D.C. Circuit Denies FCC Forbearance Challenge

Dingell, Markey Bill Would Remove ‘Deemed Granted’ Provision

The D.C. Circuit denied a challenge to the Federal Communications Commission's forbearance procedure.

Cable and telephone companies can seek an end to some Title II (telephone and telecommunications) regulations if they can show that there is sufficient competition to render those regulations unnecessary. If the FCC does not act on those requests by a certain deadline, they are "deemed granted" by default.

Sprint Nextel challenged a forbearance petition filed by Verizon Communications that resulted in a two-two tie and the FCC's granting of the regulator relief because its inaction resulted in that "deemed granted" finding. Sprint Nextel argued that commission inaction should have resulted in denial of forbearance because it constituted a commission action -- a deadlock on whether to grant or not.

More broadly, the phone company challenged the entire forbearance regime, saying that the "deemed granted" mechanism was arbitrary and capricious.

The D.C. Circuit said the decision was not arbitrary and capricious because the 2-2 tie was not a decision and, in that circumstance, it was Congress that said the petitions should be deemed granted, so it was Congress' decision, not the FCC's.

The tie stemmed from a time when the commission had only four commissioners, two Republicans and two Democrats.

Reps. John Dingell (D-Mich.) and Ed Markey (D-Mass.) said the decision "casts the spotlight on the need to reform the forbearance process to ensure written opinions and to eliminate the ability of a forbearance petition to be ‘deemed granted’ simply by agency inaction."

The FCC opened a proceeding to look into the forbearance process, and Markey and Dingell -- chairmen of the House Energy & Commerce Committee and Telecommunications & Internet Subcommittee, respectively -- introduced a bill in October that would remove "deemed granted" from the Communications Act.