Wide Voice, LLC v. FCC

“Under § 706, [the court] must determine whether the agency’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A)

In 2019, Respondent issued the Access Arbitrage Order declaring the practice of access stimulation (whereby local exchange carriers artificially inflated call traffic to collect higher fees from long-distance carriers) unjust and unreasonable under § 201(b) of the Communications Act of 1934. In response, Petitioner rearranged its call traffic patterns in tandem with two “closely related, non-independent entities” to enable it to continue to collect higher fees without technically violating the new regulation. AT&T and Verizon filed a complaint with Respondent, which found Petitioner intentionally rerouted traffic to evade the new regulation, and thus its actions were also unjust and unreasonable in violation of § 201(b). Petitioner then sought judicial review under § 706 of the Administrative Procedure Act. “Under § 706, [the court] must determine whether the agency’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Petitioner argued that Respondent lacked the requisite statutory authority to issue its finding without an explicit violation by Petitioner of its 2019 order. The Court reasoned that Respondent “need not establish new rules prohibiting the evasion of its existing rules to find a § 201(b) violation” because it has broad discretion to administer the Communications Act either through its rulemaking process or through an adjudicatory proceeding. Thus, the Court held Respondent properly exercised its delegated authority in issuing its decision that the Petitioner violated § 201(b). PETITION DENIED.