Global TelLink v. FCC (Order)
15-1461
| D.C. Cir. | Aug 4, 2017Background
- FCC issued an Order capping interstate and intrastate inmate phone rates and prescribing cost methodologies (including use of industry-averaged cost data and excluding site commission payments from cost calculations).
- Multiple carriers and intervenors challenged the Order; consolidated appeals reached the D.C. Circuit (Global Tel*Link v. FCC and others).
- The D.C. Circuit panel majority vacated three aspects of the FCC Order: (1) intrastate rate caps as exceeding statutory authority, (2) use of industry-averaged cost data as arbitrary and capricious, and (3) wholesale exclusion of site commission payments as arbitrary and capricious.
- Wright Petitioners sought rehearing en banc, arguing the panel improperly substituted its own statutory interpretation for the agency’s (invoking Chevron concerns).
- The court issued a clarification/amendment: it had reviewed the FCC’s justifications and concluded the challenged provisions fail either because they exceed statutory authority or lack reasoned decisionmaking; thus no Chevron deference was warranted for those provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FCC may cap intrastate prison-phone rates under §276 of the 1996 Act | FCC: statutory authority supports intrastate caps to protect consumers and promote justice-related communications | Petitioners: statute does not authorize nationwide intrastate rate caps; exceeds agency authority | Court: Vacated intrastate caps as exceeding statutory authority; agency interpretation not entitled to deference |
| Whether use of industry-averaged cost data is permissible method for setting rates | FCC: averaging yields administrable, uniform standard for rate-setting | Petitioners: averaging lacks record support and fails reasoned explanation | Court: Vacated use of industry-averaged data as arbitrary and capricious |
| Whether FCC may wholly exclude site commission payments from cost calculations | FCC: excluding commissions reflects policy choice to lower consumer rates | Petitioners: exclusion lacks reasoned justification and arbitrary | Court: Vacated wholesale exclusion as arbitrary and capricious; remanded for further proceedings |
| Whether Chevron deference required despite agency’s failure to defend changed positions | Wright: panel should have deferred under Chevron and not impose its own construction | Respondents/FCC: agency offered interpretations but record/justifications weak | Court: Clarified no deference where agency action exceeds statutory authority or lacks reasoned decisionmaking; decision rests on statutory interpretation and APA review, not on imposing panel’s view |
Key Cases Cited
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (framework for judicial review of agency statutory interpretations)
- Sullivan v. Zebley, 493 U.S. 521 (1990) (agency actions exceeding statutory authority receive no deference)
- Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006) (agency interpretations beyond statutory authority are not owed Chevron deference)
- Miller v. Clinton, 687 F.3d 1332 (D.C. Cir. 2012) ("best reading" standard for statutory interpretation in review)
- Landmark Legal Found. v. IRS, 267 F.3d 1132 (D.C. Cir. 2001) (discussing standards for choosing the best reading of a statute)