## Facts

- Virgin Islands Telephone Corporation (Vitelco) provided local exchange service in the U.S. Virgin Islands and terminated interstate calls from carriers such as AT&T, which paid Vitelco interstate access charges.
- In June 1997, Vitelco filed a “streamlined” interstate access tariff under 47 U.S.C. § 204(a)(3) (the July 1997 Tariff), setting rates for July through December 1997.
- Within the statutory review period, the FCC (at AT&T’s request) suspended the tariff for one day and instituted an investigation into its lawfulness.
- About one month later, the FCC, on its own motion, vacated the suspension and the investigation.
- In a later order, the FCC concluded that the initial suspension (even though vacated) prevented the tariff from ever becoming “deemed lawful” under § 204(a)(3), exposing Vitelco to damages for alleged overearnings during the tariff period.
- Vitelco petitioned for review in the D.C. Circuit, arguing that vacatur of the suspension/investigation should restore “deemed lawful” status.

## Issues

1. Whether a streamlined tariff can become “deemed lawful” under 47 U.S.C. § 204(a)(3) when the FCC timely suspended it and opened an investigation, but later vacated those actions.
2. Whether the FCC reasonably interpreted § 204(a)(3) to treat a timely suspension as permanently defeating “deemed lawful” status, leaving the carrier subject to damages for unlawful rates.

## Decision

- The D.C. Circuit denied the petition for review and upheld the FCC’s order.
- The court held that the FCC’s timely suspension and initiation of an investigation during the § 204(a)(3) window prevented the tariff from ever being “deemed lawful.”
- The court accepted the FCC’s view that later vacatur did not retroactively confer “deemed lawful” status or immunity from damages.
- As a result, Vitelco was not protected from potential damages liability for overearnings during July–December 1997.

## Legal Principles

- Under 47 U.S.C. § 204(a)(3), “deemed lawful” status depends on the FCC permitting a streamlined tariff to take effect without timely suspension or investigation during the statutory period.
- A timely FCC suspension/investigation can foreclose “deemed lawful” status even if the agency later rescinds those actions; the later rescission does not recreate the statutory condition for “deemed lawful” treatment.
- A tariff may be “legal” (effective due to proper filing) without being “lawful” (just and reasonable); “deemed lawful” is a separate statutory protection that can limit damages exposure.
- Courts will defer to the FCC’s reasonable interpretation of § 204(a)(3) in implementing the streamlined tariff scheme.

## Conclusion

The D.C. Circuit sustained the FCC’s interpretation that a streamlined tariff cannot become “deemed lawful” if the FCC timely suspends it and initiates an investigation, even when those actions are later vacated, leaving the carrier exposed to damages for unlawful rates.


Virgin Islands Tel. Corp. v. FCC, 444 F.3d 666 (D.C. Cir. 2006)