UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


BEEHIVE TELE CO INC

v.

FCC


97-1662a

D.C. Cir. 1999


*	*	*


Ginsburg, Circuit Judge: The Federal Communications  Commission,
holding that access to the central database of  routing information
for toll-free telephone numbers is a com- mon carrier
telecommunications service, required the Bell  Operating Companies
(BOCs) to file a tariff of rates for that  service. See In the Matter
of Provision of Access for 800  Service (CompTel Declaratory Ruling),
8 F.C.C.R. 1423,  p p 25-29 (1993). When the BOCs filed the tariff as
directed,  the Beehive Telephone Companies (collectively Beehive)
filed  a formal complaint against them, claiming that the Commis- sion
lacks authority to require that the service be tariffed.  The
Commission denied the complaint, and Beehive petitions  for review,
arguing, in addition to the question of the Com- mission's authority,
that the Commission violated its rules  regarding ex parte contacts in
complaint proceedings, and  that the Commission has failed to
implement a provision of  the Telecommunications Act of 1996 that
requires it to trans- fer operation of the toll-free database to an


We deny the petition for review. Beehive does not have  standing under
Article III of the Constitution to bring the 


first two claims; as to the third, it has not exhausted its 
administrative remedies.


I. Background


Toll-free telephone service (commonly called 800 service)  involves a
subscriber agreeing to pay an interexchange carri- er (IXC) for all
calls made to it using a predesignated 800  number. Toll-free service
thus enables a business to provide  its customers, potential
customers, employees, and others  with a free and convenient means of
contacting it.


Since 1993 a nationwide computer-based Service Manage- ment System has
been used to route each 800 call to the  appropriate IXC, which then
forwards the call to the sub- scriber. The SMS also makes 800 numbers
portable; that is,  a subscriber may change carriers without having to
change its  800 number. Otherwise, once a business had created sub-
stantial goodwill in a toll-free number through its advertising  and
use, or had obtained a number with substantial market- ing value
because of its mnemonic appeal (such as 1-800- FLOWERS), the cost of
switching to another IXC would be  the loss of that number, which
would inhibit competition  among IXCs.


The SMS database contains information associated with  each 800 number,
including the identity of the carrier selected  by the subscriber. See
47 C.F.R. s 52.101(d). That informa- tion is downloaded to 12 regional
databases, called Service  Control Points. When a caller places an 800
call, a switch  belonging to the caller's local exchange carrier (LEC)
queries  the regional SCP for routing information. The SCP then 
instructs the switch to route the call to the subscriber's  chosen
IXC, which delivers the call to the subscriber.


Database Service Management, Inc. (DSMI) manages the  SMS, see 47
C.F.R. s 52.103(f)(1), but does not itself collect  or update the data
the SMS uses to route calls. Instead, so- called Responsible
Organizations input and update the infor- mation contained in the SMS
database. See CompTel Declar- atory Ruling, 8 F.C.C.R. 1423, p 19. Any
entity that meets  certain financial, technical, and service-related
eligibility cri-


teria--whether an IXC, an LEC, a subscriber, or another  type of
entity--may serve as a Responsible Organization.  See id. at pp 41-47.
Because DSMI is a monopolist, and  because access to the SMS database
is necessary to the  provision of toll-free service, the Commission
requires DSMI  to provide Responsible Organizations with such access
under  a tariff; the agency's purpose is to ensure "that SMS access 
is provided at reasonable rates and on nondiscriminatory  terms." Id.


In 1993 the Commission required the BOCs, which at that  time jointly
owned DSMI, to file an SMS access tariff. See  id. at p 31. The
Commission then suspended that tariff for  one day and instituted an
investigation into its lawfulness.  See In the Matter of the Bell
Operating Companies' Tariff for  the 800 Serv. Mgmt. Sys., 8 F.C.C.R.
3242 (Com. Car. Bur.  1993). Eventually the Commission concluded that
the rates  the BOCs proposed to charge in the SMS access tariff were 
reasonable. See In the Matter of 800 Data Base Access  Tariffs and the
800 Serv. Mgmt. Sys. Tariff, 11 F.C.C.R.  15,227, p 251 (1996) (SMS


Beehive is an LEC operating in rural Nevada and Utah. It  is also a
Responsible Organization. During the pendency of  the above-mentioned
investigation, Beehive filed a complaint  against the BOCs alleging
that the SMS access tariff is  invalid because the Commission lacks
jurisdiction under the  Communications Act of 1934 to regulate SMS
access as a  common carrier service. See 47 U.S.C. s 153(10) (defining
 "common carrier"); id. s 153(52) defining "wire communica- tion");
id. ss 201-203 (setting forth duties of common carri- ers). In the
alternative Beehive claimed that the tariffed  rates are unjust and
unreasonable. See id. s 201(b). In a  subsequent pleading Beehive also
alleged that the Commis- sion violated its own rules governing whether
and to what  extent third parties are allowed to have ex parte
contacts with  the Commission concerning a complaint proceeding. See
47  C.F.R. ss 1.1200-1.1216 (1993).


In 1995 the Commission denied Beehive's complaint with- out ruling upon
the issue of ex parte contacts. Beehive 


petitioned this court for review but before briefing was  completed the
Commission moved for a remand, which we  granted, so it could pass
upon the ex parte issue. In 1997 the  Commission rejected Beehive's ex
parte contacts claim and  re-adopted and reaffirmed the 1995 opinion
and order that we  had vacated at its request. See Beehive Tel., Inc.
v. Bell  Operating Cos., 12 F.C.C.R. 17,930, 17,950 (1997). Beehive 
again petitions for review.


II. Analysis


Beehive argues first that the Commission lacks authority  under the
Communications Act to regulate SMS access as a  common carrier service
and therefore to require tariffed  rates. Second, Beehive claims the
Commission violated its ex  parte rules governing complaint
proceedings. Finally, Bee- hive asserts that the agency has failed in
a timely fashion to  require that the toll-free database be
transferred to "one or  more impartial entities," as required by 47
U.S.C. s 251(e)(1).  The Commission responds that Beehive lacks
standing to  raise the first two claims, and that Beehive cannot
obtain  review of the s 251(e)(1) claim because it did not first
present  it to the Commission. We agree with the Commission in both 


A. Statutory Authority and Violation of the Ex Parte Rules


The "irreducible constitutional minimum" for standing to  sue the
Commission is that the petitioner (1) have suffered an  injury in fact
that was (2) caused by the Commission and (3)  would likely be
redressed by a favorable decision of the court.  Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992).  Beehive asserts two injuries:
the payments it has made and  will continue to make under the
allegedly unlawful SMS tariff,  and its loss of business when DSMI,
because Beehive ceased  paying certain of the charges, withdrew all
but 185 of the  10,000 toll-free numbers that Beehive had reserved. As
to  causation, Beehive claims that although its injuries were the 
direct result of actions taken by DSMI, they were proximate- ly caused
by the Commission's requirement that SMS access  be tariffed. See
Telephone & Data Sys. v. FCC, 19 F.3d 42, 


47 (D.C. Cir. 1994) ("injurious private conduct is fairly tracea- ble
to the administrative action contested in the suit if that  action
authorized the conduct or established its legality").  Beehive does
not explain how the Commission's alleged viola- tion of its ex parte
rules contributed to either of the injuries it  asserts. In the event,
however, we need not decide whether  Beehive adequately alleges injury
in fact and causation be- cause Beehive has not shown how any order we
might issue  could redress its asserted injuries.


Beehive argues that prospective detariffing of SMS access  would
redress its continuing injury from payment of unlawful- ly tariffed
rates. The Commission responds that such a  remedy would actually
exacerbate Beehive's injury: If there  were no tariff, then Beehive
would have to negotiate with a  monopolist and almost certainly would
have to pay more than  the tariffed rates for SMS access. That seems
right to us.  See Stephen G. Breyer & Richard B. Stewart,
Administrative  Law and Regulatory Policy 223 (2d ed. 1985) ("[W]hen 
monopoly is the problem, the purpose of government rate- making is of
course to impose maximum prices to protect the  public from
monopolistic exploitation"). But cf. George J.  Stigler & Claire
Friedland, What Can Regulators Regulate?  The Case of Electricity, 5
J.L. & Econ. 1 (1962) (casting doubt  on assumption that regulation
appreciably lowers electricity  rates). Indeed, the BOCs resisted
having to file a tariff for  SMS access--undoubtedly because they
believed they could  charge a higher rate as an unregulated than as a
regulated  monopoly. See CompTel Declaratory Ruling, 8 F.C.C.R.  1423,
p 23. In its brief Beehive made no attempt to rebut the  Commission's
argument. At oral argument counsel for Bee- hive asserted that it
could negotiate a better rate from the  BOCs without a tariff, but was
at a loss to explain how or why  that might be so. Nor can we imagine
how Beehive would be  better off without the tariff, especially
considering that the  Commission found it to be just and reasonable.


Beehive also argued before the Commission that it could be  made whole
by an award of damages in the amount it had  paid for SMS access, plus
interest, and the return of the toll-


free numbers it had lost for nonpayment of the charges levied  under
the tariff. The BOCs contend that they may not be  held liable for
charges incurred under a tariff that the  Commission required them to
file, and that Beehive therefore  may not obtain the retrospective
relief it sought before the  Commission. Accordingly, the BOCs reason,
even if we were  to find that the Commission lacks authority to
require that  SMS access be offered under a tariff, then the only
available  remedy would be prospective detariffing.


Beehive does not respond to this argument, and its cryptic  request
that we order the Commission to "reconsider Bee- hive's claims for
relief" does not suffice to join the issue.  Moreover, when asked at
oral argument whether prospective  detariffing is the only relief now
at stake in this proceeding,  counsel referred solely to Beehive's
claim under s 251(e)  (which we discuss below) and failed to assert
that Beehive  continues to seek either damages or the return of its
num- bers. We conclude that Beehive has (not unreasonably)  abandoned
its claim for retrospective relief.


Beehive apparently seeks no remedy that could redress its  claimed
injuries. Accordingly, we hold that Beehive lacks  standing to
complain that the Commission violated its statuto- ry authority and
its ex parte rules.


B. Section 251(e)


Beehive also claims the Commission has been derelict in its  duty to
implement a provision of the Telecommunications Act  of 1996 that
requires it to "designate one or more impartial  entities to
administer telecommunications numbering." 47  U.S.C. s 251(e)(1); see
also id. s 251(d)(1) ("Within six  months after February 8, 1996, the
Commission shall com- plete all actions necessary to establish
regulations to imple- ment the requirements of this section"). The
Commission  counters that the s 251(e) claim is not properly before
the  court because Beehive did not present it to the Commission in 
this proceeding and thereby failed to exhaust its administra- tive
remedies. See 47 U.S.C. s 405(a) (barring judicial re- view of issues
upon which FCC "has been afforded no oppor- tunity to pass").


Beehive responds first that in its 1994 complaint initiating  this
proceeding it requested that the Commission transfer  management of
the SMS system to a neutral third party, as  s 251(e) presumably now
requires. Although Beehive did  indeed request that relief, it did so,
as the Commission points  out, under a different legal theory, which
was rejected and  which Beehive does not raise in its current petition
for  review. See Beehive Tel., 12 F.C.C.R. 17,950, p 33 (rejecting 
claim that BOCs were required under 47 U.S.C. s 214(a) to  obtain
certificate of public convenience before constructing  SMS).
Consequently, Beehive's 1994 complaint did not place  the s 251(e)
claim before the Commission; indeed, that sec- tion did not then


Beehive next points to other proceedings before the Com- mission in
which it has raised s 251(e), arguing that it has  therefore afforded
the Commission an opportunity to pass  upon the issue. In the
principal case upon which it relies,  however, DIRECTV, Inc. v. FCC,
110 F.3d 816, 825 (D.C. Cir.  1997), we excused the petitioner's
failure to raise an issue  before the Commission because the agency
had considered it  sua sponte in that same proceeding; clearly that
case does  not assist Beehive. Just as the Commission need not "sift 
pleadings and documents to identify arguments that are not  stated
with clarity by a petitioner," Bartholdi Cable Co. v.  FCC, 114 F.3d
274, 279 (D.C. Cir. 1997), we see no reason the  Commission should be
required to sift through pleadings in  other proceedings in search of
issues that a petitioner raised  elsewhere and might have raised here
had it thought to do so;  indeed, such a duty would be inconsistent
with our adversarial  system, in which the petitioner "has the burden
of clarifying  its position before the agency." Id. at 280.


Beehive next claims it would have been futile to ask the  Commission to
consider its claim under s 251(e) after we  remanded this matter
because the Commission in its 1995  order had declined to reopen the
record in order to address  certain issues regarding divestiture of
the BOCs' interest in  DSMI. We fail utterly to see how the
Commission's refusal  to entertain the divestiture issue in 1995 shows


have been futile for Beehive to raise it subsequently under a 
provision enacted in 1996.


Beehive also contends that it would have been futile to  present the
Commission with the s 251(e) claim upon remand  because the agency
need not "consider any claim not included  specifically in Beehive's
original complaint." But that can  hardly be true of a claim that
arises after the complaint has  been filed; indeed, the Commission
sought a remand to  consider Beehive's claim regarding ex parte
contacts, which  arose subsequent to the filing of its complaint.
Similarly, the  s 251(e) claim arose only upon enactment of that
section,  which was after Beehive filed its complaint (and before our 
remand), yet Beehive never presented it to the Commission,  whether by
seeking leave to amend its complaint or other- wise. We therefore hold
that Beehive's s 251(e) claim is  precluded because Beehive failed to
exhaust its administrative  remedies.


III. Conclusion


In summary, we hold that Beehive lacks Article III stand- ing to raise
two of its claims and that our review of its third  claim is precluded
because Beehive failed to exhaust its  administrative remedies.
Accordingly, the petition for review  is


Dismissed in part and denied in part.