******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of) ) William G. Bowles Jr. P.E.) d/b/a Mid Missouri Mobilfone, ) ) Complainant, ) )File No. E-96-04 v. ) ) United Telephone Company of Missouri,) ) Defendant. ) MEMORANDUM AND ORDER Adopted: July 9, 1997 ; Released July 11, 1997 By the Deputy Chief, Common Carrier Bureau: I. INTRODUCTION 1.In this Order, we address a formal complaint filed by William G. Bowles Jr. P.E., d/b/a Mid Missouri Mobilfone, ("Bowles"). Bowles, a provider of paging services, alleges that United Telephone Company of Missouri ("United"), a local exchange carrier ("LEC"), has violated sections 201(a) and 202(a) of the Communications Act of 1934, as amended (the "Act"), by refusing to provide him with Type 2 interconnection. For the reasons discussed below, we grant the complaint to the extent indicated herein. II. BACKGROUND 2.Section 201(a) requires that common carriers establish physical connections with other carriers where the Commission has found such action necessary or desirable in the public interest. Section 202(a) prohibits any unjust and unreasonable discrimination by a common carrier. 3.The Commission has considered the obligations of LECs to provide interconnection to commercial mobile radio service ("CMRS") providers pursuant to sections 201, 332, 251, and 252 of the Act. The issue was most recently considered in the Local Competition First Report and Order. In that order, the Commission concluded that sections 251 and 252 of the Act apply to LEC-CMRS interconnection. The Commission also concluded that, even following the passage of the Telecommunications Act of 1996, "section 332 in tandem with section 201 is a basis for jurisdiction over LEC-CMRS interconnection; we simply decline to define the precise extent of that jurisdiction at this time." The complaint submitted by Bowles was filed in November 1995, before the Telecommunications Act of 1996 was enacted, and neither party has asserted that sections 251 and 252 govern the determination of actions that occurred before those provisions became law. We therefore limit our review in this proceeding to whether United acted in violation of sections 201, 202 and 332 of the Act, or any other law or regulation that was in effect at the time Bowles filed the complaint in November 1995. 4.The Commission has considered the obligations of LECs to provide interconnection to CMRS providers pursuant to sections 201, 202 and 332 in four Commission orders. Such obligations were most recently considered in 1994, as part of the rule making implementing the 1993 Omnibus Budget Act, section 6002(b), which amended the Communications Act of 1934. The purpose of this order was to define which services should be classified as commercial mobile radio services and which provisions of Title II of the Act should not be applied to such services. The Communications Act, section 332(c)(1)(B) provides: Upon reasonable request of any person providing commercial mobile service, the Commission shall order a common carrier to establish physical connections with such service pursuant to the provision of Section 201 of this Act. The rule making proceeding that implemented this section reaffirmed the Commission's previous statements on the issue of interconnection rights of [Part 22] paging service providers when it stated: We see no distinction between a LEC's obligation to offer interconnection to Part 22 licensees and all other CMRS providers . . . Therefore, the Commission will require LECs to provide reasonable and fair interconnection for all commercial mobile radio services. Further, In providing reasonable interconnection to CMRS providers, LECs shall be subject to the following requirements. . . . [I]n determining the type of interconnection that is reasonable for a commercial mobile radio service system, the LEC shall not have authority to deny to a CMRS provider any form of interconnection arrangement that the LEC makes available to any other carrier or other customer unless the LEC meets its burden of demonstrating that the provision of such interconnection arrangement to the requesting commercial mobile radio service provider either is not technically feasible or is not economically reasonable. 5.The Commission has previously described Type 1 and Type 2 interconnection as follows: Type 1 service involves interconnection to a telephone company end office similar to that provided to a private branch exchange (PBX). Under Type 1 interconnection, the telephone company owns the switch serving the [CMRS] network and, therefore, performs the origination and termination of both incoming and outgoing calls. Under Type 2, the [CMRS provider] owns the switch, enabling it to originate outgoing calls and to terminate incoming calls. There are two forms of Type 2 interconnection, Type 2A and Type 2B. Type 2A service is interconnection to a local telephone company tandem similar to that used by an end office. Type 2B involves interconnection at an end office to a high usage inter-office trunk. Further, [C]ertain distinctions between Type 1 and Type 2 interconnection produce differences in their respective costs. For example, . . . the Type 2 design eliminates the need to utilize a duplicative switching center, thereby resulting in cost savings for the telephone company. 6.Bowles is a Radio Common Carrier ("RCC") providing paging services and is operating under Part 22 of the Commission's Rules. As such, Bowles is a CMRS provider. United is a local exchange carrier that provides wireline telephone services. United provides Bowles with Type 1 interconnection to its local exchange network. 7.Bowles has purchased Type 1 interconnection from United since 1981. On February 12, 1993, Bowles requested Type 2 interconnection from United. On March 17, 1993, United refused Bowles' request by stating that it offers only Type 1 interconnection to paging service providers. On March 20, 1993, Bowles requested that he and United enter negotiations aimed at reaching an agreement for Type 2 interconnection, but received no response from United. On February 27, 1995, Bowles again requested Type 2 interconnection from United. United did not reply to this request. On November 17, 1995, Bowles filed the instant complaint. United reiterates here that it does not provide Type 2 interconnection to CMRS paging providers, although it does provide Type 2 interconnection to other CMRS providers, such as cellular carriers. III. DISCUSSION 8.Bowles alleges that United's refusal to provide him with Type 2 interconnection is a violation of sections 201(a) and 202(a) of the Act. United denies Bowles' allegations. United asserts as a further defense that the Commission is without jurisdiction to rule on this complaint. We first consider the threshold issue of jurisdiction and then the alleged violations of sections 201(a) and 202(a). A.JURISDICTION 1.Contentions of the Parties 9.United asserts that the Commission lacks jurisdiction to resolve this dispute because "current Commission policy leaves intrastate interconnection rates between LECs and CMRS paging providers to the states." United contends that Bowles' allegations are a disguised challenge of the lawfulness of United's state-approved tariffed rates for Type 1 interconnection. United reasons that because Bowles, through the Type 1 interconnection he receives from United, is receiving all of the particular "service functions" that would be of use to his business and is not receiving degraded service, his only complaint must be with the rates charged for the service he receives. United argues that the Commission is, therefore, without jurisdiction to resolve this dispute because jurisdiction to establish CMRS interconnection rates belongs to the states. 10.Bowles asserts that the Commission does have jurisdiction to resolve this dispute. Bowles contends that this dispute concerns only the kind of interconnection that he is entitled to receive, not the validity of the state-approved tariff for Type 1 interconnection. In light of this proposition, Bowles argues that the Commission has clearly preempted the states' jurisdiction to regulate the kind of interconnection a CMRS provider is entitled to receive. Bowles further contends that he is being denied a particular service function by being denied Type 2 interconnection because (1) Type 1 interconnection provides a lower quality service as the result of using a greater number of switching centers and poorer quality subscriber loops, and (2) "in rural areas . . . where small towns may be miles apart and located in different exchanges or even served by different LECs, Type 2 provides a paging carrier the ability to use its unique NXX code to offer its subscribers the ability to utilize its paging system as a local call," a function that is not available through Type 1 interconnection. Bowles further asserts that a cellular provider currently receiving Type 2 interconnection from United is using part of its NXX code numbers to provide paging services in competition with Bowles. This competitor is able to offer its subscribers the ability to reach its paging system using a 7 digit local call throughout the eastern half of Missouri, a service that Bowles cannot offer with its Type 1 interconnection. 2.Discussion 11.We find that the Commission has jurisdiction to resolve this dispute. We agree with Bowles that the dispute in this case concerns the type of interconnection a CMRS provider is entitled to receive. We disagree with United's analysis that a Commission policy reserving jurisdiction over intrastate interconnection rates to the states implicitly reserves jurisdiction to the states over disputes concerning the kind of interconnection a CMRS provider is entitled to, even if a reason for requesting a certain type of interconnection is a difference in rates. We find that sections 201(a) generally and 332(c)(1)(B) explicitly grant this Commission jurisdiction over the disputed matter, an interconnection request. Section 201(a) provides: It shall be the duty of every common carrier . . . in cases where the Commission, after opportunity for hearing, finds such action necessary or desirable in the public interest, to establish physical connections with other carriers . . . . Section 332(c)(1)(B) provides: Upon reasonable request of any person providing commercial mobile service, the Commission shall order a common carrier to establish physical connections with such service pursuant to the provisions of section 201 of this Act. This section of the Act was implemented in its corresponding rule making proceeding as follows: The Commission [finds] that . . . state regulation of the right and type of interconnection would negate the important federal purpose of ensuring CMRS interconnection to the interstate network. Therefore, we preempt state and local regulations of the kind of interconnection to which CMRS providers are entitled. Hence, under sections 201(a) and 332(c)(1)(B), the Commission has preempted any state regulation governing the kind of interconnection to which a CMRS provider is entitled -- the very matter at issue here. 12.The propriety of state interconnection tariff rates is not in question in this dispute. United's assertion that Bowles' complaint is a disguised attack on United's Type 1 interconnection rates is irrelevant to the jurisdictional question. Bowles has stated a federal cause of action under sections 201(a) and 332(c)(1)(B) even assuming, arguendo, his reason for requesting Type 2 interconnection is the difference in tariffed rates between Type 1 and Type 2 interconnection. United argues that Bowles is not being denied a particular service function that would be of use to his business, and, therefore, his "real" reason for filing the complaint must be a dispute over Type 1 interconnection charges. The "real" complaint must, therefore, be a complaint about rates and, United asserts, the Commission does not have jurisdiction to set interconnection rates. We reject this argument because the Commission's orders on this issue state that CMRS providers have the right to design their own systems for the type of interconnection of their choice. Thus, United's argument that a CMRS paging provider does not require Type 2 interconnection is irrelevant to the jurisdictional question. B.SECTION 201(a) ISSUE 1.Contentions of the Parties 13.Bowles alleges that United's refusal to provide him with Type 2 interconnection upon his reasonable request violates section 201(a) of the Act. Bowles argues that the Commission's orders concerning the obligations of LECs to provide interconnection to CMRS paging providers clearly establish that Bowles is entitled to Type 2 interconnection upon his reasonable request. Bowles contends that it is presumptively reasonable for a CMRS paging provider to request Type 2 service and that it is within the discretion of each CMRS provider to design its system for the interconnection of its choice. Bowles acknowledges that there are two conditions that relieve a LEC from its obligation to provide the requested type of interconnection. The first exception applies when the provision of such service is not technically feasible, and the second applies when the provision of such service is not economically reasonable. Bowles argues that the LEC has the burden of establishing that one of the two exceptions applies and that United has not met this burden. Bowles argues that United's assertion that the provision of Type 2 interconnection to CMRS paging providers is economically unreasonable because United's Type 2 rates "are not designed to apply to the service characteristics of interconnection by paging carriers" does not meet United's burden. Bowles further maintains that United's actions in refusing to provide the requested Type 2 interconnection has damaged the ability of Bowles to compete in the marketplace by effectively limiting the service quality and capabilities that Bowles can offer to the public. 14.United responds that Bowles' reliance on the Commission's orders is misplaced and then traces the development of the Commission policy regarding CMRS interconnection. United concludes that it need only provide the type of interconnection reasonably requested and that it may deny the type of interconnection requested if it shows that it is either technically infeasible or economically unreasonable to provide it. United asserts that it is not required to provide the requested service because it would not be economically reasonable for it to do so. Specifically, United argues that: [T]he Type 2 interconnection rates Complainant wishes to have applied to it are not designed to apply to the services characteristics of interconnection by paging carriers and [are] economically unreasonable. United also asserts that Bowles is being denied no service functions that are useful for CMRS paging carriers. United does not, however, make a connection between its argument about what service functions Bowles requires and its assertion that Type 2 interconnection rates are not designed to apply to the service characteristics of interconnection by paging carriers. 2.Discussion 15.We note that United and Bowles agree, as do we, that a LEC is obligated to provide a CMRS provider with the interconnection of its choice upon its request and that two exceptions to this obligation exist. The Commission has stated that they "see no distinction between a LEC's obligation to offer interconnection to Part 22 licensees and all other CMRS providers . . . The Commission finds it is in the public interest to require LECs to provide the Type of interconnection reasonably requested by all CMRS providers." The Commission further stated: [T]he LEC shall not have authority to deny to a CMRS provider any form of interconnection arrangement that the LEC makes available to any other carrier or other customer unless the LEC meets its burden of demonstrating that the provision of such interconnection arrangement . . . either is not technically feasible or not economically reasonable. Thus, a LEC denying a reasonable request for interconnection and failing to meet its burden of establishing an exception is in violation of section 201(a) of the Act. 16.We reject United's claim that it is economically unreasonable for it to provide Type 2 interconnection to Bowles because Type 2 rates are not "designed to apply to the service characteristics of interconnection by paging carriers." United has the burden of proof to show that it is not economically reasonable to provide Bowles with the type of interconnection requested. United's assertions about the service characteristics of a CMRS paging provider and United's Type 2 interconnection tariffs do not meet United's burden. Specifically, United fails to (1) define the "service characteristics" of a CMRS paging provider that allegedly determine appropriate pricing, (2) discuss how these differ from the service characteristics of a CMRS cellular provider, and (3) use these differences to explain how Type 2 interconnection rates, as "designed," are inappropriate. Thus, United has not established a nexus between the asserted "service characteristics" and how Type 2 interconnection rates are "designed". Despite repeated opportunities, United simply has not adequately explained the economics of providing Type 2 interconnection and why providing it to Bowles is economically unreasonable. We note that United has described functions provided by Type 2 interconnection that it claims are not useful to Bowles. United does not explain, however, and we do not see, how it would be economically unreasonable to provide Type 2 interconnection to Bowles so long as Bowles pays Type 2 rates, even if he cannot use all of the functions. Thus we find that United has not met its burden of proof to show that it is economically unreasonable to provide Type 2 interconnection to Bowles. 17.Furthermore, we reject United's assertion of economic unreasonability because it flies in the face of more than a decade of Commission precedent. As discussed in part III.A.2., supra, the Commission has consistently ruled that it is presumptively reasonable for all CMRS providers, and specifically CMRS paging providers, to request Type 2 interconnection. When the Commission placed the burden of establishing economic unreasonability on a LEC that denies a CMRS provider its requested interconnection, it was well aware of the different service characteristics of the various CMRS providers and the different service functions provided by Type 1 and Type 2 interconnection. Thus, United's argument, which essentially relies on these differences, provides no basis for a finding of economic unreasonability. C.SECTION 202(a) ISSUE 1.Contentions of the Parties 18. Bowles alleges that United's refusal to provide him with Type 2 interconnection while simultaneously providing Type 2 interconnection to other CMRS providers is discriminatory and, therefore, violates section 202(a) of the Act. Bowles argues that when a LEC is providing like services to different customers on dissimilar terms, the LEC bears the burden of establishing that such disparate treatment is reasonable. Bowles asserts that: (1) the Type 2 interconnection service that United provides to CMRS cellular carriers is identical to the Type 2 interconnection service that Bowles is requesting from United, therefore, the services in question are "like"; (2) United is providing Type 2 interconnection to CMRS cellular providers and refusing to provide such interconnection to Bowles, a similarly situated CMRS provider; and (3) United has not met its burden of providing a reasonable justification for its disparate treatment of Bowles and cellular carriers. Bowles asserts that these allegations show that United is violating section 202(a). Bowles further argues that United's actions in refusing to provide the requested Type 2 service has damaged his ability to compete in the marketplace by effectively limiting the service quality and capabilities that Bowles can offer to the public. 19.United's answer contains general denials of Bowles' allegations of discriminatory practices. United does not, however, separately address Bowles' allegations of discriminatory practices in its briefs. Instead, United appears to rely on its argument that it is economically unreasonable for it to provide Type 2 interconnection to Bowles because of the differences between the "service characteristics" of paging services and those of other CMRS providers. Stated another way, United argues that its disparate treatment of Bowles and other CMRS providers is reasonable because of differences in the services provided by the different types of CMRS providers. 2.Discussion 20. Applicable judicial decisions establish a three-prong test for determining whether a section 202(a) violation has occurred. First, the Commission must determine whether the services at issue are like one another. Second, the Commission must determine whether there is disparate pricing or treatment between the like services. Third, if disparate pricing or treatment is found to exist, the Commission must decide whether the disparity is justified and, therefore, not unreasonable. In a section 208 complaint proceeding, the complainant has the evidentiary burden of establishing that the services are like and that discrimination exists between them. Once like services and discrimination are established, the burden shifts to the defendant carrier to show that the discrimination is not unreasonable. 21.Because the service in question, Type 2 interconnection, is a single type of service, it is by definition a "like" service. According to Commission decisions, a LEC's interconnection obligations are the same for all CMRS providers. CMRS paging providers and CMRS cellular providers are, therefore, similarly situated for purposes of the type of interconnection to which they are entitled. United provides this "like" service to CMRS cellular providers and does not provide the service to CMRS paging providers. In fact, United is currently providing Type 2 interconnection to CMRS cellular providers at United's Rolla Missouri exchange, the exchange where Bowles is currently receiving Type 1 interconnection. Thus, we find that United discriminates in its provision of this like service to similarly situated customers. The burden therefore shifts to United to prove that the discrimination is reasonable. 22.As its justification for treating Bowles, a CMRS paging provider, differently from CMRS cellular providers, United has asserted that its state-approved Type 1 interconnection tariffs reflect the appropriate charges for the "service characteristics" of paging services while its Type 2 interconnection tariffs do not. As discussed extensively above, United rests its justification entirely on unsubstantiated allegations related to a relationship between unidentified service characteristics and appropriate pricing. United's substantive discussion of Type 2 interconnection is limited to claiming that it provides no functional advantage to CMRS paging providers. United ignores the fact that the Commission has previously determined that it is reasonable for CMRS paging providers to request Type 2 interconnection, and more specifically, that when, as here, a LEC makes a certain type of interconnection available to a CMRS provider, that LEC "shall not have the authority" to deny that form of interconnection arrangement to any other CMRS provider. United has failed to meet its burden of justifying differential treatment of CMRS paging providers and CMRS cellular providers. United's refusal to provide Bowles with Type 2 interconnection is, therefore, unreasonably discriminatory and violates section 202(a) of the Act. IV. MOTIONS 23.Each party has filed motions in this proceeding. We shall rule on all outstanding motions in the order in which they were filed. 24.United filed a Motion to Dismiss concurrently with its Answer by designating each of its substantive arguments as an "Affirmative Defense and Motion to Dismiss." Because the Commission is deciding all issues raised in the pleadings, United's Motion to Dismiss is denied as moot. 25.Bowles filed a Motion for Expedited Consideration on April 18, 1996, and a Renewed Motion for Expedited Consideration on April 2, 1997. These Motions for Expedited Consideration are granted to the extent the Commission has acted, and otherwise denied as moot. V. DAMAGES 26.Bowles requested that United be ordered to provided him with Type 2 interconnection. As set out fully above, United's refusal to provide Bowles with Type 2 interconnection violates sections 201(a) and 202(a) of the Act. Further, the Commission has specifically required LECs such as United to provide the type of interconnection requested by CMRS providers such as Bowles. United is currently providing Type 2 interconnection to other CMRS providers at United's Rolla Missouri exchange, the exchange where Bowles is currently receiving Type 1 interconnection. United is, therefore, ordered to provide Bowles with Type 2 interconnection within 30 days of the release date of this order. 27.Bowles asserts in his complaint that he suffered injury resulting from United's refusal to provide him with Type 2 interconnection "by being restricted to offering inferior service to the public while other carriers with Type 2 service are able to provide services that [Bowles] cannot." Bowles did not, however, request damages, nor did he allege with specificity evidence to identify with reasonable certainty the amount of damages that he suffered as a result of United's violations. We do not, therefore, at this time consider whether Bowles suffered any compensable damages as a result of United's violations of sections 201(a) and 202(a) of the Act. Bowles may, however, file a supplemental complaint for damages pursuant to section 1.722(b)(1) of our rules if he so chooses. We note, in addition, that Bowles' complaint here does not preclude him from filing a private antitrust suit against United based on the facts of this case. 28.Bowles also requested that the Commission impose forfeitures against United for its unlawful failure to provide Type 2 interconnection. While we may, on our own motion, pursuant to section 503(b) of the Act and section 1.80 of our rules, assess a forfeiture against any person found to have violated the Act or the Commission's rules or orders, we decline to do so here. Forfeitures are not available as a remedy to a complainant in a section 208 complaint proceeding. VI. CONCLUSION AND ORDERING CLAUSES 29.For the reasons articulated above, we find that United's refusal to provide Bowles with Type 2 interconnection is a violation of sections 201(a) and 202(a) of the Communication Act of 1934, as amended. 30.Accordingly, IT IS ORDERED pursuant to sections 1, 4(i), 4(j), 201, 202, 208 and 332 of the Act, 47 U.S.C.  1, 154(i), 154(j), 201, 202, 208, 332 and the authority delegated in sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R.  0.91, 0.291, that the instant complaint filed by William G. Bowles Jr. P.E., d/b/a Mid Missouri Mobilfone IS GRANTED to the extent indicated herein. 31.IT IS FURTHER ORDERED that United Telephone Company of Missouri SHALL PROVIDE Type 2 interconnection to William G. Bowles Jr. P.E., d/b/a Mid Missouri Mobilfone within 30 days of the release date of this order. 32.IT IS FURTHER ORDERED that complainant William G. Bowles Jr. P.E., d/b/a Mid Missouri Mobilfone MAY FILE a supplemental complaint for damages pursuant to section 1.722(b)(1) of the Commission's rules, 47 C.F.R.  1.722(b)(1). 33.IT IS FURTHER ORDERED that United's Motion to Dismiss IS DENIED. 34.IT IS FURTHER ORDERED that Bowles' Motion for Expedited Consideration and Renewed Motion for Expedited consideration ARE GRANTED to the extent indicated herein and otherwise ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION Mary Beth Richards Deputy Chief, Common Carrier Bureau