Judicial Review of Streamlined Tariff Protest Denials

By Krogh, Frank W. | Federal Communications Law Journal, January 2013 | Go to article overview

Judicial Review of Streamlined Tariff Protest Denials


Krogh, Frank W., Federal Communications Law Journal


TABLE OF CONTENTS

  I. INTRODUCTION
 II. THE EFFECT OF THE "DEEMED LAWFUL" PRESUMPTION ON
     REVIEWABILITY
III. DENIALS OF PETITIONS TO REJECT OR SUSPEND LEC STREAMLINED
     TARIFFS ARE NOT COMMITTED TO FCC DISCRETION
 IV. STREAMLINED TARIFF PROTEST DENIALS SHOULD BE REVIEWED
     UNDER THE APA'S "ARBITRARY AND CAPRICIOUS" STANDARD
  V. OVERCOMING THE INITIAL OBSTACLES TO JUDICIAL REVIEW
 VI. CONCLUSION

I. INTRODUCTION

Section 204(a) of the Communications Act of 1934 ("Communications Act"), as amended, sets forth the authority of the Federal Communications Commission ("FCC" or "Commission") to review new interstate service tariffs filed by telecommunications common carriers. (1) Section 204(a) states, in part:

   Whenever there is filed with the Commission any new or
   revised charge ... or practice, the Commission may either
   upon complaint or upon its own initiative ... enter upon a
   hearing concerning the lawfulness thereof; and pending such
   hearing and the decision thereon the Commission ... may
   suspend the operation of such charge ... or practice.... (2)

Under section 204(a), a party may petition to reject or suspend and investigate a carrier's new tariff filing. (3) Such tariff protests are reviewed under the procedures outlined in the FCC's Rule 1.773(a)(1), which provides that a tariff meeting certain technical criteria "will not be suspended ... unless" the petition shows:

(A) That there is a high probability the tariff would be found unlawful after investigation;

(B) That the suspension would not substantially harm other interested parties;

(C) That irreparable injury will result if the tariff filing is not suspended; and

(D) That the suspension would not otherwise be contrary to the public interest. (4)

The FCC will not suspend a proposed tariff "if any one of these prongs is not met." (5)

Traditionally, a decision denying a petition to reject or suspend and investigate a new tariff filing has been treated as nonfinal and unreviewable, both in the case of FCC tariff protest denials and similar orders of other agencies overseeing parallel tariff regimes. (6) That is because judicial review is appropriate only in cases involving agency "orders of definitive impact, where judicial abstention would result in irreparable injury to a party." (7) Typically, agency denial of a petition challenging a tariff, thereby allowing the tariff to go into effect without suspension or investigation, is unreviewable because: (1) denial of such a tariff protest is an interlocutory action involving no determination on the merits; (2) review is not necessary to prevent irreparable injury, since there is the possibility of refunds or damages; and (3) judicial intervention would invade the province reserved to agency discretion. (8)

Most significantly, for purposes of this article, a party may later challenge the same tariff in a formal complaint brought under sections 206-08 of the Communications Act (9) and collect damages for any injury caused by a tariff found to be in violation of the statute. (10) That is because

   A denial of a mere petition to reject or to suspend and
   investigate a tariff filing is neither an approval of the filed
   rates nor a barrier of [sic] challenges to their lawfulness ....
   Their lawfulness ... remains subject to challenge until the
   FCC approves the rates after "full opportunity for hearing."
   That hearing may be initiated by filing a complaint under [section]
   208.... (11)

Section 402(b)(1)(A)(iii) of the Telecommunications Act of 1996 ("1996 Act"), however, upended this regime in the case of interstate tariffs filed by local exchange carriers ("LECs") by adding a new subsection (3) to section 204(a). (12) Section 204(a)(3) enables LECs to file tariffs "on a streamlined basis" and provides that such a tariff "shall be deemed lawful and shall be effective" seven days (in the case of a rate reduction), or fifteen days (in the case of an increase), "after the date on which it is filed . …

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