Case No. 11-12221-EE ___________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ___________________________________________ LSSI DATA CORP., Plaintiff-Appellee, v. COMCAST PHONE, LLC, Defendant-Appellant. ___________________________________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA CASE NO. 1:11-cv-01246-CAP ____________________________________________ AMICUS BRIEF FOR THE FEDERAL COMMUNICATIONS COMMISSION IN SUPPORT OF NEITHER PARTY ____________________________________________ SEAN A. LEV ACTING GENERAL COUNSEL PETER KARANJIA DEPUTY GENERAL COUNSEL RICHARD K. WELCH DEPUTY ASSOCIATE GENERAL COUNSEL PAMELA L. SMITH COUNSEL FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 (202) 418-1740 June 18, 2012 CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT Pursuant to Eleventh Circuit Rule 26.1-1, the Federal Communications Commissi on states that it is an independe nt agency of the U.S. government. The trial judges, attorneys, persons, associati ons of persons, firms, partnerships, or corporat i ons that have an interest in th e outcome of this app eal are listed in the Brief of Appellant Comcast Phone, LLC, as supplemented by the Brief of Appellee LSSi Data Corp. ii TABLE OF CONTENTS STATEMENT OF INTEREST..................................................................................1 STATEMENT OF THE ISSUE.................................................................................1 STATUTORY AND REGULATORY BACKGR OUND.........................................2 SUMMARY OF ARGUMENT .................................................................................7 ARGUMENT .............................................................................................................7 CONCLUSION........................................................................................................12 iii TABLE OF CITATIONS Cases Page AT&T Corp. v. I o wa Utils. Bd. , 525 U.S. 366, 119 S. Ct. 721 (1999) .........................................................................................2, 8 B o ca Airport, Inc. v. FAA , 389 F.3d 185 (D.C. Cir. 2004 )........................................8 C hase Bank, N.A., v. M c C o y , 131 S. Ct. 871 (2011) .................................................9 C hevron U.S.A, Inc. v. Natu ral Res. Def. Council, Inc. , 467 U.S. 837, 104 S. Ct. 2778 ( 1984) ............................................................8 National Cable & Telecomm. Ass’n v. Brand X Internet Servs. , 545 U.S. 967, 125 S. Ct. 2688 (2 005) ........................................................8 Talk Am., Inc. v. Mich. Bell Tel. Co ., 131 S. Ct. 2254 (2011)..................................................................................................................8, 9 Verizon Commc ’ns Inc. v. F C C , 535 U.S. 467, 122 S. Ct. 1646 (2002) ...........................................................................................2 Verizon Md., Inc. v. Public Serv. Com m ’n , 535 U.S. 635, 122 S. Ct. 1753 (200 2) ...................................................................................2 Administrative Decisions * I mplementation of the Local Competition Provisions of the Telecommunications Act of 1996 , Second Report and Order and Memorandum Opinion and Order, 11 FCC Rcd 19392 (19 96) ......................................................................5, 9 * I mplementation of the Telecommunications Act of 1996 , Third Report and Order in CC Docket No. 96-115, Second Order on Reconsideration of the Second Report and Order in CC Docket No. 96-98, and Notice of Proposed Rule making in CC Docket No. 99-273, 14 FCC Rcd 15550 ( 1999) .......................................... 2, 3, 5, 6, 9, 10 iv M c LeodUSA Publ’g Co. v . W o od Cnty Tel. Co. , 17 FCC Rcd 6151 (2002) ................................................................................ 4, 11 Provision of Directory Listing Information under the Telecommunications Act of 1934, As Amended , First Report and Order, 16 FC C Rcd 2736 (2001) ........................................ 5, 6, 7 Statutes and Regulations 47 U.S.C. § 151 ..........................................................................................................8 47 U.S.C. § 153(54) ...................................................................................................4 47 U.S.C. § 153(55) ...................................................................................................4 47 U.S.C. § 202(a) .....................................................................................................7 47 U.S.C. § 208 ..........................................................................................................4 47 U.S.C. § 217 ........................................................................................................12 47 U.S.C. § 222(e) .................................................................................................2, 3 47 U.S.C. § 222( h)(3).................................................................................................3 47 U.S.C. § 251( b)(3).............................................................................................2, 5 47 C.F.R. § 51. 217(e)(1) ............................................................................................6 * Cases and other authorities primarily re lied upon are marked with an asterisk. 1 STATEMENT OF INTEREST The Federal Communications Commissi on (“FCC”) has primary responsibili t y for implementing and enforcing the Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et seq. (“the Communications Act” or “the Act” ). The FCC has an interest in ensuring that the Act, the agency’s implementing rules, and its precedents are correctly interpreted. At the Court’s invitation, the FCC respectfully files this brief as amicus curiae in support of neither party. STATEMENT OF THE ISSUE By order dated April 12, 2012, the C ourt invited the FCC to set forth its posit ion on the follow ing question: Does a local exchange carrier (LEC) violate the non- discrimination requirements of Sections 202, 222(e), or 251(b)(3) of the Communications Act of 1934, as ame nded by the Telecommunications Act of 1996 (“the Act”), when the LEC select s a single contractor to serve as its exclusive agent in selling its directory assist ance listing data (DALD) to all other LECs and directory publishers, when that contractor also acts as an agent or contractor to other LECs in acquiring DALD and competes with at least one qualifying directory assis t ance provider in that regard? See In re Provision of Directory Listing Inform ati on under the Communications Act of 1934, as amended, 16 F.C.C. Rc d. 2736 (F.C.C. Jan. 23, 2001) (First Report and Order), available at 2001 WL 55620. Answer : As explained below, th e FCC believes that the answer to the Court’s question is no. 2 STATUTORY AND REGULATORY BACKGROUND 1. For most of the last century, Am erican consumers could purchase local telephone service from only one source: th eir incumbent local exchange carrier (“LEC”). Until the 1990s, regulators genera lly treated local telephone service as a monopoly. States typically granted an ex clusive franchise in each local service area to the LEC that owned and ope rated the local telephone network. See AT&T Corp. v. Io wa Utils. Bd. , 525 U.S. 366, 371, 119 S. Ct. 721, 726 (1999). The Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56 (“the 1996 Act”), fundamentally altered this regulatory framework “to achieve the entirely new objective of uprooting . . . monopolies.” Verizon Commc’ns Inc. v. F C C , 535 U.S. 467, 488, 122 S. Ct. 1646, 1660 (2002). The 1996 Act amended the Communications Act to create “a new telecommunications regime designed to foster competition in local telephone markets.” Verizon Md., Inc. v. Public Serv. Comm’n , 535 U.S. 635, 638, 122 S. Ct. 1753, 1756 (2002). Two components of the local telephone competition regime are section 222(e) and section 251(b)(3) of the amended statute, 47 U.S .C. §§ 222(e), 251(b)(3). I mplementation of the Telecommunications Act of 1996 , Third Report and Order in CC Docket No. 96- 115, Second Order on Reconsideration of the Second Report and Order in CC Docket No. 96-98, and Notice of Propose d Rulemaking in CC Docket No. 99-273, 14 FCC Rcd 15550, 15553 (¶ 1) (1999) (“ S L I /DA Order and NPRM ”). 3 2. Section 222(e) . Section 222(e) of the Comm unications Act mandates that “a telecommunications carrier that pr ovides telephone excha nge service shall provide subscriber list informat i on gathered in its capacity as a provider of such service on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions, to any person upon request for the purpose of publishing directories in any format.” 47 U.S.C. § 222(e). Subscriber list informat i on (“SLI”) is defined as “any informat i on: (A) identifying the listed names of subscribers of a carrier a nd such subscribers’ telephone numbers, addresses, or prima r y adver tising classifications . . . , or any combination of such listed names, numbers, addresses or classi fications; and (B) that the carrier or an affilia te has published, caused to be publis hed, or accepted for publication in any directory forma t.” 47 U.S.C. § 222(h)(3). While section 222(e) provides that SLI shall be provided under “nondiscriminatory and reasonable rates, terms, and conditio ns,” 47 U.S.C. § 222(e), the FCC has explained that section 222(e)’s nondiscrimination requirement “does not prohi b i t all variations in the rates, terms, and conditions under which a carrier provides subscriber list informat i on to directory publishers.” S L I /DA Order and NPRM, 14 FCC Rcd at 15582 (¶ 59) (em phasis added). But if a carrier is charged with violating secti on 222(e) in a complaint proceeding before 4 the FCC, 1 the carrier has the burden of showing that “specific factors, such as differences in the costs of providing s ubscriber list informat i on to particular directory publishers, warrant differences in the rates, terms, and conditions under which the carrier provides that informat i on to those publishers.” Id. at 15582-83 (¶ 59). See also McLeodUSA Publ’g Co. v . W o od Cnty Tel. Co. , 17 FCC Rcd 6151 (2002) (finding that a LEC failed to meet its burden of showing that the rate charged a directory publisher for ac cess to SLI was reasonable). 3. Section 251(b ) (3 ) . Section 251(b)(3) of the Communications Act requires LECs to allow “com peting providers of telephone exchange service and telephone toll service 2 . . . nondiscriminatory access to . . . directory assist ance, and 1 Under Section 208 of the Act, “[a]ny person, . . . complaining of anything done or omitted to be done by any comm on carrier subject to th[e Act], in contravention of any provision thereof, may apply to [the FCC] by petition” and the common carrier “shall be called upon to satisf y the complaint.” 47 U.S.C. § 208. 2 Telephone exchange service is define d as “(A) service within a telephone exchange, or within a conn ected system of telephone exchanges within the same exchange area operated to furnish to subs cribers intercommunicating service of the character ordinarily furnished by a singl e exchange, and which is covered by the exchange service charge, or (B) compara b le service provided through a system of switches, transmissi on equipment, or ot her facilities (or combination thereof) by which a subscriber can originate and te rminate a telecommunications service.” 47 U.S.C. § 153(54). Telephone toll servi ce is defined as “telephone service between stations in different exchange areas for which there is made a separate charge not included in contracts with subs cribers for exchange service.” 47 U.S.C. § 153(55). 5 directory listing.” 47 U.S.C. § 251(b)(3). 3 The FCC has determined that “‘nondiscriminatory access,’ as used in section 251(b)(3), encompasses both: (1) nondiscrimination between a nd among carriers in rates, terms and conditions of access; and (2) the abilit y of competing provi ders to obtain access that is at least equal in quality to that of the providing LEC.” L o cal Competition Second Report and Order , 11 FCC Rcd a t 19402 (¶ 12); id. at 19444 (¶ 101). If a competing provider files a compla int with the FCC alleging that a providing LEC has violated section 251(b )(3) by failing to offer nondiscriminatory access to DA, “the providing LEC . . . bear[s ] the burden of demonstrating that it is permitting nondiscriminatory acce ss, and that any dispar i t y in access is not caused by factors within the providing LEC’s control.” S L I /DA Order and NPRM , 14 FCC Rcd at 15619 (¶ 131) ( citing 47 C.F.R. § 51.217(e)(1)). 3 A “providing LEC” is a LEC that is re quired to permit nondiscriminatory access to its services pursuant to section 251(b )(3); a “competing provider” is a provider of telephone exchange service or telephone to ll service that seeks nondiscriminatory access from a providing LEC. See, e.g., I mplementation of the Local Competition Provisions of the Telecommunications Act of 1996 , Second Report and Order and Memorandum Opin ion and Order, 11 FCC Rcd 19392, 19444 n.244 (1996) (“ L o cal Competition Second Report and Order ”). The FCC also has determined that certified comp eting LECs, providers that offer call completion service, and providers that ar e acting as the agents of entities that otherwise qualify under section 251(b)(3) are likewise entitled to nondiscriminatory access. See Provision of Directory Listing Information under the Telecommunications Act of 1934, As Amended , First Report and Order, 16 FCC Rcd 2736, 2743-50 (¶¶ 12-29) (“ DA First Report and Order ”) (2001). In this brief, the abbreviation DA refers collectively to directory assis t ance and directory listings. 6 4. Section 202(a). A provision of the Communica tions Act that predates the 1996 amendments, section 202(a), establi s hes a general bar against unreasonable discrimination by common carriers in their pr ovision of service to customers. That section makes it “unlawful for any co mmon carrier to make any unjust or unreasonable discrimination in charges, prac tices, . . . , or to make or give any undue or unreasonable preference or advantage to any partic ular person, . . . or to subject any person, . . . to any undue or unreasonable prejudice or disadvantage.” 47 U.S.C. § 202(a). Notwiths tanding the conclusion of the FCC’s staff that section 251(b ) (3 ) o f the Act does not require LECs to furnish their DA database informat i on to DA providers that do not provide telephone exch ange or telephone toll service, see S L I /DA Order and NPRM , 14 FCC Rcd at 15632 (¶ 156), the Commissi on has explained that the ques tion whether LECs must furnish such service under section 202(a) of the Act “raises complex issues that have not been fully developed.” DA First Report and Order , 16 FCC Rcd at 2750 (¶ 31). The FCC specified, however, that when such DA providers have been designated to act as the agent of a provider of telephone exchange or telephone toll service, “that competing DA provider is entitled to non discriminatory access to the providing LECs’ local DA database.” Id. at 2748 (¶ 27). 4 4 The FCC also noted its expectation th at an agent-DA provider’s request for access “wi ll be accompanied by a letter or other documentation from the [provider of telephone exchange servic e or telephone toll service] evidencing its intent that 7 SUMMARY OF ARGUMENT Nothing in the Communications Act or the FCC’s implementing rules precludes a LEC from designating an agent to provide nondiscriminatory access to its subscriber list informat i on and direct ory assist ance databases, as required by sections 222(e) and 251(b)(3) of the Ac t. For purposes of those statutory provisions, nondiscriminatory access means th at the LEC (or its agent) must afford qualified entities the same access to its datab a ses as it provides to its own directory publisher under section 222(e), or its ow n directory assis t ance provider under section 251(b)(3), nor may a LEC favor one qualified entity over another with respect to the rates, terms, or conditions of access to its datab a ses. Thus, so long as a LEC’s agent provides competing LECs or directory publishers the same access to the LEC’s databa ses that it provides to the LEC and other qualif ied entities, neither the LEC nor its agent would violate secti ons 222(e), 251(b)(3), and 202(a) of the Act. ARGUMENT “Congress has delegated to the [FCC] the authority to ‘execute and enforce’ the Communications Act.” National Cable & Telecomm. A ss’n v. Brand X Internet Servs. , 545 U.S. 967, 980, 125 S. Ct. 2688, 2699 (2005) (quoting 47 U.S.C. § 151). the DA provider receive access so that it may fulfill its obliga t i ons to [the principal-competing provider].” DA First Report and Order , 16 FCC Rcd at 2748 (¶ 27). 8 The “ambiguities” that Congress incorporated into the statute “will be resolved by [the FCC as] the impl ementing agency.” AT&T , 525 U.S. at 397, 119 S. Ct. at 738. Thus, “a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the [FCC].” C hevron U.S.A, Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 844, 104 S. Ct. 2778, 2782 (1984). Similarl y, the courts owe substantial deference to the FCC’s construction of its own regulations, see Talk Am., Inc. v. Mich. Bell Tel. Co ., 131 S. Ct. 2254, 2260-61 (2011), and precedents, see Boca Airport, Inc. v. FAA , 389 F.3d 185, 190 (D.C. Cir. 2004). The FCC’s constructio n of its own regulations is controlling unless that construction is “‘pla inly erroneous or inconsistent with the regulation[]’ or there is any other ‘reason to suspect th at the interpretation does not reflect the agency’s fair and considered judgmen t on the matter in question.’” Talk Am. , 131 S. Ct at 2261 (quoting C hase Bank, N.A., v. Mc C o y , 131 S. Ct. 871, 881 (2011)). As the Supreme Court has explained, th is rule of deference extends to FCC interpretations set forth in an amicus brief. Talk Am. , 131 S. Ct. at 2261 (deferring to FCC rule interpretation c ontained in amicus brief). In response to the Court’s question, nothing in the Communications Act or FCC rules would preclude a LEC from desi gnating an agent to provide qualified entities with nondiscriminatory access to th e LEC’s SLI and DA datab ases. Those qualified entities include publishers of directories under section 222(e) or 9 competing providers of tele phone exchange or telephone toll services (including their designated agents) under section 251(b)(3). 5 The nondiscriminatory access requirement s of sections 222(e) and 251(b)(3) require a LEC to provide access that is at least equal to that enjoyed by the LEC itself, and on the rates, te rms, and conditions of access that the LEC provides to other qualified entities. “[ A]ny standard that would allow a LEC to offer access inferior to that enjoyed by the LEC itsel f would be inconsiste nt with Congress’ intention of establi s h ing competitiv e, deregulated markets for all telecommunications services.” S L I /DA Order and NPRM, 14 FCC Rcd at 15616 (¶ 125) (footnote omitted). See also id. a t 15582 (¶ 58) (the FCC has determined that section 222(e)’s “nondiscrimination requireme nt . . . obliga tes each carrier that gathers subscriber list informat i on in its capacity as a provider of local exchange service to provide that informat i on to re questing directory publishers at the same rates, terms, and conditions that the ca rrier provides the informat i on to its own directory publishing operation, its dir ectory publishing affili a te, or another directory publisher”); id. at 15618 (¶ 128) (the FCC affirmed that “under section 251(b)(3), ‘nondiscriminatory access’ m eans that providing LECs must offer 5 A LEC’s duty to provide nondiscrimina tory access to directory assist ance and directory listings “is owed to competing providers of telephone exchange service and/or telephone toll service, and not to ‘all telecommunications carriers.’” L o cal Competition Second Report and Order , 11 FCC Rcd a t 19457 (¶ 133). See also n.3, s upra . 10 access equal to that which th ey provide to themselves”); id. a t 15630 (¶ 152) (the FCC concluded that “secti on 251(b)(3) prohib i t s pr oviding LECs from providing directory assis t ance databa se informat i on in a manner that is inferior to that which they supply to themselves.”). For example, consistent with the nondi scriminatory access requirement of section 251(b)(3), the FCC’s rules requi re that “a LEC shar e [with competing providers] the names and addr esses of subscribers with unpublished numbers if the LEC provides those names to its own directory assis t ance operators.” Id. a t 15638 (¶ 167). And, “[i]f a LEC, in its provision of directory assist ance service to itself, allows its own directory assis t ance operato rs to see the names and addresses of subscribers with unlisted informati on, this informat i on must also be made available to the requesting competitive LEC.” I bid. Similarl y, with respect to section 222(e), the FCC has observed that, dependi ng on the circumstances, a failure to provide competing directory publishers with the names and add resses of their subscribers with unlisted or unpublishe d numbers (which are excluded from the definition of SLI) “may be unreasonable or unreasonably discriminatory within the meaning of sections 201(b) and 202(a) of the Communications Act” if the LEC provides such informat i on to its own directory publisher. S L I /DA Order and NPRM , 14 FCC Rcd at 15575 (¶ 41). 11 At bottom, whether a LEC’s actions constitute a violation of the nondiscriminatory access requirements of sections 222(e) and 251(b)(3) hinges on the particular facts of a case – specifically , whether the LEC is providing access to its DA and SLI datab ases that is equal to the access the LEC itself enjoys and on the same rates, terms, and conditions that it provides to others. Thus, a LEC’s use of an agent to provide access to its DA and SLI databases does not necessarily constitute a violation of sections 222(e), 2 51(b)(3), or 202(a) of the Act; nor would the agent’s status as a competitor in acquiring DA and SLI for other LECs. Rather it is the LEC’s (or its agent’s) conduct that is most determinative of whether the LEC has provided nondiscriminatory access to its databa ses as re quired by sections 222(e) and 251(b)(3) of the Act. See 47 U.S.C. § 217 (“In construing and enforcing the provisions of this chapter, th e act, omissi on, or failure of any officer, agent, or other person acting for or employed by any common carrier or user, acting within the scope of his employment, shall in every case be also deemed to be the act, omissi on, or failure of such carrier or user as well as that of the person.”). See also McLeodUSA , 17 FCC Rcd 6151 (LEC that employed an agent to provide its SLI to requesting telephone di rectory publishers held to be charging unreasonably high rates under section 222(e)). 12 CONCLUSION As explained above, the FCC believes that the answer to the Court’s question is negative. Respectfully submitted, Sean A. Lev Acting General Counsel Peter Karanjia Deputy General Counsel Richard K. Welch Deputy Associate General Counsel /s/ Pamela L. Smith Pamela L. Smith Counsel Federal Communications Commissi on Washington, D.C. 20554 (202) 418-1740 June 18, 2012 CERTIFICATE OF COMPLIANCE Pursuant to Federal Rule of Appellate Procedure 32(a)(7)(B), the undersigned certifies that this brief co mp lies with the applicable type-volume limitati ons of FRAP 32(a). It was prepared using a propor t ionately spaced type: Times New Roman, 14 point. Exclusiv e of the portions exempted by FRAP 32(a)(7)(B)(iii) and 11 th Circuit Rule 32-4, the brief contains 2776 words. This certificate was prepared in relian ce on the word-count function of the wordpr ocessing system used to prepare th is brief: Microsoft Office Word 2003. /s/ Pamela L. Smith Pamela L. Smith 11-12221-EE IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT LSSi DATA CORP., Plaintiff-Appellee, v. COMCAST PHONE, LLC, Defendant-Appellant. CERTIFICATE OF SERVICE I, Pamela L. Smith, hereby certify that on June 18, 2012, I electronically filed the foregoing Amicus Brie f for the Federal Communications Commissi on with the Clerk of the C ourt for the United States Court of Appeals for the Eleventh Circuit by usi ng the CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. Some of the participants in the case, denoted with aste risks below, are not CM/ECF users. I certify further that I have directed that copies of the foregoing document be maile d by First-Class Mail to those persons, unless another attorney at the same mailing a ddress is receiving electronic service. Robert P. Williams II Bradley M. Davis Claiborne Benson Smith Troutman Sanders, LLP 600 Peachtree St NE Ste 5200 Atlanta, GA 30308-2216 C o unsel for : L S Si Data Corp. *Michael C. Sloan *Robert G. Scott Davis Wright Tremaine, LLP 1919 Pennsylvania Ave NW Ste 800 Washington, DC 20006-3401 C o unsel for Co m cast Phone, LLC 11-12221-EE *Samuel S. Woodhouse III The Woodhouse Law Firm, LLC 260 Peachtree St NW Ste 1402 Atlanta, GA 30303-1237 C o unsel for : C o m cast Phone, LLC *Jaime A. Bianchi White & Case, LLP 200 S Biscayne Blvd Ste 4900 Miami, FL 33131-2346 C o unsel for Co m cast Phone, LLC /s/ Pamela L. Smith