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


HI TECH FURNACE SYS

v.

FCC


99-1220a

D.C. Cir. 2000


*	*	*


Garland, Circuit Judge: Hi-Tech Furnace Systems, Inc.  and its
president, Robert E. Kornfeld,1 filed a complaint with  the Federal
Communications Commission (FCC) concerning  revisions Sprint
Communications made in a long distance  calling program known as
"Fridays Free." Concluding that  the revisions were lawful, the FCC
denied the complaint. We  affirm.


I


Sprint, a common carrier regulated under the Communica- tions Act of
1934, provides long distance telephone service to  the public. See 47
U.S.C. ss 153(h), 203. Hi-Tech is a small  business located in the
state of Michigan. On December 14,  1995, Sprint filed tariff
provisions proposing to offer its new  and existing "Business Sense"
customers a promotion under  which they would be able to make free
domestic and interna- tional long distance calls on one day of the
week for twelve  months. Sprint selected Friday as the day for free
service  and promoted its new offering as "Fridays Free." The 




__________

n 1 For ease of reference, Hi-Tech and its president will be re- ferred
to collectively as "Hi-Tech" or "petitioner."


Fridays Free tariff provisions went into effect on January 1,  1996.2


On February 29, 1996, Hi-Tech enrolled in the Fridays  Free program by
signing Sprint's standard agreement form.  The agreement committed
subscribers to a minimum enroll- ment term of two years and a minimum
monthly usage  requirement of $50. In compliance with the agreement,
Hi- Tech switched its long distance service to Sprint.


Shortly after initiating Fridays Free, Sprint began experi- encing a
substantial increase in international call volume on  Fridays. The
growth was so pronounced that it produced  capacity problems at
Sprint's international gateway switch in  New York.3 The volume of
traffic impaired the carrier's  ability to complete calls to many
international locations and  threatened to crash Sprint's
international network. See Hi- Tech Furnace Sys. v. Sprint
Communications Co., 14  F.C.C.R. 8040, 8047-48 (1999) [hereinafter
Hi-Tech]. Sprint  tried to handle the overload by installing a new,
more power- ful processor at the New York gateway. Nonetheless, call 
volume on Fridays remained at dangerously high levels and  continued


On April 4, 1996, in an effort to ameliorate the overload  problem,
Sprint filed a tariff revision to take effect on April  18. Under the
revision, Sprint removed 10 countries4 with  high numbers of calls
from the list of approximately 220  foreign locations to which free
calling was permitted under  the Fridays Free program. Sprint
subsequently restored one  


__________

n 2 Section 203(a) of the Communications Act requires every com-
munications common carrier to file with the FCC a schedule of its 
charges, and the "classifications, practices, and regulations
affecting  such charges." 47 U.S.C. s 203(a). In this case, the
Fridays Free  promotion was a revision of Sprint's existing Business


3 During the period at issue in this case, an international call had 
to go through the "gateway switch" that connected with the interna-
tional cable system serving the country to which the call was made. 
See Sprint Br. at 4 n.7.


4 The deleted countries were Bolivia, China, the Dominican Re- public,
Ecuador, India, Iran, Israel, Myanmar, Pakistan, and Thai- land.


country, the Dominican Republic, to the list, leaving a total of  nine
deletions. Sprint notified its subscribers of the modifica- tions by
mailgram. In lieu of free Friday calling to the  deleted countries,
Sprint offered subscribers a 25% discount  on calls to those countries
every day of the week. Sprint also  allowed Fridays Free customers who
did not want to continue  in the program to terminate their
subscription without penal- ty--although it did not advise subscribers
of this option  unless they affirmatively communicated their lack of
contin- ued interest.


The tariff revisions immediately remedied Sprint's system  capacity
problems. The occupancy level of the New York  gateway switch declined
from 109% on April 12, to 59% on  April 19, the day after the program
was revised. The total  number of calls made to those countries
dropped from 3.69  million on April 12 to 1.43 million on April 19,
1996. See Hi- Tech, 14 F.C.C.R. at 8048.


On April 18, 1996, the day the tariff revisions became  effective,
Hi-Tech filed a class action in Missouri state court,  alleging that
Sprint had breached its contract with its Fridays  Free subscribers.
Sprint removed the case to the United  States District Court for the
Western District of Missouri.  There, the district court concluded
that Hi-Tech's complaint  required a determination of the
reasonableness of Sprint's  revised tariff, and that such a
determination was within the  primary jurisdiction of the FCC. See
Hi-Tech Furnace Sys.  v. Sprint Communications Co., No. 96-0566-CV-W-3
(W.D.  Mo. May 9, 1997). The court permitted Hi-Tech to amend its 
complaint to add counts alleging violations of the Communica- tions
Act, and thereafter referred the case to the FCC "for all  further
proceedings." Hi-Tech Furnace Sys. v. Sprint Com- munications Co., No.
96-0566-CV-W-3 (W.D. Mo. Aug. 29,  1997). At the same time, it
dismissed Hi-Tech's contract  claim without prejudice and denied its


On April 17, 1998, Hi-Tech filed a complaint against Sprint  with the
FCC, alleging that Sprint's curtailment of the Fri- days Free program
violated section 201(b) of the Communica-


tions Act because it was unjust and unreasonable,5 and sec- tion 203(c)
because it was in breach of Sprint's existing  tariffs.6 On April 16,
1999, the Commission ruled against Hi- Tech on both claims. See
Hi-Tech, 14 F.C.C.R. at 8041. Hi- Tech then petitioned for review in
this court, limiting its  petition to the claim that Sprint violated
section 201(b). See  Hi-Tech Br. at 4 n.1. Petitioner challenges the
FCC's deci- sion on both procedural and substantive grounds, and we 
consider those challenges in turn.


II


Hi-Tech levels two procedural attacks against the FCC's  decision.
First, it contends that the Commission improperly  assigned it the
burden of proof on the question of whether  Sprint's tariff revisions
were just and reasonable. Second, it  argues that the Commission
improperly denied its requests  for discovery from Sprint.


A The FCC assigned Hi-Tech the burden of proof, holding  that "[i]t is
well established that, in a formal complaint  proceeding brought under
section 208 of the Act, the com- plainant has the burden of proof to
demonstrate that the  carrier has violated the Act." Hi-Tech, 14
F.C.C.R. at 8044.  Hi-Tech argues that this allocation was error.
First, it  contends that it brought this proceeding not under Communi-
cations Act section 208,7 but rather under section  


__________

n 5 Section 201(b) requires that "[a]ll charges, practices, classifica-
tions and regulations" of communications common carriers "shall be 
just and reasonable." 47 U.S.C. s 201(b).


6 Section 203(c) provides that "no carrier shall (1) charge, de- mand,
collect, or receive a greater or less or different compensation  ...
for any service ... than the charges specified in the [tariff]  then
in effect." 47 U.S.C. s 203(c).


7 Section 208, entitled "Complaints to the Commission," states:


(a) Any person ... complaining of anything done or omitted to  be done
by any common carrier subject to this chapter, in  contravention of
the provisions thereof, may apply to said  Commission by petition....
If such common carrier within  the time specified shall make
reparation for the injury alleged  204,8 which expressly places the
burden of proof on the  carrier. See 47 U.S.C. s 204 ("At any hearing
involving a  new or revised charge, or a proposed new or revised
charge,  the burden of proof to show that the new or revised charge, 


__________

n to have been caused, the common carrier shall be relieved of 
liability to the complainant.... If such carrier ... shall not 
satisfy the complaint within the time specified or there shall  appear
to be any reasonable ground for investigating said  complaint, it
shall be the duty of the Commission to investigate  the matters
complained of in such manner and by such means  as it shall deem


8 Section 204, entitled "Hearings on new charges," states: (a)(1)
Whenever there is filed with the Commission any new or  revised charge
... or practice, the Commission may either  upon complaint or upon its
own initiative without complaint ...  enter upon a hearing concerning
the lawfulness thereof; and  pending such hearing and the decision
thereon ... may sus- pend the operation of such charge ... or
practice, ... but not  for a longer period than five months beyond the
time when it  would otherwise go into effect; and after full hearing
the  Commission may make such order with reference thereto as  would
be proper in a proceeding initiated after such charge ...  or practice
had become effective. If the proceeding has not  been concluded and an
order made within the period of the  suspension, the proposed new or
revised charge ... or practice  shall go into effect at the end of
such period.... At any  hearing involving a new or revised charge, or
a proposed new  or revised charge, the burden of proof to show that
the new or  revised charge, or proposed charge, is just and reasonable
shall  be upon the carrier....


(b) Notwithstanding the provisions of subsection (a) of this  section,
the Commission may allow part of a charge ... or  practice to go into
effect, based upon a written showing by the  carrier or carriers
affected ... that such partial authorization  is just, fair, and
reasonable. Additionally, or in combination  with a partial
authorization, the Commission, upon a similar  showing, may allow ...
a charge ... or practice to go into  effect on a temporary basis
pending further order of the  Commission.


47 U.S.C. s 204.


or proposed charge, is just and reasonable shall be upon the 
carrier...."). Second, even if the proceeding had been  brought under
section 208, Hi-Tech contends it would be  unlawful to allocate the
burden differently under that section.


We agree with the FCC that the complaint was brought,  and properly so,
under section 208 rather than section 204.9  That Hi-Tech brought the
complaint under section 208 is  apparent from its own pleadings, which
attached a form  identifying section 208(a) as the statutory basis for
the claims.  See Formal Complaint Intake Form (J.A. at 79). That sec-
tion 208 was the proper avenue derives from an analysis of  the
purposes of the two sections.


The FCC interprets section 204 as granting it a quasi- legislative
authority to evaluate a carrier's proposals for new  or revised rates.
It understands section 208, by contrast, as  granting it authority,
upon complaint by an injured party, to  adjudicate the lawfulness of a
carrier's past and present rates  and practices. See, e.g., National
Exchange Carrier Ass'n, 2  F.C.C.R. 3679, 3679 (1987) ("[I]ssues
[that] ... relate to  currently effective tariff provisions ... cannot
be raised in a  petition for a Section 204 investigation. Objections
to an  existing tariff provision may be presented in a Section 208 
complaint."). We have previously expressed the same under- standing,10
and the distinction is similar to that which courts 




__________

n 9 At oral argument, petitioner verified that these are the only 
sections at issue. Hi-Tech did not, it conceded, endeavor to bring 
its complaint under another possibly relevant section, section 205, 
which permits the FCC (on its own initiative or upon complaint) to 
determine that an existing rate is unjust or unreasonable and to 
provide prospective relief. See 47 U.S.C. s 205; Illinois Bell Tel. 
Co. v. FCC, 966 F.2d 1478, 1482 (D.C. Cir. 1992).


10 Compare Southwestern Bell Tel. Co. v. FCC, 168 F.3d 1344,  1350
(D.C. Cir. 1999) ("Section 204(a) gives the Commission the  authority
to approve or suspend a proposed charge...."), and  Southwestern Bell
Corp. v. FCC, 43 F.3d 1515, 1524 (D.C. Cir. 1995)  ("Upon complaint or
on its own initiative, the Commission may hold  hearings and declare
unlawful proposed rate increases under sec- tion 204."), with AT&T v.
FCC, 978 F.2d 727, 732 (D.C. Cir. 1992) 


have made with respect to analogous provisions in both the  Interstate
Commerce Act (ICA)11 and the Natural Gas Act  (NGA).12 As the FCC's
construction constitutes a reasonable  interpretation of the statutory
language,13 we are bound to  


__________

n (describing s 208 proceeding as one in which the FCC's task was,  "as
an adjudicator of private rights," to determine "whether or not  [the
carrier] has been, and currently was, violating the law"). See  also
Direct Mktg. Ass'n v. FCC, 772 F.2d 966, 969 (D.C. Cir. 1985).


11 49 U.S.C. ss 10101 et seq. See Southern Ry. v. Seaboard  Allied
Milling Corp., 442 U.S. 444, 446, 450, 454 (1979) (noting  distinction
between proceedings under ICA s 15(8)(a) to challenge  proposed rate
increases, and "posteffective proceedings" to protect  "aggrieved"
parties under ICA s 13(1)); Baer Bros. Mercantile Co.  v. Denver & Rio
Grande R.R., 233 U.S. 479, 486 (1914) ("[A]warding  reparation for the
past and fixing rates for the future involve the  determination of
matters essentially different. One is in its nature  private and the
other public. One is made by the Commission in its  quasi-judicial
capacity to measure past injures sustained by a  private shipper; the
other, in its quasi-legislative capacity, to  prevent future injury to
the public."); see also MCI Tel. Corp. v.  FCC, 59 F.3d 1407, 1418
(D.C. Cir. 1995) ("Because the Congress  borrowed heavily from the
Interstate Commerce Act when it draft- ed the Communications Act of
1934 ... both this court and the  [FCC] often turn to decisions under
the ICA for guidance in  interpreting the Communications Act."). The
Interstate Commerce  Commission was abolished in 1996, and its
remaining functions were  transferred to the Surface Transportation
Board. See ICC Termi- nation Act of 1995, Pub. L. No. 104-88, 109


12 15 U.S.C. ss 717 et seq. See Public Serv. Comm'n v. FERC,  866 F.2d
487, 488 (D.C. Cir. 1989) (noting distinction between  proceedings
concerning "proposed rates" under NGA s 4, and  proceedings concerning
existing rates under s 5); see also Las  Cruces TV Cable v. FCC, 645
F.2d 1041, 1047 (D.C. Cir. 1981)  (stating that ratesetting provisions
of Communications Act are  analogous to provisions of NGA and "trace
their lineage" to ICA).


13 Section 204 contains repeated indications of its intended appli-
cation to charges not yet in effect. It applies to "any new or 
revised" charge or practice; it permits suspension of such charge or 
practice for not longer than five months "beyond the time when it 
would otherwise go into effect"; if an order has not been issued 


defer to it. See Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837,  842-45
(1984).


Hi-Tech did not file a complaint with the Commission  before the
Fridays Free revisions went into effect. Instead,  it challenged them
two years after they had been in place.  Accordingly, under the
foregoing interpretation of the two  statutory provisions, Hi-Tech's
complaint falls within section  208.


Unlike section 204, section 208 is silent as to which party  bears the
burden of proof. Hi-Tech argues that it is unlawful  for the FCC to
place the burden on the complainant in section  208 proceedings, when
the statute places it on the carrier in  proceedings under section
204. We disagree.


Well-established FCC precedent imposes the burden of  proof on the
complainant in section 208 proceedings.14 So 




__________

n within the period of the suspension, it provides that "the proposed 
new or revised" charge or practice "shall go into effect"; and it 
authorizes the Commission to allow a charge or practice "to go into 
effect on a temporary basis" pending further order. Section 208, by 
contrast, contains repeated indications of its intended application to
 past actions. For example, it permits any person complaining of 
anything "done or omitted to be done" by any common carrier to 
petition the FCC, and it relieves the carrier of liability if it makes
 reparations "for the injury alleged to have been caused." See 47 
U.S.C. s 204, set out at supra note 8; 47 U.S.C. s 208, set out at 


14 See Beehive Tel., Inc., 12 F.C.C.R. 17950, 17961-62 (1995) 
("Although carriers who file new or revised rates bear the burden of 
proof in Section 204 proceedings, it is well settled that complainants
 in Section 208 formal complaint proceedings bear the burden of 
proof."), aff'd on other grounds, 179 F.3d 941 (D.C. Cir. 1999); see 
also Ascom Communications, Inc. v. Sprint Communications Co.,  15
F.C.C.R. 3223, 3230 n.41 (2000); AT&T v. Bell Atlantic, 14  F.C.C.R.
556, 570 (1998); Directel, Inc. v. AT&T, 11 F.C.C.R. 7554,  7560
(1996); Connecticut Office of Consumer Counsel, 4 F.C.C.R.  8130, 8133
(1989), aff'd on other grounds, 915 F.2d 75 (2d Cir. 1990).  The
petitioner's references to FCC opinions in agency proceedings 
initiated under sections other than s 208 are inapposite.


does our own.15 Such an allocation is consistent with the 
Administrative Procedure Act (APA), which takes into ac- count the
distinction between statutory provisions that do and  do not mention
the burden of proof, and which directs that:  "Except as otherwise
provided by statute, the proponent of a  rule or order has the burden
of proof." 5 U.S.C. s 556(d). It  is likewise consistent with the
Supreme Court's allocation of  the burden of proof under the analogous
provisions in the  ICA,16 and with our own allocation of the burden
under the  analogous provisions in the NGA.17 Accordingly, we find 




__________

n 15 See American Message Ctrs. v. FCC, 50 F.3d 35, 41 (D.C. Cir. 
1995) (stating, regarding a case brought under s 208, that "[t]he 
rules place the burden of pleading and documenting a violation of  the
Act on [the complainant]. They do not require [the carrier] to  prove
it has not violated the Act."); Aeronautical Radio, Inc. v.  FCC, 642
F.2d 1221, 1235 n.34 (D.C. Cir. 1980) (noting that the  complaint
procedure of ss 206-209 "shifts the burden of proof onto  the
aggrieved party"). See generally Copley Press, Inc. v. FCC, 444  F.2d
985, 988 (D.C. Cir. 1971) (holding s 204 burden-allocation  provision
may not be relied upon to assess burden in non-204  proceeding).


16 See Southern Ry., 442 U.S. at 446, 450, 454 (noting that burden  of
proof is on carrier in s 15(8)(a) proceeding, while burden is on 
shipper (customer) in s 13(1) proceeding); Aeronautical Radio, 642 
F.2d at 1235 n.34 (relying on Southern Railway for conclusion that  ss
206-209 of Communications Act "shift[ ] the burden of proof  onto the
aggrieved party"). See generally supra note 11.


17 In Public Service, we held that "[u]nder s 4 [of the NGA] the 
company has the burden of showing that [its] proposed rates are  just
and reasonable, while under s 5 the Commission must show  that the
[filed] rates it would alter are not just and reasonable....  The
unifying principle is that the proponent of change bears the  burden."
866 F.2d at 488. Section 4 of the NGA, 15 U.S.C.  s 717c(e), like
section 204 of the Communications Act, expressly  provides that "[a]t
any hearing involving a rate or charge sought to  be increased, the
burden of proof to show that the increased rate or  charge is just and
reasonable shall be upon the natural-gas compa- ny." Section 5 of the
NGA, like section 208 of the Communications  Act, is silent as to the
burden of proof. See ANR Pipeline v. 


nothing unlawful about the FCC's decision to impose upon  Hi-Tech the
burden of proof regarding the reasonableness of  the tariff


B


After filing its complaint with the FCC, Hi-Tech served  Sprint with a
set of seven interrogatories. Sprint objected  and, Hi-Tech contends,
FCC counsel declined to direct the  carrier to respond.18 Instead, the
Commission undertook its  own investigation, making its own demands
for information  from the parties and following up with supplemental
inquiries.  Hi-Tech contends that the agency acted unlawfully in
failing  to allow petitioner to conduct its own discovery.


The FCC responds that this court has no jurisdiction to  review its
decision not to permit discovery. It asserts that  discovery is agency
action "committed to agency discretion by  law" within the meaning of
the APA, 5 U.S.C. s 701(a)(2), and  thus is not subject to judicial
review. See generally Heckler  v. Chaney, 470 U.S. 821, 828-29 (1985).
For support, the  FCC points to the broad language of Communications
Act  s 208(a), which states that "it shall be the duty of the 
Commission to investigate the matters complained of in such  manner
and by such means as it shall deem proper." And it  further cites our
decision in Sprint Communications Co. v.  FCC, 76 F.3d 1221, 1231
(D.C. Cir. 1996), which it reads as  declaring, albeit in dictum, that
the Commission's refusal to  permit discovery under section 208(a) is
a matter within its  unreviewable discretion.


The United States, represented by the Department of  Justice, is by law
a co-respondent with the FCC in this case.  See 28 U.S.C. ss 2344,
2348. In contrast to the FCC, the  United States believes that the
agency's decision regarding  discovery is reviewable. See Resp'ts Br.
at 32 n.69. We  agree. The FCC's position confuses the narrow category
of  agency action wholly committed to agency discretion under  


__________

n


FERC, 771 F.2d 507, 513 (D.C. Cir. 1985) (discussing different  burdens
of proof under NGA). See generally supra note 12.


18 The FCC contends that Hi-Tech never filed a motion to compel  a
response.


APA s 701(a)(2), with the primary category of agency action  that is
subject to review for "abuse of discretion" under APA  s 706(2)(A).
See Heckler, 470 U.S. at 828-29. We do not  lightly place a matter
within the former category, as the APA  embodies "a 'basic presumption
of judicial review.' " Lincoln  v. Vigil, 508 U.S. 182, 190 (1993)
(quoting Abbott Labs. v.  Gardner, 387 U.S. 136, 140 (1967)). The
exception for agency  action "committed to agency discretion by law"
is a "very  narrow" one, reserved for "those rare instances where
stat- utes are drawn in such broad terms that in a given case there 
is no law to apply." Citizens to Preserve Overton Park v.  Volpe, 401
U.S. 402, 410 (1971) (internal quotation omitted);  see Lincoln, 508


As the United States correctly points out, this court's  dictum in
Sprint Communications does not support the  FCC's claim to immunity
from judicial review. Sprint stated  that "it appears that the FCC's
decision whether to investi- gate a particular matter is an 'agency
action ... committed  to agency discretion by law.' " 76 F.3d at 1231
(emphasis  added).19 The court suggested, by its immediately-following
 citation to Heckler v. Chaney, that an agency's decision not to 
commence an investigation is analogous to an agency's deci- sion not
to take enforcement action--which the Supreme  Court held unreviewable
in Heckler. See Heckler v. Chaney,  470 U.S. at 832. An agency's
decision not to permit discov- ery, however, is not analogous to a
decision not to take  enforcement action. Unlike the latter, which the
Court noted  has long been regarded as committed to an agency's
absolute  discretion, see id. at 831 (citing precedent dating to
1869), this  court and others have long reviewed agency decisions
regard- ing discovery.20 In fact, in American Message Centers v. 




__________

n 19 Although the Sprint opinion noted the petitioner's objection "to 
the FCC's failure to permit discovery or to conduct an evidentiary 
proceeding in order to investigate the alleged fraudulent conceal-
ment," the court's comment on reviewability mentioned only the 
"decision whether to investigate a particular matter." Sprint Com-
munications, 76 F.3d at 1231 (emphasis added). Moreover, not-
withstanding its comment, the court went on to review the FCC's 
failure and found no abuse of discretion. See id.


20 See Lakeland Bus Lines v. ICC, 810 F.2d 280, 287-88 (D.C. Cir. 
1987) (reversing in part ICC denial of petitioner's discovery request


FCC, 50 F.3d 35, 40-41 (D.C. Cir. 1995), we reviewed for  abuse of
discretion the FCC's refusal to compel discovery in a  section 208
proceeding. We follow that course here as well.


This court reviews such a determination, however, with  "extreme
deference." Lakeland Bus Lines v. ICC, 810 F.2d  280, 286 (D.C. Cir.
1987). "[T]he conduct and extent of  discovery in agency proceedings
is a matter ordinarily en- trusted to the expert agency in the first
instance and will not,  barring the most extraordinary circumstances,
warrant the  Draconian sanction of overturning a reasoned agency deci-
sion." Trailways Lines v. ICC, 766 F.2d 1537, 1546 (D.C.  Cir. 1985).
Although we have concluded that the Commis- sion's actions are
reviewable for abuse of discretion, we agree  with both the United
States and the Commission that there  has been no such abuse here.


In this case, a body of evidence was generated by the  formal written
submissions of the litigants. In addition, the  FCC made its own
inquires, directing the parties to respond  to detailed requests for
information. The Commission also  had available Sprint's responses to
the discovery requests  served by Hi-Tech during proceedings in the
district court.  As our analysis in Part III below makes clear, the
sum of  these measures created the record necessary to make the just 
and reasonableness determination contemplated by 47 U.S.C.  s




__________

n on ground that denial relied on inaccurate factual premise); Trail-
ways Lines v. ICC, 766 F.2d 1537, 1546 (D.C. Cir. 1985) (reviewing, 
but upholding as reasonable, ICC's rejection of petitioners' discov-
ery request); Cross-Sound Ferry Svcs., Inc. v. ICC, 738 F.2d 481, 
486-87 (D.C. Cir. 1984) (holding that ICC's failure to gather suffi-
cient evidence from applicant for common carrier authority was 
arbitrary and capricious); McClelland v. Andrus, 606 F.2d 1278,  1286
(D.C. Cir. 1979) (reviewing agency discovery decision and  remanding
for further consideration); Virginia Petroleum Jobbers  Ass'n v. FPC,
293 F.2d 527, 529 (D.C. Cir. 1961); see also, e.g.,  Pacific Gas and
Elec. Co. v. FERC, 746 F.2d 1383, 1387-88 (9th Cir.  1984); Armstrong,
Jones & Co. v. SEC, 421 F.2d 359, 364 (6th Cir.  1970); NLRB v.
Gala-Mo Arts, Inc., 232 F.2d 102, 106 (8th Cir.  1956).


Hi-Tech's real dispute is not with the discovery measures  the FCC
took, but with additional measures it did not take.  Specifically,
petitioner insists that the Commission should  have permitted Hi-Tech
itself to take discovery from Sprint,  in the form of its own
interrogatories and depositions, in  order to test Sprint's responses
"through normal adversarial  proceedings." Hi-Tech Br. at 17. But
Hi-Tech's demand  misapprehends the nature of the administrative
process it  entered into when its complaint was ousted from the
district  court and referred to the FCC. As we have pointed out 
before in affirming an FCC decision not to compel discovery  sought by
a petitioner: Complaint proceedings under the  Communications Act,
"unlike court litigation or  administrative-trial type hearings, are
often resolved solely on  the written pleadings," and the Commission
has properly  "placed limitations on the scope and methods of
discovery in  its formal complaint proceedings that do not exist in
trials  governed by the Federal Rules." American Message Ctrs.,  50
F.3d at 41; see McClelland v. Andrus, 606 F.2d 1278, 1285  (D.C. Cir.
1979) ("The extent of discovery that a party  engaged in an
administrative hearing is entitled to is primari- ly determined by the
particular agency: ... courts have  consistently held that agencies
need not observe all the rules  and formalities applicable to


Nothing in either the Communications Act or the APA  entitles a party
to the specific procedures Hi-Tech demands.  To the contrary, and as
the FCC properly emphasizes, section  208 of the Communications Act
expressly authorizes the  Commission "to investigate the matters
complained of in such  manner and by such means as it shall deem
proper." 47  U.S.C. s 208; cf. FCC v. Schreiber, 381 U.S. 279, 289
(1965).  Moreover, the Supreme Court has firmly instructed us that 
"courts are not free to impose upon agencies specific proce- dural
requirements that have no basis in the APA" or statute.  Pension
Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654  (1990). Although
"[a]gencies are free to grant additional  procedural rights in the
exercise of their discretion,"21 "re-




__________

n 21 FCC regulations permit complainants to file requests for inter-
rogatories, but leave it to Commission staff to "determine the 


viewing courts are generally not free to impose them if the  agencies
have not chosen to grant them." Vermont Yankee  Nuclear Power Corp. v.
NRDC, 435 U.S. 519, 524 (1978).


Cross-Sound Ferry Services, Inc. v. ICC, cited by petition- er, is not
to the contrary. 738 F.2d 481, 486-87 (D.C. Cir.  1984). In that case,
a ferry company challenged the ICC's  decision to grant common carrier
authority to its competitor,  the Bridgeport & Port Jefferson
Steamboat Company  (B&PJ). On appeal from the agency, this court held
that the  ICC had acted arbitrarily in failing to gather the
information  necessary to make the statutory determination of whether
the  proposed service was " 'required by the present or future  public
convenience and necessity.' " Id. at 482-84 (quoting 49  U.S.C. s
10922(a)). We did not, however, say that the error  was the ICC's
failure to permit discovery by the complainant.  Rather, the error was
the Commission's refusal to generate  an appropriate record--"by
requiring greater specificity from  B&PJ or by permitting Cross-Sound
to ferret out relevant  evidence through discovery"--which left the
ICC without  "sufficient record evidence to permit a reasoned
application of  statutory directives." Id. at 484 (emphasis added).


As we have noted above, the FCC did compile a record  sufficient to
make the statutory determination at issue in this  case. Hi-Tech does
not specify any additional information  that should have been
obtained, nor does it point out any way  in which conducting its own
discovery would have made a  difference--other than to emphasize its
skepticism of the  "self-serving" nature of Sprint's responses and the
need to  test them by the adversary process. Since the Supreme  Court
has made clear that we are not permitted to impose  any such testing
procedure on an agency, we have no basis  for setting aside the FCC's




__________

n interrogatories, if any, to which parties shall respond." 47 C.F.R. 
s 1.729(d). The regulations also authorize the Commission, in its 
discretion, to allow additional discovery, including depositions. See 
47 C.F.R. s 1.729(h).


III


With these preliminary matters attended to, we now reach  the merits of
Hi-Tech's complaint. We review the FCC's  denial only to determine
whether it was "arbitrary, capri- cious, an abuse of discretion, or
otherwise not in accordance  with law." 5 U.S.C. s 706(2)(A); see
American Message  Ctrs., 50 F.3d at 39.


The gravamen of Hi-Tech's complaint is that the changes  Sprint made in
its Fridays Free program breached the  requirement of section 201(b)
that "charges, practices, classi- fications, and regulations ... be
just and reasonable." 47  U.S.C. s 201(b). To determine whether the
revisions met the  statutory standard, Hi-Tech urged the Commission to
employ  its so-called "substantial cause" test: that is, to determine 
whether Sprint had "substantial cause" to amend the tariff.  See
Hi-Tech Br. at 21-23; see generally Showtime Networks  Inc. v. FCC,
932 F.2d 1 (D.C. Cir. 1991) (discussing "substan- tial cause" test for
determining whether tariff modifications  are just and reasonable);
RCA American Communications,  Inc., 86 F.C.C.2d 1197, 1201-02 (1981)
(holding that a carri- er's decision "to revise material provisions in
the middle of a  term" will be considered "reasonable" if the carrier
can make  a showing of "substantial cause" for so doing). The FCC 
noted that it had previously applied the substantial cause test  only
to revisions of individually-negotiated contract tariffs and  to
revisions of generic, long-term service tariffs filed by  dominant
carriers. See Hi-Tech, 14 F.C.C.R. at 8045-46.  The Commission had not
yet decided, however, whether the  test should be applied to "a
nondominant carrier's generic,  long-term service tariff, such as the
Fridays Free promotion  at issue here." Id. at 8046. Nonetheless, the
FCC agreed to  apply the standard, arguendo, to Sprint's tariff


Under the substantial cause test, the FCC measures the  reasonableness
of a tariff modification by weighing two princi- pal considerations:
the "carrier's explanation of the factors  necessitating the desired
changes at that particular time,"  and the "position of the relying
customer." RCA American,  86 F.C.C.2d at 1201; see Hi-Tech, 14
F.C.C.R. at 8045. The 


FCC resolved the first factor in Sprint's favor, concluding  that
"Sprint has demonstrated that the tariff revisions were  necessary to
prevent the overloading of Sprint's network,  despite reasonable
efforts by Sprint to preserve the Fridays  Free promotion in its
original form." Hi-Tech, 14 F.C.C.R.  at 8046. The Commission found
that on each successive  Friday after the promotion began, call volume
increased  dramatically. See id. By late March, "the extraordinarily 
high call volumes on Fridays threatened to bring down  Sprint's New
York international gateway switch ... which  repeatedly reached over
100% of designed traffic capacity."  Id. at 8047. Moreover, "because
of this international over- load, the New York domestic switch ...
also approached  overload levels." Id. Together, "[t]hese system
overloads  prevented the completion of many international calls from


The FCC also found that Sprint had taken steps to try to  resolve the
overload problem short of deleting countries from  the Fridays Free
program. See id. Sprint purchased and  installed a new processor, and
it changed the routing of calls  so that the domestic New York switch
would receive less  traffic. See id. Despite these efforts, "[t]raffic
loads contin- ued to increase dangerously" and threatened to crash the
 gateway switch. Id. at 8047-48. Sprint then filed its tariff 
revisions, and on the first Friday after they took effect, call 
volume dramatically decreased and the threat was eliminated.  See id.


These findings reasonably support the FCC's conclusion  that Sprint
satisfied the first half of the substantial cause  test, by
establishing its need for the revisions in the Fridays  Free program.
This was not a case in which the carrier  sought midterm changes based
merely on a "generalized  assertion of rising costs," RCA American, 86
F.C.C.2d at  1205, or on a claim "that it will make less money"
without  them, AT&T Communications, 5 F.C.C.R. 6777, 6779 
(1990)--rationales the agency has found unpersuasive in the  past.
Here, the FCC concluded that revisions were neces- sary "to protect
the integrity of [Sprint's] network"--to pre- vent the crash of key
switches with consequent disruption for 


all of Sprint's subscribers. Hi-Tech, 14 F.C.C.R. at 8050.  Although
Hi-Tech argues that Sprint could have expanded its  facilities rather
than curtail the program, the FCC reasonably  noted that Sprint had
already tried that to no avail, and that  further expansion of
Sprint's international capacity would  have required negotiations with
a foreign carrier, a process  that could not have been completed in
time to resolve the  capacity crisis. See id. at 8048.


Hi-Tech also argues that Sprint should have employed a  "less onerous"
alternative than deletion of the nine countries.  Hi-Tech Br. at 26.
Of course, deletion was itself a less  drastic alternative than
canceling the entire program: Sprint  continued to permit free Friday
calling to more than 200  foreign locations, as well as to all
domestic locations. None- theless, Hi-Tech argues that Sprint could
have retained free  calling to the nine countries, but "spread the
program bene- fits over more days of the week" by "designating
different  days of the week for different segments of customers." Id.
at  26-27 (quoting Compl. p 27). Sprint should not be permitted  to
revise its tariff "in a way that is economically beneficial to  the
carrier," Hi-Tech insists, "when better and fairer alterna- tives are


The FCC rejected this demand. The Commission noted  Sprint's
representations that such a plan would have been  impractical, and
noted that Hi-Tech had failed to offer any  evidence to the contrary.
See Hi-Tech, 14 F.C.C.R. at 8049.  It further pointed out that Hi-Tech
had failed to show why  free calling on one day of the week was any
more reasonable  than the alternative Sprint adopted: a 25% discount
every  day. The FCC's statutory mandate is only to ensure that  tariff
revisions are "just and reasonable," 47 U.S.C. s 201(b),  not that
they are the "least onerous" alternative available.  See Showtime, 932
F.2d at 4 (holding that substantial cause  test is only an aid in
ascertaining whether newly filed modifi- cations to long-term tariffs
are "within the zone of reason- ableness," and "not an additional
hurdle" for carriers to  overcome). And our statutory mandate is only
to ensure that  the agency's determinations are themselves reasonable,
re- gardless of whether there may be other "better and fairer" 


alternatives. Cf. Serono Labs., Inc. v. Shalala, 158 F.3d 1313,  1321
(D.C. Cir. 1998). The FCC's finding with respect to  Sprint's need for
the tariff revisions meets that standard.


Turning to the second half of the substantial cause test, the  FCC
looked for evidence of Hi-Tech's reliance on the provi- sions of the
Fridays Free plan--and found it to be minimal.  Hi-Tech's president
conceded that he had switched to Sprint  not only because of the
Fridays Free promotion, but also  because Sprint's "rate was
attractive in itself." J.A. at 228  (Kornfeld Dep.). There was no
evidence that, during the  month and a half in which it subscribed to
the unrevised  Fridays Free program, Hi-Tech had made any calls to any
of  the nine deleted countries--with the exception of three calls  its
president made after Sprint announced the revisions, calls  he
conceded making to take advantage of the last free-calling 
opportunity under the program. See Hi-Tech, 14 F.C.C.R. at  8049; J.A.
at 237, 239, 241 (Kornfeld Dep.). Nor did the  company offer evidence
to show that it had been any better  off under Fridays Free than it
was under the new 25%- discount plan. And while Hi-Tech contends that
it should be  able to support its case by showing the detrimental
reliance  of Sprint customers other than itself--because it initially
filed  the case in court as a class action22--there is no evidence of 
such reliance in the record. To the contrary, the Commission 
concluded that because Sprint permitted Fridays Free cus- tomers to
terminate their contracts without penalty if they  were dissatisfied
with the revisions, they were "no worse off  than if they had never
enrolled in Sprint's Fridays Free  promotion." Hi-Tech, 14 F.C.C.R. at




__________

n 22 But see Krauss, 14 F.C.C.R. 2770, 2774 (1999) (finding it 
inappropriate to determine carrier's liability for injuries to other 
subscribers, as that "would, in effect, transform this section 208 
complaint proceeding into a class action suit, a result neither 
contemplated by, nor consistent with, the private remedies created 
under sections 206 through 209 of the Act"); Certified Collateral 
Corp., 2 F.C.C.R. 2171, 2173 (1987) (noting that FCC rules "do not 
contemplate class action complaints").


23 The FCC also noted that the standard order form signed by  Hi-Tech
stated that the promotion was "governed by the applicable 


In sum, we discern no abuse of discretion in the agency's  conclusion
that the tariff revisions were just and reasonable  under both prongs
of the substantial cause test.


IV


As a final argument, Hi-Tech contends that the FCC  should have used
"commercial contract law principles" to  resolve this case, and that
if it had, Hi-Tech would have  prevailed. It further argues that
because the FCC did not  employ such principles, we are obliged to
vacate the Commis- sion's order. Without deciding what the result
would be  under "commercial contract law principles," it is clear that
 petitioner has misperceived both the Commission's role in this 
dispute and our own.


Hi-Tech's breach-of-contract claims were dismissed by the  district
court in Missouri, and we have no jurisdiction (and  have not been
asked) to review that decision. Instead, un- der review here is the
FCC's determination of whether  Sprint's tariff revisions were just
and reasonable--which is,  as we have noted above, the only authority
the Commission  has under section 201(b) of the Communications Act. At
 Hi-Tech's own request, the Commission agreed to evaluate 
reasonableness under the "substantial cause" standard.  That test
requires an evaluation of the carrier's need for  tariff revisions and
of the subscriber's reliance on the tariff's  original terms. Although
these factors may reflect familiar  contract law principles, see,
e.g., Restatement (Second) of  Contracts s 261 (1979), they are not




__________

n Sprint tariffs, as they may be amended from time to time." Hi- Tech,
14 F.C.C.R. at 8050. The Commission did not rest on this  point in
stating its ultimate conclusion, see id. at 8050, and we would  not
regard it as sufficient to establish lack of justified reliance on 
the part of Hi-Tech. Although Sprint was free to amend its tariff,  it
could not do so--regardless of the boilerplate language--unless  the
amendment was "just and reasonable" under s 201. See RCA  American, 86
F.C.C.2d at 1202 ("[T]he mere presence of some  sweeping reservation
to unilaterally change any and all terms and  conditions will not
serve to lessen our original concerns.").


contract law analysis, but only to assist the FCC in deter- mining
whether the revisions were "within the zone of rea- sonableness"
required by the statute. Showtime, 932 F.2d  at 4; see Cahnmann v.
Sprint Corp., 133 F.3d 484, 488 (7th  Cir. 1998) (holding that "[a]ny
rights that the plaintiff has to  complain about a breach of contract"
in a tariff revision case  are evaluated "by the principle of
reasonableness that the  FCC uses to determine the validity of ... an
amendment to  a tariff.")


As we have also stressed above, our authority is limited to 
determining whether the FCC's determination was itself rea-
sonable--that is, whether the agency's decision was "arbi- trary,
capricious, [or] an abuse of discretion." 5 U.S.C.  s 706(2)(A).
Finding no violation of that deferential stan- dard, we deny the