Section 203(a) of the Communications Act requires common carriers to file tariffs with the FCC, while § 203(b)(2) allows the FCC to 'modify' any requirement of that section. Beginning in the 1980s, the FCC progressively relaxed tariff-filing requirements for nondominant long-distance carriers and eventually adopted a permissive detariffing policy under which such carriers could, but need not, file tariffs. AT&T challenged MCI's use of unfiled rates and also challenged the FCC's rule as beyond its statutory authority. The FCC defended permissive detariffing as a valid exercise of its power to 'modify' § 203 requirements.
Issue
Does § 203(b)(2) of the Communications Act authorize the FCC to make tariff filing optional for all nondominant long-distance carriers by 'modifying' the tariff-filing requirements of § 203? More specifically, can 'modify' be read to permit a fundamental elimination of the filing requirement for most carriers in that market?
Rule
Under § 203(b)(2), the FCC may 'modify' tariff-filing requirements only through moderate, limited changes, not through wholesale elimination or fundamental revision of the statutory tariff-filing regime. An agency interpretation receives no deference if it goes beyond the meaning the statute can bear, and a general order under § 203(b)(2) must apply only to 'special circumstances or conditions.'
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
Congress requires every licensed intercity rail-freight carrier to submit quarterly rate schedules to the Surface Transport Board. A separate provision says the Board may, for good cause shown, "modify any requirement" of that section. The Board adopts a rule allowing all carriers that lack market power in the Midwest to choose whether to file schedules at all, reasoning that competition makes filing unnecessary.
If a court applies the majority's reasoning, how should it evaluate the Board's interpretation of "modify"?
Explanation. The majority held that Chevron deference does not apply when the agency's interpretation goes beyond the meaning the statute can bear. "Modify" means moderate or minor change, not wholesale elimination of a central filing requirement for a broad category of regulated entities. The agency's policy rationale may be sensible, but it cannot expand statutory authority beyond the text.