a

perfunctory “see also” citation: Unlike most other provisions of

the 1996 Act, Section 601(a)(1) of that Act is not codified with the

24

Congress wanted to “punish” them by subjecting them

to more onerous conditions than those that existed

under the consent decree, they cannot seriously argue

at the same time that Congress would have wished to

set them free from continuing judicial oversight in the

absence of statutory regulation.

Bell Atlantic suggests (Pet. 28) that if invalidation of

Sections 271 through 275 would require invalidation of

Section 601(a)(1), it would also require invalidation of

all the common carrier provisions of the 1996 Act, in-

cluding the very provisions that this Court is now

reviewing in AT&T Corp. v. lowa Utilities Board, No.

97-826, and consolidated cases. We disagree with that

proposition, but we note the following inescap-

able point. If successful, petitioners’ challenge would

threaten to unravel much of the 1996 Act, to the great

detriment of American consumers. The result of that

unraveling could be a return to a telecommunications

world dominated by judicial decrees rather than posi-

tive lawmaking by Congress and its delegates. Review

Communications Act, but is merely referred to in the codifier’s

historical notes. See 47 U.S.C. 152 note (Supp. II 1996). In any

event, even if Section 601(a)(1) of the 1996 Act were part of the

Communications Act, the obvious interrelationship between that

provision and Sections 271 through 275 would rebut any contrary

presumption of severability created by 47 U.S.C. 608. See Alaska

Airlines, Inc. v. Brock, 480 U.S. 678, 686 (1987).

14 Petitioners mistakenly invoke the interest of consumers as a

basis for granting them fuli and immediate entry into the long-dis-

tance market. SBC Pet. 30. There are two short answers to that

argument. First, Congress resoundingly rejected petitioners’ view

of the best way to promote consumer interest in the long run.

Second, invalidation of that congressional judgment would not in

any event give petitioners the windfall that they seek for them-

selves, because, as discussed, Section 601(a)(1) is inseverable from

the provisions that petitioners challenge.

Ee Pop ee

25

of the severability question would be only the first step

in a very long process of litigation.

Fortunately, however, this Court need not accept

Bell Atlantic’s invitation to grant certiorari on that

severability question, because there is no reason for the

Court to consider petitioners’ underlying claims on the

merits. As explained above, those claims are unsound.

And, so long as the courts of appeals maintain their

current consensus to that effect, further review by this

Court is not warranted.

CONCLUSION

The petitions for a writ of certiorari should be denied.

Respectfully submitted.

SETH P. WAXMAN

Solicitor General

JOEL I. KLEIN

Assistant Attorney General

PHILIP D. BARTZ

Acting Assistant Attorney

CHRISTOPHER J. WRIGHT General

General Counsel MARK B. STERN

JOHN E. INGLE JACOB M. LEWis

ALISA B. KLEIN

DANIEL L. KAPLAN

DANAJ. MARTIN

Attorneys

Deputy Assistant General

Counsel

Federal Communications

Commission

DECEMBER 1998