a) Section 1708

TURN and DRA argue that the Decision abandons or modifies the definition of relevant markets adopted in the Merger Decisions without explanation or notice. Accordingly, they argue that the Decision violates the requirements of section 1708. We find no merit in this argument.

Section 1708 provides in relevant part:

The commission may at any time, upon notice to the parties, and with opportunity to be heard as provided in the case of complaints, rescind, alter, or amend any order or decision made by it. (Pub. Util. Code, § 1708 (emphasis added).)

TURN and DRA argue that Motor Vehicle Mfrs. Assn. v. State Farm (1983) 463 U.S. 29, 42, 1983 U.S.LEXIS 84 controls, to provide that although agencies have flexibility to adapt rules and policies to changing circumstances, they are nonetheless required to supply a "reasoned analysis" when rescinding a rule or regulation.

TURN and DRA are wrong that the Merger Decisions created a general rule regarding the definition of relevant markets. Our conclusions in those decisions were specific to the unique transactions under review. Nothing in D.06-08-030 rescinds or modifies the Merger Decisions, and the definition of relevant markets used in those decisions remains intact and unchanged. Because the Merger Decisions did not adopt a general rule, there was nothing that the Commission could have rescinded or amended by D.06-08-030. Accordingly, the requirements of section 1708 regarding notice and opportunity to be heard were not triggered, and the principles in Motor Vehicles Mfrs. Assn. v. State Farm regarding when an administrative agency can change a rule or regulation have no applicability here.

We also disagree that our Decision fails to explain the basis of our conclusion to use a different market definition. Our conclusion took into account that certain individual service concepts such as long distance and basic local exchange service "make little sense in an era of dominated by telecommunications sold through bundled services." (D.06-08-030, p. 75), and that "our market definition should take into account technological developments [such as VoIP] in the dynamic marketplace. Additionally, a service need not be identical to provide a competitive substitute." (D.06-08-030, p. 76.) Our conclusion recognizes that it is both reasonable and necessary to adjust the definition of relevant markets depending upon the circumstances in question and the ultimate goal of the proceeding.