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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 ) ) Motion for Declaratory Ruling ) File No. WTB/POL 95-2 Concerning Preemption of Alaska ) Call Routing and Interexchange ) Certification Regulations as ) Applied to Cellular Carriers ) MEMORANDUM OPINION AND ORDER Adopted: August 28, 1997 Released: September 15, 1997 By the Commission: I. Introduction 1. This Memorandum Opinion and Order disposes of a Motion for Declaratory Ruling ("Motion") filed by Alaska-3 Cellular LLC d/b/a CellularOne ("CellularOne") on September 22, 1995, requesting that the Commission declare that federal law preempts Alaska state regulations to the extent they require: (1) cellular carriers to be certificated as interexchange carriers ("IXCs"); and (2) local exchange carriers ("LECs") to route all landline calls through the landline caller's presubscribed IXC, including those calls bound to cellular subscribers. For the reasons discussed below, we dismiss CellularOne's Motion. II. Background 2. CellularOne is the "A" block, or non-wireline, licensee providing cellular service in the Alaska-3 Rural Service Area ("RSA"). The Alaska-3 RSA includes the cities of Sitka, Juneau and Ketchikan, Alaska. According to its Motion, CellularOne plans to construct a total of fourteen cell sites and three mobile telephone switching offices ("MTSOs") in the Alaska-3 RSA. One MTSO will be constructed in each of the three cities of Juneau, Sitka and Ketchikan. A number of cellular transmitter cell sites will be associated with each MTSO. Using mobile cellular telephones, CellularOne customers will be able to send and receive communications using signals picked up and transmitted by the cell sites, which will communicate with the MTSOs. The MTSOs, in turn, will be interconnected with the landline facilities of a local exchange carrier. Telephone Utilities of Alaska, Inc. and Telephone Utilities of Northland, Inc., doing business together as PTI Communications (collectively, "PTIC"), operate the incumbent LEC in Sitka and Juneau. 3. CellularOne has designed its cellular system to have a leased line connection between its Sitka and Juneau MTSOs, and a leased line connection between its Juneau and Ketchikan MTSOs. CellularOne plans to lease a local trunk group, such as a T-1 link, to interconnect the CellularOne MTSO in Sitka with PTIC's facilities in Sitka. A similar link would interconnect CellularOne's MTSO in Juneau with PTIC's facilities in Juneau. CellularOne has acquired the 723 NXX local exchange code for the Juneau area and would like to assign seven-digit numbers that use the same 723 prefix to all of its customers, regardless of their location in the Alaska-3 RSA. 4. PTIC has agreed to provide CellularOne with the physical interconnection arrangements that it requests. CellularOne and PTIC disagree, however, over how the landline network should route intercity traffic that is destined for a cellular customer whose NXX is situated outside the caller's local, toll-free calling area. Specifically, CellularOne proposes that when a landline caller in Sitka, for example, calls a cellular subscriber based in Juneau, the call would be delivered to CellularOne's network in Sitka and then transported to Juneau via CellularOne's leased line. In this way, the landline caller would avoid dialing ten digits and paying toll charges. CellularOne believes that its assignment of 723 NXX numbers to all of its cellular customers in the Alaska-3 RSA, regardless of their location, should allow a landline PTIC customer located anywhere in the RSA where CellularOne has an MTSO to place a call to any of CellularOne's mobile customers without incurring toll charges. Because CellularOne will have customers in Sitka using the 723 NXX local exchange code, CellularOne believes the PTIC switch in Sitka should identify the landline-to- cellular call as a local call and route that call to CellularOne rather than the landline customer's presubscribed IXC. 5. PTIC believes, however, that pursuant to the equal access requirements of Alaska Public Utilities Commission ("APUC"), a LEC must deliver a landline caller's intrastate interexchange traffic, including traffic bound for a cellular customer, to the appropriate IXC to which the landline caller presubscribes. Routine landline calls from persons with the Sitka 747 NXX to persons with a Juneau NXX, including 723, require ten digit dialing and are subject to a toll charge. PTIC believes that only if the two areas were converted to the same local calling area would the calls not be ten digit dialed calls and not be subject to toll charges. Consistent with this position and its interpretation of state law, PTIC also believes that CellularOne's plans to carry calls between Juneau and Sitka by way of its leased line may require CellularOne to obtain certification from APUC to operate as an IXC. Therefore, PTIC has refused to arrange for the routing of calls as CellularOne has requested. 6. CellularOne filed the instant Motion requesting that the Commission preempt APUC's regulations, as interpreted by PTIC, to the extent the regulations require: (1) cellular carriers to become certificated as IXCs; and (2) LECs to route all calls from landline callers through the landline caller's presubscribed IXC, including those calls bound to cellular mobile subscribers. CellularOne argues that both the certification and the "call-routing" requirements (1) constitute regulation of CMRS entry into a market within the State of Alaska in violation of Section 332(c)(3) of the Communications Act of 1934, as amended (the "Act"); (2) conflict with the Commission's pre-1996 LEC-CMRS interconnection policies; and (3) frustrate the federal policy of promoting rapid and efficient cellular service. 7. The Commission requested comment on CellularOne's Motion by public notice dated November 1, 1995. Comcast Cellular Communications, Inc. and Cox Enterprises, Inc. (in a joint filing, collectively "Comcast/Cox") and GTE Service Corporation (GTE) filed comments supporting CellularOne's petition. AT&T Wireless (AT&T) also supports CellularOne's petition with respect to the certification requirement, but opposes it with respect to the call routing requirement on the grounds that routing landline calls to presubscribed IXCs does not affect CMRS entry and is strictly an intrastate matter. PTIC filed comments expressing no opinion on the merits of the Motion, but requesting that the Commission issue a decision in order to provide guidance regarding the permissible implementation of the relevant APUC regulations. 8. The National Association of Regulatory Utility Commissioners (NARUC) was the principal commenter opposing CellularOne's Motion. NARUC argues primarily that the Motion is premature because APUC could interpret its regulations in such a way that the regulations would not produce the effects to which CellularOne objects. APUC and General Communication, Inc. (GCI) also oppose the Motion as premature. APUC claims that it has not received any request for declaratory ruling concerning the regulations in question. The opponents argue that, because APUC has not been asked to determine its regulations' applicability under the posed circumstances, the Motion must be rejected. III. Discussion 9. This case involves a petition to preempt the application of a private party's interpretation of several provisions of Alaska law. Alaska Statute 42.05.221(a) provides that "[a] public utility may not operate and receive compensation for providing a commodity or service without first having obtained from the commission [APUC] under this chapter a certificate declaring that public convenience and necessity require or will require the service." An APUC regulation, 3 AAC 52.360(a), further requires that "[a]n entity proposing to provide intrastate interexchange telephone service must file an application for a certificate of public convenience and necessity." In addition, APUC regulation 3 AAC 52.340(36) provides that the term "'interexchange carrier' means any individual, partnership, association, joint-stock company, trust, governmental entity, or corporation engaged for hire in interexchange communication by wire, fiber, or radio, between two or more exchanges." PTIC asserts that these provisions, taken together, require CellularOne to obtain certification in order to transport calls between cities to its own subscribers after those calls have been delivered to its network. Another APUC regulation, 3 AAC 52.333(b), provides that [i]f a local exchange telephone utility receives a bona fide request for interconnection in a location identified in 3 AAC 52.355(a)(1) in an exchange where interstate equal access is being provided at the time of the request, that utility shall implement 2-PIC dialing in that exchange within 90 days after receipt of that request. Upon implementation of 2-PIC dialing, the access line or lines of each customer will be presubscribed to the incumbent carrier until the local exchange telephone utility receives a written letter of authorization signed by the customer changing presubscription for an access line or lines to another certificated intrastate interexchange carrier. PTIC asserts that this regulation requires PTIC to route intercity calls bound for CellularOne's subscribers to the caller's presubscribed IXC, rather than to CellularOne. 10. Section 332(c)(3)(A) of the Act preempts any state law or regulation that regulates CMRS entry into the marketplace. Furthermore, the Commission has the power, when acting within the scope of its delegated authority, to preempt state action that conflicts with federal law or obstructs the achievement of federal goals. In general, however, the Commission will not make a preemption determination in the absence of an adequate record clearly describing the state law or action to be preempted. Here, the record does not contain any analysis of how the regulations and statute at issue would apply to CellularOne's specific proposal. We are only provided with PTIC's bald assertion. Although application of the law as interpreted by PTIC would raise serious concerns, it does not appear to us, at first impression, that the regulations and the statute would necessarily apply in the manner asserted by PTIC. Therefore, we dismiss the Motion. A discussion of our reasoning follows. 11. CellularOne and the commenters supporting its position argue that Alaska's statute and regulations are preempted under a number of legal theories. First, they argue that Alaska's alleged requirements violate Section 332(c)(3)(A) of the Act. Section 332(c)(3)(A) provides that "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service." According to CellularOne, Alaska's call routing and certification requirements, as interpreted by PTIC, regulate entry because they effectively prohibit CellularOne's ability to provide wide area service in the market defined by its federally licensed RSA boundaries. CellularOne contends that the rate plan contemplated by its wide area dialing service includes no charge to a landline caller for placing a call to a cellular subscriber. CellularOne argues that Alaska regulations, as interpreted by PTIC, preclude CellularOne's rate plan by requiring the routing of calls to the landline caller's IXC, which will charge a toll. 12. CellularOne also argues that Alaska's requirements, as interpreted by PTIC, are inconsistent with the Commission's LEC-CMRS interconnection policies that were in effect at the time it filed its Motion. CellularOne claims that the Commission intends to encourage a rapid, efficient, nationwide cellular service at reasonable charges and "expressly stated that a cellular subscriber traveling outside of his or her local service area should be able to communicate over a cellular system in another city." Further, CellularOne contends that with regard to the interconnection of cellular carriers with landline carriers, the Commission follows the principle that it will exercise its preemption authority whenever state regulation negates the purposes underlying the Commission's decisions, even when the state regulation involves an intrastate matter over which the state possesses jurisdiction. CellularOne contends that Alaska's requirements obstruct the achievement of Congress' and the Commission's policies favoring the rapid and ubiquitous availability of competitive CMRS offerings. In light of these asserted conflicts with federal law and policy, CellularOne argues that the Commission has the authority to preempt the offending regulations pursuant to Title III of the Act, which grants the Commission sole authority to license radio facilities, and case law construing the Commission's jurisdiction to preempt common carrier regulations. 13. We do not reach the merits of CellularOne's claims because, as described above, the record does not sufficiently establish any application of the Alaska statute and regulations at issue to CellularOne's plans. CellularOne speculates that, based on PTIC's interpretation of the relevant statute and regulations, CellularOne must be certificated as an IXC prior to obtaining the interconnection it requires for its seven digit wide area dialing plan. The provisions at issue generally require an entity providing interexchange service to obtain a certificate, and they define interexchange carriers to include radio common carriers. However, it is unclear from the plain language of the Alaska statute and regulations that these provisions would require a CMRS provider to obtain certification in order to carry calls directed only to its own subscribers under the arrangements that CellularOne proposes. No further discussion exists in the record of whether or how APUC intends to interpret the Alaska provisions in question as they apply to CMRS providers. 14. Further, PTIC has expressed to CellularOne that, pursuant to APUC's regulation requiring presubscription to interexchange carriers, PTIC must route calls from its landline customers to CellularOne's subscribers through the landline customer's presubscribed IXC rather than through CellularOne's MTSO, thus thwarting CellularOne's seven digit wide area dialing plan. Again, however, it is not clear to us on the face of the regulation that this presubscription requirement includes a requirement that the specific calls at issue be routed through the presubscribed carrier, as PTIC apparently contends. Consequently, because we do not believe the regulations and statute necessarily apply to the CellularOne proposal, we see no conflict between CellularOne and the State of Alaska. 15. Pursuant to Section 332(c)(3)(A), Congress prohibited states from regulating CMRS entry and gave the Commission authority to preempt inconsistent state law regarding CMRS entry. The Commission also has the power to preempt state law that is inconsistent with federal law, or that obstructs the achievement of federal objectives, so long as the Commission acts within its congressionally delegated authority. The Commission has broad authority to issue a declaratory ruling to terminate a controversy or remove uncertainty, and the Commission is not bound by the "case or controversy" requirement that applies to federal courts. However, the Commission refrains from preempting state requirements that do not appear on their face to regulate entry or conflict with federal law, where there is nothing in the record to demonstrate otherwise. The practice of requiring an adequate record to review ensures that Commission decisions on preemption questions are made with the benefit of as much information as possible, and in particular with the guidance of a state agency's interpretation of its own regulations. This approach improves the accuracy of the Commission's decisions and helps avoid the unnecessary expenditure of Commission resources. 16. Here, the record is inadequate to support a determination that the challenged statute and regulations apply to CellularOne. Therefore, there is no basis for us to preempt. CellularOne's underlying dispute is not with APUC but with PTIC. The dispute arises from PTIC's refusal to route certain landline traffic through CellularOne's leased line. PTIC claims it cannot comply with CellularOne's request because of a controlling Alaska statute and APUC regulations. If the Alaska statute and regulations were clear and unambiguous, we might be able to make an appropriate decision on this record. As described above, it is far from clear, however, that the statute and attendant regulations apply to these facts. Therefore, if there is to be any federal preemption, the parties should first seek specific guidance and direction from APUC regarding the appropriate interpretation of state law. If APUC confirms PTIC's interpretations, the issue of impermissible regulation of CMRS entry would be appropriate for our consideration. 17. Our decision not to reach the merits of CellularOne's Motion on this record should not be interpreted as an endorsement of the Alaska provisions. On the contrary, if APUC were to interpret its regulations consistent with PTIC's reading, such an interpretation would raise serious concerns. For example, we have made clear that a requirement that CMRS providers certify as service providers other than CMRS in order to obtain the same treatment afforded other telecommunications providers under state law may well constitute entry regulation in violation of Section 332(c)(3)(A). We would therefore scrutinize closely any requirement that CellularOne certify as an IXC in order to offer the service that it proposes. IV. Conclusion 18. This case is about a dispute between two private parties over whether a speculative interpretation of a state statute and regulations would violate federal law. The application of state law to these facts is not clear on its face, and the parties have not asked the state agency to interpret or apply its regulations. Under these circumstances, we conclude that it would not serve the public interest for us to render a declaratory ruling. V. Ordering Clause 19. Accordingly, IT IS ORDERED, pursuant to sections 4(i) and 4(j) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 154(j), and Section 1.2 of the Commission's rules, 47 C.F.R.  1.2, that the Motion for Declaratory Ruling filed by Alaska-3 Cellular LLC d/b/a CellularOne IS DISMISSED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary