Both carriers had just been relieved of collecting Universal Services Fund (USF) fees from those customers, which would have meant a real reduction in what consumers pay for DSL service. The new fees were almost identical in cost to the old USF fees, and appeared designed to allow the carriers to collect more DSL revenues while their subscribers' bills stayed about the same.
The Commission applied pressure late last week, saying it planned to send “letters of inquiry” to both carriers based on concerns that the new fees violated the Commission’s “truth-in-billing” rules.
Sources say Commissioner Martin's office and the two carriers were in phone conversation Friday. BellSouth avoided being the recipient of the FCC's letter by agreeing to cancel the fees, while Verizon held its ground and indeed received an FCC letter Friday. Verizon has 20 days to respond.
BellSouth released a statement late Friday announcing the "immediate" cancellation of the fees. The carrier also said it will credit any of its subscribers who have already paid the fees.
BellSouth has good reason to play nice with the FCC. Its planned merger with AT&T Inc. (NYSE: T), announced in March, is subject to the approval of Martin and the rest of the FCC. (See AT&T, BellSouth to Merge.)
BellSouth says it removed the fee because of complaints from its customers, but said its decision was also influenced by the involvement of the FCC. “We were getting feedback from that regulatory body,” BellSouth spokesman Joe Chandler tells Light Reading. “We’re obviously involved in a merger situation, and we wanted to make sure that this did not present a distraction to that process.”
The FCC has no such leverage over Verizon, sources say.
Verizon explained last week it needs the fees to help pay for the costs of connecting its “naked DSL” customers. Such customers buy DSL service without buying phone service. (See Verizon Blames New Fees on 'Naked' Users.)
Verizon spokeswoman Bobbi Henson told Light Reading Monday that her company hasn’t much to say on the issue at present. Henson confirms Verizon received a letter of inquiry from the FCC Friday, and says her company is working on addressing the commission’s questions. Asked if Verizon might cancel its new DSL fees, Henson declined to speculate and says the issue is being considered by “business leadership.”
AT&T says it never considered such a fee. A spokesman said AT&T removed the USF fee line item from its DSL subscribers' bills starting August 14.
An FCC spokesman was called for this story, but he had no comment.
You are welcome; always up for a civil dialog; this has been one; and we all learn by open debate - most especially those that contribute.
>> VZ recent actions of eliminating what used to be the USF fee is consistent with this analysis <<
Indeed - the context of unpredictable delegation should inspire fear. Let us hope though that the Supreme Court does not become even more confused and ends up defering to the FCC (or any other agency) the right to interpret the constitution as well.
Thanks for the discussion. It helped me to better understand the issues. I now agree the FCC has great latitude and a more power than I thought it had before our discussion. VZ recent actions of eliminating what used to be the USF fee is consistent with this analysis.
Given the accepted ethos of being conservative with what you send and liberal with what you receive, I think the other distinction would be of dubious merit indeed - and perhaps all the more reason for the monkey to banana slap me ;-)
Hope we don't start a word count war here. I once had a writing job where I was measured by the amount of words I wrote - but I am much better now (he said as the twitch in his neck caused an uncontrollable reflex). Ahhhh, value creation and productivity metrics - now there's an interesting subject.......
The monkey's still checking, but we believe that was the longest bulletin board post in Light Reading history at 1,458 words! Well-written too -- thanks. -M
Even for me this is a very large response - so apologies in advance, but there are many outstanding questions to address.
Before responding to your outstanding questions I would first like to return to the beginning so to speak.
This branch of the tree started with your suggesting that any FCC remedy to Truth-In-Billing would not have much teeth. To which I responded that it would appear the courts defer to the FCC great latitude, even the latitude of rules that have the equal force of statute, and I would further argue that the non-ambiguity test is so high, even the ability to preempt statute (the very statute that governs it). In the discussion that has followed there was one small push back on this point, but mostly there has been a defense of the deference the court allows which I think would seem to support my initial claim - clumsy as its construction may have been. We are now I believe down the road of exploring why this deference exists and arguing about whether it should or not. I am going to assume from Fred's responses that he is quite comfortable with this deference existing - please say otherwise Fred if I am misreading you.
To revisit your question of Post 12, I would say both the congress and the court have deferred power to the FCC - and that is the scary part of the equation. For as the link you provided in Post 20 states:
"Congress has been willing to delegate its legislative powers broadly and courts have upheld such delegation because there is court review to assure that the agency exercises the delegated power within statutory limits. The Court allows broad delegations of congressional power as long as the power to say what the statute means resides with the courts". This is similar, though more robust, than the issue I raised in post 19 when I asked "If the Supreme Court refuses to interpret for itself what a statute means, how then are rules bound by the law?" WRT your question in post 14, I would request a release from an answer on this question in light of the fact that even contemplating it is likely to lead to a large head ache ;-) But more importantly, I would prefer a more specific question. Are you asking should I and you each be able to print our own money and control its supply for example? Or are you referring to specific elements of the central banking system and interest rate adjustments? Without knowing the specifics of what you refer to I will simply say we are blessed to be living within a system that goes to so much pain to measure itself - this provides a great deal of information which aids decision making - would this be possible if we let "the public determine the best monetary policies" would be one question I would have (assuming I actually knew what you meant by that). I would also ask you in return what you thought of the system that existed before the current system and how would you solve those problems differently? WRT your question in post 16, my only expectation of businesses is that they will pursue the rewards granted to them by increasing share holder / investor value. I am generally ok with this as long as there is a system that defines the boundaries of their behavior, monitors that behavior, and enforces penalties and remedies when that behavior falls outside of the prescribed boundaries. I am generally inclined to want to see those boundaries be fairly broad as to not strangle the benefits to society of rewarding enterprise - but as in all things there is a need for balance. So no, I do not expect that businesses will be the stewards of anything other than their own self-interest, even if it does happen in the exception. That is why there should be laws that protect the interests of others, free speech being among the most sacred to Americans. The ability of the Internet to facilitate a citizen press has dangers, but it also presents great opportunity, arguably an historic and unprecedented opportunity WRT the small transaction costs the Internet poses when an individual expresses an opinion via a BLOG for example. This historic opportunity is worthy of reflection and consideration (IMO). WRT to post 20, there appears to be two fundamental claims for deference. One you quoted - the preference for democratic decision making and the other being the presumed expertise of the agency. I am troubled by the first. The rationale for appointing Supreme Court judges to life terms is to diminish the influence of politics in the process of interpreting the law. Why then would we place interpretation of the law back in to the political process? Because the agency has an expertise greater than the Courts? Is an agency's expertise in interpreting the law really greater than the courts - especially with respect to the conflict of interest regarding the FCC's own powers? Does the FCC of 2006 really understand the intent of the 1996 congress better than the courts? is the presumption that the congress deliberately leaves statutory gaps and ambiguities in knowledge of the political leanings of a 1996 FCC a valid thing to do given that a later FCC with different leanings, such as the 2006 FCC, may later emerge, i.e. can a congress possibly have fore knowledge of a future FCC leaning? If the FCC is accountable by an extension of the accountability of the executive, does this not undermine the agreed upon statute (a process involving both congress and the executive) by deferring to the executive the ability to have sole interpretation of anything a court might declare not undeniably unambiguous? And if the FCC is not unduly swayed by the executive that undermines one of the key rationales. I am very troubled by this rationale for deference. To quote from your link again: "Application of Chevron would cripple the judicial policing of statutory terms and would remove all the remaining teeth from the Rice presumption, leaving the Court with very little control over congressional delegations of power. This result may lead to constitutional crisis requiring the revival of the nondelegation doctrine for its resolution." So the unintended (or intended depending on your propensity for conspiracy theories) of the court deferring to agencies so much might be a reaction that restricts the growth of agencies and the federal government. Some may see this as a good thing. I might even myself. However, the more important issue at hand for me is the question of what are the implications of playing with the fundamental roles and responsibilities of different arms of government as established by the founders within an interdependent **system** of checks and balances. I remain unconvinced that Chevron is good law - and the controversy alluded to about Chevron in your link suggests I am not alone; and I am not even a legal professional - I think there are some obviously common sense issues here; and if it is truly as complicated as your link suggest it is, how then is the average person supposed to a) have any understanding of the system and b) really know who to hold politically accountable for what happens within the system. WRT to your post 21 I believe I addressed that issue in the above. WRT to your post 23 the official question of record is not the issue you cited, but can be found at: http://www.supremecourtus.gov/qp/04-00277qp.pdf . The majority opinion makes many sub-arguments including the one you cited - to respond to each would require a very lengthy response. Is the issue of the process that the appeals court went through relevant to the main question? I presume so seeing as though that is ultimately the reason why the court is hearing the case. But if the Supreme Court's argument truly rested on a technicality WRT what the appeals court failed to say, why would the issue not be sent to the appeals court for comment? And then back up to the Supreme Court to address the central issue? It seems to me there is no avoiding the Supreme Court addressing the central issue as stated in the official records. WRT to your post 24, I also did not interpret the comments the majority opinion made about DSL in the same way as Fred did. I thought it was clear they were saying inconsistency with the DSL rulings was no defense WRT cable under any circumstances, but specifically in this case as the FCC had indicated it would likely do the same with DSL as evidenced by its temporary ruling.
re: The majority decision also said quite specifically that it was not discussing DSL, just cable, and that it is not holding the same way for DSL, which was not at bar at the time.
I didn't read it exactly that way. Didn't it give the FCC authority to decide for both cable and DSL and recognize that DSL was going to be revisited by the FCC?
"It [The FCC] apparently has decided to revisit its longstanding Computer II classification of facilities-based information-service providers incrementally. Any inconsistency between the order under review and the Commissions treatment of DSL service can be adequately addressed when the Commission fully reconsiders its treatment of DSL service and when it decides whether, pursuant to its ancillary Title I jurisdiction, to require cable companies to allow independent ISPs access to their facilities. See supra, at 7, this page. We express no view on those matters. In particular, we express no view on how the Commission should, or lawfully may, classify DSL service."
The Brand X case is a special one. The Supreme Court's decision seemed quite rational, and well within the Chevron precedent. However, very few people seem to be familiar with the Supreme Court's decision. Instead, there's Kevin Martin's recitation of what the Supreme Court said. It is rougly 179 degrees different from the original, a real Satanic Verse of citation. So when people discuss Brand X, are they discussing the Supreme Court decision or the FCC's? They just don't jibe at all.
In the actual case, six of nine justices decided that the FCC's position was not optimal, but not entirely beyond Chevron deference. Three felt that it was totally out of line. For a regulatory agency, that's pretty bad. The majority decision also said quite specifically that it was not discussing DSL, just cable, and that it is not holding the same way for DSL, which was not at bar at the time.
I frankly think that if the actual FCC rulings came back to the Supremes, Martin would be likely to get his sorry arse chewed out.
re: My personal opinion is the court went out of its way to find something ambiguous that has never been ambiguous up until the FCC ruled non-facilities based ISPs as being providers of an information service
If I'm reading this correctly, the supreme court said that the appeals court had to declare the statute as unambiguous for the court to trump the agency. It did not do so.
an excerpt:
"Against this background, the Court of Appeals erred in refusing to apply Chevron to the Commission’s interpretation of the definition of “telecommunications service. Its prior decision in Portland held only that the best reading of §153(46) was that cable modem service was a “telecommunications service,” not that it was the only permissible reading of the statute. See 216 F. 3d, at 877–880. Nothing in Portland held that the Communications Act unambiguously required treating cable Internet providers as telecommunications carriers. Instead, the court noted that it was “not presented with a case involving potential deference to an administrative agency’s statutory construction pursuant to the Chevron doctrine,” id., at 876; and the court invoked no other rule of construction (such as the rule of lenity) requiring it to conclude that the statute was unambiguous to reach its judgment. Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency’s, the court must hold that the statute unambiguously requires the court’s construction. Portland did not do so.
So it's ambiguous, and under chevron, because the court didn't explictly state that it wasn't. (Also, it probably really is ambiguous.)
Does it mean the '96 Telco Act is worthless? Don't know. It seems to mean the FCC is in a position to change policies on a whim. Good for infrastructure investment? Don't know. Probably good for lobbying organizations though ;-)
Thanks for the link (BTW, is there a secret to putting links in posts. I looked at the source of your post and the link format links similar to what I have used in the past yet my links don't seem to be working too well).
A quick response now and I will read the link tonight to see if there is anything more clarifying there.
The Chevron case dealt with something that was not defined in the statute (stationary source). Brand X dealt with something that was explictly defined in statute, and fairly clearly (IMO).
So one question is what is the standard by which we declare something is a matter of "policy" for the agency to decide. The majority opinion in Brand X did some hand waiving about policy but did not nail that issue explicitly, it was more a supporting argument.
Not being able to claim that the issue being judged was not explicitly addressed in the statute, the court had to find another ambiquity, and the one it found was of course the one provided by the FCC, that though it is clear what a telecommunications service is, does the expectation by the consumer that an Internet access service will always be attached to computer processing services, make those computer processing services an inherent part of the service, and therefore the telecommunications component not separable from the integrated telecommunications / information service. That they would claim is not directly addressed in the statute and therefore there is ambiguity, and therefore this is a policy issue to be decided by the agency. The dissenting opinion found that the issue was directly addressed by the statute due to the clarity of the language and some convaluted and ultimately unhelpful analogies to other business situations.
I would ask the general question of at what point do we decide whether something explictly addressed in statute is ambiguous and therefore the courts should step away. Should the courts find the definition of "is" ambiguous for example.
My personal opinion is the court went out of its way to find something ambiguous that has never been ambiguous up until the FCC ruled non-facilities based ISPs as being providers of an information service (a rule, not a law, that was used by the court to support its own argument - and thus once again elevating rules to the force of legal precedent).
But there were two important truths revealed in this case. One was a reasonable interpretation of the language of the statute vs the statutes direction to the FCC to deregulate as needed to promote competition. I have no way of understanding at this point, which one should have the highest legal importance. But it seems to me that if the latter does, then the Telecom Act is not worth the paper it is written on, because anything can be found to be ambiguous and / or a matter of policy.
re: "But there is no doubt in my mind that the net effect is the empowerment of an agency to declare the best intepretation of a statute because the Supreme Court does not believe it has the right to.
The flip side is the affirmative statement, i.e. that the political agencies closest to the people shall have the power to make policy judgments.
"The separation of powers reading of Chevron argues that policy judgments are invariably involved in resolving ambiguities that arise in Chevron cases. These policy judgments should be made by politically accountable actors. Agency actors are far more politically accountable than Article III judges, and as such, the agency interpretation should be granted deference."
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