ÿWPCå ûÿ2© ZB œ0¦ÿÿHP LaserJet 5Si/5Si MXXNô\  PXPÐЫXNô\  PXP(ÈhH Z‹6Times New Roman RegularXPXXXNô\  PXP(ÈhH Z‹6Times New Roman RegularXûÿ2Ûã#|xÑ#PX#ÑÐ È ÐÑ#XNô\  PXP#ÑŠÁà ì ÁUnited States Court of Appealsƒ ÁÁ Áà ìÁFOR THE DISTRICT OF COLUMBIA CIRCUITƒ Áàj ìÁArgued May 3, 1999 Decided June 8, 1999 ƒ Áàóì&ÁNo. 98-1468ƒ ÁàuìÁU S WEST Communications, Inc., et al., ƒ Áà@ì&ÁPetitionersƒ Áà¡ì)Áv.ƒ Áà&ìÁFederal Communications Commission and ƒ ÁàÆì!ÁUnited States of America, ƒ Áàíì&ÁRespondentsƒ Áàºì!ÁAT&T Corporation, et al., ƒ Áà&ì&ÁIntervenorsƒ Áàøì$ÁConsolidated with ƒ ÁàMì"ÁNos. 98-1469, 98-1471ƒ Áà'ìÁOn Petitions for Review of an Order of the ƒ ÁàèìÁFederal Communications Commissionƒ William T. Lake argued the cause for petitioners U S WEST Communications, Inc., andAmeritech Corporation. With him on the briefs were William R. Richardson, Jr., Lynn R.Charytan, Theodore A. Livingston, John E. Muench and Kaspar J. Stoffelmayr. Drew S. Days, III, argued the cause for petitioner Qwest Communications Corporation. Withhim on the briefs was Robert H. Loeffler. Kenneth W. Irvin entered an appearance. Richard K. Welch, Counsel, Federal Communications Commission, argued the cause forrespondents. With him on the brief were Joel I. Klein, Assistant Attorney General, U.S.Department of Justice, Catherine G. O'Sullivan and Adam D. Hirsh, Attorneys, Christopher J.Wright, General Counsel, Federal Communications Commission, Daniel M. Armstrong,Associate General Counsel, and John E. Ingle, Deputy Associate General Counsel. David W. Carpenter argued the cause for intervenors AT&T Corporation, et al. With him onthe brief were Peter D. Keisler, Mark C. Rosenblum, Roy E. Hoffinger, William Single, IV,Jerome L. Epstein, Donald B. Verrilli, Jr., Howard J. Symons, Sara F. Seidman, Albert H.Kramer, Andrew D. Lipman, Richard M. Rindler, W. Anthony Fitch, Brian Conboy, Thomas Jones and Robert M. McDowell. Genevieve Morelli and Michael J. Shortley, III, enteredappearances. John Thorne, Michael E. Glover, Mark L. Evans and M. Robert Sutherland were on the brieffor amici curiae Bell Atlantic Telephone Companies. Before: Silberman, Williams and Tatel, Circuit Judges. Opinion for the Court filed by Circuit Judge Williams. Williams, Circuit Judge: Until various conditions relating to competition in local("intraLATA") telephone service are satisfied, the Telecommunications Act of 1996 generallybars each Bell operating company ("BOC") from providing long distance ("interLATA") serviceoriginating in the region where it provides local service: ÂÂÂ` ` ` ÂNeither a Bell operating company, nor any affiliate of a Belloperating company, may provide interLATA services except asprovided in this section. ÀÀ 271(a) of the Communications Act, 47 U.S.C. ÀÀ 271(a). In May 1998 two of the BOCs, U S WEST and Ameritech, announced deals with QwestCommunications Corporation under which each BOC would market Qwest's long distanceservice to its customers. Each BOC employed a special label for the resulting package ("Buyer'sAdvantage" for U S WEST, "CompleteAccess" for Ameritech); each offered the customer"one-stop shopping" for both local and long distance, with all customer support (sign-up andservicing) through the BOC's own toll-free number. Qwest was to compensate each BOC with afixed fee for every customer obtained. Competitors of Qwest in the long distance market filed complaints in two federal districtcourts, which referred them to the FCC. The Commission invited the filing of administrativecomplaints, which duly followed. The Commission held adjudicative proceedings and ultimatelyissued the order under review here, finding the agreements in violation of ÀÀ 271. AT&T Corp. v.Ameritech Corp., 13 FCC Rcd 21,438 (1998). U S WEST, Ameritech, and Qwest petitioned forreview. The statutory term "provide" appears to us somewhat ambiguous in the present context. TheCommission believes that the disputed arrangements would give the two BOCs positions in themarket for local and long distance service that would greatly advantage them once they becomeexplicitly entitled to provide long distance service. Given the reasonableness of that belief, andits relation to the overall purposes of the Act, we find the Commission's interpretation herepermissible. ŒÁà$ì(Á* * *ƒ As we said, ÀÀ 271 says that a BOC may not "provide interLATA services except as providedin this section." Exceptions in the Act allow several forms of interLATA service immediately; the rest--including the sort of service at issue here--is permitted, on a state-by-state basis, onlyupon application and FCC approval pursuant to ÀÀ 271(d). See generally SBC CommunicationsInc. v. FCC, 138 F.3d 410, 412-14 (D.C. Cir. 1998) (explaining history and structure of ÀÀ 271(c)- (d)). Neither U S WEST nor Ameritech has received ÀÀ 271(d) approval for any state: each istherefore subject to the general ÀÀ 271(a) prohibition. Under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984), we of course honor Congress'sclearly expressed answer to the "question" confronted by the agency. See id. at 842-43. Petitioners claim that ÀÀ 271(a)'s ban clearly cannot apply to any marketing arrangements; as thetwo Qwest arrangements are a form of marketing, they reason that the Commission necessarilyerred in its expansive view of "provide." Petitioners base this claim on ÀÀ 272 of the Act. It requires that each BOC, even afterreceiving ÀÀ 271(d) approval, provide most interLATA services only through a separate affili- ate. See 47 U.S.C. ÀÀ 272(a). Further, ÀÀ 272(g)(2) places the following restriction on the BOCand its affiliate: ÂÂÂ` ` ` ÂA Bell operating company may not market or sell interLATAservice provided by an affiliate required by this section within anyof its in-region States until such company is authorized to provideinterLATA services in such State under section 271(d) of this title. Id. ÀÀ 272(g)(2). The BOCs argue that since this section prevents them from marketing theinterLATA service of an affiliate until they receive the go-ahead under ÀÀ 271(d), it carries a clearimplication that they may, before that date, market the interLATA services of a non-affiliate suchas Qwest. The Commission agreed--to the extent of reading ÀÀ 272(g)(2) as showing that theforbidden "provi[sion]" of ÀÀ 271(a) cannot cover all marketing relationships. See 13 FCC Rcd at21,463, p 32. But some arrangements that are marketing in the conventional sense of the word, itthought, could also qualify as provision of service forbidden under ÀÀ 271(a). See id. at21,463-64, p 33. Addressing this precise question first, we think it plain that the Commission's reading of thetwo sections has not led it into any logical contradiction. So long as there remains somenon-trivial range of marketing of non-affiliate services that does not fall under the ÀÀ 271(a) ban,the Commission preserves some scope for ÀÀ 272(g)(2)'s implicit authorization. The BOCs arguethat the Commission in fact leaves no such room, pointing to language in the Order saying thatalthough a BOC could offer its marketing services to a long distance supplier, it could not"represent[ ] that [the marketed] product or service is associated with its name or services." Id. at21,474, p 50. Thus the Commission's view would, they say, allow a marketing arrangement only if it "has no conceivable business purpose." The exact meaning of "associated with its name orservices" is not before us, but we read the phrase together with the Commission's expression ofconcern about the BOCs' developing a "first mover's advantage" over long distance carriers in theas yet undeveloped full-service market. Id. at 21,467-68, 21,473, pp 40-41, 49. Thus, although the Commission's view bars the BOCs from taking advantage of some of the synergies that theirmarketing of interLATA service might exploit, it cannot be said to cut the implicitly permissiblemarketing down to zero or its functional equivalent. For example, the Commission's decisionexplicitly allows a BOC to offer the services of its marketing department for sale of interLATAservices, subject to the proviso noted above. The Commission cannot be said to have squeezedthe life out of ÀÀ 272(g)(2)'s implied permission. Thus, the BOCs' argument from ÀÀ 272(g)(2)doesn't compel the narrow reading they claim for ÀÀ 271(d). Nor are there other reasons to suppose Congress clearly intended such a narrow interpretation. Unlike numerous other terms in the Telecommunications Act of 1996, neither the word "provide"nor the phrase "provide interLATA services" is anywhere defined in the Act. Cf. 47 U.S.C. ÀÀ153 (definitions). "InterLATA service" is defined--as "telecommunications between a pointlocated in a local access and transport area and a point located outside such area," id. ÀÀ153(21)--but that doesn't help: the definition does not specify some necessary relation of anactor to such telecommunications. Nor do any of the various ordinary meanings of "provide"appear necessarily superior in this context. See 13 FCC Rcd at 21,460, p 27 (comparingdictionary definitions). Petitioners also point to numerous other places where the Act uses the term "provide" or itscognates, see 47 U.S.C. ÀÀ 153(44) ("provider of telecommunications services"); id. ÀÀ 153(45)("provide telecommunications services"); id. ÀÀ 271(c) ("providing access and interconnection"); id. ÀÀ 272(a) ("provide" various services, including interLATA services); id. ÀÀ 275 ("provision ofalarm monitoring services"), arguing that the Commission's assignment of narrow meanings to"provide" in those instances compels equal narrowness here. But although we normally attributeconsistent meanings to statutory terms, "[i]dentical words may have different meanings wherethe subject-matter to which the words refer is not the same in the several places where they areused, or the conditions are different." Weaver v. USIA, 87 F.3d 1429, 1437 (D.C. Cir. 1996)(internal quotation omitted). As the Commission noted, no other section besides ÀÀ 271(a)-(b)uses "provide" to describe a restriction on BOCs' entry into a market where the lifting of therestriction depends on the BOCs themselves. 13 FCC Rcd at 21,462, p 30. A narrow readingwould thus tempt the BOCs to defer conduct that Congress hoped to accelerate--acts facilitating the development of competition in the intraLATA market. FCC's reading of "provide" to include the BOCs' actions here, moreover, appears clearlyreasonable in the specific context of ÀÀ 271. See Chevron, 467 U.S. at 845. As the Commissionnoted, ÀÀ 271 both gives the BOCs an opportunity to enter the long-distance market andconditions that opportunity on the BOCs' own actions in opening up their local markets. See 13FCC Rcd at 21,645, p 36. The Commission viewed the powerful incentive set up by this schemeas shedding light on the market entry prohibition:Œ™ÂÂÂ` ` ` Â[I]n order to determine whether a BOC is providing interLATAservice within the meaning of section 271, we must assess whethera BOC's involvement in the long distance market enables it toobtain competitive advantages, thereby reducing its incentive tocooperate in opening its local market to competition. Id. at 21,465, p 37. This seems reasonable as a general approach. Of course too-broad a notion of "competitiveadvantage" or "incentive" could make it nonsensical, turning it into an excuse to stifle the BOCsat every opportunity. But the FCC found that the arrangements here would have afforded theBOCs in question a serious advantage, namely a "first mover's advantage" over any non-BOCfirms hoping to secure a position in the anticipated full-service market. See id. at 21,467-68,21,473, pp 40-41, 49. By offering one-stop shopping for local and long distance under their ownbrand name and with their own customer care, see id. at 21,466, p 38, U S WEST and Ameritechcould build up goodwill as full-service providers, positioning themselves in these markets beforeÀÀ 271 allows them actually to enter. There appears to have been specific congressional concernover the impact of jointly marketed local and long distance service; this is manifested in the ÀÀ271(e) rule barring the major interLATA carriers from jointly marketing their interLATA servicewith local service obtained from a BOC, for three years or until the BOC in question gains accessto the long distance market under ÀÀ 271, whichever is first. See id. at 21,473-74, p 49; 47U.S.C. ÀÀ 271(e)(1). If the BOCs could secure this advantage without opening their local servicemarkets, the blunting of the intended incentive would be considerable--or so the Commissioncould reasonably find. Petitioners seek to press the ÀÀ 271(e) likeness further. They note that the Commission,despite what they claim is an incentive structure similar to ÀÀ 271(a)'s, relied on the FirstAmendment in allowing long distance carriers covered by ÀÀ 271(e) to engage in certainadvertising activities paralleling what is forbidden here. See In the Matter of Implementation ofthe Non-Accounting Safeguards of SectionÀÀ 271 and 272 of the Communications Act of 1934, asamended, 11 FCC Rcd 21905, 22,040-41, pp 279-80. But ÀÀ 271(e) allows the long distancecarriers to (1) offer and market separately their long distance service plus resold BOC services,and (2) offer and market jointly their long distance service and local service not based on resoldBOC services. In that context, the Commission allowed a covered carrier to proclaim its offersboth of long distance and of resold BOC local service in a single ad, so long as it did not offersuch service as a "bundle" or otherwise with "one-stop" shopping. Id. In short, it let themtruthfully advertise the services they could lawfully provide, but no more. As the BOCs arebarred from providing interLATA service until they have surmounted the ÀÀ 271(d) hurdles, thepresent case presents no real analogy. Context also explains the Commission's application of the "engage in the provision of alarmmonitoring" language of ÀÀ 275. The Commission and the petitioners spar over whether theCommission's approach here is genuinely different, but we need not resolve the clash, as the differences in the statutory contexts justify different outcomes. See 13 FCC Rcd at 21,462-63, p31. Incentives are not as crucial in a situation where the business prohibition will be lifted in a fixed time, as they will for alarm monitoring, see 47 U.S.C. ÀÀ 275(a)(1), as where its durationdepends on the BOC's own actions. The Commission's action here of course does not represent a complete demarcation of theborder between permitted marketing and forbidden provision. That is entirely reasonable. Apartfrom the Commission's general authority to choose between adjudication and rulemaking, seeNLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974), it makes sense for it to proceed throughcase-by-case judgments of a questioned action's likely effect--whether, for example, themarketing materials will cause consumers to identify the services with the BOC. While--aswe've noted--some of the Commission's language on incentives is rather broad, it is notinconsistent with future judgments balancing the interests that are relevant under ÀÀ 271(a). Weare also puzzled by the Commission's concern that the two BOCs in each instance laid down theterms for the transaction, which Qwest humbly accepted. 13 FCC Rcd at 21,449-50, 21,452, pp10, 14. As the BOCs had unique advantages to offer Qwest, this course of events was hardlysurprising; we cannot see that the issue of who first proposed what to whom has much bearingon the policy values at stake. But the Commission's detours on the subject do not appear to haveplayed a decisive role in its decision. Petitioners also assert a want of substantial evidence. They regard the Commission's ultimatefinding as belied by Qwest's repeated identification in the BOCs' marketing materials as the longdistance provider. But that identification is still consistent with the view that the materials as awhole would lead consumers to link long-distance service to the BOCs, particularly as longdistance was offered only as part of a full-service package with a BOC brand name. Nor does it appear that the FCC, by pointing to various activities characterized as "typically performed bythose who resell interLATA services," 13 FCC Rcd at 21,471-73, pp 46, 48, was somehowsuggesting that the ultimate finding of "provider" status depended on an intermediate finding of"reseller" status; petitioners' arguments that they are not actually resellers are thus misguided. The petitions are Denied.