The U.S. Court of Appeals has given the Federal Communications Commission 30 days to come up with a plan to end four years of indecision about whether American Telephone and Telegraph's long-line rates are justified.
The court repeated its earlier warning to the agency that protracted delays in decision-making threaten the FCC's credibility and subvert the standards of "just and reasonable" rates that the FCC is supposed to enforce.
"it corrupts the statutory scheme to keep in place, for several years, rates the FCC cannot, or perhaps more pertinently will not, deign to call just or unjust, reasonable or unreasonable, "Judge Patricia M. Wald wrote in an opinion for the court released last week.
Wald was joined by Appeals Court Judge Spottswood W. Robinson and U.S. District Court Judge June L. Green, who sat on the appeals court by special designation.
The basis for the court's decision dates to a 1976 FCC decision that found AT&T's tariff revisions for Wide Area Telecommunication Service (WATS) from 1973 through 1976 were unsupported by data the company produced. That FCC decision, however, and two more in 1977 and 1978, allowed the revisions to remain in effect.
WATS lines enable subscribers to place or receive long distance calls within specified areas, and at specified times, at less than standard rates.
AT&T's competitors, principally Washington-based MCI Telecommunications Corp., challenged what they called the FCC's "acquiescence" to AT&T and alleged that AP&T's rates were too low. As a result, MCI argued, it was losing business to AT&T.
Considering the "enormous complexity of rate-making for an enterprise of AT&T's dimensions," the law must allow for some flexibility while the FCC arrives at a decision, Wald said. In such cases, the existing -- and challenged -- tariffs can avoid "the stigma of unlawfulness, at least for a reasonable time," Wald wrote.
Wald said the court was aware that the FCC has been in a "period of transition for several years" in determining methods to evaluate rates such as those submitted by AT&T.
"nevertheless, there must be some limit to the time tariffs unjustified under the law can remain in effect" even when the FCC cannot decide whether the tariffs are unlawful, Wald wrote.
"otherwise, the regulatory scheme Congress has crafted becomes anarchic and whatever tariff rates the 'regulated' entity files become, for all practical purposes, the accepted rates."
The court gave the FCC 30 days to devise a timetable for disposition of any current or proposed agency proceedings related to the AT&T tariff revisions. Parties with an interest in the proceedings then will have 15 days to file comments with the court on the timetable, and the FCC will then have another 15 days to reply. The court will then approve, reject or modify the schedule and "the parties will be expected to adhere to it, "Wald said
The court will maintain jurisdiction over the case, Wald said, to ensure compliance with its decision.