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


US WEST COMM INC

v.

FCC


98-1468a

D.C. Cir. 1999


*	*	*


Williams, Circuit Judge: Until various conditions relating  to
competition in local ("intraLATA") telephone service are  satisfied,
the Telecommunications Act of 1996 generally bars  each Bell operating
company ("BOC") from providing long  distance ("interLATA") service
originating in the region  where it provides local service:


Neither a Bell operating company, nor any affiliate of a  Bell
operating company, may provide interLATA ser- vices except as provided
in this section.


s 271(a) of the Communications Act, 47 U.S.C. s 271(a).


In May 1998 two of the BOCs, U S WEST and Ameritech,  announced deals
with Qwest Communications Corporation  under which each BOC would
market Qwest's long distance  service to its customers. Each BOC
employed a special label  for the resulting package ("Buyer's
Advantage" for U S  WEST, "CompleteAccess" for Ameritech); each
offered the  customer "one-stop shopping" for both local and long dis-
tance, with all customer support (sign-up and servicing)  through the
BOC's own toll-free number. Qwest was to  compensate each BOC with a
fixed fee for every customer  obtained.


Competitors of Qwest in the long distance market filed  complaints in
two federal district courts, which referred them  to the FCC. The
Commission invited the filing of administra- tive complaints, which
duly followed. The Commission held  adjudicative proceedings and
ultimately issued the order un- der review here, finding the
agreements in violation of s 271.  AT&T Corp. v. Ameritech Corp., 13
FCC Rcd 21,438 (1998).  U S WEST, Ameritech, and Qwest petitioned for


The statutory term "provide" appears to us somewhat  ambiguous in the
present context. The Commission believes  that the disputed
arrangements would give the two BOCs  positions in the market for
local and long distance service that  would greatly advantage them
once they become explicitly  entitled to provide long distance
service. Given the reason- ableness of that belief, and its relation
to the overall purposes  of the Act, we find the Commission's


* * *


As we said, s 271 says that a BOC may not "provide  interLATA services
except as provided in this section." Ex- ceptions 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, only upon appli- cation and FCC
approval pursuant to s 271(d). See general- ly SBC Communications Inc.
v. FCC, 138 F.3d 410, 412-14  (D.C. Cir. 1998) (explaining history and
structure of s 271(c)- (d)). Neither U S WEST nor Ameritech has
received  s 271(d) approval for any state: each is therefore subject
to  the general s 271(a) prohibition.


Under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984),  we of course
honor Congress's clearly expressed answer to  the "question"
confronted by the agency. See id. at 842-43.  Petitioners claim that s
271(a)'s ban clearly cannot apply to  any marketing arrangements; as
the two Qwest arrange- ments are a form of marketing, they reason that
the Commis- sion necessarily erred in its expansive view of


Petitioners base this claim on s 272 of the Act. It requires  that each
BOC, even after receiving s 271(d) approval, pro- vide most interLATA
services only through a separate affili- ate. See 47 U.S.C. s 272(a).
Further, s 272(g)(2) places the  following restriction on the BOC and
its affiliate:


A Bell operating company may not market or sell inter- LATA service
provided by an affiliate required by this  section within any of its
in-region States until such  company is authorized to provide
interLATA services in  such State under section 271(d) of this


Id. s 272(g)(2). The BOCs argue that since this section  prevents them
from marketing the interLATA service of an  affiliate until they
receive the go-ahead under s 271(d), it  carries a clear implication
that they may, before that date,  market the interLATA services of a
non-affiliate such as  Qwest. The Commission agreed--to the extent of
reading  s 272(g)(2) as showing that the forbidden "provi[sion]" of  s
271(a) cannot cover all marketing relationships. See 13  FCC Rcd at
21,463, p 32. But some arrangements that are  marketing in the
conventional sense of the word, it thought,  could also qualify as
provision of service forbidden under  s 271(a). See id. at 21,463-64,


Addressing this precise question first, we think it plain that  the
Commission's reading of the two sections has not led it  into any
logical contradiction. So long as there remains some  non-trivial
range of marketing of non-affiliate services that  does not fall under
the s 271(a) ban, the Commission pre- serves some scope for s
272(g)(2)'s implicit authorization.  The BOCs argue that the
Commission in fact leaves no such  room, pointing to language in the
Order saying that although  a BOC could offer its marketing services
to a long distance  supplier, it could not "represent[ ] that [the
marketed] prod- uct or service is associated with its name or
services." Id. at  21,474, 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 or services" is not before us, but we read the phrase 
together with the Commission's expression of concern about  the BOCs'
developing a "first mover's advantage" over long  distance carriers in
the as yet undeveloped full-service mar- ket. 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 their
marketing of interLATA  service might exploit, it cannot be said to
cut the implicitly  permissible marketing down to zero or its
functional equiva- lent. For example, the Commission's decision
explicitly al- lows a BOC to offer the services of its marketing
department  for sale of interLATA services, subject to the proviso
noted  above. The Commission cannot be said to have squeezed the  life
out of s 272(g)(2)'s implied permission. Thus, the BOCs'  argument


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 ser- vices" is anywhere defined in the Act.
Cf. 47 U.S.C. s 153  (definitions). "InterLATA service" is defined--as
"telecom- munications between a point located in a local access and 
transport area and a point located outside such area," id.  s
153(21)--but that doesn't help: the definition does not 


specify some necessary relation of an actor to such telecom-
munications. 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 (comparing dictionary definitions).


Petitioners also point to numerous other places where the  Act uses the
term "provide" or its cognates, see 47 U.S.C.  s 153(44) ("provider of
telecommunications services"); id.  s 153(45) ("provide
telecommunications services"); id.  s 271(c) ("providing access and
interconnection"); id.  s 272(a) ("provide" various services,
including interLATA  services); id. s 275 ("provision of alarm
monitoring ser- vices"), arguing that the Commission's assignment of
narrow  meanings to "provide" in those instances compels equal nar-
rowness here. But although we normally attribute consistent  meanings
to statutory terms, "[i]dentical words may have  different meanings
where the subject-matter to which the  words refer is not the same in
the several places where they  are used, or the conditions are
different." Weaver v. USIA,  87 F.3d 1429, 1437 (D.C. Cir. 1996)
(internal quotation omit- ted). As the Commission noted, no other
section besides  s 271(a)-(b) uses "provide" to describe a restriction
on BOCs'  entry into a market where the lifting of the restriction 
depends on the BOCs themselves. 13 FCC Rcd at 21,462,  p 30. A narrow
reading would thus tempt the BOCs to defer  conduct that Congress
hoped to accelerate--acts facilitating  the development of competition


FCC's reading of "provide" to include the BOCs' actions  here,
moreover, appears clearly reasonable in the specific  context of s
271. See Chevron, 467 U.S. at 845. As the  Commission noted, s 271
both gives the BOCs an opportunity  to enter the long-distance market
and conditions that oppor- tunity on the BOCs' own actions in opening
up their local  markets. See 13 FCC Rcd at 21,645, p 36. The
Commission  viewed the powerful incentive set up by this scheme as 
shedding light on the market entry prohibition:


[I]n order to determine whether a BOC is providing  interLATA service
within the meaning of section 271, we  must assess whether a BOC's
involvement in the long 


distance market enables it to obtain competitive advan- tages, thereby
reducing its incentive to cooperate 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 "competitive advantage" or "incentive"  could make it
nonsensical, turning it into an excuse to stifle  the BOCs at every
opportunity. But the FCC found that the  arrangements here would have
afforded the BOCs in question  a serious advantage, namely a "first
mover's advantage" over  any non-BOC firms hoping to secure a position
in the antici- pated 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 own brand name and with their own  customer
care, see id. at 21,466, p 38, U S WEST and  Ameritech could build up
goodwill as full-service providers,  positioning themselves in these
markets before s 271 allows  them actually to enter. There appears to
have been specific  congressional concern over the impact of jointly
marketed  local and long distance service; this is manifested in the 
s 271(e) rule barring the major interLATA carriers from  jointly
marketing their interLATA service with local service  obtained from a
BOC, for three years or until the BOC in  question gains access to the
long distance market under  s 271, whichever is first. See id. at
21,473-74, p 49; 47  U.S.C. s 271(e)(1). If the BOCs could secure this
advantage  without opening their local service markets, the blunting
of  the intended incentive would be considerable--or so the 


Petitioners seek to press the s 271(e) likeness further.  They note
that the Commission, despite what they claim is an  incentive
structure similar to s 271(a)'s, relied on the First  Amendment in
allowing long distance carriers covered by  s 271(e) to engage in
certain advertising activities paralleling  what is forbidden here.
See In the Matter of Implementa- tion of the Non-Accounting Safeguards
of Sections 271 and  272 of the Communications Act of 1934, as
amended, 11 FCC  Rcd 21905, 22,040-41, pp 279-80. But s 271(e) allows


long distance carriers 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
resold BOC services. In that context,  the Commission allowed a
covered carrier to proclaim its  offers both of long distance and of
resold BOC local service in  a single ad, so long as it did not offer
such service as a  "bundle" or otherwise with "one-stop" shopping. Id.
In  short, it let them truthfully advertise the services they could 
lawfully provide, but no more. As the BOCs are barred from  providing
interLATA service until they have surmounted the  s 271(d) hurdles,
the present case presents no real analogy.


Context also explains the Commission's application of the  "engage in
the provision of alarm monitoring" language of  s 275. The Commission
and the petitioners spar over wheth- er the Commission'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, p 31. 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.  s 275(a)(1),
as where its duration depends on the BOC's own  actions.


The Commission's action here of course does not represent  a complete
demarcation of the border between permitted  marketing and forbidden
provision. That is entirely reason- able. Apart from the Commission's
general authority to  choose between adjudication and rulemaking, see
NLRB v.  Bell Aerospace Co., 416 U.S. 267, 294 (1974), it makes sense 
for it to proceed through case-by-case judgments of a ques- tioned
action's likely effect--whether, for example, the mar- keting
materials will cause consumers to identify the services  with the BOC.
While--as we've noted--some of the Commis- sion's language on
incentives is rather broad, it is not incon- sistent with future
judgments balancing the interests that are  relevant under s 271(a).
We are also puzzled by the Com- mission's concern that the two BOCs in
each instance laid  down the terms for the transaction, which Qwest
humbly  accepted. 13 FCC Rcd at 21,449-50, 21,452, pp 10, 14. As 


the BOCs had unique advantages to offer Qwest, this course  of events
was hardly surprising; we cannot see that the issue  of who first
proposed what to whom has much bearing on the  policy values at stake.
But the Commission's detours on the  subject do not appear to have
played a decisive role in its  decision.


Petitioners also assert a want of substantial evidence.  They regard
the Commission's ultimate finding as belied by  Qwest's repeated
identification in the BOCs' marketing mate- rials as the long distance
provider. But that identification is  still consistent with the view
that the materials as a whole  would lead consumers to link
long-distance service to the  BOCs, particularly as long distance 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 by those who resell  interLATA
services," 13 FCC Rcd at 21,471-73, pp 46, 48, was  somehow suggesting
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.