Section 203(a) of Title 47 of the United States Code requires communications common carriers to file tariffs with the Federal Communications Commission, and § 203(b) authorizes the Commission to "modify" any requirement of § 203. These cases present the question whether the Commission's decision to make tariff filing optional for all nondominant long-distance carriers is a valid exercise of its modification authority.
Like most cases involving the role of the American Telephone and Telegraph Company (AT&T) in our national telecommunication system, these have a long history. An understanding of the cases requires a brief review of the Commission's efforts to regulate and then deregulate the telecommunications industry. When Congress created the Commission in 1934, AT&T, through its vertically integrated Bell system, held a virtual monopoly over the Nation's telephone service. The Communications Act of 1934, 48 Stat. 1064, as amended, authorized the Commission to regulate the rates charged for communication services to ensure that they were reasonable and nondiscriminatory. The requirements of § 203 that common carriers file their rates with the Commission and charge only the filed rate were the centerpiece of the Act's regulatory scheme.
In the 1970's, technological advances reduced the entry costs for competitors of AT&T in the market for longdistance telephone service. The Commission, recognizing the feasibility of greater competition, passed regulations to facilitate competitive entry. By 1979, competition in the provision of long-distance service was well established, and some urged that the continuation of extensive tariff filing requirements served only to impose unnecessary costs on new entrants and to facilitate collusive pricing. The Commission held hearings on the matter, see Competitive Carrier Notice of Inquiry and Proposed Rulemaking, 77
The First Report and Order, 85 F. C. C. 2d 1, 20-24 (1980), distinguished between dominant carriers (those with market power) and nondominant carriers—in the long-distance market, this amounted to a distinction between AT&T and everyone else—and relaxed some of the filing procedures for nondominant carriers, id., at 30-49. In the Second Report and Order, 91 F. C. C. 2d 59 (1982), the Commission entirely eliminated the filing requirement for resellers of terrestrial common carrier services. This policy of optional filing, or permissive detariffing, was extended to all other resellers, and to specialized common carriers, including petitioner MCI Telecommunications Corp., by the Fourth Report and Order, 95 F. C. C. 2d 554 (1983),
AT&T petitioned for review, arguing, inter alia, that the Commission lacked authority to defer to a later rulemaking consideration of an issue which was dispositive of an adjudicatory complaint. The United States Court of Appeals for the District of Columbia Circuit granted the petition for review. See American Telephone & Telegraph Co. v. F. C. C., 978 F.2d 727 (1992) (Silberman, J.). The Court of Appeals characterized the Commission's failure to address its authority to promulgate the permissive detariffing policy as "a sort of administrative law shell game," id. , at 731-732. Addressing
Moving now with admirable dispatch, less than two weeks after the decision by the Court of Appeals concerning the adjudicatory proceeding, the Commission released a Report and Order from the rulemaking proceeding commenced in response to AT&T's complaint. See In re Tariff Filing Requirements for Interstate Common Carriers, 7 FCC Rcd 8072 (1992), stayed pending further notice, 7 FCC Rcd 7989 (1992). That is the Report and Order at issue in this case. The Commission, relying upon the § 203(b) authority to "modify" that had by then been twice rejected by the District of Columbia Circuit, determined that its permissive detariffing policy was within its authority under the Communications Act. AT&T filed a motion with the District of Columbia Circuit seeking summary reversal of the Commission's order. The motion was granted in an unpublished per curiam order stating: "The decision of this court in [American Telephone & Telegraph Co. v. FCC, 978 F.2d 727 (1992),] conclusively determined that the FCC's authorization of permissive detariffing violates Section 203(a) of the Communications Act." App. to Pet. for Cert. 2a. Both MCI and the United States (together with the Commission) petitioned for certiorari. We granted the petitions and consolidated them. 510 U.S. 989 (1993).
Section 203 of the Communications Act contains both the filed rate provisions of the Act and the Commission's disputed modification authority. It provides in relevant part:
"(a) Filing; public display.
"(c) Overcharges and rebates.
The dispute between the parties turns on the meaning of the phrase "modify any requirement" in § 203(b)(2). Petitioners argue that it gives the Commission authority to make even basic and fundamental changes in the scheme created by that section. We disagree. The word "modify"—like a number of other English words employing the root "mod-" (deriving from the Latin word for "measure"), such as "moderate," "modulate," "modest," and "modicum"—has a connotation of increment or limitation. Virtually every dictionary we are aware of says that "to modify" means to change moderately or in minor fashion. See, e. g., Random House Dictionary of the English Language 1236 (2d ed. 1987) ("to change somewhat the form or qualities of; alter partially; amend"); Webster's Third New International Dictionary 1452 (1981) ("to make minor changes in the form or structure of: alter without transforming"); 9 Oxford English Dictionary 952 (2d ed. 1989) ("[t]o make partial changes in; to change (an object) in respect of some of its qualities; to alter or vary without radical transformation"); Black's Law Dictionary 1004 (6th ed. 1990) ("[t]o alter; to change in incidental or subordinate features; enlarge; extend; amend; limit; reduce").
In support of their position, petitioners cite dictionary definitions contained in, or derived from, a single source, Webster's Third New International Dictionary 1452 (1981) (Webster's Third), which includes among the meanings of
But Boston & Maine does not stand for that proposition. That case involved the question whether the statutory term "required" could only mean "demanded as essential" or could also mean "demanded as appropriate." In holding that the latter was a permissible interpretation, to which Chevron deference was owed, the opinion did not rely exclusively upon dictionary definitions, but also upon contextual indications, see 503 U. S., at 417-419—which in the present cases, as we shall see, contradict petitioners' position. Moreover, when the Boston & Maine opinion spoke of "alternative dictionary definitions," ibid., it did not refer to what we have here: one dictionary whose suggested meaning contradicts virtually all others. It referred to alternative definitions
Most cases of verbal ambiguity in statutes involve, as Boston & Maine did, a selection between accepted alternative meanings shown as such by many dictionaries. One can envision (though a court case does not immediately come to mind) having to choose between accepted alternative meanings, one of which is so newly accepted that it has only been recorded by a single lexicographer. (Some dictionary must have been the very first to record the widespread use of "projection," for example, to mean "forecast.") But what petitioners demand that we accept as creating an ambiguity here is a rarity even rarer than that: a meaning set forth in a single dictionary (and, as we say, its progeny) which not only supplements the meaning contained in all other dictionaries, but contradicts one of the meanings contained in virtually all other dictionaries. Indeed, contradicts one of the alternative meanings contained in the out-of-step dictionary itself—for as we have observed, Webster's Third itself defines "modify" to connote both (specifically) major change and (specifically) minor change. It is hard to see how that can be. When the word "modify" has come to mean both "to change in some respects" and "to change fundamentally" it will in fact mean neither of those things. It will simply mean "to change," and some adverb will have to be called into service to indicate the great or small degree of the change.
If that is what the peculiar Webster's Third definition means to suggest has happened—and what petitioners suggest by appealing to Webster's Third—we simply disagree.
Beyond the word itself, a further indication that the § 203(b)(2) authority to "modify" does not contemplate fundamental changes is the sole exception to that authority which
Since an agency's interpretation of a statute is not entitled to deference when it goes beyond the meaning that the statute can bear, see, e. g., Pittston Coal Group v. Sebben, 488 U.S. 105, 113 (1988); Chevron, 467 U. S., at 842-843, the Commission's permissive detariffing policy can be justified only if it makes a less than radical or fundamental change in the Act's tariff-filing requirement. The Commission's attempt to establish that no more than that is involved greatly understates the extent to which its policy deviates from the filing requirement, and greatly undervalues the importance of the filing requirement itself.
To consider the latter point first: For the body of a law, as for the body of a person, whether a change is minor or major depends to some extent upon the importance of the item changed to the whole. Loss of an entire toenail is insignificant; loss of an entire arm tragic. The tariff-filing requirement is, to pursue this analogy, the heart of the commoncarrier section of the Communications Act. In the context of the Interstate Commerce Act, which served as its model, see, e. g., MCI Telecommunications Corp. v. FCC, 917 F.2d 30,
& (1907); R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 440 see also Robinson v. Baltimore & Ohio R. Co., 222 U.S. 506, 508-509 (1912). "The duty to file rates with the Commission, [the analog to § 203(a)], and the obligation to charge only those rates, [the analog to § 203(c)], have always been considered essential to preventing price discrimination and stabilizing rates." Maislin Industries, U. S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 126 (1990); see also Arizona Grocery Co. v. Atchison, T. & S. F. R. Co., 284 U.S. 370, 384 (1932) (filing requirements "render rates definite and certain, and . . . prevent discrimination and other abuses"); Armour Packing Co. v. United States, 209 U.S. 56, 81 (1908) (elimination of filing requirement "opens the door to the possibility of the very abuses of unequal rates which it was the design of the statute to prohibit and punish"). As the Maislin Court concluded, compliance with these provisions "is `utterly central' to the administration of the Act." 497 U. S., at 132, quoting Regular Common Carrier Conference v. United States, 793 F.2d 376, 379 (CADC 1986).
Much of the rest of the Communications Act subchapter applicable to Common Carriers, see 47 U. S. C. §§ 201-228, and the Act's Procedural and Administrative Provisions, 47 U. S. C. §§ 401-416, are premised upon the tariff-filing requirement of § 203. For example, § 415 defines "overcharges" (which customers are entitled to recover) by reference to the filed rate. See § 415(g). The provisions allowing customers and competitors to challenge rates as unreasonable or as discriminatory, see 47 U. S. C. §§ 204, 206—
Bearing in mind, then, the enormous importance to the statutory scheme of the tariff-filing provision, we turn to whether what has occurred here can be considered a mere "modification." The Commission stresses that its detariffing policy applies only to nondominant carriers, so that the rates charged to over half of all consumers in the longdistance market are on file with the Commission. It is not clear to us that the proportion of customers affected, rather than the proportion of carriers affected, is the proper measure of the extent of the exemption (of course all carriers in the long-distance market are exempted, except AT&T). But even assuming it is, we think an elimination of the crucial provision of the statute for 40% of a major sector of the industry is much too extensive to be considered a "modification." What we have here, in reality, is a fundamental revision of the statute, changing it from a scheme of rate regulation in long-distance common-carrier communications
Apart from its failure to qualify as a "modification," there is an independent reason why the Commission's detariffing policy cannot come within the § 203(b)(2) authority to modify. That provision requires that when the Commission proceeds "by general order" (as opposed to when it acts "in particular instances") to make a modification, the order can only apply "to special circumstances or conditions." Although that is a somewhat elastic phrase, it is not infinitely so. It is hard to imagine that a condition shared by 40% of all long-distance customers, and by all long-distance carriers except one, qualifies as "special" within the intent of this limitation.
Both sides of this dispute contend that Congress has manifested in later legislation agreement with their respective interpretations of the Communications Act. Petitioners point to the 1990 amendment of the Act to require operator service providers (OSP's) to file informational tariffs, which can be phased out after four years, see Telephone Operator Consumer Services Improvement Act of 1990 (TOCSIA), 104 Stat. 990, 47 U. S. C. § 226(h) (1988 ed., Supp. IV). Petitioners reason that this must envision a background of permissive filing, since otherwise the permitted phaseout of informational
Finally, petitioners earnestly urge that their interpretation of § 203(b) furthers the Communications Act's broad purpose of promoting efficient telephone service. They claim that although the filing requirement prevented price discrimination and unfair practices while AT&T maintained a monopoly over long-distance service, it frustrates those same goals now that there is greater competition in that market. Specifically, they contend that filing costs raise artificial barriers to entry and that the publication of rates facilitates parallel pricing and stifles price competition. We have considerable sympathy with these arguments (though we doubt it makes sense, if one is concerned about the use of filed tariffs to communicate pricing information, to require filing by the dominant carrier, the firm most likely to be a price leader). The Court itself has policed trade associations and rate bureaus under the antitrust laws precisely because the sharing of pricing information can facilitate price fixing, see, e. g., Sugar Institute, Inc. v. United States, 297 U.S. 553
We do not mean to suggest that the tariff-filing requirement is so inviolate that the Commission's existing modification authority does not reach it at all. Certainly the Commission can modify the form, contents, and location of required filings, and can defer filing or perhaps even waive it altogether in limited circumstances. But what we have here goes well beyond that. It is effectively the introduction of a whole new regime of regulation (or of free-market competition), which may well be a better regime but is not the one that Congress established.
The communications industry has an unusually dynamic character. In 1934, Congress authorized the Federal Communications Commission (FCC or Commission) to regulate "a field of enterprise the dominant characteristic of which was the rapid pace of its unfolding." National Broadcasting Co. v. United States, 319 U.S. 190, 219 (1943). The Communications Act of 1934 (Act) gives the FCC unusually broad discretion to meet new and unanticipated problems in order to fulfill its sweeping mandate "to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nation-wide and world-wide wire and radio communication service with adequate facilities at reasonable charges." 47 U. S. C. § 151. This Court's consistent interpretation of the Act has afforded the Commission ample leeway to interpret and apply its statutory powers and responsibilities. See, e. g., United States v. Southwestern Cable Co., 392 U.S. 157, 172-173 (1968); FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 138 (1940). The Court today abandons that approach in favor of a rigid literalism that deprives the FCC of the flexibility Congress meant it to have in order to implement the core policies of the Act in rapidly changing conditions.
At the time the Act was passed, the telephone industry was dominated by the American Telephone & Telegraph Company (AT&T) and its affiliates. Title II of the Act, which establishes the framework for FCC regulation of common carriers by wire, was clearly a response to that dominance. As the Senate Report explained, "[u]nder existing provisions of the Interstate Commerce Act the regulation of the telephone monopoly has been practically nil. This vast monopoly which so immediately serves the needs of the people
The wire communications provisions of the Act address problems distinctly associated with monopoly. Section 201 requires telephone carriers to "furnish . . . communication service upon reasonable request therefor," and mandates that their "charges, practices, classifications, and regulations" be "just and reasonable." 47 U. S. C. § 201. Section 202 forbids carriers to "make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services . . . or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality." 47 U. S. C. § 202(a). The Commission, upon complaint or its own motion, may hold hearings upon, and declare the lawfulness of, proposed rate increases, § 204, and may prescribe just and reasonable charges upon a finding that a carrier's actual or proposed charges are illegal, § 205. Persons damaged by a carrier's violation of the statute have a right to damages, §§ 206-207, and any person may file with the Commission a complaint of violation of the Act, § 208.
Section 203, modeled upon the filed rate provisions of the Interstate Commerce Act, see 49 U. S. C. §§ 10761-10762; S. Rep. No. 781, supra, at 4, requires that common carriers other than connecting carriers "file with the Commission and print and keep open for public inspection schedules showing all charges for itself and its connecting carriers." 47 U. S. C. § 203(a). A telephone carrier must allow a 120-day period of lead time before a tariff goes into effect, and, "unless otherwise
. . . . .
Congress doubtless viewed the filed rate provisions as an important mechanism to guard against abusive practices by wire communications monopolies. But it is quite wrong to suggest that the mere process of filing rate schedules—rather than the substantive duty of reasonably priced and nondiscriminatory service—is "the heart of the common-carrier section of the Communications Act." Ante, at 229.
In response to new conditions in the communications industry, including stirrings of competition in the long-distance telephone market, the FCC in 1979 began re-examining its regulatory scheme. The Commission tentatively concluded that costly tariff-filing requirements were unnecessary and actually counterproductive as applied to nondominant carriers, i. e., those whose lack of market power leaves them unable to extract supracompetitive or discriminatory rates from customers. See Competitive Carrier Rulemaking, 77 F. C. C. 2d 308 (1979). Relaxing the regulatory burdens upon new entrants would foster competition into the telecommunications
In the instant In re Tariff Filing Requirements for Interstate Common Carriers, 7 FCC Rcd 8072 (1992), the FCC adhered to its policy of excusing nondominant providers of long-distance telephone service from the § 203 filing requirement, and codified that longstanding forbearance policy. The Commission reaffirmed its commitment to "adapt . . . regulation of telecommunications common carriers to the changed circumstances of competition and to develop a regulatory approach that furthers the purposes of the Act while fostering innovation and the efficient development of the telecommunications industry," id., at 8079, and explained once again why, in its view, permissive detariffing furthered these goals, id., at 8079-8080. As it had since its initial
Although the majority observes that further relaxation of tariff-filing requirements might more effectively enhance competition, ante, at 233-234, it does not take issue with the Commission's conclusions that mandatory filing of tariff schedules serves no useful purpose and is actually counterproductive in the case of carriers who lack market power. As the Commission had noted in its prior detariffing orders, see, e. g., 84 F. C. C. 2d, at 479-480, if a nondominant carrier sought to charge inflated rates, "customers would simply move to other carriers." 7 FCC Rcd, at 8079. Moreover, an absence of market power will ordinarily preclude firms of any kind from engaging in price discrimination. See, e. g., L. Sullivan, Law of Antitrust 89 (1977) ("A firm will not discriminate unless it has market power"); 9 P. Areeda, Antitrust Law ¶ 1711a, pp. 119-120 (1991). The Commission plausibly concluded that any slight enforcement benefits a tariff-filing requirement might offer were outweighed by the burdens it would put on new entrants and consumers. Thus, the sole question for us is whether the FCC's policy, however sensible, is nonetheless inconsistent with the Act.
In my view, each of the Commission's detariffing orders was squarely within its power to "modify any requirement" of § 203. Section 203(b)(2) plainly confers at least some discretion to modify the general rule that carriers file tariffs,
The only statutory exception to the Commission's modification authority provides that it may not extend the 120-day notice period set out in § 203(b)(1). See § 203(b)(2). The Act thus imposes a specific limit on the Commission's authority to stiffen that regulatory imposition on carriers, but does not confine the Commission's authority to relax it. It was no stretch for the FCC to draw from this single, unidirectional statutory limitation on its modification authority the inference that its authority is otherwise unlimited. See 7 FCC Rcd, at 8075.
According to the Court, the term "modify," as explicated in all but the most unreliable dictionaries, ante, at 225-228, and n. 3, rules out the Commission's claimed authority to relieve nondominant carriers of the basic obligation to file tariffs. Dictionaries can be useful aides in statutory interpretation, but they are no substitute for close analysis of what words mean as used in a particular statutory context.
The Court seizes upon a particular sense of the word "modify" at the expense of another, long-established meaning
A modification pursuant to § 203(b)(1), like any other order issued under the Act, must of course be consistent with the purposes of the statute. On this point, the Court asserts that the Act's prohibition against unreasonable and discriminatory rates "would not be susceptible of effective enforcement if rates were not publicly filed." Ante, at 231. That determination, of course, is for the Commission to make in the first instance. But the Commission has repeatedly explained
The Court's argument is also demonstrably incorrect. A contemporary cousin of the Communications Act of 1934— the Robinson-Patman Price Discrimination Act, 15 U. S. C. §§ 13(a), 13a, 13b, enacted in 1936—contains a much broader prohibition against price discrimination than does the Communications Act. That statute has performed its mission for almost 60 years without any counterpart to the filed rate doctrine. Indeed, the substantive requirements of Title II of the Communications Act itself apply to "connecting carriers" even though § 203(a) exempts such carriers from the § 203 tariff-filing provisions. See 47 U. S. C. § 152(b); National Assn. of Regulatory Utility Commr's v. F. C. C., 737 F.2d 1095, 1115, n. 23 (CADC 1984), cert. denied, 469 U.S. 1227 (1985). The small fraction of competitive carriers that
The filed tariff provisions of the Communications Act are not ends in themselves, but are merely one of several procedural means for the Commission to ensure that carriers do not charge unreasonable or discriminatory rates. See 84 F. C. C. 2d, at 483. The Commission has reasonably concluded that this particular means of enforcing the statute's substantive mandates will prove counterproductive in the case of nondominant long-distance carriers. Even if the 1934 Congress did not define the scope of the Commission's modification authority with perfect scholarly precision, this is surely a paradigm case for judicial deference to the agency's interpretation, particularly in a statutory regime so obviously meant to maximize administrative flexibility.
I respectfully dissent.