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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) ) Southwestern Bell Telephone ) Company ) SWBT Transmittal ) Nos. 2646, 2647, 2649, ) and 2656 Tariff F.C.C. No. 73 ) ORDER ON REVIEW Adopted: October 8, 1997 Released: October 14, 1997 By the Commission: I. INTRODUCTION 1. In this Order, we deny Southwestern Bell Telephone Company's (SWBT) Applications for Review (Applications) of four Common Carrier Bureau (Bureau) Orders issued on July 16, July 25, and September 8, 1997. We find that the Bureau acted properly by granting in part SWBT's requests for confidential treatment of cost support data filed with SWBT Transmittal Nos. 2646, 2647, 2649, and 2656, and imposing protective orders that allow limited access to SWBT's cost support data during tariff review while safeguarding these data from widespread disclosure. We further find that the protective orders adopted by the Bureau for all four tariff filings adequately address SWBT's concerns regarding access to its cost support data, and that no modifications to the protective orders are therefore necessary. II. BACKGROUND 2. On July 16, July 25, and September 8, 1997, the Bureau issued the Confidentiality Orders, which denied in part and granted in part SWBT's requests for confidential treatment of cost data filed in support of SWBT Transmittal Nos. 2646, 2647, 2649, and 2656. All four transmittals remain pending. In the Confidentiality Orders, the Bureau held that good cause did not exist to waive the rules requiring the public availability of SWBT's cost support data, but recognized the need to protect the data from widespread disclosure. The Bureau noted that previously it had granted requests for confidential treatment where good cause was shown by waiving the requirement that materials filed in support of tariff revisions be made publicly available. It found, however, that "the better approach, in circumstances where the party demonstrates that the support data should be afforded confidential treatment, is to allow disclosure of the support data subject to a protective order that will guard against improper dissemination or use of the data." The Bureau ruled, therefore, that the cost support data for which SWBT sought confidential treatment would be made available only to parties that executed an appropriate protective order. 3. The Bureau adopted, for this purpose, the same standard protective order that we had previously adopted for use in the context of streamlined tariff filings. Under the streamlined tariff procedures, implemented by this Commission pursuant to the Telecommunications Act of 1996, a tariff filing proposing a price increase or a change in the terms of a tariff becomes effective on 15 days' notice, unless it is suspended during that 15 day period. The streamlined procedures present an alternative to the standard review procedures. Under standard procedures a new or revised tariff must be filed with the Commission 45 days in advance of its effective date. In designing the new streamlined procedures, we adopted a protective order for use when a carrier seeks and is granted confidential treatment of cost support data. 4. SWBT filed Transmittal Nos. 2646, 2647, 2649, and 2656 pursuant to the standard, non- streamlined rules. Therefore, its requests for confidential treatment of the cost support data did not automatically trigger the application of the protective order under the streamlined procedures. The Bureau nevertheless adopted the same protective order for use with these transmittals, finding that treatment of confidential data should be the same regardless of which tariff review mechanism the carrier elects. 5. On July 23, August 1, and September 15, 1997, SWBT filed its Applications for review of the Confidentiality Orders, asking us to reverse the Orders. On August 7, August 28, and September 17, 1997, respectively, MCI Telecommunications Corporation (MCI) filed Oppositions to the Applications for Review (MCI Oppositions). On September 2, September 9, and October 1, 1997, respectively, SWBT filed Replies to MCI's Oppositions to SWBT's Applications for Review (Replies). For the reasons set forth herein, we deny SWBT's Applications, and affirm the Bureau's Confidentiality Orders in all respects. II. PLEADINGS 6. SWBT alleges that the Bureau has no authority to use the standard protective order as adopted in the Streamlined Tariff Filing Order unless the party files a tariff under streamlined procedures. SWBT argues that in the Streamlined Tariff Filing Order we decided to impose a protective order because of the "limited time available for streamlined tariff review." According to SWBT, we specifically recognized that the time limits under the Freedom of Information Act (FOIA) exceed the time available for review of streamlined tariff filings made by Local Exchange Carriers (LECs), and we, therefore, found that a protective order should be used in filings submitted pursuant to streamlined tariff rules. SWBT argues that for tariffs not filed under the streamlined procedures, a short time frame is not an issue, and that the Commission did not intend for a protective order to be imposed in absence of this time constraint. SWBT claims that extending the use of a protective order to standard tariff filing procedures is overreaching, because it forces SWBT to disclose information under circumstances never contemplated by the Commission. 7. According to SWBT, the Confidentiality Orders improperly interferes with SWBT's rights under the FOIA. SWBT alleges that it considers a number of criteria including the confidential status of its cost support data in deciding whether to file a tariff pursuant to streamlined or non-streamlined procedures. SWBT argues that, by imposing a standard protective order for non-streamlined tariff filings, the Bureau has effectively eliminated SWBT's right to file confidential information under the exemptions to the FOIA. 8. In addition, SWBT contends that the Bureau acted prematurely, given the pendency of two other Commission proceedings that will address the issues that are raised when a party seeks confidential treatment of data filed to support a tariff filing. SWBT notes, for example, that it has pending a petition for reconsideration (Petition) of the Streamlined Tariff Filing Order. SWBT also cites our pending Notice of Proposed Rulemaking (NPRM) in GC Docket No. 96-55, which examines the current policy concerning the treatment of confidential information submitted to the Commission. SWBT contends that we should not release any confidential information until the Commission rules on SWBT's Petition and concludes consideration of new policies regarding treatment of confidential information in GC Docket No. 96-55. 9. SWBT also argues that the protective orders are deficient. SWBT complains that the protective orders do not prohibit parties from making copies of confidential data and keeping copies of the data in their possession. Further, SWBT alleges that the protective orders do not adequately address how to treat data for which one of SWBT's vendors require confidential treatment. According to SWBT, the agreements between SWBT and its vendors may not permit disclosure of pricing information even under the terms of a protective order. Finally, SWBT argues that the protective orders are insufficient because they do not recognize different levels of confidentiality, arguing that protective orders are only effective "if they afford the level of protection required by specific categories of confidential information." 10. MCI contends that the issue is not whether the Bureau exceeded its authority under the FOIA by acting on SWBT's requests for confidential treatment of cost support data. MCI argues that section 0.459(d) of the Commission's Rules gives the Bureau the authority act upon, and either grant or deny, in full or in part, a FOIA request. The error in the Confidentiality Orders, according to MCI, is that the Bureau granted confidential treatment to SWBT's cost support data. MCI argues that the Communications Act of 1934, as amended (the Act), mandates that tariffs and all information filed with tariffs be made available to the public. MCI notes that the Act provides the public with a crucial role in the tariff review process, and contemplates that the public will assist the Commission in discharging its duties to ensure that dominant carrier tariffs are lawful. According to MCI, SWBT's requests for confidential treatment nullify the basic purposes of the Act. MCI therefore contends that SWBT's Applications for Review should be rejected. 11. MCI's Oppositions also take issue with previous Bureau orders that granted SWBT a waiver of the requirement that its cost support data be filed on the public record. MCI contends that such earlier waivers violate the Administrative Procedure Act (APA), and are inconsistent with prior precedent. 12. SWBT's Replies allege that MCI's Oppositions do not address the "eradication" of SWBT's rights to file under the exemptions to the FOIA. Further, while acknowledging "the Bureaus [sic] authority to act on FOIA requests," SWBT states that the basis for its challenge is the alleged failure of the Confidentiality Orders to address SWBT's requests for confidential treatment. The Bureau, argues SWBT, did not make a determination as to whether the preponderance of the evidence made a case for non-disclosure pursuant to the Commission's Rules and the FOIA. III. DISCUSSION 13. SWBT's primary argument is centered upon an alleged violation of its rights under the FOIA. Specifically, SWBT alleges that the Bureau has effectively prevented SWBT from exercising its "right" to file confidential information under the FOIA exemptions. SWBT appears to believe that it has a legal right to file tariff cost support data under one or more of the exemptions to the FOIA. SWBT presents no legal theory and cites no authority for this proposition. 14. The Supreme Court, in Chrysler Corporation v. Brown, 441 U.S. 281 (1979), held that the FOIA does not afford a party any right to enjoin agency disclosure. The Supreme Court held that the FOIA is "exclusively a disclosure statute." According to the Supreme Court: Congress appreciated that, with the expanding sphere of governmental regulation and enterprise, much of the information within Government files has been submitted by private entities seeking Government contracts or responding to unconditional reporting obligations imposed by law. There was sentiment that Government agencies should have the latitude, in certain circumstances, to afford the confidentiality desired by these submitters. [Footnote omitted] But the congressional concern was with the agency's need or preference for confidentiality; the FOIA by itself protects the submitters' interest in confidentiality only to the extent that this interest is endorsed by the agency collecting the information. 15. We find that the Chrysler holding makes clear that SWBT's has no "right" to file information under the exemptions to the FOIA. SWBT also misconstrues the effect of the exemptions contained in the FOIA. Its argument implies that it not only has a right to file confidential data under these exemptions, but that these exemptions are mandatory. SWBT is incorrect. In Chrysler v. Brown, the Supreme Court held that, although "[e]nlarged access to governmental information undoubtedly cuts against the privacy concerns of nongovernmental entities, and as a matter of policy some balancing and accommodation may well be desirable . . . we simply hold here that Congress did not design the FOIA exemptions to be mandatory bars to disclosure." Since the exemptions have been deemed permissive rather than mandatory, this Commission can exercise its discretion to allow limited access to the cost support information, even if the information is deemed to fall within one of the exemptions. 16. In a "reverse-FOIA" action, a plaintiff, after submitting information to a government agency, attempts to enjoin public disclosure of that information. A reverse-FOIA plaintiff's sole basis for relief, according to the Supreme Court, is not the FOIA itself, but the APA. That is, an agency's decision to allow limited access to information for which a party has sought confidential treatment will be set aside by a reviewing court only if the agency's decision is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Here the Bureau's decision was entirely reasonable. 17. We also are not persuaded by SWBT's contentions that our rationale for imposing a protective order for use in the context of streamlined tariff filings is inapplicable to standard tariff filings. SWBT erroneously asserts that we adopted a protective order for purposes of the pre-effective review of streamlined tariff filings solely because the Bureau does not have enough time to issue written determinations concerning whether data are entitled to confidential treatment under the FOIA and still complete the tariff review process. In the Streamlined Tariff Filing Order, however, we took into account not only time constraints, but also our precedent of using protective orders to "protect competitively sensitive material from public disclosure, while allowing interested parties to have access to potentially decisional documents." We thus sought to encourage meaningful participation in the tariff review process by all interested parties. We agree with the Bureau that this same rationale justifies the use of a protective order in non-streamlined tariff proceedings. 18. We reject SWBT's argument that the Bureau had no authority to extend the use of the protective order we adopted in the Streamlined Tariff Filing Order. The Bureau addressed the requests for confidentiality before it and imposed what it considered to be the most appropriate protective order under the circumstances. Our rules delegate to the Bureau authority to address such matters. SWBT does not argue that the Bureau could not impose any protective order; SWBT only argues that the Bureau could not extend the use of the specific protective order we adopted in the Streamlined Tariff Filing Order. We placed no such limitation on the use of the protective order adopted in the Streamlined Tariff Filing Order and we decline to do so now. We find that it was entirely appropriate for the Bureau to adopt the same protective order we approved in the Streamlined Tariff Filing Order. 19. In addition, we reject SWBT's contention that we should not consider these issues or allow limited access to the information pursuant to a protective order while SWBT's Petition for Reconsideration of the Streamlined Tariff Filing Order and the NPRM in GC Docket No. 95-55 are pending. We have the authority, when addressing requests for confidentiality, to impose or modify protective orders on a case-by-case basis as circumstances dictate. That is what the Bureau did here. Further, no matter how we ultimately resolve those two proceedings, until that time the Bureau must handle, in a timely manner, confidentiality requests associated with tariff filings, especially where, as here, they affect tariffs that absent further action will shortly be going into effect. Thus, we find the Bureau's actions to be consistent with current Commission policy. 20. We also reject SWBT's argument contained in its Replies that the Bureau failed to address SWBT's requests for non-disclosure. Section 0.459(d) of our rules states that the Bureau is directed to grant a request for confidentiality if the requesting party presents, by a preponderance of the evidence, a case for non-disclosure. The Confidentiality Orders show that the Bureau considered SWBT's requests for non-disclosure. Specifically, the Bureau found that SWBT's showing did not justify a complete ban on disclosure of SWBT's support data, but that SWBT had shown good cause to justify the imposition of protective orders to safeguard SWBT's data. The absence of the exact words "by a preponderance of the evidence" does not connote that the Bureau failed to consider SWBT's request for non-disclosure under the appropriate standards. In fact the text of the orders demonstrates otherwise. For instance, the Bureau specifically stated that its result derived from an approach of considering "separately each request for confidentiality under section 0.459 of our rules and tailor[ing] any relief to the circumstances presented." We find that the text of the Confidentiality Orders does not support SWBT's allegation. 21. SWBT also complains that several terms in the protective orders fail to provide adequate protection of the data against disclosure. SWBT's first concern is that the protective orders do not prohibit parties from making copies of data for which confidential treatment is sought and keeping copies of the data in their possession. We believe a ban on copying would be unduly burdensome on parties reviewing cost support information. The protective order instead requires that the reviewing party log and track all copies. It is a common provision in protective orders to allow parties to keep in their possession copies of data for which confidential treatment is sought. SWBT does not identify a specific harm that it fears may result from permitting parties to obtain copies of the data pursuant to the protective orders, and we find that, in any case, the protective orders provide SWBT with sufficient protection. For example, the protective orders provide that confidential information: [S]hall not be used by any person granted access under [the] Protective Order for any purpose other than for use in this proceeding (including any subsequent administrative or judicial review), shall not be used for competitive business purposes, and shall not be used or disclosed except in accordance with [the] Order. The protective orders also provide that sanctions for violations include disbarment from Commission proceedings, forfeitures, cease and desist orders, denial of further access to information under Commission protective orders and civil remedies in law and equity. We find that these provisions, among others, sufficient to protect the confidentiality of SWBT's information regardless of whether a party makes copies of the information. We have no basis for assuming, as SWBT offers none, that third parties will not abide by the terms of our protective order that they will sign, and use or release the confidential information for improper purposes. 22. SWBT also contends that the protective order does not provide sufficient protection to vendors who request that information filed with the Commission be kept absolutely confidential. As explained above, we find that the protective orders provides SWBT and its vendors with substantial protection, and neither SWBT nor any other party has adequately explained why these protections are insufficient. We also find unpersuasive SWBT's contention that we should not require limited access to this information pursuant to the protective orders because its vendor agreements prohibit such disclosure of certain information. Our pricing rules require that LECs provide cost data in certain situations, such as for new services, to ensure that their rates are "just and reasonable" pursuant to section 201 and that such cost information generally be made available publicly. Although many tariff revisions of price cap LECs require no cost data, we require the filing of such data where important and necessary. We find it unreasonable to forgo review of those data, or their availability to third parties subject to a protective order, on the basis that SWBT has negotiated certain agreements with vendors. 23. SWBT's last concern regarding the terms of the protective orders is that they do not recognize different levels of confidentiality. In the Streamlined Tariff Filing Order, we found that our protective order affords adequate protection even for highly sensitive information. The burden in establishing the need for any confidential treatment is upon the requesting party. We find, therefore, in sum, that no modifications to the protective orders imposed by the Bureau pursuant to the Confidentiality Orders are warranted. 24. MCI argues in its Oppositions that the Bureau should not have granted SWBT any form of confidential protection for its information. MCI, however, did not file its own Applications for Review of the Bureau's Orders. Nor did it request in its Oppositions that we overturn the Bureau's decisions to impose protective orders. It only requested that we deny SWBT's Applications, which we have done. No further action on our part is warranted in considering MCI's Oppositions. MCI's other arguments presented in its Oppositions are based upon its own applications for review of other Bureau orders in which the Bureau waived the requirement that SWBT's cost support data be filed in the public record pursuant to several tariff filings made by SWBT. These applications filed by MCI are outside the scope of this particular proceeding, and will not be addressed at this time. IV. ORDERING CLAUSES 25. Accordingly, IT IS ORDERED, That, pursuant to pursuant to Section 1.115(a) of the Commission's rules, 47 C.F.R.  1.115(a), that the Applications for Review filed by SWBT are DENIED. 26. IT IS FURTHER ORDERED, That, pursuant to section 0.459(g) of the Commission's rules, SWBT will be afforded five (5) working days in which to seek a judicial stay of this ruling. 27. IT IS FURTHER ORDERED, That the Common Carrier Bureau shall, upon release of this order, furnish immediate notice by telephone of our determination and of the time for seeking a judicial stay to SWBT, and follow up by serving a copy of this order on SWBT. 28. IT IS FURTHER ORDERED, That the Common Carrier Bureau is authorized to allow access to the cost support data subject to a protective order on the sixth working day following notice of this order to SWBT, unless SWBT has sought a judicial stay. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary