USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 1 of 26 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Great Lakes Communication Corp., et al., ) Petitioners, ) ) v. ) No. 19-1233 ) Federal Communications Commission ) and United States of America, ) Respondents. ) OPPOSITION OF FEDERAL COMMUNICATIONS COMMISSION TO EMERGENCY MOTION FOR STAY PENDING REVIEW Through a practice known as access stimulation or  traffic pumping, some local exchange carriers (providers of local telephone service) artificially inflate the number and duration of long-distance calls their customers receive, thereby increasing by tens of millions of dollars annually the per-minute access charges they collect from long-distance carriers to complete those calls.1 The Federal Communications Commission adopted rules in 2011 to curtail these arbitrage schemes. In response, some carriers developed new methods of access stimulation that sidestepped the 2011 rules. To remove the financial incentive to engage in these new arbitrage schemes, the FCC issued an order in September 2019 amending its access stimulation rules. Updating the Intercarrier Compensation                                                              1 This Court is well-acquainted with access stimulation or  traffic pumping schemes. See All Am. Tel. Co., Inc. v. FCC, 867 F.3d 81 (D.C. Cir. 2017); N. Valley Commc ns, LLC v. FCC, 717 F.3d 1017 (D.C. Cir. 2013); Farmers & Merchants Mut. Tel. Co. v. FCC, 668 F.3d 714 (D.C. Cir. 2011). USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 2 of 26 2   Regime to Eliminate Access Arbitrage, FCC 19-94, 2019 WL 4785554 (rel. Sept. 27, 2019) (Order). Two access-stimulating carriers and three providers of  free conference calling services petitioned for review of the Order. They have now moved that certain rules  be stayed with regard to [p]etitioners pending judicial review. Mot. 1. But petitioners do not come close to justifying their request for such extraordinary relief. As we explain below, petitioners are not likely to prevail on the merits of their claims and have not shown that they would be irreparably harmed absent a stay. Nor would a stay serve the public interest; it would leave in place arbitrage schemes that distort competition, inefficiently allocate network resources, increase the risk of service disruptions, and impose unjust and unreasonable costs on long-distance carriers and their customers. The Court should deny the motion. BACKGROUND When an interexchange carrier (a provider of long-distance telephone service) transmits a long-distance call to the local exchange carrier serving the call s recipient, the interexchange carrier must pay an access charge to the local carrier for completing the call. All Am. Tel., 867 F.3d at 84. Taking advantage of this access charge regime, some local carriers have engaged in an arbitrage  scheme known as  traffic pumping or  access stimulation,  whereby they USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 3 of 26 3   artificially inflate the number and duration of long-distance calls their customers receive. Id. at 85. As a result of this insidious practice, interexchange carriers and their customers have had to pay significant amounts to local carriers  in the form of artificially inflated and distorted access charges. Ibid.; see also No. Valley Commc ns, 717 F.3d at 1017. In 2011, the FCC adopted rules designed to curb access arbitrage. Connect America Fund, 26 FCC Rcd 17663, 17874-90 ¶¶ 656-701 (2011). Under those rules, any carrier engaged in access stimulation must file revised tariffs reducing its access rates. Id. ¶¶ 679-698. As defined by the 2011 rules, access stimulation occurs when a local carrier has (1) entered into a revenue sharing agreement with another party collaborating in the scheme (such as a conference calling service), id. ¶¶ 668-674, and (2) either an interstate terminating-to-originating traffic ratio of at least 3:1 in a calendar month or more than 100 percent growth in interstate minutes in a month compared to the same month in the preceding year, id. ¶¶ 675-678. The United States Court of Appeals for the Tenth Circuit upheld these rules as a reasonable exercise of the FCC s authority under 47 U.S.C. § 201(b) to prohibit unjust and unreasonable access rates. In re FCC 11-161, 753 F.3d 1015, 1144-47 (10th Cir. 2014). Access-stimulating carriers adjusted their practices to circumvent the 2011 rules  by interposing intermediate providers of switched access service not subject USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 4 of 26 4   to the & rules in the call route, thereby increasing the access charges paid by interexchange carriers. Updating the Intercarrier Compensation Regime to Eliminate Access Arbitrage, 33 FCC Rcd 5466, 5467 ¶ 2 (2018) (Notice). In response to these new arbitrage schemes, the FCC issued a notice of proposed rulemaking in 2018 seeking comment on proposed amendments to the access stimulation rules. Among other things, the Commission asked whether it should require access-stimulating carriers to assume financial responsibility for the delivery of terminating traffic to their end offices. Id. ¶¶ 10-12, 21-22. The agency also asked  whether, and if so how, to revise the current definition of access stimulation to more accurately and effectively target harmful access stimulation practices. Id. ¶ 26. Specifically, the Commission requested comment on whether it should  modify the ratios or triggers in the definition. Ibid. Commenters submitted evidence that access-stimulating carriers, working in concert with intermediate access providers, had routed  billions of minutes of long-distance traffic  through a handful of rural areas in order  to increase [the] tandem switching and transport charges they collected from interexchange carriers. Order ¶ 14 (internal quotation marks omitted). For example, one carrier reported that twice as many minutes were routed per month to Redfield, South Dakota (population 2,300) as were routed to Verizon s facilities in New York City (population 8.5 million). Id. ¶ 15. These new arbitrage schemes, like the ones USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 5 of 26 5   targeted by the 2011 rules, involved the provision of  free conference calling and other high-volume calling services to  a small proportion of consumers. Id. ¶ 20. Such services were provided  at an annual cost of $60 million to $80 million in access charges  a cost that interexchange carriers and their customers were  forced to bear. Ibid. The Commission also found  evidence that the staggering volume of minutes generated by these [access stimulation] schemes can result in call blocking and dropped calls. Id. ¶ 3. To reduce carriers incentive to participate in such schemes, the FCC in September 2019 adopted rules requiring any access-stimulating local carrier  to bear financial responsibility for all interstate and intrastate tandem switching and transport charges for terminating traffic to its own end office(s) or functional equivalent whether terminated directly or indirectly. Order ¶ 17. Under the new rules, access-stimulating carriers would not collect access fees and would be forced to pay for services provided by intermediate carriers that they had introduced into the call path to evade the 2011 rules. The agency explained that the new rules  properly align financial incentives by making the access-stimulating [carrier] responsible for paying for the part of the call path that it dictates. Ibid. The Commission also found evidence that  access stimulation may occur even when there is no access revenue sharing agreement. Order ¶ 4. To account for this possibility, the agency amended its rules to add two  alternate tests for USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 6 of 26 6   access stimulation  that require no revenue sharing agreement. Id. ¶ 43. One test applies to competitive local carriers, including two of the petitioners, while the second applies to  incumbent rate of return carriers.2 Under the first alternate test, competitive local carriers without revenue sharing agreements are  defined as engaging in access stimulation if they have  an interstate terminating-to-originating traffic ratio of at least 6:1. Order ¶ 43. This 6:1 traffic ratio, which is twice the ratio used for carriers with revenue sharing agreements, was adopted by the Commission to avoid  ensnaring carriers that experience traffic growth  solely due to the development of their communities. Id. ¶ 48. For the second alternate test, the Commission selected an even higher traffic ratio to define access stimulation by rate-of-return local exchange carriers without revenue sharing agreements. Such carriers are defined  as engaging in access stimulation if they have  an interstate terminating-to-originating traffic ratio of at least 10:1 in a three calendar month period and  500,000 minutes or more of                                                              2 Incumbent carriers generally existed before 1996, whereas competitive carriers (like petitioners Great Lakes and Northern Valley) were formed after 1996 and compete with incumbent carriers. See 47 U.S.C. § 251(h); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 549 (2007). Rate-of-return carriers incumbent carriers subject to rate-of-return regulation are primarily  small, rural carriers. Order ¶ 49. USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 7 of 26 7   interstate terminating minutes-of-use per month in an end office in the same three calendar month period. Order ¶ 43. The Commission applied a higher ratio to rate-of-return carriers for several reasons. First,  the majority of those carriers are small, rural carriers with different characteristics than competitive [carriers]. Order ¶ 49. The Commission concluded that because rate-of-return carriers  serve small communities and have done so for years, they  would not be able to freely move stimulated traffic to different end offices like competitive carriers do, creating  structural disincentives for rate-of-return carriers  to engage in access stimulation. Id. ¶¶ 49, 50. In addition, the Commission found that a  significant number of rate-of- return [carriers] that are apparently not engaged in access arbitrage would nevertheless  trip the 6:1 trigger applicable to competitive carriers. Order ¶ 50. To prevent rate-of-return carriers from being misidentified as access stimulators, the Commission determined that such carriers should be deemed access stimulators only if they have at least a 10:1 traffic ratio  combined with more than 500,000 interstate terminating minutes-of-use per month, per end office, averaged over three calendar months. Ibid. The new rules were published in the Federal Register on October 28, 2019. 84 Fed. Reg. 57629. They are scheduled to take effect on November 27, 2019. USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 8 of 26 8   See Order ¶ 122. Carriers engaged in access stimulation when the rules take effect will have 45 days to come into compliance with the rules. Id. ¶¶ 74-75.3 ARGUMENT To obtain the extraordinary remedy of a stay, petitioners must demonstrate that (1) they will likely prevail on the merits, (2) they will suffer irreparable harm without a stay, (3) a stay will not harm other parties, and (4) a stay will serve the public interest. Nken v. Holder, 556 U.S. 418, 434 (2009). Petitioners have failed to satisfy any of these prerequisites. I. Petitioners Have Not Demonstrated A Likelihood Of Success On The Merits Petitioners raise various challenges to the Order, but none of their claims is likely to prevail on the merits. A. The Notice Satisfied The Administrative Procedure Act Petitioners maintain that the FCC violated the Administrative Procedure Act by failing to provide adequate notice of the new rules. Mot. 15-16, 19-20. That claim is unavailing. Petitioners contend that the Notice was deficient because it did not specify that the agency might adopt different access stimulation tests for different types of                                                              3 Petitioners filed a petition for an administrative stay with the FCC on October 4, 2019. Acting under delegated authority, the FCC s staff denied that petition. Updating the Intercarrier Compensation Regime to Eliminate Access Arbitrage, DA 19-1093 (Wireline Comp. Bur. Oct. 25, 2019) (Stay Denial Order). USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 9 of 26 9   carriers. Mot. 15-16. To comply with the APA, however, a notice of proposed rulemaking  need not specify every precise proposal which [the agency] may ultimately adopt as a rule. Nuvio Corp. v. FCC, 473 F.3d 302, 310 (D.C. Cir. 2006) (internal quotation marks omitted). An agency provides adequate notice under the APA if its final rule is  a logical outgrowth of its initial notice. Agape Church, Inc. v. FCC, 738 F.3d 397, 411 (D.C. Cir. 2013) (internal quotation marks omitted). A notice  satisfies the logical outgrowth test if it expressly ask[s] for comments on a particular issue or otherwise ma[kes] clear that the agency [is] contemplating a particular change. United States Telecom Ass n v. FCC, 825 F.3d 674, 700 (D.C. Cir. 2016) (internal quotation marks omitted). That is precisely what the Notice did here. The Notice made clear that the Commission was considering  whether, and if so how, to revise the current definition of access stimulation. Notice ¶ 26. Indeed, the agency solicited comment on whether and how it should  modify the ratios or triggers in the definition. Ibid. In response, parties submitted evidence that even though rate-of-return carriers generally do not engage in access arbitrage, they  may have traffic ratios that are disproportionately weighted toward terminating traffic and may experience  spikes in call volume due to  the unique geographical areas they serve. Order ¶ 49. To account for this possibility, the USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 10 of 26 10   Commission established a separate access stimulation test (with a higher traffic ratio) for rate-of-return carriers. Id. ¶ 50. The adoption of unique access stimulation triggers for carriers with different structural and operational characteristics was reasonably foreseeable after the Notice announced that the Commission was contemplating revisions to the definition of access stimulation  to more accurately and effectively target harmful access stimulation practices. Notice ¶ 26. Given the Notice s questions about whether (and if so, how) to modify the triggers in the definition,  interested parties should have anticipated that the change the FCC ultimately made  was possible. Agape Church, 738 F.3d at 411 (internal quotation marks omitted). That is all the APA requires. Petitioners also assert that the FCC violated the APA by adopting a rule that differed from the agency s proposal in the Notice. Mot. 19-20. They are wrong.  The final rule need not be the one proposed [by the agency] in the [notice]. Agape Church, 738 F.3d at 411. The Commission had proposed to require access- stimulating carriers to choose between (1) assuming financial responsibility for calls delivered to their networks or (2) accepting direct connections from interexchange carriers or their designated intermediate access providers. Notice ¶ 9. But the Notice also sought comment on NTCA s  independent proposal, id. ¶ 22, to require access-stimulating carriers to bear financial responsibility for USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 11 of 26 11   terminating traffic without giving them  the option of electing to accept direct connections. Id. ¶ 21. The agency ultimately adopted a rule reflecting the approach that NTCA advocated. Order ¶¶ 17-18. Therefore, petitioners cannot plausibly claim that the rule  was not foreseeable in light of the Notice. Mot. 20. B. The Commission Reasonably Applied Different Traffic Ratios To Different Types Of Carriers In defining access stimulation for carriers without revenue sharing agreements, the Commission adopted traffic ratios of 6:1 for competitive local carriers and 10:1 for rate-of-return carriers. Order ¶¶ 47-50. Petitioners assert that the Commission did  not explain why these particular ratios were adopted. Mot. 16. They also argue that the agency did not justify its disparate treatment of competitive carriers. Mot. 16-17. These claims lack merit. Petitioners have not shown that the traffic ratios the Commission selected to define access stimulation were  patently unreasonable, Covad Commc ns Co. v. FCC, 450 F.3d 528, 541 (D.C. Cir. 2006) (internal quotation marks omitted), or an abuse of the Commission s  wide discretion to determine where to draw administrative lines, AT&T Corp. v. FCC, 220 F.3d 607, 627 (D.C. Cir. 2000). To the contrary, the agency reasonably explained why it chose those ratios. Specifically, the Commission explained that it adopted a 6:1 or higher terminating-to-originating traffic ratio for competitive carriers without revenue USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 12 of 26 12   sharing agreements because  a smaller ratio would likely  be overinclusive, and the agency wanted both  to protect non-access-stimulating [carriers] from being misidentified and to avoid  costly disputes between carriers and confusion in the market. Order ¶ 47. In the Commission s considered judgment, a 6:1 ratio was  sufficient to prevent the definition from ensnaring competitive [carriers] that have traffic growth solely due to the development of their communities. Id. ¶ 48. The agency also amply explained why it adopted a higher traffic ratio to define access stimulation by rate-of-return carriers. The record indicated that  the majority of those carriers are small, rural carriers with different characteristics than competitive [carriers]. Order ¶ 49. And the record contained no evidence that rate-of-return carriers  are currently engaged in access stimulation. Id. ¶ 50. The Commission found that such carriers have  structural disincentives to engage in access arbitrage schemes. Ibid.  [U]nlike access-stimulating [carriers] that only serve high-volume calling providers, rate-of-return carriers, which serve small communities and have done so for years, would not be able to freely move stimulated traffic to different end offices. Id. ¶ 49. The Commission was also justifiably concerned that  a small but significant number of rate-of-return [carriers] that are apparently not engaged in access arbitrage would trip the 6:1 trigger applicable to competitive carriers. Id. ¶ 50. For all these reasons, the Commission reasonably decided that the access stimulation test for rate-of-return USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 13 of 26 13   carriers should be based on a 10:1 traffic ratio  combined with more than 500,000 interstate terminating minutes-of-use per month, per end office, averaged over three calendar months. Ibid.4 C. Substantial Evidence Supported The New Rules There is no basis for petitioners argument that  the Commission s justifications for the rules were  unsupported or contrary to the record evidence. Mot. 18. The record amply supported the agency s decision to amend its rules to address new access stimulation schemes. Specifically, record evidence indicated that  carriers located in remote areas with long transport distances and high transport rates had made  arrangements with high volume service providers & for the sole purpose of extracting inflated [access charges] due to the distance and volume of traffic. Order ¶ 24 (internal quotation marks omitted). As a result of these arrangements,  billions of minutes of access arbitrage every year [were] being directed to access-stimulating [carriers] using expensive tandem switching providers for conference calling and other services. Id. ¶ 20. Although these services were  offered for  free to the                                                              4 Petitioners also complain that the FCC gave  no explanation why its new access stimulation definition  should not apply to larger, non-rate-of-return incumbent local exchange carriers, known as price cap carriers. Mot. 17. But there was no reason to apply the definition to those carriers. The record contained no evidence that those incumbent carriers were engaged in schemes to intentionally inflate the volume of long-distance calls to their customers. USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 14 of 26 14   callers, the record showed that the  annual cost of the services was  $60 million to $80 million in access charges. Ibid. The FCC found that all  long-distance customers are forced to bear that cost, ibid.,  paying for services that the vast majority will never use. Id. ¶ 25. Although petitioners make the unsubstantiated claim that  free conferencing users pay their own way (Mot. 18-19), nothing in the record refutes the FCC s finding that all long-distance customers subsidize access-stimulating services that  only a small proportion of consumers use. Order ¶ 20.5 In addition, record evidence suggested that  the staggering volume of minutes generated by [access stimulation] schemes could  result in call blocking and dropped calls. Order ¶ 3. For example, due to the network congestion triggered by an access stimulation scheme in Tampa, some  customers were unable to make regular calls and may not have been able to reach 911. Sprint May 16, 2019 Ex Parte at 7-8.6 The risk of such service disruptions further justified the Commission s efforts to curb these arbitrage schemes.                                                              5 See Stay Denial Order ¶ 12 (rejecting petitioners unsubstantiated claim that long-distance fees paid by users of free conferencing services are sufficient to cover the access charges associated with those services). 6 Available at https://ecfsapi.fcc.gov/file/10516158248327/Sprint%2018- 155%20Ex%20Parte%20May%2016%202019.pdf). USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 15 of 26 15   Petitioners assert that the Commission  did not obtain relevant data from [interexchange carriers]. Mot. 18. But their stay motion does not identify what additional information they believe the agency should have obtained. In any event, the Commission rejected the notion that  not enough data was submitted in the record. Order ¶ 66. It reasonably concluded that seeking more evidence would needlessly delay the adoption of rules to address an arbitrage problem that was already well documented. Id. ¶ 36. The decision not to seek more data fell well within the agency s broad discretion in conducting this proceeding. See 47 U.S.C. § 154(j); see also United States v. FCC, 652 F.2d 72, 90 (D.C. Cir. 1980) (the Commission  must decide when enough data is enough ). Petitioners contend that the Commission  disregarded their  expert s economic analysis because he did not consider the data that petitioners  implored the Commission to obtain from interexchange carriers. Mot. 18. Not so. The Commission discounted the economic analysis of petitioners expert because it  assume[d] away & the use of [access] charges to fund access stimulators operations and failed to  take into account the cost that access stimulators impose on larger networks and their subscribers. Order ¶ 31. Petitioners further assert that it was arbitrary for the agency to assume that its new rules would benefit consumers after petitioners  presented data demonstrating the FCC s 2011 reforms have not yielded lower long-distance rates USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 16 of 26 16   for consumers. Mot. 19. But as the Commission s staff explained when it denied the request for an administrative stay, petitioners data were  irrelevant or at best, tangentially relevant  because they  fail[ed] to control for the effects of access arbitrage, relevant reforms, and other issues. Stay Denial Order ¶ 11. Petitioners do not seriously dispute that  any increase in the price of long-distance service is partly attributable to the increased presence of access arbitrage. Ibid. The Commission cited  ample record data clearly demonstrating the costs that access stimulation imposes on [interexchange carriers] and their customers. Ibid.; see Order ¶¶ 9, 20, 22, 24. Those data fully justified the Commission s conclusion that its new rules would benefit consumers. D. The Commission Had Authority To Adopt The Rules This Court has held that the FCC has authority under 47 U.S.C. § 201(b) to prohibit access stimulation schemes. See All Am. Tel., 867 F.3d at 85; Farmers & Merchants, 668 F.3d at 721. The agency exercised that authority here, finding that  the practice of imposing tandem switching and tandem switched transport access charges on [interexchange carriers] for terminating access-stimulation traffic & is unjust and unreasonable under [Section] 201(b) & and is therefore prohibited. Order ¶ 92. Petitioners nonetheless assert that  the Order exceeds the Commission s jurisdiction in three independent ways. Mot. 20. These arguments lack merit. USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 17 of 26 17   Reciprocal Compensation. Petitioners argue that the Order  conflicts with the Communications Act s provisions concerning reciprocal compensation of carriers costs. Mot. 20 (citing 47 U.S.C. § 252(d)(2)(A)(i), 252(d)(2)(B)(i)). According to petitioners, the Order  deprives them  of access revenues without any reciprocal obligation on other carriers to accept traffic from petitioners. Mot. 21. That argument fails because the Order does not alter other carriers  reciprocal obligation to accept incoming calls delivered by access-stimulating carriers. To be sure, the Order makes access-stimulating carriers responsible for the cost of completing calls to their customers costs which they can pass along to those customers. Order ¶ 79. But the Tenth Circuit held that  reciprocal obligation under the Act can mean an obligation for carriers to complete calls without access charges, and to  recover their costs from their end-user customers rather than from other carriers. See In re FCC 11-161, 753 F.3d at 1113, 1128. Network  Edge. There is likewise no merit to petitioners contention (Mot. 21) that the Order usurps states authority to set the network  edge ( the points at which a carrier must deliver terminating traffic to avail itself of bill-and-keep ). See In re FCC 11-161, 753 F.3d at 1126.  Shifting the financial responsibility for the delivery of traffic to access-stimulating [carrier] end offices does not move the network edge or affect a state s ability to determine that edge. Order ¶ 105.  Under [47 U.S.C. §] 252(d)(2), states continue to enjoy authority to arbitrate USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 18 of 26 18   terms and conditions in reciprocal compensation, including  the edge of [carriers ] networks. In re FCC 11-161, 753 F.3d at 1126 (internal quotation marks omitted). This authority applies to all intercarrier compensation agreements, whether produced via negotiation, see 47 U.S.C. § 252(a), (e), or arbitration, see id. § 252(b), (c). The Order  does not interfere with any agreements governed by Section 252 or  affect a state s rights or responsibilities under Section 252 with respect to such agreements. Order ¶ 105. Taking. Petitioners argue that the Order violates the Fifth Amendment s Takings Clause. Mot. 21-22. This argument is baseless. In assessing whether a regulation effects a taking, courts examine (1) the  economic impact of the regulation on the claimant, (2) the extent to which the regulation interferes with  investment-backed expectations, and (3) the  character of the governmental action. Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). Petitioners fail to  satisfy the heavy burden of establishing  a regulatory taking under this three-factor test. Keystone Bituminous Coal Ass n v. DeBenedictis, 480 U.S. 470, 493 (1987). First, the economic impact of the new rules is not  likely to be so significant as to demonstrate a regulatory taking. Order ¶ 79. Petitioners remain  free to respond in a number of ways to mitigate any economic disadvantage the rules might cause,  such as by changing end-user rates & or by seeking revenue USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 19 of 26 19   elsewhere, for example, through an advertising-supported approach to offering free services. Ibid. Second, the rules do not upset  any reasonable investment-backed expectations. Order ¶ 80. For more than a decade, the FCC has put carriers on notice that it intended to take measures  to address problems associated with access stimulation. Ibid.; see id. n.263 (citing FCC orders on access stimulation dating back to 2007). If petitioners opted to invest in access arbitrage schemes, they did so at their own risk. Finally,  the character of the governmental action here cuts against a finding of a regulatory taking because the Order involves   adjusting the benefits and burdens of economic life to promote the common good,  not  a  physical invasion by government. Order ¶ 81 (quoting Penn Cent., 438 U.S. at 124). The Order advances  legitimate governmental interests by  discouraging inefficient marketplace incentives, promoting efficient communications traffic exchange, and guarding against implicit subsidies contrary to the universal service framework under 47 U.S.C. § 254. Ibid. II. Petitioners Have Not Shown Irreparable Injury This Court  has set a high standard for irreparable injury. Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006).  Such injury must be both certain and great, actual and not theoretical, beyond USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 20 of 26 20   remediation, and of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm. Mexichem Specialty Resins, Inc. v. EPA, 787 F.3d 544, 555 (D.C. Cir. 2015) (internal quotation marks omitted). To obtain a stay, petitioners  must provide proof that irreparable harm  is certain to occur in the near future. Wis. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985). Petitioners fail to meet this demanding standard. Petitioners Great Lakes and Northern Valley assert that the Order will destroy their businesses if they continue to serve high-volume customers. See Pet. Exh. FF ¶ 19; Pet. Exh. EE ¶ 23. As they concede, however, they can mitigate such harm by ending their relationships with high-volume customers. Pet. Exh. FF ¶ 20; Pet. Exh. EE ¶ 24. The CEOs of Great Lakes and Northern Valley have expressed their  view that even if these carriers drop high-volume customers, they will ultimately face financial ruin. Pet. Exh. FF ¶ 20; Pet. Exh. EE ¶ 24. Such unsubstantiated claims of harm are not sufficiently  certain to justify a stay. Wis. Gas, 758 F.2d at 674. Insofar as the CEOs believe that their companies will not be able to  function long-term under the rules (see Pet. Exh. FF ¶ 20; Pet. Exh. EE ¶ 24), their speculative assertions of future harm lack the imminence necessary to establish  a clear and present need for a stay. Mexichem, 787 F.3d at 555 (internal quotation marks omitted). USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 21 of 26 21   Essentially, Great Lakes and Northern Valley contend that they will suffer irreparable harm if they must bear the costs of complying with the new rules. But  ordinary compliance costs are typically insufficient to constitute irreparable harm. Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 115 (2d Cir. 2005); see also Am. Hosp. Ass n v. Harris, 625 F.2d 1328, 1331 (7th Cir. 1980) (same); A.O. Smith Corp. v. FTC, 530 F.2d 515, 527-28 (3d Cir. 1976) (same).  The other three petitioners, providers of  free conferencing services, argue that the new rules will force them  to move their traffic to an urban carrier that has higher originating volumes. Mot. 23; see Pet. Exh. GG ¶ 9; Pet. Exh. HH ¶ 9; Pet. Exh. II ¶ 9. Claiming that the Order s 45-day compliance period will not afford sufficient time to find another carrier and to relocate their conferencing equipment, these petitioners assert that  it is unavoidable that they  will experience a significant loss of customers at best and, much more likely, will be forced out of business. Pet. Exh. GG ¶ 12; Pet. Exh. HH ¶ 12; Pet. Exh. II ¶ 12. Those claims are wholly speculative. They ignore the possibility that petitioners could seek an extension of the compliance deadline through the FCC s waiver process. See 47 C.F.R. § 1.3. And even assuming that the rules will cause conferencing service providers to lose customers,  it is well settled that economic loss does not, in and of itself, constitute irreparable harm. John Doe Co. v. CFPB, 849 F.3d 1129, 1134 (D.C. Cir. 2017) (internal quotation marks omitted). USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 22 of 26 22   III. A Stay Would Harm Other Parties And The Public Interest A stay in this case would harm interexchange carriers and their customers. The new rules are reasonably designed to dismantle arbitrage schemes that impose unjust and unreasonable costs on both providers and consumers of long-distance telephone service. As a result of access arbitrage,  long-distance customers throughout the nation have been  forced to bear the costs of  free conferencing and other services that  only a small proportion of consumers use. Order ¶ 20. If a stay is granted, petitioners arbitrage schemes will persist, and interexchange carriers and their customers will continue to shoulder the cost of inequitable access charges artificially generated by petitioners access stimulation schemes. In addition, a stay would not serve the public interest. Access stimulation distorts competition  because access-stimulation revenues subsidize the costs of high-volume calling services, granting providers of those services a competitive advantage over companies that collect such costs directly from their customers. Order ¶ 26. Although roughly 75 million consumers use  free high-volume calling services, those services  are paid for by the more than 455 million subscribers of voice services across the United States, most of whom do not use high-volume calling services. Id. ¶ 25. Under the new rules,  valuable network resources & will no longer be assigned to such low-value use, and the waste caused by access stimulation will be eliminated. Id. ¶ 27. If the rules are stayed, USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 23 of 26 23   however, implicit subsidies and inefficiencies will continue to skew competition in the telecommunications market. A stay also increases the risk of network failures. If left unchecked,  the staggering volume of minutes generated by petitioners access stimulation schemes could  result in call blocking and dropped calls, including the disruption of 911 calls seeking emergency assistance. Order ¶ 3. Thus, even if petitioners could establish that the new rules will substantially harm them, the balance of the equities weighs heavily against a stay. USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 24 of 26 24   CONCLUSION For the foregoing reasons, the Court should deny the motion for stay. Respectfully submitted,  Thomas M. Johnson, Jr. General Counsel Ashley Boizelle Deputy General Counsel Richard K. Welch Deputy Associate General Counsel /s/James M. Carr James M. Carr Matthew J. Dunne Counsel Federal Communications Commission Washington, D.C. 20554 (202) 418-1740 November 14, 2019 USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 25 of 26 CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMIT Certificate of Compliance With Type-Volume Limitation, Typeface Requirements and Type Style Requirements . This document complies with the type-volume limit of Fed. R. App. P. (d)()(A) because, excluding the parts of the document exempted by Fed. R. App. P. (f): & this document contains words, or & this document uses a monospaced typeface and contains lines of text. . This document complies with the typeface requirements of Fed. R. App. P. (a)() and the type style requirements of Fed. R. App. P. (a)() because: & this document has been prepared in a proportionally spaced typeface using Microsoft Word in -point Times New Roman, or & this document has been prepared in a monospaced spaced typeface using with . s/ James M. Carr James M. Carr Counsel Federal Communications Commission Washington, D.C. 20554 (202) 418-1740 USCA Case #19-1233 Document #1815789 Filed: 11/14/2019 Page 26 of 26   CERTIFICATE OF FILING AND SERVICE I, James M. Carr, hereby certify that on November , , I filed the foregoing Opposition of Federal Communications Commission to Emergency Motion for Stay Pending Review with the Clerk of the Court for the United States Court of Appeals for the District of Columbia Circuit using the electronic CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. s/ James M. Carr James M. Carr Counsel Federal Communications Commission Washington, D.C. 20554 (202) 418-1740