Ameren Corp. v. Federal Communications Commission
865 F.3d 1009
| 8th Cir. | 2017Background
- Section 224 of the Communications Act gives the FCC authority to set “just and reasonable” pole-attachment rates for cable and telecommunications providers; §224(d) sets bounds for cable rates and §224(e) prescribes apportionment rules for telecommunications rates.
- Historically the FCC computed the Cable Rate and the Telecom Rate using the same cost definition (net cost of a bare pole × carrying charge), but the Telecom Rate typically ran higher because §224(e) allocates unusable space differently.
- In April 2011 the FCC reinterpreted “cost” in §224(e) (66% for urban poles, 44% for non-urban) to approximate parity between Cable and Telecom Rates; the D.C. Circuit upheld that interpretation in American Electric Power.
- In November 2015 the FCC replaced the urban/non-urban approach with a sliding scale tying “cost” to the area-average number of attachers (66% for 5 attachers, 56% for 4, 44% for 3, 31% for 2, with interpolation for non-whole averages) to further equalize rates and prevent disparities across jurisdictions.
- Utilities (Petitioners) challenged the November 2015 Order, arguing §224(e)’s use of “cost” must mean fully allocated costs and that the FCC’s change was unlawful; the petition sought judicial review in this court.
- The court reviewed the FCC’s interpretation under Chevron and denied the petition, holding §224(e)’s term “cost” is ambiguous and the FCC’s reinterpretation is reasonable and not arbitrary or capricious.
Issues
| Issue | Petitioners' Argument | FCC / Respondents' Argument | Held |
|---|---|---|---|
| Proper meaning of “cost” in §224(e) | “Cost” means fully allocated costs of a pole; FCC cannot apportion fractions | §224(e) is ambiguous; FCC may define “cost” to achieve just/equitable outcomes and reduce market distortions | Court: Ambiguous term; FCC’s interpretation is reasonable and permissible under Chevron |
| Whether §224(e) must use same cost definition as §224(d) | Statute requires distinct upper bound and thus same cost concept; FCC’s change conflicts with congressional scheme | §224(d) and §224(e) serve different functions; ambiguity allows different cost definitions | Court: No contradiction; statute permits divergence; §224(e) not rendered superfluous |
| Whether November 2015 Order is arbitrary and capricious (APA) | FCC failed to justify that equalizing rates promotes broadband expansion; record insufficient | FCC had policy reasons (avoid deterring broadband, interstate/regulatory disparities); decisionmaking reasonable | Court: FAA claim fails—decision is reasonable and justified; not arbitrary/capricious |
| Whether petition is time-barred on factual challenges to April 2011 findings | Petitioners argue record lacks evidence to support broadband-promoting rationale | FCC notes challenges to April 2011 findings were untimely under 28 U.S.C. §2344 | Court: Some challenges time-barred; did not reconsider April 2011 factual findings here |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (Chevron deference framework governs agency statutory interpretation)
- Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467 (interpretive flexibility of the term “cost” in regulatory contexts)
- Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (agency interpretations reasonable need not be sole plausible reading)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (standards for agency policy changes)
- American Electric Power Serv. Corp. v. FCC, 708 F.3d 183 (D.C. Cir. upheld FCC’s April 2011 reinterpretation of “cost")
- Corley v. United States, 556 U.S. 303 (statutes construed to give effect to all provisions)
- Shays v. Federal Election Comm’n, 414 F.3d 76 (overlap between Chevron step two and arbitrary-and-capricious review)
- Chamber of Commerce v. Federal Election Comm’n, 76 F.3d 1234 (principles on administrative review)