Ken Starr Says the Big Issue in the FCC's TRO and USTA II is Separation of Powers

June 2, 2004. Kenneth Starr, an attorney at the law firm of Kirkland & Ellis, gave a speech at a luncheon hosted by the Progress and Freedom Foundation (PFF) titled "The Supreme Court and the Future of the Telecom Act of 1996". Starr argued that the fundamental legal issues raised by the Federal Communications Commission's (FCC) triennial review order's (TRO) unbundling provisions are not about telecommunications. The fundamental issues are executive power, and the separation of powers.

Starr is a former Solicitor General (SG), and former Judge of the U.S. Court of Appeals (DCCir), who now works at a law firm that represents the interests of incumbent local exchange carriers (ILECs).

He argued that the larger question involved in the TRO and the March 2 opinion [62 pages in PDF] of the DC Circuit in USTA v. FCC is not the unbundling requirements under Section 251 of the Communications Act. Rather, the most important question raised is the nature of federal executive power. He opines that were the courts to adopt the position advocated by the FCC Commissioners Martin, Copps and Adelstein, then federal authority, separation of powers, and governmental accountability would be undermined.

See also, story titled "Appeals Court Overturns Key Provisions of FCC Triennial Review Order" in TLJ Daily E-Mail Alert No. 848, March 3, 2004. This case is also known as USTA II.

Starr said that "In my judgment, the right answer is that the SG should not accede to what the FCC appears to be requesting. First and foremost, the three member majority, over two vigorous dissents, has embarked on an entirely new venture, with, in my judgment, no basis in the law, but with enormous implications for the administrative state, and Presidential power."

He continued that the three member majority on the FCC "has determined to delegate fundamental questions of national telecommunications policy to state entities, and to do that, it has advanced a truly revolutionary view of federal statutes. Namely -- this is its position -- that an independent agency can, in the absence of an express prohibition, delegate its substantive powers to state agencies and officials."

"This then is not simply a quibble over the interpretation of the Communications Act. This is new, and it cuts across agency lines. It is quite distinct from the kinds of issues that would have guided the Solicitor General in the past to accept the Commission's interpretation of its own organic statute", said Starr. He continued that this goes beyond intra-executive Chevron deference.

"It is a fundamental decision that goes far beyond the domain of the FCC. It is not simply a squabble over unbundling. It is a fundamental disagreement about power in the executive, and then, our federal system. The way to look at the issue before the Solicitor General is that it is not a question of telecommunications law, at all. It is a general issue of administrative law, with a very powerful separation of powers overlay", said Starr.

"Let's first understand what the majority is arguing. I saw this from the DC Circuit's opinion. I quote, ``the Commission claims that agencies have the presumptive power to subdelegate to state commissions, so long as the statute authorizing agency action refrains from foreclosing such a power. Given the absence of any express foreclosure the Commission argues that its interpretation of the statute on the matter of subdelegation is entitled to deference under Chevron."

Starr added that there is a difference between subdelegation within the federal executive, and subdelegation to an outside party. He said that there is a presumption in favor of the former, and against the latter.

Starr said that one rationale for a presumption against subdelegation to a state is that governmental accountability becomes blurred.

"This is not about TELRIC. It is about power", concluded Starr.

Starr also advanced other arguments, such as the uncertainty that would result from a continuation of litigation. He stated that "What we do know is that were the Solicitor General to decide to go forward to the Supreme Court, great uncertainty will linger over this important sector of our economy for yet another year. I believe that is a very bad thing in terms of the business climate needed for sound decision making, fostering investment, and the like. Indeed,  ... were the SG to decide to go forward, and should the Court determine to hear the case, oral arguments will not occur until the next calendar year, 2005, with the decision to come about this time next year."

Christopher Wright, a lawyer with the law firm of Harris Wiltshire & Grannis, then offered a rebuttal. Wright represents the interests of competitive local exchange carriers (CLECs) in this matter. He is a former General Counsel of the FCC, and previously worked in the Office of the Solicitor General.

Wright argued that the Supreme Court should grant certiorari in this case, and reverse the DC Circuit.

He said that Starr is wrong on the subdelegation of authority argument. He argued that the delegation of authority to the states found in the TRO is based on the language of Sections 251 and 251 of the Act. He said that Congress made the delegation. So, he said, "I don't think that there is a subdelegation going on here at all."

This case is about TELRIC, concluded Wright. The DC Circuit, in its USTA II opinion, is trying to reverse the Supreme Court's opinion in the Verizon case.

See, the May 13, 2002 opinion [104 pages in PDF] of the Supreme Court in Verizon v. FCC, upholding the FCC's rules regarding how incumbent local exchange carriers (ILECs) charge interexchange carriers (IXCs) and competitive local exchange carriers (CLECs) for access to their facilities.