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                           Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, DC  20554

Texcom, Inc., d/b/a Answer      )
Indiana,                        )
                               )
         Complainant,          )
                               )        File No.  EB-00-MD-14
         v.                    )
                               )
Bell Atlantic Corp., d/b/a      )
Verizon Communications,         )
                               )
         Defendant.

                  MEMORANDUM OPINION AND ORDER

Adopted: September November 26,    Released: November 28, 2001
             2001

By the Commission:

I.   INTRODUCTION

          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 
network.2

II.  BACKGROUND

          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 
followed.

III. DISCUSSION

          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 
network.

          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 
traffic.

          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 
same facilities.

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
                              Secretary
_________________________

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. 
5, 2001).

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 
omitted).

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 
added).

17   See id.

18   TSR Wireless Order, 15 FCC Rcd at 11181-82,  26 (emphasis 
added).

19   See Answer Indiana Complaint at 7-11; Answer Indiana Reply 
at 6-10.

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.