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FEDERAL COMMUNICATIONS COMMISSION
Washington, DC 20554
Texcom, Inc., d/b/a Answer )
) File No. EB-00-MD-14
Bell Atlantic Corp., d/b/a )
Verizon Communications, )
MEMORANDUM OPINION AND ORDER
Adopted: September November 26, Released: November 28, 2001
By the Commission:
In this Memorandum Opinion and Order, we deny the
above-captioned complaint filed by Texcom, Inc., d/b/a Answer
Indiana (``Answer Indiana'') against Bell Atlantic Corp., d/b/a
Verizon Communications (``GTE North''). Answer Indiana alleges
that GTE North violated section 51.703 of our rules1 by charging
Answer Indiana for terminating traffic that transits GTE North's
Answer Indiana is a Commercial Mobile Radio Service
(``CMRS'') provider offering one-way paging services to the
public in the State of Indiana. GTE North is a local exchange
carrier (``LEC'') offering local phone service to the public in
the State of Indiana.3 GTE North serves as the interconnecting
LEC for Answer Indiana's paging facilities so that calls from the
public switched network can be made to Answer Indiana's paging
customers.4 GTE North has been providing interconnection
services to Answer Indiana since at least November 1996.
On April 12, 2000, Answer Indiana sent a letter to GTE
North requesting that GTE North stop billing and issue refunds
for any charges for numbers, call termination, and facilities
used to deliver calls to Answer Indiana's network.5 On May 18,
2000, Answer Indiana sent another letter reiterating this request
and indicated that it would file a complaint with the Commission
alleging violations of 47 C.F.R. § 51.703(b) if GTE North failed
to respond by June 5, 2000.6 On June 12, 2000, GTE North
responded to Answer Indiana's letter, asking for more information
from Answer Indiana and disagreeing with Answer Indiana's
interpretation of 47 C.F.R. § 51.703(b).7 This complaint
Our rules state that a CMRS provider (such as Answer
Indiana) is not required to pay an interconnecting LEC (such as
GTE North) for traffic that terminates on the CMRS provider's
network if the traffic originated on the LEC's network.8 As we
stated in the TSR Wireless Order, however, an interconnecting LEC
may charge the CMRS carrier for traffic that transits across the
interconnecting LEC's network and terminates on the CMRS
provider's network, if the traffic did not originate on the LEC's
network.9 In the TSR Wireless Order, we found that the defendant
LECs had improperly charged for the delivery of LEC-originated
traffic to complainants.10 We also noted that, although our
rules bar a LEC from charging another carrier for the delivery of
traffic from the LEC's own customers, a LEC could charge a CMRS
carrier for the transport of third-party originated traffic that
traversed the LEC's network on its way to the CMRS carrier's
network. Citing the Local Competition Order, we concluded that
the paging carriers were ``required to pay for `transiting
traffic,' that is, traffic that originates from a carrier other
than the interconnecting LEC but nonetheless is carried over the
LEC network to the paging carrier's network.'' 11
Answer Indiana raises three arguments to counter the
rule outlined above regarding transiting traffic. First, Answer
Indiana claims that our rules do not allow LECs to charge for
transiting traffic and that the TSR Wireless Order is, therefore,
an incorrect statement of the law, insofar as the transiting
traffic issue is concerned.12 As we explain below, however, we
interpret our rules to allow a LEC to charge a paging carrier for
traffic that transits the LEC's network and terminates on the
paging carrier's network as long as the traffic does not
originate on the LEC's network.
Currently, our rules in this area follow the cost
causation principle of allocating the cost of delivering traffic
to the carriers responsible for the traffic, and ultimately their
customers.13 Thus, through reciprocal compensation payments, the
cost of delivering LEC-originated traffic is borne by the persons
responsible for those calls, the LEC's customers. As we stated
in the Local Competition Order, ``[t]he local caller pays charges
to the originating carrier, and the originating carrier must
compensate the terminating carrier for completing the call.''14
We reflected this thinking in section 51.703(b), which bars a LEC
from charging for the delivery of traffic that originates on the
LEC's own network.15 In the case of third-party originated
traffic, however, the only relationship between the LEC's
customers and the call is the fact that the call traverses the
LEC's network on its way to the terminating carrier. Where the
LEC's customers do not generate the traffic at issue, those
customers should not bear the cost of delivering that traffic
from a CLEC's network to that of a CMRS carrier like Answer
Indiana. Thus, the originating third party carrier's customers
pay for the cost of delivering their calls to the LEC, while the
terminating CMRS carrier's customers pay for the cost of
transporting that traffic from the LEC's network to their
Answer Indiana further argues that where a LEC owns
facilities that exchange traffic between the LEC and a CMRS
carrier, section 51.709(b) bars the LEC from charging the CMRS
carrier for more than the proportion of those facilities used by
the CMRS carrier to send traffic back to the LEC.16 In the case
of traffic between a LEC and a paging carrier like Answer
Indiana, such a reading of section 51.709(b) effectively would
prohibit all transiting traffic charges, since one-way paging
companies do not originate any traffic.
We do not read section 51.709(b) in this manner.
Section 51.709(b) governs the division of the cost of dedicated
transmission facilities between two carriers.17 As we stated in
the TSR Wireless Order, ``Section 51.709(b) simply applies the
general principle of section 51.703(b) -- that a LEC may not
impose on a paging carrier any costs the LEC incurs to deliver
LEC-originated, intraMTA traffic, regardless of how the LEC
characterizes those costs -- to the specific case of dedicated
facilities.''18 The rule does not apply in the transiting
traffic context, where the traffic is not ``LEC-originated'' but
originates instead with a third carrier.
Second, Answer Indiana contends that if our rules do,
in fact, allow GTE North to charge for transiting traffic that
does not originate on GTE North's network, then the Commission
should consider all traffic that terminates on Answer Indiana's
network to have originated on GTE North's network.19 We decline
to adopt this interpretation of the term ``originates'' in
section 51.703(b).20 We have previously distinguished between
the ``originating'' carrier from which a call begins and the
``transit'' or intermediate carrier that delivers that call to
the terminating carrier.21 To adopt Answer Indiana's definition
of ``originates'' would vitiate the practical distinction between
traffic that begins from a customer of GTE North and traffic that
starts elsewhere. This distinction has a difference and we will
continue to maintain the separate treatment of those types of
To construe section 51.709(b) to restrict transiting
traffic charges would violate the cost causation principle
discussed above. Our rules seek to impose the costs attributable
to traffic on the carriers responsible for those calls, and
ultimately, the callers making and receiving that traffic.
Section 51.709(b) reflects this principle by requiring a LEC to
charge a connecting carrier for dedicated transmission facilities
used to carry traffic between the two carriers based solely on
the amount of traffic the connecting carrier sends back to the
LEC. In this manner, the two carriers split the cost of the
facilities based on the amount of traffic each carrier originates
and sends to the other. In the transiting traffic context,
however, the LEC does not ``originate'' any traffic. Rather, the
traffic originates with a third carrier, and terminates with the
CMRS carrier. Construing section 51.709(b) to bar transiting
traffic charges, therefore, would compel the LEC and its
customers to bear the cost of carrying traffic to which they have
no relation, and allow the terminating carrier and its customers
a ``free ride.'' We have never interpreted section 51.709(b) to
yield such a result. Accordingly, we do not agree with Answer
Indiana that the term ``originate'' in section 51.703(b) read in
conjunction with 51.709(b) bars GTE North from charging for
traffic and facilities associated with transiting traffic.
Third, Answer Indiana claims that interconnecting LECs
such as GTE North already receive adequate compensation for
carrying this traffic from other sources such as long distance
carriers and other interconnecting LECs and CMRS carriers, and
that permitting LECs to charge for transiting traffic allows them
to recover their costs twice over.22 GTE North claims that it
does not recover the cost for the facilities used to interconnect
Answer Indiana from any other carrier and that our rules and
previous decisions prohibit GTE North from recovering the cost of
the facilities it provides to Answer Indiana except to the extent
allowed under the TSR Wireless Order.23
Answer Indiana's ``double recovery'' claims are
deficient. The Commission has previously concluded that LECs
cannot assess charges on interexchange carriers (``IXCs'') for
the facilities used to connect the CMRS provider's network to
that of the LEC because those facilities are not common lines for
purposes of the access charge rules.24 Thus, access charge
revenue received by GTE North from an IXC cannot lawfully include
the cost of the interconnection facilities associated with
transiting traffic between Answer Indiana and GTE North. Because
Answer Indiana has presented no evidence indicating that GTE
North's access charges do, in fact, include such costs, we
conclude that GTE North is not using access charge revenue to
recover twice for the same facilities.
The same argument holds true with respect to reciprocal
compensation - the LEC that carries the call from the originating
LEC to the CMRS provider is prohibited from recovering the cost
associated with the facilities used to interconnect to the CMRS
provider's network. Section 252(d)(2) allows for the recovery of
``a reasonable approximation of the additional costs'' to the
terminating LEC for calls that originate on a competing LEC's
network.25 Pursuant to the Local Competition Order, ``non-
traffic sensitive costs should not be considered `additional
costs' when a LEC terminates a call that originated on the
network of a competing carrier.''26 Thus, only traffic-sensitive
costs can be recovered through termination charges when setting
reciprocal compensation rates under section 252(d)(2).27 Like
common lines, the cost of the LEC-CMRS interconnection facilities
do not vary in proportion to the number of calls transiting those
facilities and are, therefore, non-traffic sensitive.28 As a
result, GTE North is prohibited from recovering the costs
associated with the interconnection facilities between it and
Answer Indiana through reciprocal compensation arrangements with
competing LECs. Because Answer Indiana has presented no evidence
indicating that GTE North's reciprocal compensation charges seek
recovery for these facilities, we conclude that GTE North is not
using reciprocal compensation revenue to recover twice for the
IV. ORDERING CLAUSE
Accordingly, IT IS ORDERED, pursuant to sections 4(i),
4(j), and 405 of the Communications Act of 1934, as amended, 47
U.S.C. §§ 154(i), 154(j), 405, and sections 51.703(b) and
51.709(b) of our rules, 47 C.F.R. §§ 51.703(b) and 51.709(b),
that Answer Indiana's Complaint IS DENIED and that this
proceeding IS TERMINATED as of the Release Date of this Order.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
1 See 47 C.F.R. § 51.703.
2 Answer Indiana also alleged in its complaint that GTE North
violated section 51.305 of our rules and sections 201, 251, and
252 of the Communication Act of 1934, as amended (the ``Act''),
by failing to negotiate an interconnection agreement with Answer
Indiana in good faith. See id. § 51.305; see also 47 U.S.C.
§§ 201, 251, 252. The good faith negotiation claims, however,
were previously dismissed in a Letter Ruling on procedural
grounds. See Letter Ruling from Frank G. Lamancusa, Deputy Chief,
Market Disputes Resolution Division, File No. EB-00-MD-014 (Sep.
3 See Formal Complaint of Answer Indiana, File No. EB-00-MD-
014, at 3 (filed July 24, 2000) (``Answer Indiana Complaint'').
4 See Answer of Verizon Communications, File No. EB-00-MD-014,
at 8 (filed Aug. 15, 2000) (``GTE North Answer'').
5 See Answer Indiana Complaint at 3, Exhibit II.
6 See id. at 3, Exhibit III.
7 See id. at 4, Exhibit V.
8 47 C.F.R. § 51.703(b) (``A LEC may not assess charges on any
other telecommunications carrier for local telecommunications
traffic that originates on the LEC's network.'').
9 See TSR Wireless, LLC v. U S West Communications, Inc.,
Memorandum Opinion and Order, 15 FCC Rcd 11166, 11177, ¶ 19 n.70
(2000) (``TSR Wireless Order''), petition for recon. dismissed,
16 FCC Rcd 11462, aff'd sub. nom., Qwest v. FCC, 252 F.3d 462
(D.C. Cir. 2001).
10 TSR Wireless Order, 15 FCC Rcd at 11176-83, ¶¶ 18-29.
11 Id. at 11177, ¶ 19 n.70; see also 47 C.F.R. § 51.703(b),
51.709(b); see also Implementation of the Local Competition
Provisions of the Telecommunications Act of 1996; Interconnection
Between Local Exchange Carriers and Commercial Mobile Radio
Service Providers, Memorandum Opinion and Order, 11 FCC Rcd 15499
(1996) (``Local Competition Order'') (subsequent history
12 See Answer Indiana Complaint at 4-6.
13 See, e.g., Local Competition Order, 11 FCC Rcd at 15850-51,
¶ 691; see also Developing a Unified Intercarrier Compensation
Regime, Notice of Proposed Rulemaking, 16 FCC Rcd 9610, 9624-28,
¶¶ 37-51 (2001).
14 Local Competition Order, 11 FCC Rcd at 16013, ¶ 1034.
15 47 C.F.R. § 51.703(b) (``A LEC may not assess charges on any
other telecommunications carrier for local telecommunications
traffic that originates on the LEC's network.'').
16 Section 51.709(b) of our rules states, in part, that ``the
rate of a carrier providing transmission facilities dedicated to
the transmission of traffic between two carriers shall recover
only the costs of the proportion of that trunk capacity used by
an interconnecting carrier to send traffic that will terminate on
the providing carrier's network.'' Id. § 51.709(b) (emphasis
17 See id.
18 TSR Wireless Order, 15 FCC Rcd at 11181-82, ¶ 26 (emphasis
19 See Answer Indiana Complaint at 7-11; Answer Indiana Reply
20 See 47 C.F.R. § 51.703(b).
21 Cf. AT&T Corp. et al. for Grant of Section 214 Authority,
Memorandum Opinion and Order, 14 FCC Rcd 19140, 19177 n.168
(1999) (``Transit allows a carrier in one country, the
originating carrier, to route traffic to a carrier in another
country, the destination carrier, through a carrier in a third
country, the transit carrier.'').
22 See Answer Indiana Complaint at 5-6; see also Texcom, Inc.
d/b/a Answer Indiana's Brief, File No. EB-00-MD-014, at 1-6
(filed Oct. 10, 2000) (``Answer Indiana Brief''); see also
Texcom, Inc. d/b/a Answer Indiana's Reply to the Brief of Verizon
Communications, File No. EB-00-MD-014, at 1-7 (filed Oct. 24,
2000) (``Answer Indiana Reply'').
23 See Brief of Verizon Communications, File No. EB-00-MD-014,
at 5-6 (filed Oct. 10, 2000); see also Verizon Reply Brief, File
No. EB-00-MD-014, at 2-3 (filed Oct. 24, 2000).
24 See e.g., Bell Atlantic Tel. Cos., Revisions to Tariff
F.C.C. No. 1, 6 FCC Rcd 4794, ¶ 7 (Com. Car. Bur. 1991)
(prohibiting the assessment of carrier common line charges). A
common line, sometimes called a ``local loop,'' connects an end
user's home or business to a LEC central office. See AT&T Corp.
v. Bell Atlantic - Pennsylvania, 14 FCC Rcd 556, 559, ¶ 4 (1998).
It is firmly established that paging carriers are not themselves
end users and the lines to their facilities are not common lines.
See id. at 583, ¶ 61; see also Bell Atlantic Tel. Cos., 6 FCC Rcd
4794-95, ¶¶ 9-10.
25 47 U.S.C. § 252(d)(2).
26 Local Competition Order, 11 FCC Rcd at 16024-25, ¶ 1057.
27 Id. at 16024-26, ¶¶ 1056-58.
28 Id. at 16024-25, ¶ 1057.