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


BEEHIVE TELE CO NV

v.

FCC


98-1293a

D.C. Cir. 1999


*	*	*


Ginsburg, Circuit Judge: The Federal Communications  Commission
determined that the rate Beehive Telephone  Company charged
interexchange carriers (IXCs) for local  switching service was unjust
and unreasonable, and it ordered  the Company to refund the
overcharges. Beehive sought  reconsideration of that decision, which
the Commission grant- ed in part and denied in part. Beehive then
petitioned this  court for review which, for the reasons that follow,


I. Background


Beehive is a local exchange carrier (LEC) operating in  parts of nine
counties in Utah and in two counties in Nevada.  Beehive first filed
its own tariff in 1994, having previously  charged the interstate
local switching rates filed by the  National Exchange Carrier
Association (NECA) on behalf of  participating LECs. As a small LEC
Beehive has the option  of filing tariffs for traffic-sensitive
interstate access charges  under rules different from those that apply
to larger LECs.  See 47 C.F.R. s 61.39(a). In addition, while the
largest  LECs--the regional Bell Operating Companies and GTE-- must
calculate their tariffs under the Commission's price cap  regulations,
Beehive can and did opt for rate of return 


regulation. See id. s 61.41(a)(3); see also United States Tel.  Ass'n
v. FCC, ___ F.3d ____, 1999 WL 317035, at *1 (D.C.  Cir. May 21,
1999).


On July 22, 1997 Beehive filed a new tariff changing its  interstate
access charge. That charge has three compo- nents--a per-minute local
transport termination charge, a  per-minute local switching charge,
and a per-minute per-mile  charge for local transport facilities--each
of which differs for  premium and non-premium service (for the former
of which  AT&T may be the only customer). In the new tariff Beehive 
proposed to reduce its premium and non-premium charges for  local
transport termination and for the use of its local trans- port
facilities, but to increase its per minute charge for local  switching
to $0.04012 from $0.0348 for premium service and  to $0.01805 from
$0.01566 for non-premium service.


AT&T filed a petition opposing Beehive's tariff. After  reviewing
AT&T's submission and Beehive's response there- to, the Commission was
"not persuaded based on the present  record that Beehive has shown
that its proposed rate levels  are justified under existing rules
governing its interstate  access charges." The Commission therefore
suspended Bee- hive's tariff for one day and instituted an
investigation.  Nearly four months later the agency issued a
"Designation  Order" setting down the following issue for
investigation:  "Whether Beehive's traffic sensitive local switching
rate is  based on its interstate cost of service for the period since
its  last annual filing and related demand for the same period."  In
order to resolve that issue and to determine "whether its  proposed
switching rate for 1997/98 is reasonable ... in light  of historical
cost and demand trends," the Commission direct- ed Beehive "to provide
detailed cost data for calendar years  1994, 1995, and 1996" and to
explain "any changes in costs  and demand from year to year."


At that point, the Commission had just over one month in  which to
complete its investigation into the lawfulness of  Beehive's tariff.
See 47 U.S.C. s 204(a)(2)(A) ("the Commis- sion shall ... issue an
order concluding [a] hearing [under 


s 204] within 5 months after the date that the charge ...  becomes
effective"). In the Designation Order the Commis- sion first set out a
briefing schedule giving Beehive ten days  in which to prepare its
direct case, with briefing to conclude  on December 29, 1997, eight
days before the Commission's  decision was due. Later in the order,
however, the agency  set forth another schedule, which gave Beehive 15
days in  which to present its direct case, with briefing to conclude
on  December 31, 1997. Six days later the Commission amended  the
Designation Order to confirm the former schedule, where- upon Beehive
sought an extension of the deadline for submis- sion of its direct
case, which the Commission granted to the  extent of three days.
Beehive submitted the bulk of its direct  case on the new filing date,
but the agency accepted supple- mental materials that Beehive filed on
the following two days  and again later in connection with its
rebuttal of AT&T's  opposition.


On January 6, 1998 the Commission issued an "Investiga- tion Order"
concluding its inquiry and holding that Beehive's  proposed rate for
local switching was unreasonable. First,  the Commission found that
Beehive "did not explain or pro- vide data supporting the changes in
its costs and demand  from year to year." Indeed, Beehive admitted
that it had  erroneously based its proposed tariff only upon its 1996
cost  and demand figures, and not upon the figures for both 1995  and
1996 as required by 47 C.F.R. s 61.39(b)(1)(ii). The  Commission
further noted that Beehive's rate of return for  local switching had
been 111% in 1995 and 65% in 1996, well  over the 11.25% rate of
return the agency had prescribed for  LECs. In sum, "Beehive's failure
to justify or support its  proposed increase in operating expenses and
its use of an  unauthorized rate of return in calculating the
interstate local  switching rates" led the Commission to conclude that
"Bee- hive's rates ... are unjust and unreasonable."


The Commission then prescribed a rate for the purpose of  calculating
refunds. The agency based that rate upon the  ratio of total operating
expenses (TOE) to total plant in  service (TPIS) for similarly sized
LECs that reported data to  the NECA in 1995 and 1996. (The Commission
assumed that 


Beehive would have a similar TOE to TPIS ratio, "[a]bsent  unusual
circumstances, which Beehive has not shown in this  record.") The mean
TOE to TPIS ratio for those LECs was  21.55%. "By contrast, the data
upon which Beehive comput- ed the local switching rates contained in
[its 1997 tariff] show  a ratio ... of 59.96%." Yet Beehive had
reported ratios of  23.55% and 24.03% to the NECA in 1994 and 1995.
Allowing  that Beehive might be a higher-than-average cost LEC, the 
Commission adopted a TOE to TPIS ratio of 25% which,  combined with
the 11.25% permissible rate of return and  Beehive's demand figures,
led it to prescribe rates of  $0.009443 for premium switching service
and $0.004249 for  non-premium switching service. Based upon these
rates,  Beehive submitted a plan to refund about $141,000 to its 
customers, which the agency approved.


Beehive sought reconsideration of the Investigation Order,  claiming
that the short briefing and decision-making period  deprived it of its
right to a full hearing; it did not use an  unauthorized rate of
return in calculating its local switching  rates; it was not permitted
to comment upon the NECA data  the Commission used to prescribe a
rate; it is an unusually  high cost LEC for its size; the Commission
adopted an  erroneous demand figure; and the prescribed rate
constituted  a taking prohibited by the Fifth Amendment to the
Constitu- tion of the United States. The Commission granted the 
petition for reconsideration to the extent of admitting that it  had
erred in calculating Beehive's demand, and revised the  prescribed
local switching rates to $0.010106 and $0.004548  for premium and
non-premium service, respectively; it denied  Beehive's petition in


Beehive then petitioned this court for review, invoking our 
jurisdiction under the Hobbs Act, 28 U.S.C. s 2342. Its  petition,
however, seeks review only of the Reconsideration  Order and not of
the underlying Investigation Order.


II. Analysis


AT&T, intervening on behalf of the Commission, argues  that the
Reconsideration Order is not reviewable and that 


this court must therefore dismiss the petition for review for  lack of
jurisdiction. The Commission adopted AT&T's posi- tion at oral
argument. We agree that the Order is unreview- able but, as explained
below, not for want of jurisdiction.


A. Jurisdiction and the Standard of Review


In Southwestern Bell Telephone Co. v. FCC, No. 98-1197,  released
today, we hold that "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." Slip
op. at 7. That decision follows the  teaching of the Supreme Court in
ICC v. Brotherhood of  Locomotive Engineers, 482 U.S. 270 (1987): 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
alleging new evidence or changed circumstances and  never in a case
alleging only material error. See id. at 278- 79. Further, the Court
held that the Administrative Proce- dure Act "codifies the nature and
attributes of judicial review  [under the Hobbs Act], including the
traditional principle of  its unavailability 'to the extent that ...
agency action is  committed to agency discretion by law.' " Id. at 282
(quoting  5 U.S.C. s 701(a)(2)). Because the Court "perceive[d] that a
 ... tradition of nonreviewability exist[ed] with regard to  refusals
to reconsider for material error," it concluded that  "the agency's
refusal to go back over ploughed ground is  nonreviewable." Id. at


Beehive argues that BLE is inapplicable to this case in view  of s
405(b) of the Communications Act, which the Congress  added in 1988.
It provides:


(b)(1) Within 90 days after receiving a petition for  reconsideration
of an order concluding a hearing under  section 204(a) of this title
or concluding an investigation 


under section 208(b) of this title, the Commission shall  issue an
order granting or denying such petition.


(2) Any order issued under paragraph (1) shall be a  final order and
may be appealed under section 402(a) of  this title.


Because the Investigation Order concluded "a hearing under  section
204(a)," Beehive maintains that the Reconsideration  Order is "a final
order [that] may be appealed under section  402(a)," which states that
"[a]ny proceeding to ... set aside  ... any order of the Commission
... shall be brought as  provided by and in the manner prescribed in"
the Hobbs Act.  Further, Beehive contends that s 405(b) both overrides
the  "tradition of nonreviewability ... with regard to refusals [of 
the Commission] to reconsider for material error" and ren- ders the
Commission's decision upon reconsideration one not  committed to
agency discretion. BLE, 482 U.S. at 282.


Beehive misapprehends the import of s 405(b), however.  First, that
provision states merely that certain types of  orders granting or
denying petitions for reconsideration are  appealable under the Hobbs
Act. As the Supreme Court  pointed out in BLE, "[w]hile the Hobbs Act
specifies the form  of proceeding for judicial review of ICC orders,
it is the  [APA] that codifies the nature and attributes of judicial 
review." Id. Nothing in s 405(b) alters the standard of  review that a
court would apply in reviewing a decision of the  Commission granting
or denying a petition for reconsidera- tion. Accordingly, "the
impossibility of devising an adequate  standard of review" for an
order denying a petition for  reconsideration based upon a claim of
material error contin- ues to counsel against review of such a


Nor does s 405(b) alter the "tradition of nonreviewability  ... with
regard to refusals to reconsider for material error."  Id. When the
Congress added subsection (b) to s 405 it also  added ss 204(a)(2)(C)
and 208(b)(3) to the statute. Both  provisions make "[a]ny order
concluding a hearing [or investi- gation] under [s 204(a) or s 208(b)]
... a final order [that]  may be appealed under section 402(a)." Even
without those  sections, however, no one could seriously argue that an
order  of the Commission concluding a hearing or investigation 


under s 204(a) or s 208(b) was not among the final orders  made
appealable in s 402(a). That is, if ss 204(a)(2)(C) and  208(b)(3) are
not superfluous, it is only because they serve,  "in Macbeth's words,
'to make assurance double sure.' "  Shook v. District of Columbia Fin.
Responsibility & Manage- ment Assistance Auth., 132 F.3d 775, 782
(D.C. Cir. 1998).  We read s 405(b)(2) in the same light: it merely
makes  explicit what was already implicit, namely, that an order 
denying a petition for reconsideration of an order concluding  a
hearing under s 204(a) or an investigation under s 208(b) is  a final
order that, pursuant to s 402(a), is appealable under  the Hobbs


Finally, the Commission's decision to deny a petition for 
reconsideration remains committed to agency discretion, and  therefore
unreviewable as provided in the APA. More specif- ically, while s
405(b)(1) limits the Commission's discretion  with regard to the
timing of its disposition of a petition for  reconsideration under s
204(a), it does not constrain the  Commission's discretion with regard
to the merits of such a  petition, and the APA precludes review of
agency action "to  the extent ... committed to agency discretion by
law." 5  U.S.C. s 701(a)(2).


In sum, pursuant to ss 402(a) and 405(b)(2), this court has 
jurisdiction over Beehive's petition, which seeks review of a  final
order of the Commission and was filed in conformity  with the
requirements of the Hobbs Act. The BLE decision,  in turn, governs the
reviewability of the Commission's order  denying rehearing. Cf.
Heckler v. Chaney, 470 U.S. 821, 825,  837-38 (1985) (jurisdiction
over petition for review grounded  in 28 U.S.C. s 1331, but agency
action complained of in  petition unreviewable under APA).
Accordingly, we now turn  to Beehive's two arguments that the
Reconsideration Order is  reviewable under the standard set out in BLE
because Bee- hive's petition alleged new evidence or changed circum-


B. New Evidence


In BLE, the Court explained that the denial of a petition  for
reconsideration that raises new evidence is reviewable 


because otherwise "the petitioner will have been deprived of  all
opportunity for judicial consideration--even on a 'clearest  abuse of
discretion' basis--of facts which, through no fault of  his own, the
original proceeding did not contain." 482 U.S. at  279. The evidence
to which Beehive now refers us does not  come within this rationale
for review.


In its petition for reconsideration, Beehive sought to intro- duce
evidence that its costs are unusually high compared to  those of other
LECs of a similar size. Beehive noted that it  "is among the lowest
density LECs in terms of access lines  per exchange and per mile" and
that it "has more exchanges  (14) than the nearest similarly sized LEC
(9)." Further, it  argued that its "TOE to TPIS anomaly is explained
by the  fact that it uses leased switching equipment at four of its 
exchanges." Section 405(a), however, limits the 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  proceeding." Beehive's evidence was clearly not
new "in the  sense of being discovered after the Commission issued its
 Investigation Order." Southwestern Bell, slip op. at 8.  Moreover, it
was evidence that Beehive had reason to submit  to the Commission as
part of its direct case; the Designation  Order required Beehive to
provide "an explanation and data  supporting any changes in costs and
demand from year to  year," of which the evidence detailed above would
have been a  part. Therefore, Beehive could have and should have put
its  purportedly new evidence before the Commission in the  original
proceeding, not at the reconsideration stage.


In any event, even if we were to review Beehive's claim to  have
submitted new evidence, under the abuse of discretion  standard
implicit in BLE we would have to reject it. The  Commission declined
to allow the Company to introduce its  purportedly new evidence
because it found "that Beehive  ha[d] failed to satisfy the
requirements of Section 405[(a)] of  the Communications Act and
Section 1.106(c) of the Commis- sion's rules." Pursuant to that rule,
the Commission may  grant a "petition for reconsideration which relies


previously presented" only if such facts have changed since,  or could
not through ordinary diligence have been learned  prior to, the
petitioner's last opportunity to present such  matters, or if the
Commission determines that consideration  of such facts "is required
in the public interest." 47 C.F.R.  s 1.106(c). Because Beehive knew,
when it submitted its  direct case, of the evidence it sought to
present upon recon- sideration, that evidence could be admitted only
under the  public interest standard. Inasmuch as Beehive does not even
 argue that standard is satisfied, we could hardly say that the 
Commission abused its discretion in refusing to admit that 


Beehive does contend that, because it "sought reconsidera- tion largely
on due process grounds and the remedy it sought  was for the FCC to
reopen the record to consider new facts,"  the Reconsideration Order
is reviewable under our reasoning  in Fritsch v. ICC, 59 F.3d 248
(1995). In that case a railroad  (CSX) had sought and received the
approval of the Interstate  Commerce Commission to abandon a line.
Almost six months  after CSX abandoned the line it reached an
agreement with a  county parks department to convert part of the line
into a  nature trail. Upon the petition of CSX the ICC reopened the 
abandonment proceeding and approved the rail-to-trail con- version.
Six days after the time for seeking reconsideration  of that order had
expired, a group of landowners over whose  property the trail would
run filed a petition to reopen the  ICC proceeding, which the ICC
denied. We held that the  landowner's petition presented the ICC with
"new material,"  namely, their claim that they were denied the
opportunity to  submit protests against CSX's petition to reopen. Id.
at 251.  Therefore, the denial of their petition was reviewable under 
the exception in BLE for petitions raising new matter. See  id. at


The rationale for our decision in Fritsch is clearly inappli- cable
here: if review of the ICC's denial of the landowners'  petition were
not available as new material under BLE, then  a party "deprived of
due process in an original agency  petition could never obtain review
of the merits although he  never learned, actively or constructively,
of the proceedings 


to deprive him of his rights until after the expiration of the  [Hobbs
Act] review period." Id. Unlike the landowners in  Fritsch, Beehive
filed its petition for rehearing within the 30- day statutory period
for seeking reconsideration of a Commis- sion order, see 47 U.S.C. s
405(a), thereby tolling the period  for seeking judicial review of the
Investigation Order. See  Southwestern Bell Tel. Co. v. FCC, 116 F.3d
593, 596-97 (D.C.  Cir. 1997); see also 28 U.S.C. s 2344. Accordingly,
Beehive  could have sought judicial review of the alleged denial of
due  process by filing a timely petition for review of the Investiga-
tion Order following issuance of the Reconsideration Order.


Because Beehive has not made a showing of either new  evidence or
changed circumstances, "we must deny its peti- tion for review unless
... its petition seeks review of some- thing other than the agency's
refusal to reopen the proceed- ing." Southwestern Bell, slip op. at
8-9. Beehive has two  arguments to that effect, which we consider in
the next  section.


C. Other Grounds for Reviewing the Reconsideration Order


First, Beehive notes that its filing a petition for reconsider- ation
of the Investigation Order "rendered [that] order nonfi- nal and
unreviewable as to [it]," which clearly is correct. See  Bellsouth
Corp. v. FCC, 17 F.3d 1487, 1489 (D.C. Cir. 1994)  ("[A] party that
stays before an agency to seek reconsidera- tion of an order cannot at
the same time appear before a  court to seek review of that same
order, any more than the  party could literally be in two places at
the same time").  Then, Beehive urges that its petition for
reconsideration  transformed the Investigation Order into an
interlocutory  order and that "its petition for review of the
Reconsideration  Order [brought up] for review 'all interlocutory
orders which  preceded it.' " By denying reconsideration, however, the
 Commission confirmed the Investigation Order as a final  order
subject to judicial review; the Investigation Order  never was an


Second, Beehive argues that because the Commission  granted
reconsideration in part, the Reconsideration Order is 


a "new order immediately appealable" under BLE. 482 U.S.  at 286. In
BLE the Court, in a dictum, did state 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 reviewable on its  merits." Id. at 278; see also id. at 286
("If, of course, the  ICC's action here had gone beyond what was (at
most)  clarification of an ambiguity, and in the guise of interpreting
 the original order in fact revised it, that would have been a  new
order immediately appealable" (emphasis in original)).  In the same
decision, however, the Court made clear that  whether an agency has
reopened a proceeding is dependent  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. In this case, the Commission simply 
amended its prior order by adjusting the amount of Beehive's  refund
obligation. Accordingly, only the portion of the order  actually
reopened, which Beehive does not challenge, is re- viewable on its
merits. Cf. Poulin v. Bowen, 817 F.2d 865,  869 (D.C. Cir. 1987) (when
agency exercises discretion to  reopen proceeding, new order is
reviewable "to the extent of  the reopening"). Therefore, we reject
Beehive's arguments  that it sought review of something other than the


III. Conclusion


Beehive sought review solely of an order denying reconsid- eration. For
the reasons set forth above, that order is  unreviewable, and the
petition for review is therefore


Denied.