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


SW BELL TELE CO

v.

FCC


98-1197a

D.C. Cir. 1999


*	*	*


Ginsburg, Circuit Judge: The Federal Communications  Commission
determined that the method by which six local  exchange carriers
(LECs) calculated the "common line bas- ket" in arriving at their
1997-98 tariffs resulted in unjust and  unreasonable rates charged to
interexchange carriers (IXCs),  and it ordered the LECs to refund the
overcharges. Two of  the LECs, Southwestern Bell Telephone Company and
the  Bell Atlantic telephone companies, sought reconsideration of 
that order, which the Commission denied. Southwestern Bell  then
petitioned for review of the order denying reconsidera- tion. As
explained below, an order denying reconsideration is  not reviewable
for material error but only for new evidence or  changed
circumstances. Applying that standard of review,  we deny the


I. Background


In 1990 the Commission adopted a price cap system for  larger LECs,
including petitioner Southwestern Bell and  intervenor Bell Atlantic.
The general features of the price  cap system are described in other
opinions of this court. See, 


e.g., Illinois Pub. Telecomm. Ass'n v. FCC, 117 F.3d 555, 570  (1997);
Southwestern Bell Tel. Co. v. FCC, 100 F.3d 1004,  1005 (1996). The
component of the price cap pertinent to this  case is the "common line
basket," which contains all the  interstate charges associated with
the "local loop"--the facili- ties that carry traffic between the end
user and a LEC's  central switch.


The cost of the local loop is shared by end users and the  IXCs. The
precise formula for determining the amounts to  be paid by the two
groups is quite complex, see generally 47  C.F.R. s 69, but a simple
description will suffice for this case.  The portion of the "common
line basket" not allocated auto- matically to the IXCs is known as the
base factor portion  (BFP). The BFP is divided by the projected end
user  common line (EUCL) demand to arrive at a monthly EUCL  charge.
End users are charged the lower of that amount or  their EUCL cap.
Prior to 1998 the caps were $3.50 for  residential and single-line
business subscribers, and $9.00 for  multi-line business subscribers.
That is, if the calculated  EUCL charge was less than or equal to
$3.50, then a LEC  would recover the full BFP from end users. If the
calculated  EUCL charge was more than $3.50, then residential and 
single-line business users would pay $3.50 and multi-line  business
users would pay the lower of the EUCL charge or  $9.00; the LEC would
recover the remainder of the BFP  through a per-minute carrier common
line (CCL) charge to  the IXCs. Accordingly, between $3.50 and $9.00 a
change in  the level of the EUCL charge would inversely affect the
level  of the CCL charge to the IXCs.


At the urging of the IXCs, which claimed that the LECs  had been
overcharging them for per-minute access to the  local loop since the
inception of the price cap system, the  Commission suspended for one
day the 1997-98 tariffs filed  by the price cap LECs. In the
Commission's view the LECs  had not adequately supported their BFP
revenue require- ments or their end user demand projections. In its
order  designating issues for investigation, the Commission required 
each LEC to submit its actual and projected BFP revenue  requirements
from 1991 to 1997, as well as a detailed explana-


tion of the method by which it arrived at its BFP projection  for the
1997-98 tariff. The Commission also noted that  under-forecasting the
BFP requirement would not necessarily  reduce a LEC's total common
line revenue; for reasons that  need not detain us for the purposes of
this case, "so long as  this year's growth in minutes of use per
common line is  expected to exceed half the previous year's growth,
the price  cap LEC would expect to receive greater total common line 
revenues by charging relatively lower EUCLs and relatively  higher CCL
charges."


In its Investigation Order, which concluded its inquiry into  the LECs'
1997-98 tariffs, the Commission found that six of  the twelve LECs
under investigation--petitioner Southwest- ern Bell, intervenor Bell
Atlantic, US West, NYNEX, GTE,  and Sprint--"employed forecasts that
reflect a consistent  downward bias." The Commission concluded that
the 1997- 98 tariffs filed by five of the six LECs contained the same 
bias, and that the tariff filed by the sixth, Bell Atlantic, had a 
specific flaw in its forecasting methodology. For the reasons  set out
in its Designation Order, the agency rejected the  LECs' contention
that they have little or no incentive to  underestimate their BFP
revenue requirements because, in  their view, the allocation of
charges between end users and  the IXCs is a zero-sum game. The
Commission next ana- lyzed the pattern of underestimation in the LECs'
forecasts  of their per-line BFP revenue requirements, that is, the 
result of dividing the BFP by projected end user demand.  The
Commission concluded that "their forecasting techniques  underestimate
the per-line BFP revenue requirement in a  statistically significant
manner" and, therefore, that their  1997-98 "forecasts are likely to
be the product of biased  forecasting techniques." Finally, the
Commission canvassed  the reasons proffered by the LECs for their
underestimates  and rejected them, ultimately concluding that the
1997-98  per-minute charges to the IXCs were not just and


The Commission then prescribed for each LEC a method  for determining
just and reasonable CCL charges for the  purpose of ordering refunds
to the IXCs, although it acknowl- edged that it had not previously
prescribed a methodology for 


forecasting the BFP and stated that it continued "to believe  that
there are many different methods that could produce  reasonable
forecasts for individual LECs." It ordered the six  LECs to use the
revised BFP forecasts to calculate the  refunds owed to the IXCs for
the period July 1 to December  31, 1997 and to recalculate the EUCL
and the CCL charges  for use from January 1 through June 30, 1998.


Bell Atlantic petitioned for rehearing. In its petition, the  LEC
challenged the assumptions underlying the Commis- sion's conclusion
that underestimating the BFP revenue re- quirement is not necessarily
a zero-sum game and the analy- sis upon which the Commission relied in
concluding that the  LECs' underestimates were the result of bias.
Bell Atlantic  also claimed that for tariffs filed in years prior to
1997 its  method was more accurate than the Commission's. Finally, it 
argued that if the agency was going to order the LECs to  make refunds
to the IXCs, then it should have "provid[ed] a  method to recover that
same amount--which no one disputed  they were entitled to
recover--from end-users." Southwest- ern Bell submitted comments in
support of Bell Atlantic's  petition and also filed its own petition
for rehearing, in which  it challenged a different aspect of the
Commission's decision.  The agency denied both petitions for


Southwestern Bell then petitioned this court for review of  the
Reconsideration Order only. Bell Atlantic intervened and  the two
filed the joint briefs now before us.


II. Analysis


The Commission, along with AT&T and MCI, which inter- vened in support
of the agency, argue that the Reconsidera- tion Order is not a
reviewable order and, therefore, that this  court must dismiss the
petition to review that order for lack  of jurisdiction. For the
reasons given today in Beehive  Telephone Co. v. FCC, No. 98-1293, we
hold that we have  jurisdiction over the petition for review pursuant
to 47 U.S.C.  ss 402(a) and 405(b)(2). See slip op. at 6-8. We agree
that  the petition is unreviewable, however, and we deny it on that 


A. Standard of Review


Twenty-five years ago we regarded it as "settled [law] that  an order
which merely denies rehearing of another order is  not itself
reviewable" and that the filing of a petition for  reconsideration
simply "toll[s] the period for seeking judicial  review" of the
underlying order. Microwave Communica- tions, Inc. v. FCC, 515 F.2d
385, 387 n.7 (1974). The Su- preme Court reached the same conclusion
thirteen years later  in ICC v. Brotherhood of Locomotive Engineers,
482 U.S. 270,  279-80 (1987), citing our earlier decision with


In the Supreme Court case a union representing railroad  employees
sought review of two decisions of the Interstate  Commerce Commission,
one denying the Union's petition for  clarification, which was "in
effect a petition to reopen," id. at  285, and the other denying its
petition for reconsideration of  the first petition. The Court held
that when an agency  "refuses to reopen a proceeding, what is
reviewable is merely  the lawfulness of the refusal ... [and]
overturning the refusal  to reopen requires 'a showing of the clearest
abuse of discre- tion.' " Id. at 278 (emphasis in original). Reviewing
its past  decisions, the Court noted that it had entertained a
petition to  review an agency's refusal to reopen a proceeding only in
 cases involving new evidence or changed circumstances and  never in a
case alleging solely material error. The Court  explicated the


If review of denial to reopen for new evidence or changed 
circumstances is unavailable, the petitioner will have  been deprived
of all opportunity for judicial consider- ation--even on a "clearest
abuse of discretion" basis--of  facts which, through no fault of his
own, the original  proceeding did not contain. By contrast, where no
new  data but only "material error" has been put forward as  the basis
for reopening, an appeal places before the  courts precisely the same
substance that could have been  brought there by appeal from the
original order--but  asks them to review it on the strange,
one-step-removed  basis of whether the agency decision is not only


but so unlawful that the refusal to reconsider it is an  abuse of
discretion. Id. at 279 (emphasis in original).


The Court went on to explain that the latter sort of appeal


serves no purpose whatever where a petition for recon- sideration has
been filed within a discretionary review  period specifically provided
by the agency (and within  the period allotted for judicial review of
the original  order), since in that situation the petition tolls the
period  for judicial review of the original order, which can there-
fore be appealed to the courts directly after the petition  for
reconsideration is denied. Id. (emphasis in original).


When, as in BLE, a petition for reconsideration is filed  outside the
period allotted in the Hobbs Act for judicial  review of an agency
order, allowing review of the denial of  reconsideration "would serve
only the peculiar purpose of  extending indefinitely the time within
which seriously mistak- en agency orders can be judicially
overturned." Id. (empha- sis in original).


The Court also noted that the Hobbs Act specifies only the  "form of
proceeding for judicial review," 5 U.S.C. s 703,  whereas the
Administrative Procedure Act "codifies the na- ture and attributes of
judicial review, including the traditional  principle of its
unavailability 'to the extent that ... agency  action is committed to
agency discretion by law.' " BLE, 482  U.S. at 282 (quoting 5 U.S.C. s
701(a)(2)). The Court held  that this limitation upon judicial review
in the APA "applies  to the general grant of jurisdiction [in] the
Hobbs Act." Id.  Noting the "tradition of nonreviewability ... with
regard to  refusals to reconsider for material error," the Court
conclud- ed that "the agency's refusal to go back over ploughed ground
 is nonreviewable." Id. at 282-84.


As we read BLE, therefore, a petition seeking review of an  agency's
decision not to reopen a proceeding is not reviewable  unless the
petition is based upon new evidence or changed  circumstances.


B. New Evidence


Southwestern Bell argues that its petition for reconsidera- tion did
raise new evidence, and therefore the Commission's  denial of that
petition is reviewable. Yet the evidence to  which the petitioner
points does not satisfy the test for new  evidence set forth in BLE:
"facts which, through no fault of  [the petitioner's], the original
proceeding did not contain."  Id. at 279; see also 47 U.S.C. s 405(a)
(limiting evidence  admissible upon reconsideration to "newly
discovered evi- dence, evidence which has become available only since
the  original taking of evidence, [and] evidence which the Commis-
sion ... believes should have been taken in the original 


First, the Bells point to data showing the growth in min- utes of use
per common line from 1991 to 1997. Bell Atlantic  relied upon these
data to argue before the Commission that  "there is no basis [for a
LEC] to assume that future growth  will always exceed [last year's
growth divided by two]." But  this evidence is not new in the sense of
being discovered after  the Commission issued its Investigation Order.
Nor is it  true, as the petitioner contends, that "[n]o party to the
tariff  proceeding had any reason to submit [this] evidence until 
after the FCC" issued that order. The Designation Order  clearly set
forth the Commission's view that under- forecasting the BFP revenue
requirement would be to a  LEC's benefit if it could expect in the
upcoming year that its  increased growth in minutes per line would
exceed half its  increased growth during the previous year. The second
 alleged piece of new evidence--a demonstration that the  method the
Commission chose for prescribing the LECs'  rates is less accurate
than Bell Atlantic's method when ap- plied to the tariffs filed prior
to 1997--is not evidence at all,  but simply an argument that the
Commission made a material  error.


Because Southwestern Bell has not shown that its petition  for
reconsideration was based upon new evidence or changed  circumstances,
we must deny its petition for review unless, as  Southwestern argues
next, its petition seeks review of some-


thing other than the agency's refusal to reopen the proceed- ing. The
petitioner has two arguments to that effect, which  we discuss in the
next section.


C. Other Grounds for Reviewing the Reconsideration Order


First, Southwestern Bell argues that by responding to its  claim based
upon the growth in minutes of use per common  line from 1991 to 1997
and by including those data in the  Reconsideration Order, the
Commission reopened the pro- ceeding and, therefore, the denial of
reconsideration is re- viewable on its merits. To this end, the
petitioner correctly  points out that in BLE the Court, in a dictum,
stated that  when an agency "reopens a proceeding for any reason and, 
after reconsideration, issues a new and final order setting  forth the
rights and obligations of the parties, that order-- even if it merely
reaffirms ... the original order--is reviewa- ble on its merits." 482
U.S. at 278. In that case the Court  also made clear, however, that
whether an agency has re- opened a proceeding depends upon the
formalities of its  action: "Where the Commission's formal disposition
is to  deny reconsideration, and where it makes no alteration in the 
underlying order, we will not undertake an inquiry into  whether
reconsideration 'in fact' occurred." Id. at 280.  Here, the petitioner
can point to no formal action of the  Commission reopening the
proceeding or otherwise modifying  the underlying order. As we have
noted before, even "dis- cuss[ion of] the merits at length ... does
not necessarily  mean the agency has reopened the proceedings. ...
Only  when the agency has clearly stated or otherwise demonstrat- ed
that it has reopened the proceeding will the [denial of 
reconsideration] be ... subject to judicial review." Sendra  Corp. v.


Second, Southwestern Bell suggests that we should read its  petition
for review of the Reconsideration Order as a petition  for review of
the Investigation Order. Review of the Investi- gation Order in this
case, unlike review of the first order in  BLE, would not circumvent
the time limit in the Hobbs Act  because Southwestern Bell's petition
for reconsideration was  filed within the 30-day period for such a
filing, see 47 U.S.C. 


s 405(a), and therefore also within the 60-day period for  seeking
judicial review under the Hobbs Act. That is, having  tolled the time
limitation in the Hobbs Act, Southwestern Bell  could have sought
review of the Investigation Order after the  Commission issued the
Reconsideration Order. The petition- er also correctly points out
that, in the cases upon which the  agency and the intervenors rely,
review of the denial of  reconsideration would have effected an end
run around the  time limits for judicial review, see, e.g., Sendra,
111 F.3d at  166 (petition for reconsideration filed after statute of
limita- tions had run), or the finality doctrine, see, e.g., City of 
Benton v. NRC, 136 F.3d 824, 826 (D.C. Cir. 1998) (per  curiam)
(permitting petition naming non-final order to bring  final order
before court "would make unclear the point at  which agency orders


We have previously set out a test for determining whether  a filing
that names one order suffices to bring a different  order before the
court. See Brookens v. White, 795 F.2d 178,  180 (1986) (per curiam)
("[A] mistake in designating the  judgment ... should not result in
loss of the appeal as long  as the intent to appeal from a specific
judgment can be fairly  inferred from the notice and the appellee is
not misled by the  mistake"); accord Nichols v. Board of Trustees of
Asbestos  Workers Local 24 Pension Plan, 835 F.2d 881, 889 & n.73 
(D.C. Cir. 1987); see also Foman v. Davis, 371 U.S. 178, 181  (1962).
In Brookens, we held that "the specification of [other]  orders and
hearing dates and the failure to mention the  [disputed] order in
either the notice of appeal or the docket- ing statement indicate[d]
an intent not to appeal the earlier  grant of summary judgment." 795
F.2d at 181 (emphasis in  original). In Nichols, however, we excused
the appellants'  failure to designate the judgment appealed from
because  their "Rule 10(b)(1) certificate plainly reveal[ed] their
inten- tion." 835 F.2d at 889.*




__________

n * Although Brookens and Nichols each involve a notice of appeal 
filed pursuant to Federal Rule of Appellate Procedure 3 that 
specified the wrong judgment of the district court, no party to the 
present case suggests that such a notice is not analogous to a 


Applying the test of Brookens and Nichols, it is clear that  the intent
to seek review of the Investigation Order cannot  fairly be inferred
from either Southwestern Bell's petition for  review or its subsequent
filings (all of which were filed by  inside counsel). The petition for
review names only the  Reconsideration Order and only that order is
appended to the  petition. The docketing statement that Southwestern
Bell  filed again mentions and attaches only the Reconsideration 
Order. Finally, Southwestern Bell's preliminary statement of  issues
both begins and ends by referring to the Reconsidera- tion Order and
mentions only issues raised in its and Bell  Atlantic's petitions for
reconsideration. In short, nothing  prior to the brief filed in this
court (by appellate counsel)  gave the Commission any notice of
Southwestern Bell's intent  to seek review of the Investigation Order.
Nor should that  intent have been obvious.


Southwestern Bell's intent to seek review of the Investiga- tion Order
might seem obvious if its petition would otherwise  appear to seek
review of an obviously unreviewable order.  As we have seen, however,
under BLE a petitioner can obtain  review of a denial of its petition
for reconsideration if the  petition was based upon new evidence or
changed circum- stances; so there no doubt are cases in which a
petitioner  rationally seeks review only of the order denying
reconsidera- tion. Accordingly, we will not impose upon the respondent
 agency the obligation to determine when a party seeking  review must
have meant to name a different order in its  petition for review
because the order actually named in that  petition is unreviewable.


Finally, because Southwestern Bell can point to nothing  from which its
"intent to appeal from [the Investigation  Order] can be fairly
inferred," Brookens, 795 F.2d at 180, we  place no weight upon its
claim that neither the Commission  nor the intervenors were prejudiced
by its failure to name the  correct order. The lack of prejudice is a
necessary, not a 




__________

n petition for review filed pursuant to Federal Rule of Appellate 
Procedure 15. See also Gottesman v. INS, 33 F.3d 383, 388 (4th  Cir.
1994).


sufficient, condition for excusing a petitioner's mistake in  naming
the order of which review is sought. See id.


In sum, we reject Southwestern Bell's arguments that it  sought review
of something other than an order denying  rehearing.


III. Conclusion


Southwestern Bell sought review of an order of the Com- mission over
which we have jurisdiction but which, for the  reasons set forth in
Parts II.B and C above, is not reviewable.  The petition for review is
therefore


Denied.