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


VIRGIN IS TELE CORP

v.

FCC


98-1575a

D.C. Cir. 1999


*	*	*


Rogers, Circuit Judge: Petitioner, the Virgin Islands Tele- phone
Corporation, is a provider of local telephone service in  the U.S.
Virgin Islands. AT&T Submarine Systems, Inc.  ("AT&T-SSI"), a
wholly-owned subsidiary of intervenor,  AT&T Corporation, constructs
and maintains undersea fiber  optic telecommunications cable systems,
or, submarine cable  systems. In this appeal, petitioner contends that
in granting  AT&T-SSI's application for cable landing rights as a non-
common carrier, the Federal Communications Commission  ("Commission")
ignored Congress' clear directive in the 1996  Telecommunications Act
("1996 Act") to apply a new regime  for distinguishing between common
carrier and private carri- er services. Petitioner maintains that,
under the 1996 Act,  "telecommunications services" is defined in a
manner that no  longer permits the Commission to apply the two-part
test of  National Association of Regulatory Utility Commissioners v. 
FCC, 525 F.2d 630 (D.C. Cir. 1976) ("NARUC I"). In peti- tioner's
view, AT&T-SSI would be offering telecommunica- tions "to such classes
of users as to be effectively available  directly to the public" as
defined by the 1996 Act if its  customers used the capacity they
bought from AT&T-SSI to  provide service to the public. Because the
Commission's  interpretation of an ambiguous new term in the 1996 Act
to  mean "essentially" the same thing as "common carrier"--and  thus
governed by the NARUC I framework--is reasonable,  we deny the


I.


AT&T-SSI filed with the Commission an application for  authority to
land and operate a submarine cable system  extending between St.
Thomas and St. Croix in the Virgin  Islands, pursuant to 47 U.S.C. s
34 (1994).1 In the applica- tion, AT&T-SSI expressed its intention to
sell the capacity to  common carriers on an indefeasible right of use
("IRU")  basis.2 Petitioner and TelefOnica Larga Distancia de Puerto 
Rico, Inc. ("TLD"), a long distance service provider in the  U.S.
Virgin Islands-Puerto Rico market, filed petitions to  deny AT&T-SSI's
application. Petitioner and TLD asserted  that the proposed submarine
cable system should be operated  on a common carrier basis and that
AT&T-SSI should ac- cordingly resubmit its application and seek
authorization to  construct or operate the proposed system under 47
U.S.C.  s 214.3 Shortly after the petitions to deny were filed, peti-


__________

n 1 The statute provides, in pertinent part, that "[n]o person shall 
land or operate in the United States any submarine cable directly  or
indirectly connecting the United States with any foreign country,  ...
unless a written license to land or operate such cable has been 
issued by the President of the United States." 47 U.S.C. s 34.


2 The Commission has previously explained IRU interests as  follows:


An IRU interest in a communications facility is a form of  acquired
capital in which the holder possesses an exclusive and  irrevocable
right to use the facility and to include its capital  contribution in
its rate base, but not the right to control the  facility or,
depending on the particular IRU contract, any right  to salvage.


Reevaluation of the Depreciated-Original-Cost Standard in Set- ting
Prices for Conveyances of Capital Interests in Overseas 
Communications Facilities Between or Among U.S. Carriers, 8  F.C.C.R.
4173 p 2 n.6 (1993).


3 Section 214(a) provides, in relevant part:


No carrier shall undertake the construction of a new line or of  an
extension of any line, or shall acquire or operate any line, or 
extension thereof, or shall engage in transmission over or by  means
of such additional or extended line, unless and until 


tioner filed a petition for a declaratory ruling that the pro- posed
submarine cable system should be operated as a com- mon carrier
facility.


While the AT&T-SSI application was pending, Congress  enacted the
Telecommunications Act of 1996, Pub. L. No.  104-104, 110 Stat. 56
(codified in scattered sections of 47  U.S.C.) ("1996 Act"). The 1996
Act, among other things,  introduced two new terms,
"telecommunications carrier" and  "telecommunications service," and


The term "telecommunications carrier" means any pro- vider of
telecommunications services, except that such  term does not include
aggregators of telecommunications  services (as defined in section 226
of this title). A  telecommunications carrier shall be treated as a
common  carrier under this chapter only to the extent that it is 
engaged in providing telecommunications services, except  that the
Commission shall determine whether the provi- sion of fixed and mobile
satellite service shall be treated  as common carriage.


47 U.S.C. s 153(44) (Supp. III 1997).


The term "telecommunications service" means the offer- ing of
telecommunications for a fee directly to the public,  or to such
classes of users as to be effectively available  directly to the
public, regardless of the facilities used.


Id. s 153(46). For the purposes of this appeal, the key  aspects of
these definitions are that "any provider of telecom- munications
services," except for "aggregators" of such ser- vices, is designated
a "telecommunications carrier" and that  to the extent that a
telecommunications carrier is engaged in  providing
"telecommunications services," it "shall be treated  as a common
carrier." Id. s 153(44). In other words, wheth- 


__________

n there shall first have been obtained from the Commission a 
certificate that the present or future public convenience and 
necessity require or will require the construction, or operation,  or
construction and operation, of such additional or extended  line.


47 U.S.C. s 214(a).


Er a carrier will be subject to common carrier regulation  pursuant to
s 153(44) turns on whether it offers "telecommu- nications for a fee
directly to the public, or to such classes of  users as to be
effectively available directly to the public." Id.  s 153(46).


The International Bureau ("Bureau") granted AT&T-SSI's  application for
a cable landing license on a non-common  carrier basis. See AT&T
Submarine Systems, Inc., 11  F.C.C.R. 14885 p 1 (1996) ("Bureau
Order").4 Observing that  "[t]he Commission has not yet addressed the
issue of how, if  at all, the 1996 Act's introduction of the concept
of a 'telecom- munications carrier' affects the applicability of NARUC
I  standard," id. p 15, the Bureau decided that, in any event, 
AT&T-SSI is not a common carrier because it is neither a 
"telecommunications carrier" under the 1996 Act nor a "com- mon
carrier" under the NARUC I standard. Id. pp 13-15.


In examining whether AT&T-SSI is a "telecommunications  carrier," or a
provider of "telecommunications service," under  the 1996 Act, the
Bureau looked to the Commission's inter- pretation of the term
"commercial mobile service," as defined  in the Omnibus Budget
Reconciliation Act of 1993, Pub. L.  No. 103-66, Title VI, 107 Stat.
312, 379-401 (codified in  scattered sections of 47 U.S.C.) ("1993
Budget Act"). The  1993 Budget Act defined "commercial mobile service"
as "any  mobile service ... that is provided for profit and makes 
interconnected service available (A) to the public or (B) to  such
classes of eligible users as to be effectively available to a 
substantial portion of the public, as specified by regulation by  the
Commission." 47 U.S.C. s 332(d)(1). The Commission  subsequently read
"available ... to the public" as "offered  without restriction on who
may receive it" and declared that  whether a service was available to
"such classes of eligible  users as to be effectively available to a
substantial portion of  the public" depended on "several relevant




__________

n 4 The Bureau Order disposed of both the petitions to deny  AT&T-SSI's
application and the petition for a declaratory ruling  that the
proposed facility must be operated on a common carrier  basis. See
Bureau Order p 8 n.7.


type, nature, and scope of users for whom the service is  intended."
Implementation of Sections 3(n) and 332 of the  Communications Act,
Regulatory Treatment of Mobile Ser- vices, 9 F.C.C.R. 1411 p 265
(1994) ("CMRS Order"). The  Commission also stated that a service will
not be considered  "available to the public" or "effectively available
to a substan- tial portion of the public" if it is "provided only for
internal  use or only to a specified class of eligible users under the
 Commission's Rules." Id.


Noting the similarity in the definitions of the terms "tele-
communications service" and "commercial mobile service," the  Bureau
concluded that under the 1996 Act, "whether a service  is effectively
available directly to the public depends on the  type, nature, and
scope of users for whom the service is  intended and whether it is
available to 'a significantly restrict- ed class of users.' " Bureau
Order p 25. The Bureau applied  these criteria to AT&T-SSI's proposed
facility and found  that:


AT&T-SSI ... will make available bulk capacity in its  system to a
significantly restricted class of users, includ- ing common carrier
cable consortia, common carriers,  and large businesses. Potential
users are further limited  because only consortia, common carriers,
and large busi- nesses with capacity in interconnecting cables or
other  facilities and, in many cases, operating agreements with 
foreign operators, will be able to make use of the cable as  a


Id. The Bureau rejected the argument that AT&T-SSI will  be making a
service effectively available directly to the public  because
AT&T-SSI's customers will use the capacity to pro- vide a service to
the public, noting that "[s]uch an interpreta- tion is contrary to the
plain language of the [1996 Act] by  focusing on the service offerings
AT&T-SSI's customers may  make rather than what AT&T-SSI will offer."5
Id. p 26. 




__________

n 5 The Bureau also questioned the assumption that AT&T-SSI's 
customers would sell the capacity to the public because some of the 
"large businesses [to which the capacity will be made available] ...


Therefore, the Bureau concluded that AT&T-SSI will not be  offering a
service "directly to the public, or to such classes of  users to be
effectively available directly to the public" and  that, consequently,
AT&T-SSI is not a "telecommunications  carrier" providing
"telecommunications service" under the  1996 Act. Id. p 29.


The Bureau then considered whether AT&T-SSI should  nevertheless be
regulated as a common carrier under  NARUC I. The NARUC I test has two
parts: "[W]e must  inquire, first, whether there will be any legal
compulsion ...  to serve [the public] indifferently, and if not,
second, whether  there are reasons implicit in the nature of [the]
operations to  expect an indifferent holding out to the eligible user
public."  NARUC I, 525 F.2d at 642. The Commission has subse- quently
interpreted this two-part test to mean that a carrier  has to be
regulated as a common carrier if it will "make  capacity available to
the public indifferently" or if "the public  interest requires common
carrier operation of the proposed  facility." Cable & Wireless, PLC,
12 F.C.C.R. 8516 pp 14-15  (1997). The Bureau, applying the two-part
test, decided that  neither prong of the NARUC I standard was
applicable to  AT&T-SSI's proposed system and that the proposed system
 may thus be offered on a non-common carrier basis. See  Bureau Order
p 69. The Bureau added, however, that it  retained "the right to
change the regulatory status of the  cable system to common carrier
should conditions change in  the future." Id. p 2.


The Commission denied petitioner's application for review,  agreeing
with the Bureau that the 1996 Act did not require it  to regulate
AT&T-SSI as a common carrier and that "there  are no other public
interest reasons for doing so." AT&T  Submarine Systems, Inc., 13
F.C.C.R. 21585 p 1 (1998)  ("Commission Order"). In the Commission's
view, as it had  previously held in Cable & Wireless, "the term
'telecommuni- cations carrier' means essentially the same as common
carri- er" and "does not ... introduce a new concept whereby we 




__________

n would not use the capacity to provide service to the public." Id.  p
26.


must look to the customers' customers to determine the  status of a
carrier." Commission Order p 6 (citing Cable &  Wireless p 13). The
Commission accordingly proceeded to  apply the traditional NARUC I
two-part test to determine  whether AT&T-SSI should be regulated as a
common carrier  under the 1996 Act.


First, the Commission asked, under the second part of the  NARUC I
test, whether AT&T-SSI "intend[ed] to make  'individualized decisions,
whether and on what terms to  serve.' " Id. p 7 (citation omitted).
Noting that the Bureau  had found that "AT&T-SSI would have to engage
in negotia- tions with each of its customers on the price and other
terms  which would vary depending on the customers' capacity  needs,
duration of the contract, and technical specifications,"  id. p 8, the
Commission found that AT&T-SSI "will not sell  capacity in the
proposed cable indifferently to the public."  Id. The Commission thus
concluded that the second part of  the NARUC I test did not require
that AT&T-SSI be regu- lated as a common carrier. See id.


Next, the Commission considered whether, under the first  part of the
NARUC I test, "the public interest requires  common carrier operation
of the facility." Id. p 9. The  Commission focused its inquiry on
whether AT&T-SSI "has  sufficient market power to warrant regulatory
treatment as a  common carrier." Id. The Commission concluded that be-
cause "sufficient alternative facilities" to service the St.  Thomas
to St. Croix route are available, "AT&T-SSI does not  have market
power," Id. p 11, and the first part of the  NARUC I test does not
require that AT&T-SSI be regulated  as a common carrier. See id.


II.


Petitioner principally contends that the Commission's deci- sion to
apply the NARUC I test to find that AT&T-SSI does  not offer
"telecommunications services" ignored both the  plain language of the
1996 Act and the congressional intent to  replace the traditional
NARUC I test with a new statutory  standard that effects a drastic
change in the regulatory 


regime.6 Further, petitioner maintains that the Commission  has ruled
in other contexts that providers offering services  similar to
AT&T-SSI's services are "telecommunications car- riers" under the 1996
Act and that the Commission failed to  follow its own precedent
without adequate explanation. We  apply the now familiar standard of
review articulated in  Chevron U.S.A. Inc. v. Natural Resources
Council, Inc., 467  U.S. 837 (1984).


The parties agree that AT&T-SSI does not sell its capacity  "directly
to the public," and hence the question before the  Commission was
whether AT&T-SSI's business activities  constitute an "offering of
telecommunications ... to such  classes of users as to be effectively
available directly to the  public." The first inquiry under Chevron is
"whether Con- gress has directly spoken to the precise question at
issue."  Id. at 842. Neither the text nor legislative history of the
1996  Act shows that Congress has decided whether the activities  by
AT&T-SSI constitute a "telecommunications service."  The phrase "to
such classes of users as to be effectively  available directly to the
public" is sufficiently vague and open- ended to leave the precise
issue of how to treat AT&T-SSI  undecided. Taken at face value, the
legislative history offers  little additional guidance because it
simply states that the  definition of telecommunications service
"recogniz[es] the dis- tinction between common carrier offerings that
are provided  to the public ... and private services." H.R. Conf. Rep.
No.  104-458, at 115 (1996).


Consequently, petitioner's contention that the Commission  failed to
follow what the text of the 1996 Act "unambiguously"  requires is
exaggerated. Petitioner claims that "the statuto- ry language requires
... an examination of the 'class of users'  served by" AT&T-SSI and
that the Commission's refusal to  look at the activities of AT&T-SSI's
customers thus amount- ed to a disregard of the statutory directive.
Although the  plain language of the statute does not preclude




__________

n 6 Because petitioner does not challenge the substance of the 
Commission's NARUC I analysis, we do not reach the question  whether
the Commission applied the NARUC I test correctly.


reading, neither does it compel such a result. The phrase  "effectively
available directly to the public" can be reasonably  read instead as
reflecting the NARUC I court's emphasis that  "carriers need not serve
the whole public" to be classified as  common carriers. NARUC I, 525
F.2d at 642 (citation omit- ted). The court, after stating that
"[w]hat appears to be  essential to ... the common carrier concept is
that the  carrier 'undertakes to carry for all people indifferently,'
" id.  at 641 (citation omitted), stressed that "[t]his does not mean 
that a given carrier's services must practically be available to  the
entire public." Id. The court then added, "It is not  necessary that a
carrier be required to serve all indiscrimi- nately; it is enough that
its practice is, in fact, to do so." Id.  (citation omitted). Given
that the statute's distinction be- tween "directly available to the
public" and "effectively avail- able directly to the public" can be
read as reflecting the  NARUC I court's distinction between serving
the entire  public and serving only a fraction of the public, it is
reason- able to read the statute as adopting the NARUC I frame- work.
Therefore, petitioner's contention that the statute  requires the
Commission to examine AT&T-SSI's customers'  activities to determine
AT&T-SSI's status attributes more  determinative force to the language
of the statute than is  warranted.


Because the 1996 Act is silent with respect to the issue of  whether
AT&T-SSI should be treated as a common carrier,  the question under
Chevron becomes "whether the agency's  answer is based on a
permissible construction of the statute."  Chevron, 467 U.S. at 843.
The Commission construed the  term "telecommunications carrier" by
reasoning that it  "means essentially the same as common carrier" and
that it  does not "introduce a new concept whereby we must look to 
the customers' customers to determine the status of a carri- er."
Commission Order p 6. As support for its conclusion,  the Commission
looked to its decision in Cable & Wireless,  where it had concluded
that the definition of "telecommunica- tions services" in the 1996 Act
was "intended to clarify that  telecommunications services are common
carrier services,"  Cable & Wireless p 13, citing the above-mentioned


history that "the definition of telecommunications service  'recognizes
the distinction between common carrier offerings  that are provided to
the public ... and private services.' "  Id. (quoting H.R. Conf. Rep.
No. 104-458, at 115). Reasoning  from this statement in the
legislative history, the Commission  viewed the definition of
"telecommunication services," that is,  "the offering of
telecommunications for a fee directly to the  public or to such
classes of users as to be effectively available  directly to the
public," to be essentially a way of restating the  definition of


Although the Commission has not provided a detailed ex- planation of
its interpretation of the statute in the decision  under review, the
rationale in Cable & Wireless, on which the  Commission relies,
constitutes a permissible construction of  the statute. As discussed,
Cable & Wireless based its reading  primarily on the legislative
history of the 1996 Act. The  Conference Report stated that the
definition of telecommuni- cations service "recogniz[es] the
distinction between common  carrier offerings that are provided to the
public ... and  private services." H.R. Conf. Rep. No. 104-458, at
115. This  emphasis on the distinction between the public and the pri-
vate echoes the NARUC I court's discussion of the term  "common
carrier." The NARUC I court, in discussing the  concept of "common
carrier," stated that "the critical point is  the quasi-public
character of the activity involved," NARUC  I, 525 F.2d at 641, and
referred to phrases like "a sort of  public trust," "availing
themselves of the business of the  public at large," and "the public's
business" to elucidate the  concept. Id. at 641-42. In addition, the
court used the  phrase "public-private dichotomy" to describe "the
distinction  between common carrier and non-common carrier operators."
 Id. Although the Commission's decision here did not explicit- ly make
this point, the legislative history that Cable &  Wireless relied on
can be reasonably construed as manifesting  Congress' intention to


We disagree with petitioner's contention that the Commis- sion's use of
the NARUC I test constitutes a failure to give  meaning to the
definition of "telecommunications service." It 


is true that the Commission never explained in detail how its 
interpretation corresponded to the specific text of the rele- vant
provision.7 However, the Commission implicitly gave  meaning to the
statutory language by applying the NARUC I  test. Under the NARUC I
test, the key determinant wheth- er a carrier is a common carrier is
"the characteristic of  holding oneself out to serve
indiscriminately," NARUC I, 525  F.2d at 642, and whether a carrier is
offering services "direct- ly to the public" or making them
"effectively available directly  to the public" is irrelevant for the
purpose of determining  one's common carrier status. In other words,
under the  Commission's reading of the statute, the emphasis is on the
 phrase "to the public" that appears in both "directly to the  public"
and "effectively available directly to the public," and  the
difference between "directly" and "effectively available  directly" is
important merely for the purpose of emphasizing  the proposition that
"common carriers need not serve the  whole public." Id. (emphasis
added) (citation omitted). This  is a reasonable reading of the
statute, and petitioner's re- peated demand that the Commission
articulate an interpreta- tion of "effectively available directly to
the public" that is  separate from "directly to the public" evinces
its failure to  comprehend the structure of the NARUC I test and the 


To the extent that petitioner's challenge rests on the as- sumption
that if all Congress had intended was to clarify the  phrase "common
carrier" it would not have introduced a new  term, it fares no better.
First, the two terms, "telecommuni- cations carrier" and "common
carrier" are not necessarily  identical, and, as intervenor AT&T
Corporation urges, we  need not decide today what differences, if any,
exist between  the two. Second, as the Commission points out in its
brief,  the concept of "common carrier" has not been eliminated by 
the 1996 Act because "the core provisions of Title II of the 




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n 7 Although the Bureau engaged in a textual analysis of sort by 
referring to the CMRS Order, the Commission does not seem to  have
adopted the Bureau's analysis of the relationship between the  instant
case and the CMRS Order. See infra pp. 14-15.


1934 [Communications] Act ... remain in the Act and ad- dress the
duties of 'common carriers.' " The Commission's  theory that Congress
attempted to retain the familiar concept  of "common carrier" and yet
redefine it in a way that is  clearer thus seems plausible. Whether
this is the most  elegant way of providing clarification is, of
course, not the  issue.


Finally, petitioner's contention that in granting AT&T- SSI's
application, the Commission departed from its own  precedent without
adequate explanation is unpersuasive.  First, petitioner refers to the
Commission's rulemaking in  CMRS Order, which interpreted the term
"commercial mobile  service" defined by Congress as: "any mobile
service ... that  is provided for profit and makes interconnected
service avail- able (A) to the public or (B) to such classes of
eligible users as  to be effectively available to a substantial
portion of the  public, as specified by regulation by the Commission."
47  U.S.C. s 332(d). Petitioner contends that the Commission's 
rulemaking order indicates that it "recognized that by intro- ducing
the new concept of CMRS, Congress intended to alter  the
[Commission's] method for determining which carriers  would be subject
to common carrier regulation" and "that the  phrase 'effectively
available' to the public brought within the  definition of CMRS
services reaching the public either direct- ly or indirectly-like
wholesale services." Thus, petitioner  implies that because AT&T-SSI's
planned activities with the  proposed cable system can be
characterized as wholesale  services, AT&T-SSI, too, should be treated


Although petitioner's discussion of the CMRS Order in its  opening
brief implies the objection just outlined, petitioner  never
explicitly contends that the Commission's decision is  inconsistent
with the CMRS Order. Therefore, petitioner  may have waived this
particular argument. See Corson &  Gruman Co. v. NLRB, 899 F.2d 47, 50
n.4 (D.C. Cir. 1990)  (per curiam). Even if petitioner has not waived
it, it is  meritless. Petitioner's contention that the Commission con-
sidered "effectively available to the public" to include whole- sale
services mischaracterizes the CMRS Order. Nowhere in 


that decision is there a statement or suggestion that services 
reaching the public indirectly, such as wholesale services, fall 
within the meaning of "effectively available to the public."  See CMRS
Order pp 65-70. Furthermore, even if petitioner  were correct that the
CMRS decision considered wholesale  services to be covered by the
phrase "effectively available to  the public," it is unclear why that
is inconsistent with the  decision on appeal. Unlike petitioner, who
assumes a whole- saler-retailer distinction throughout its briefs,
neither the  Bureau nor the Commission relied on the distinction for
its  decision. Instead, the Commission focused on the NARUC I  test of
whether there is an offering of "indiscriminate service"  to the
public, leaving open the possibility of characterizing a  type of
wholesaler as a common carrier. Therefore, a mere  showing that a
previous decision characterized a wholesaler  as a common carrier is
insufficient to demonstrate an incon- sistency between the Order and


Petitioner's further contention that the Commission misap- plied the
principle announced in the CMRS Order is to no  avail. Despite the
similarities in the language of the provi- sions considered in the
CMRS Order and the Commission  Order, they are not identical: the CMRS
Order interpreted  the phrase "effectively available to a substantial
portion of the  public," 47 U.S.C. s 332(d)(1), whereas the Commission
Or- der interpreted "effectively available directly to the public." 
47 U.S.C. s 153(46). Therefore, the terms of the provisions  by
themselves do not compel the Commission to interpret  them in an


It is true that the Bureau arrived at its decision, in part, by 
drawing an analogy to the definition of "commission mobile  service"
as read by the CMRS Order, see Bureau Order  pp 24-25, and the
Commission's brief even states that "the  Commission expressly
affirmed" the Bureau's discussion of  the CMRS Order. To the extent
that the Commission fol- lowed the analysis provided in the CMRS
Order, it may be  argued that the Commission was obliged to apply the
CMRS  Order's standard correctly. But, in our view, the Commission 
never relied on the CMRS Order. Although the Commission  affirmed the
Bureau's decision, it did not adopt the entirety of 


the Bureau's rationale. The Bureau's decision was that  AT&T-SSI was
neither a telecommunications carrier under  the 1996 Act nor a common
carrier under the NARUC I  framework. The two legal authorities--the
1996 Act and  NARUC I--were treated as requiring separate tests, and
the  Bureau's decision was based primarily on the fact that the  two
tests, independent from each other, led to the same  conclusion. See
Bureau Order pp 13, 15. In fact, the Bureau  expressed uncertainty
concerning the exact relationship be- tween the 1996 Act and the NARUC
I test. See id. p 15. By  contrast, the Commission harbored no such
uncertainty, and  expressly articulated the relationship between the
1996 Act  and the NARUC I test by stating that " 'telecommunications 
carrier' means essentially the same as common carrier,"  Commission
Order p 6, and then proceeded to apply the  NARUC I test. Therefore,
unlike the Bureau, the Commis- sion never relied on the CMRS Order for
its decision in the  first place, and the Commission thus never
imposed on itself a  requirement to follow the standard announced in


No more successful is petitioner's contention that the Com- mission's
position is inconsistent with its decisions in Federal- State Joint
Board on Universal Service, 12 F.C.C.R. 87  (1996) ("Universal Service
Recommended Decision"), and  Implementation of the Non-Accounting
Safeguards of Sec- tions 271 and 272 of the Communications Act of
1934, as  amended, 11 F.C.C.R. 21905 (1996) ("Non-Accounting Safe-
guards Order"). Again, petitioner's challenges erroneously  rely on
the assumption that the Commission's decision turned  on the fact that
AT&T-SSI could be characterized as a  wholesaler, when, in fact, no
such wholesaler-retailer distinc- tion is assumed by the Commission.


The source of the confusion is petitioner's failure to distin- guish
between a "recommended decision" and an "order."  Universal Service
Recommended Decision stated that whole- sale carriers' activities "are
included in the phrase 'to such  classes of eligible users as to be
effectively available to a  substantial portion of the public,' " and
that carriers that  "lease capacity to other carriers ... would be
considered 


carriers that provide ... telecommunications services." Uni- versal
Service Recommended Decision p 788 (quoting 47  U.S.C. s 153(46)).
However, such recommendations were not  adopted by the Commission
until it released Federal-State  Joint Board on Universal Service, 12
F.C.C.R. 8776 (1997)  ("Universal Service Order"). Although the
Universal Service  Order adopted most of the recommendations contained
in the  Universal Service Recommended Decision, the Commission 
rejected the portion of the analysis that petitioner cites.  Instead,
the Commission observed that "the definition of  'telecommunications
services' ... is intended to encompass  only telecommunications
provided on a common carrier ba- sis," Universal Service Order p 785,
and, accordingly, "private  network operators that lease excess
capacity on a non- common carrier basis" are not telecommunications
carriers  under the 1996 Act because they are not "common carriers." 
Id. p 786. While the Commission acknowledged that common  carriers'
customers need not be "end users" and that "[c]om- mon carrier
services include services offered to other carri- ers," it emphasized
that "a carrier may be a common carrier  if it holds itself out to
service indifferently all potential users,"  and that "a carrier will
not be a common carrier where its  practice is to make individualized
decisions in particular cases  whether and on what terms to serve."


Petitioner's contention that the Commission's Non- Accounting
Safeguards Order is inconsistent with the Com- mission Order at issue
does not work, either.8 The relevant  portions of Non-Accounting
Safeguards Order, if anything,  are very similar to the Commission
Order. For instance, the  Commission noted in the Non-Accounting
Safeguards Order  that "the definition of telecommunications services




__________

n 8 As the Commission notes, although the Non-Accounting Safe- guards
Order was reconsidered in Implementation of the Non- Accounting
Safeguards of Sections 271 and 272 of the Communica- tions Act of
1934, as amended, 12 F.C.C.R. 8653 (1997), there was  no
reconsideration of the initial position relevant to the instant case. 
We focus on the initial order because it contains a more detailed 
discussion of the relevant issue.


to clarify that telecommunications services are common carri- er
services." Non-Accounting Safeguards Order p 263. It  also stated that
the term "telecommunications service" creat- ed a distinction between
"common and private carriage." Id.  p 265. It did observe that common
carrier services "include  wholesale services to other carriers," id.
p 263, that "the term  'telecommunications service' was not intended
to create a  retail/wholesale distinction," id. p 265, and that
"[n]either the  Commission nor the courts ... has construed 'the
public' as  limited to end-users of a service." Id. However, none of 
these statements is inconsistent with the Commission's grant  of
AT&T-SSI's application. Again, the Commission never  relies on a
wholesale-retail distinction; the focus of its analy- sis is on
whether AT&T-SSI offered its services indiscrimi- nately in a way that
made it a common carrier under NARUC  I, and the fact that AT&T-SSI
could be characterized as a  wholesaler was never dispositive.


Accordingly, we deny the petition for review.