Opinion for the Court filed by Chief Judge GINSBURG.
Verizon petitions for review of an order of the Federal Communications Commission denying the Company’s request that the Commission forbear from requiring it to unbundle and to lease certain elements of its network pursuant to § 271 of the Communications Act of 1934. The Commission had previously determined that incumbent local exchange carriеrs (ILECs), including Verizon, need not unbundle and lease those same elements under § 251 of the Act. Because the Commission failed adequately to explain its decision not to forbear, we grant Verizon’s petition for review.
I. Background
Under § 10 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, the Commission “shall forbear from applying any regulation or any provision [of the Act] ... to a telecommunications carrier or telecommunications service” if it determines
(1) enforcement of such regulation or provision is not necessary to ensure that the charges, practices, classifications, or regulations by, for, or in conneсtion with that telecommunications carrier or telecommunications service are just and reasonable and are not unjustly or unreasonably discriminatory;
(2) enforcement of such regulation or provision is not necessary for the protection of consumers; and
*1231 (3) forbearance from applying such provision or regulation is consistent with the public interest.
47 U.S.C. § 160(a)(1)-(3). The Commission must make its determination whether to grant or to deny a petition for forbearance within one year of receiving it, else the petition is deemed granted. Id. § 160(c). The Commission may, however, upon finding an extension is necessary in order to meet the requirements set out above, extend the one-year period by 90 days, as it did here.
As a Bell Operating Company (BOC), Verizon must satisfy the requirements of § 271 of the Act before it may provide interLATA (i.e., long distance) services. See 47 U.S.C. § 271. Those requirements include a “competitive checklist” setting out 14 conditions a BOC must satisfy when providing “access and interconneсtion” to competitive local exchange carriers (CLECs). 47 U.S.C. § 271(c)(2)(B). The four checklist items at issue in this case require the BOCs to provide CLECs with local loop transmission, transport, and switching, as well as nondiscriminatory access to certain network elements. See 47 U.S.C. § 271(c)(2)(B)(iv)-(vi) & (x). Section 251 of the Act sets out “interconnection” requirements with which аll telecommunications carriers, not only the BOCs, must comply. Section 251(d)(2) instructs the Commission to “consider, at a minimum, whether ... the failure [of an ILEC] to provide access to such network elements would impair” the ability of a CLEC to provide the services it seeks to offer. See 47 U.S.C. § 251(d)(2).
On July 29, 2002 Verizon petitioned the Commission “to forbear from apрlying items four through six and item ten of the Section 271 competitive checklist once the corresponding elements no longer need to be unbundled under Section 251(d)(2).” Verizon took the position in its petition for forbearance that “[w]here an element no longer meets the Section 251(d)(2) standard for unbundling, forbearance with resрect to the parallel checklist item is required by Section 10.”
In August 2003 the Commission “eliminate[d]” the unbundling requirement of § 251 with respect to most broadband network elements, in order to “mak[e] it easier for companies to invest in new equipment and deploy the high-speed services that consumers desire.”
See
Report and Order and Order on Rеmand and Further Notice of Proposed Rulemaking,
Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers,
CC Docket Nos. 01-338 et al., FCC 03-36, 18 FCC Red 16978 (Aug. 21, 2003)
(Triennial Review Order).
We upheld that part of the
Triennial Review Order
in
United States Telecom Ass’n v. FCC,
On October 24, 2003, one business day before expiration of the 90-day extension of the time for the Commission to act upon Verizon’s July 2002 petition, Verizon submitted an ex parte letter to the Commission, as authorized by 47 C.F.R. §§ 1.1200, 1.1206. The letter stated:
[Although Verizon’s petition originally requested forbearance with respect to all elements that do not have to be unbundled under section 251, the broadband issue is sufficiently urgent that we hereby withdraw our request for forbearance with respect to any narrow-band elements that do not have to be unbundlеd under section 251. Specifically, the portion of the forbearance petition that remains pending relates to the broadband elements that the Commission has found [in the Triennial Review Order] do not have to be unbundled under section 251, including fiber-to-the-premises-loops, the packet-switched fea *1232 tures, functions and capability of hybrid lоops, and packet switching.
(Emphasis in original.) Along with its letter, Verizon submitted a 19-page memorandum detailing the reasons it maintained the Commission was required to forbear from requiring it to unbundle broadband elements pursuant to § 271.
On October 27, 2003, the last day of the 90-day extension period, the Commission denied Verizon’s petition for forbearance, stating in relevant part:
We find that Verizon’s October 24 Ex Parte Letter abandoned the core legal rationale underlying its Petition and substituted a wholly different argument for forbearance. We therefore deny Verizon’s initial Petition because the principal argument for the relief initially requested was rendered moot by the Triennial Review Order and because Verizon substituted a nеw theory of relief. In light of this substitution, we choose to treat Verizon’s October 24 Ex Parte Letter as a new forbearance petition.
As “a new forbearance petition,” Verizon’s ex parte letter triggered a new one-year period for consideration, and the Commission established a new schedule for comments accordingly. Verizon now petitions the court for review of the October 27 order.
II. Analysis
Verizon first complains the Commission violated § 10(c) of the Communications Act by failing to rule on the merits of its petition for forbearance within the statutory period. As mentioned above, a petition for forbearance is deemed granted under § 10(c) if the Commission does not deny it within one year (or, as here, one year plus 90 days) after it receives the petitiоn. See 47 U.S.C. § 160(c). Verizon also argues that by treating its ex parte letter of October 24, 2003 as a new forbearance petition, the Commission unlawfully extended the review period beyond the statutory deadline.
As the Commission first correctly points out, its decision of October 27, although not on the merits, was timely; nothing in the Act requires that the Commission make a deсision on the merits of an application that is defective procedurally — particularly if the defect arises only one day before the deadline for a decision. The significant question, therefore, is not whether the Commission violated the statutory deadline, but whether, as Verizon also argues, the Commission’s explanаtion for denying Verizon’s petition was inadequate and its decision therefore “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
See
5 U.S.C. § 706(2)(A);
see also Cellular Telcoms. & Internet Ass’n v. FCC,
The Commissiоn denied Verizon’s petition on two independent grounds: (1) In its ex parte letter of October 24 ‘Verizon substituted a new theory of relief’; and (2) “the principal argument for the relief initially requested was rendered moot by the Triennial Review Order.” With respect to the ex parte letter, Verizon argues it neither “abandoned the core legal rationale underlying its Petition,” nor “substituted a wholly different argument for fоrbearance,” as the Commission put the matter in the order. On the contrary, Verizon argues that in the letter it “reiterated the basic rationales for forbearance” (emphasis in original); the broadband issues raised in the ex parte letter addressed the same “policy concerns that Verizon ... had aired, and the FCC [had] accepted, in the *1233 Triennial Review proceeding.” The Commission responds by pointing out that Verizon had made no mention of broadband in its July 2002 petition whereas in the ex parte letter it “relied upon the specific finding relating to broadband elements in the Triennial Review Order” issued in August 2003.
The Commission’s assertion that Verizon’s ex parte letter “abandoned the core legal rationale underlying its Petition” makes no apparent sense when one realizеs that broadband elements are merely a subset of the network elements for which Verizon requested forbearance in its July 2002 petition. In that petition Verizon had asked the Commission, without qualification or limitation,
to forbear from applying items four through six and ten of the Section 271 competitive checklist once the cоrresponding elements no longer need to be unbundled under Section 251(d)(2).
This request was applicable on its face to broadband as well as to other network elements. Yet the Commission in its brief claims
the issue raised by Verizon's ex parte forbearance request was very different [from the one it raised in its July 2002 petition]: whether the Commission should exercise its section 10 fоrbearance authority not to apply specific section 271 competitive checklist items to broadband elements that the Commission had found no longer subject to section 251 unbundling requirements.
At the very least, it is not apparent — and the Commission certainly did not explain in the order denying Verizon’s petition — why or how “the issue rаised by Verizon’s ex parte forbearance letter was,” in any meaningful way, “very different” from, rather than a mere narrowing of, its petition for forbearance.
In its brief the Commission offers additional bases of support for its decision to treat Verizon’s
ex parte
letter as a new petition. It points to § 4(j) of the Communications Act, which authorizes the Commission to “conduct its proceedings in such a manner as will best conduce to the proper dispatch of business and to the ends of justice,” 47 U.S.C. § 154(j), and to § 4(j), which authorizes the Commission to “perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this Act,”
id.
§ 154(i). No doubt the Commission is authorized to order its own proсeeding as it reasonably sees fit, but that authority does not extend to dispensing with a reasoned explanation for its decisions. Perhaps the cited provisions would have formed a proper basis for deferring a decision upon an issue first raised — if indeed a new issue was raised — only one business day before the statutory deadline, but nowhere in the order did the Commission suggest Verizon’s
ex parte
letter was untimely filed. Because the foregoing reasons formed no part of the Commission’s rationale, and because they cannot reasonably be linked to either of the two reasons the Commission did give in denying Verizon’s petition, they “cannot provide the basis for upholding the FCC’s decision.”
AT&T Corp. v. FCC,
At oral argument Commission counsel argued for the first time the relief Verizon requested in its petition for forbearance was necessarily limited to instances where “evidence ... supports a finding of no impairment for a particular network element.” Because there was no such finding with respect to hybrid loops,
see Triennial Review Order
¶ 286, which were included among the broadband elements expressly mentioned in the memorandum Verizon submitted in support of its
ex parte
letter, counsel claimed Verizon abandoned in its entirety the theory underlying its initial
*1234
petition for forbearance. Although we do not ordinarily consider a claim or defense raised for the first time at oral argument,
see United Distrib. Cos. v. FERC,
Having failed to provide an adequate explanation of how Verizon’s ex paHe letter “abandoned the core legal rationale underlying its Petition” rather than, as Verizon claims, merely “narrow[ed to broadband] and simplified the range of issues” coverеd in the petition, the Commission’s decision denying Verizon’s petition must stand or fall upon its alternative holding that Verizon’s “principal argument for [forbearance] was rendered moot by the Triennial Review Order.” In support of this claim the Commission relied upon the following passage in the Triennial Review Order:
[T]he requirements of section 271(c)(2)(B) establish an independent obligаtion for BOCs to provide access to loops, switching, transport, and signaling regardless of any unbundling analysis under section 251.... [T]he plain language and the structure of section 271(c)(2)(B) establish that BOCs have an independent and ongoing access obligation under section 271. Checklist item 2 requires compliance with the general unbundling obligatiоns of section 251(c)(3) and of section 251(d)(2) which cross-references section 251(c)(3). Checklist items 4, 5, 6, and 10 separately impose access requirements regarding loop, transport, switching, and signaling, without mentioning section 251.
¶¶ 653-54; see also id. ¶ 655.
Verizon acknowledges that its obligations under § 271 are, per the excerpt above, independent of its corresponding obligations under § 251 and therefore persist after the latter have been eliminated, but it argues that is a “reason to grant forbearance” from § 271, not a ground for dismissing its request for forbearance as moot: “There can be no forbearance until the Commission first establishes the existence of a statutory obligаtion to forbear from.” (Emphasis in original.) According to Verizon, the disincentive to pursue “research and development” that ILECs face when forced to unbundle certain network elements — specifically broadband elements — under § 251 is no different from the disincentive BOCs, being a subset of ILECs, likewise face when required to un-bundle those samе network elements under § 271. The Commission responds by claiming it did not deem moot Verizon’s request that it forbear from applying § 271 to broadband elements; rather, the Commission viewed Verizon’s petition as addressing only whether “the removal of the section 251 unbundling requirement for a particular element by itself mandates forbearance frоm the corresponding [checklist] requirement under section 271,” an issue it had already resolved in the Triennial Review Order.
As an initial matter, we note the Commission’s claim that the
Triennial Review Order
rendered Verizon’s argument moot
*1235
is in some tension with its disclaimer in that very order: “We do not address Verizon’s forbearance petition in this
Triennial Review
proceeding.”
III. Conclusion
For the foregoing reasons, Verizon’s petition for review is granted. This matter is remanded to the Commission either to grant Verizon’s petition for forbearance or to provide a reasoned explanation for denying it. Verizon’s further request that the Commission be required to issue a new order within 30 days, based upon the record as it stands now — that is, as supplemented by the filings of Verizon and other interested parties since the Commission issued the order now under review — is denied. Lest the intention of the Congress in § 10 to expedite forbearance decisions be set to naught, we would have required the Commission to issue a new order within 30 days had Verizon itself not made clear that it wants a decision based upon the record compiled through the present. It would be inappropriate, however, for the court to require so expedited a decision based upon a record that, as far as we can tell, is not yet closed and may, in any event, require the Commission to consider much material that was not before it as of last October 27.
So ordered.