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National Association of Regulatory Utility Commissioners v. Federal Communications Commission

United States Court of Appeals, District of Columbia Circuit

March 24, 2017

National Association of Regulatory Utility Commissioners, Petitioner
v.
Federal Communications Commission and United States of America, Respondents Vonage Holdings Corporation, Intervenor

          Argued February 8, 2017

         On Petition for Review of an Order of the Federal Communications Commission

          James Bradford Ramsay argued the cause for petitioner. With him on the briefs was Jennifer Murphy.

          Matthew J. Dunne, Counsel, Federal Communications Commission, argued the cause for respondents. With him on the briefs were Robert B. Nicholson and Sean Sandoloski, Attorneys, U.S. Department of Justice, Jonathan B. Sallet, General Counsel, Federal Communications Commission, David M. Gossett, Deputy General Counsel, and Richard K. Welch, Deputy Associate General Counsel. Jacob M. Lewis, Associate General Counsel, Federal Communications Commission, entered an appearance.

          Elizabeth A. Bonner argued the cause for intervenor. With her on the brief was Brita D. Strandberg.

          Before: Garland, Chief Judge, and Henderson and Rogers, Circuit Judges.

          PER CURIAM.

         This petition challenges the Order of the Federal Communications Commission authorizing interconnected Voice-over-Internet-Protocol service providers ("I-VoIPs") to obtain North American Numbering Plan telephone numbers directly from the Numbering Administrators rather than through intermediary local phone service numbering partners. Numbering Policies for Modern Communications, 30 FCC Rcd. 6839 (2015) ("Order"). The National Association of Regulatory Utility Commissioners ("NARUC") challenges the Order, contending that the Commission has effectively classified I-VoIP service as a Title II telecommunications service, or acted arbitrarily by delaying a classification decision or by extending Title II rights and obligations to I-VoIPs in the absence of classification. Because NARUC fails to show that it has standing to challenge the Order, the court lacks jurisdiction and the petition is dismissed.

         I.

         The Communications Act, as amended by the Telecommunications Act of 1996, defines two mutually exclusive categories of communication services: "telecommunications service" and "information service." 47 U.S.C. § 153(24), (53). Providers of telecommunications service are subject to regulation as common carriers under Title II of the Act, id. § 153(51), while information services are not. See Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 974 (2005).

         Prior to the challenged Order, the Commission's regulations required "an entity requesting numbering resources to demonstrate that it is 'authorized' to provide service in the area for which it is requesting telephone numbers." Order ¶ 20. The entity had to produce "evidence of either a state certificate of public convenience and necessity [ ] or a Commission license." Id. ¶ 4. Absent such evidence, I-VoIPs had to "partner with a carrier, " usually a local exchange carrier ("LEC"), and pay that carrier a Primary Rate Interface service fee in order to get telephone numbers. Id. ¶¶ 17 n. 54, 69. In 2004, the Commission issued a notice of proposed rulemaking to classify VoIP, among others, as a "telecommunications service, " In re IP-Enabled Services, WC Docket No. 04-36, 19 FCC Rcd. 4863 (2004), but had taken no further action in that separate proceeding when the challenged Order was issued.

         In 2005, the Commission began granting waivers of its rules to permit I-VoIPs, including Vonage Holdings Corporation, to "obtain numbers directly from the Numbering Administrators" without a carrier partner. Order ¶ 4. I-VoIPs that received direct number access through waivers had to "process[] port requests directly rather than going through a LEC." In re Administration of the North American Numbering Plan, 20 FCC Rcd. 2957, 2962 (2005), at ¶ 9. For I-VoIPs that did not receive waivers, the regulations, beginning in 2007, imposed portability requirements where "both an interconnected VoIP provider and its numbering partner [ ] facilitate a customer's porting request to or from an interconnected VoIP provider." In re Telephone Number Requirements for IP-Enabled Service Providers, 22 FCC Rcd. 19531, 19532, 19548-49 (2007), at ¶¶ 1, 30, 31, 32, aff'd Nat'l Tel. Coop. Ass'n v. FCC, 563 F.3d 536 (D.C. Cir. 2009).

         The Order revised the regulations to allow I-VoIPs, without state certification, to "obtain telephone numbers directly from the Numbering Administrators, subject to several conditions designed to minimize number exhaust and preserve the integrity of the numbering system." Order App. C ¶ 3. Following a six-month trial period that demonstrated "there are no technical barriers preventing interconnected VoIP providers from accessing numbering resources directly, " Order ¶ 4, the Commission concluded direct access would "facilitate innovative technologies and services that will benefit both consumers and providers, and further the Commission's recognized pro-consumer, pro-competition, and public safety goals, " id. ¶ 2. The Commission thereby allowed number access "directly to interconnected VoIP providers, without regard to whether they are [common] carriers, " id ¶ 78, noting that it had yet to classify "interconnected VoIP services as either telecommunications services or information services, " id ¶ 79 n. 282. The revised regulations continued to ensure that users of I-VoIP services would obtain the benefits of local number portability, regardless of whether the I-VoIP provider obtained numbers directly or through a carrier partner Id. ¶ 55.

         The Commission rejected NARUC's argument that its exclusive authority over numbering under 47 U.S.C. § 251(e)(1), is limited by provisions imposing number portability and cost recovery obligations on "telecommunications carriers." See 47 U.S.C. §§ 251(b) & (e), 153(37) & (51). It interpreted these provisions to set a statutory floor that did not limit the Commission's ...


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