Court Backs FCC in Verizon Broadband Ruling

The ruling lets stand the FCC's 2006 decision to deregulate some of Verizon's commercial broadband obligations.

The Federal Communications Commission could not come to a clear consensus on Verizon's request to deregulate some of its commercial broadband business.

By government rules, the FCC's 2-2 vote in 2006 on Verizon's request meant that the commission actually approved it. On Dec. 7, a federal court upheld the decision, refusing to overturn it despite the deadlock vote.

The FCC's vote and the court's ruling drew the ire of some congressmen who are looking to revise the rules that allow for a tie vote to translate into an approval.

In 2006, Verizon filed a petition with the FCC to ease its broadband obligations to share lines with competitors and to make those lines available at "just and reasonable rates." Verizon argued in its petition that the level of local competition no longer justified the original rules.

The FCC was unable to come to a decision on the Verizon petition, deadlocking on a 2-2 vote along party lines. Republican commissioner Robert McDowell refused himself from the vote. Republicans on the panel, including FCC Chairman Kevin Martin, supported the petition in the name of deregulation while the two Democrats opposed it, claiming approval would lead to higher prices and fewer consumer choices for broadband service.

Under the arcane, bureaucratic rules of the FCC, the deadlock on the petition means the agency did not actually deny the petition, which, in turn, translates into approval of the petition. It's called forebearance.


Sprint Nextel and the New Jersey Division of Rate Counsel appealed the FCC decision, arguing that granting Verizon's petition without an actual decision is arbitrary and capricious.

The Court of Appeals for the District of Columbia agreed with the FCC.

"We … recognize that because a deadlocked vote is unreviewable, we lack jurisdiction in what may be the hardest cases—cases in which the forbearance petition raises such difficult issues that it produces an equally divided vote among the commissioners," the Dec. 7 ruling states. "Be that as it may, the statute is clear. A petition is deemed granted if the commission 'does not deny' it."

In the ruling, the court added that "ties … do not result in commission action. The commission did not grant Verizon's petition and it did not deny it. In those instances in which the commission does not deny a forbearance petition, Congress has spelled out the legal effect: the petition 'shall be deemed granted.'"


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At least two Democratic House members—John Dingell of Michigan and Ed Markey of Massachusetts—hope to change those rules. In October, Dingell and Markey introduced legislation to change the forbearance process at the FCC.

The proposed bill—the Proper Forbearance Procedures Act of 2007—would remove the "deemed granted" language from the Communications Act of 1934.

"The court found what we already knew: On the critical matter of protecting consumers, the FCC failed to do its job," Dingell and Markey said in a joint statement Dec. 7. "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."


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