The Federal Communications Commission filed a reply brief last week with the U.S. Court of Appeals for the Sixth Circuit which is causing a review of the commission’s wireless resale sunset decision.
Cellnet Communications Inc., a Detroit cellular reseller, brought a lawsuit against the commission in September. The Telecommunications Resellers Association joined the lawsuit as an intervener in support of Cellnet. AirTouch Communications Inc., rural Telecommunications Group and GTE Service Corp. filed in defense of the FCC.
The FCC last July ruled that wireless resale obligations for cellular and personal communications services carriers would expire five years after all broadband PCS licenses were awarded. The commission previously had mandated cellular resale.
In its reply to the court, the FCC said it has the discretion under the communications act to allow resale under certain conditions and exclude it under other competitive conditions, said Joel H. Levy, attorney with Cohn and Marks who represents Cellnet. The commission added that in light of expected increased wireless competition, it had decided that the cost of requiring resale outweighed any benefits that may occur in competition with resale, Levy added.
Cellnet had filed its brief in March with the court and concluded that the FCC’s withdrawal from its prior rule mandating cellular resale and its decision to terminate commercial mobile radio services resale rights in five years was “arbitrary and capricious, unlawful and unsupported by the evidence in the record. By terminating Cellnet’s mandatory resale rights some five years hence and without advancing any compelling public needs, at the very least, the first [Report and Order] will damage Cellnet’s cellular resale business and, at worst, spell the demise of that enterprise.” Cellnet has asked the court to declare invalid the new sunset rule adopted in the first Report and Order and to direct reinstatement of the unrestricted resale provisions of former FCC rules.
The FCC also gave paging carrier Conxus Communications Inc. a scolding for filing a brief of amicus curiae with the court under the Cellnet case. The commission stated it was improper for the paging company to argue a new issue with an amicus brief rather than filing an appeal, Levy said. Conxus already has filings with the FCC on the same legal point and did not allow Paging Network Inc., the company Conxus has filed a complaint against with the FCC, to be a party to the action, the commission argued.
Conxus, which plans to launch nationwide voice paging service based on InFLEXion technology, requested resale of Paging Network Inc.’s VoiceNow paging service in November. PageNet and Motorola Inc. have an exclusive licensing agreement on hardware for six months which forces Conxus to wait until Sept. 1 to launch service. PageNet denied Conxus’ request stating that FCC rules mandating reselling do not extend to paging carriers.
Conxus asked the FCC for a ruling that if PageNet offers resale to any other party, it must allow resale to Conxus pursuant to the communications act. This would constitute unreasonable discrimination since PageNet has publicly announced it plans to distribute VoiceNow through resale, Cellnet argued. It filed a complaint with the FCC in December and then filed a request for a declaratory ruling in March.
“The FCC has denied [the declaratory ruling] without prejudice because PageNet claims it is not allowing resale,” said Cellnet’s counsel George L. Lyon of Lukas, McGowan, Nace & Gutierrez. “If I can show PageNet is reselling, I can go back to the FCC.” The commission has yet to rule on Conxus’ complaint.
Conxus said its issues raised in the Amicus brief went beyond the FCC.
“That’s because the resale order under review appears to take the position that the commission can allow restrictions on resale,” said Lyon. “Our reading of cases we’ve cited leads to the conclusion that section 201 [of the communications act] requires PageNet to provide us that service and does not allow the service provider to restrict what we do with that service as long as it’s not publicly harmful.”
In regard to Conxus’ legal arguments, the commission argued again in its reply brief that no absolute right to resale exists under the communications act.
