Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

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
Microsoft Word or Adobe Acrobat version.

*****************************************************************



                         Before the
              Federal Communications Commission
                   Washington, D.C. 20554



Premiere    Network    Services,  )
Inc.,                             )
                                 )
    Complainant,                 )
                                 )   File No. EB-02-MD-032
    v.                           )
                                 )
Southwestern    Bell   Telephone  )
Co.,                              )
           Defendant.             )


                            ORDER

       Adopted:   June 10, 2003         Released:   June 11, 
     2003

By the Deputy Chief, Market Disputes Resolution Division, 
Enforcement Bureau:

In this Order, we grant Complainant Premiere Network 
Services, Inc.'s (``Premiere'') motion to dismiss without 
prejudice the formal complaint it filed against Defendant 
Southwestern Bell Telephone Co. (``SWBT'').1  We find that 
granting Premiere's Motion, in the manner described herein, 
will ensure the most efficient use of the parties' and the 
Commission's resources without materially prejudicing SWBT.

I.   BACKGROUND

Premiere filed a formal complaint against SWBT with the 
Commission on May 24, 2002, 2 following the parties' 
unsuccessful efforts over an approximately 30-month period 
to resolve their dispute.3  Although Premiere's Complaint 
includes numerous claims, the fundamental issue raised in 
the complaint is whether SWBT violated the Act and/or 
Commission rules by failing to route Premiere's ``555 
numbers'' in the manner Premiere requested.4    

On November 27, 2002, Premiere filed a motion to dismiss its 
complaint without prejudice.5  Premiere contends that 
``SWBT's representations before the Commission regarding the 
issue of the availability of 555 service'' have damaged 
``the integrity and accuracy of the record.''6  Premiere 
argues that the record developed in this proceeding ``is so 
flawed that the [Commission] will be unable to issue a 
decision consistent with due process.''7  Premiere also 
argues that granting its motion will conserve the parties' 
and Commission resources.8  SWBT filed an opposition to 
Premiere's motion on December 5, 2002.9  SWBT asserts that 
the Commission should deny Premiere's request or dismiss the 
complaint with prejudice.10  SWBT contends that granting 
Premiere's Motion will prejudice SWBT, because it has 
expended ``considerable resources'' defending against 
Premiere's claims and it ``is entitled to a resolution of 
this dispute.''11  

II.  DISCUSSION

The Commission has broad discretion to conduct complaint 
proceedings ``in a manner that will best conduce to the 
proper dispatch of business and to the ends of justice.''12  
Although the Commission does not have a specific rule 
relating to the dismissal of formal complaints, we agree 
with SWBT that Rule 41(a)(2) of the Federal Rules of Civil 
Procedure,13 although not controlling, is instructive.14  
The purpose of Rule 41(a)(2) ``is primarily to prevent 
voluntary dismissals which unfairly affect the other 
side.''15  In determining whether to dismiss a complaint, 
courts generally follow the traditional principle that 
dismissal should be allowed unless the defendant will suffer 
some plain legal prejudice other than the mere prospect of a 
second lawsuit.16  The grant or denial of a motion to 
dismiss under Rule 41(a)(2) is within the sound discretion 
of the trial court, and its order is reviewable only for 
abuse of that discretion.17  

In this instance, we conclude, as explained below, that 
dismissal without prejudice is appropriate, because 
dismissal will conserve the parties' and the Commission's 
resources and SWBT has failed to demonstrate any plain legal 
prejudice arising from such dismissal.18   

As an initial matter, we reject Premiere's contention that 
the record in this proceeding is ``so flawed'' as to impede 
the Commission's ability ``to issue a decision consistent 
with due process.''19  Premiere points to alleged 
discrepancies it found between certain factual information 
detailed in SWBT's Amended Answer with information contained 
in documents SWBT voluntarily produced in response to 
Premiere's document requests.  Premiere complains that SWBT 
represented in its Amended Answer that it routed calls to 
only two 555 numbers but documents attached to the Amended 
Answer showed a third 555 number in use.20  This discrepancy 
was identified promptly, Commission staff ordered SWBT to 
take certain steps to correct the record, and SWBT 
complied.21  Thus, Premiere's allegations concerning a 
flawed record are meritless.22     

Although we find Premiere's arguments concerning the record 
to be unpersuasive, we are persuaded that granting the 
Motion will conserve the parties' and Commission's 
resources.  As an initial matter, we note that Premiere has 
expressed some optimism regarding the prospects of this 
dispute being resolved in the context of other disputed 
matters between the parties. 23  Further, even without a 
settlement, Premiere may elect not to file a subsequent 
complaint proceeding.  Indeed, its unwillingness to pursue 
its complaint at this stage of the proceeding suggests that 
it is unlikely that Premiere will file a subsequent 
complaint.  Thus, the parties may very well entirely avoid 
the time and expense associated with briefing this case and 
challenging the Commission's ultimate decisions, and the 
Commission may turn its attention to other matters.

SWBT disputes the notion that resources will be saved by 
granting Premiere's Motion and argues that we should either 
deny Premiere's motion or dismiss the complaint with 
prejudice.  First, SWBT claims that its expenditure of 
resources to date will have been wasted if we dismiss the 
complaint without prejudice and leave SWBT exposed to the 
expenses associated with any potential future litigation 
brought by Premiere.24  Second, SWBT argues that, pursuant 
to Rule 41(a)(1) of the Federal Rules of Civil Procedure, 
Premiere's motion to dismiss should automatically be treated 
as a motion to dismiss with prejudice.25  According to SWBT, 
Premiere had voluntarily dismissed a prior proceeding before 
the Texas PUC that SWBT asserts involved the same claims as 
those in the instant complaint.26   

We reject both of SWBT's arguments.  As to the first 
argument, although we acknowledge the possibility that 
Premiere might file a subsequent action, we conclude that 
this does not constitute the type of plain legal prejudice 
that warrants a denial of Premiere's request.27 Courts 
typically find that the mere prospect of having to defend a 
second lawsuit is not a sufficient basis to dismiss a 
complaint with prejudice.28  Further, we disagree that 
SWBT's expenditure of resources to date would be wasted if 
Premiere files a second lawsuit.  If Premiere files a second 
complaint, SWBT will have the benefit of its research into 
the matters complained of in this proceeding, as well as a 
clear understanding of Premiere's claims and legal analysis.  
This should greatly minimize SWBT's costs in having to 
defend against any future action.  In addition, we expect 
that SWBT will seek to rely on pleadings filed in this 
proceeding in any subsequent proceeding, and we will 
reasonably exercise our discretion in such a subsequent 
proceeding to minimize the burdens on SWBT in responding to 
the proceeding.29  

Furthermore, to help ensure that any potential prejudice to 
SWBT associated with having to defend a duplicative second 
complaint is minimized, we exercise our discretion to impose 
a condition on Premiere as part of our grant of Premiere's 
Motion.30  If Premiere files, within one year of the date of 
this Order, a formal complaint against SWBT at the 
Commission that alleges the same or materially similar facts 
and legal issues as raised in this proceeding, Premiere must 
include an exhibit to that complaint that compares that 
complaint with the complaint filed in this proceeding.  Such 
a requirement will help reduce the time and resources 
required of SWBT to respond to a duplicative complaint.  

We also reject SWBT's second ground for denial of Premiere's 
Motion.  SWBT argues that, pursuant to Rule 41(a)(1), we 
should treat Premiere's Motion as a motion to dismiss with 
prejudice because Premiere had filed and dismissed a related 
complaint before the Texas Public Utilities Commission 
(``Texas PUC'').31  SWBT has failed, however, to provide 
sufficient information regarding the Texas PUC proceeding, 
including the circumstances of that complaint's dismissal,32 
and whether that proceeding actually involved the same 
claims made in Premiere's FCC complaint.  Thus, we deny 
SWBT's request that we treat Premiere's Motion as a motion 
to dismiss with prejudice.   

For the foregoing reasons, we grant Premiere's Motion to 
Dismiss its complaint without prejudice.  We find that, 
under the circumstances of this case, dismissing the 
complaint without prejudice is appropriate and is in the 
public interest, because it ensures the efficient use of the 
Commission's formal complaint process, and may eliminate the 
need for further litigation and expenditure of additional 
time and resources of the parties and this Commission.33  

III.      ORDERING CLAUSES

Accordingly, IT IS ORDERED, pursuant to sections 4(i), 4(j), 
and 208 of the Communications Act of 1934, as amended, 47 
U.S.C.  154(i), 154(j), and 208, and section 1.727 of the 
Commission's rules, 47 C.F.R.  1.727, and the authority 
delegated in sections 0.111 and 0.311 of the Commission's 
rules, 47 C.F.R.  0.111, 0.311, that Complainant's Motion 
to Dismiss the Proceeding Without Prejudice IS GRANTED.

IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), and 
208 of the Communications Act of 1934, as amended, 47 U.S.C. 
 154(i), 154(j), and 208, and section 1.727 of the 
Commission's rules, 47 C.F.R.  1.727, and the authority 
delegated in sections 0.111 and 0.311 of the Commission's 
rules, 47 C.F.R.  0.111, 0.311, that Complainant's 
complaint is hereby dismissed without prejudice, and the 
above-captioned complaint proceeding IS TERMINATED.

IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), and 
208 of the Communications Act of 1934, as amended, 47 U.S.C. 
 154(i), 154(j), and 208, and section 1.727 of the 
Commission's rules, 47 C.F.R.  1.727, and the authority 
delegated in sections 0.111 and 0.311 of the Commission's 
rules, 47 C.F.R.  0.111, 0.311, that should Premiere 
Network Services, Inc. file, within one year of the date of 
this Order, a formal complaint against Southwestern Bell 
Telephone Co. at the Commission that alleges the same or 
materially similar facts and legal issues raised in this 
proceeding, Premiere Network Services, Inc. must include an 
exhibit to its new complaint that compares it to the 
complaint filed in this proceeding.

                         FEDERAL COMMUNICATIONS COMMISSION




                         Radhika V. Karmarkar
                         Deputy   Chief,   Market   Disputes 
                    Resolution Division
                         Enforcement Bureau
_________________________

1    Complainant's Motion to Dismiss the Proceeding Without 
Prejudice,  File No.  EB-02-MD-032  (filed  Nov. 27,  2002) 
(``Motion'').

2    See Complaint,  File No.  EB-02-MD-032 (filed  May 24, 
2002) (``Complaint'').  

3    The   parties  generally   agree  on   the  procedural 
background of  this proceeding.   See Complaint,   24-36, 
46-47.   See also  Defendant's Opposition  to Complainant's 
Motion to Dismiss Without  Prejudice, File No. EB-02-MD-032 
(filed Dec. 5, 2002) at 2-3.

4    A ``555  number'' is a  unique line number in  the 555 
NXX  exchange.   Implementation  of the  Local  Competition 
Provisions  of the  Telecommunications Act  of 1996,  Third 
Order  on Reconsideration  of Second  Report and  Order and 
Memorandum Opinion and Order, 14 FCC Rcd 17964, 17997,  46 
(1999).

5    In  addition to  seeking dismissal  without prejudice, 
Premiere   also  requested   that  the   briefing  schedule 
established  in the  case be  extended one  week to  permit 
``full consideration'' of its Motion.  Motion at 5-6.  Upon 
receipt of Premiere's Motion,  Commission staff revised the 
briefing schedule to extend the  deadline for the filing of 
the  parties'  opening briefs  by  one  week.  Letter  from 
Anthony   J.   DeLaurentis,   Attorney,   Market   Disputes 
Resolution Division, FCC, to Brad E. Mutschelknaus, Counsel 
for Premiere, and William A.  Brown, Counsel for SWBT, File 
No.  EB-02-MD-032 (Nov.  27, 2002).   After SWBT  filed its 
Opposition on  December 5, 2002, the  briefing schedule was 
suspended  pending  our   decision  on  Premiere's  Motion.  
Letter  from  Anthony   J.  DeLaurentis,  Attorney,  Market 
Disputes   Resolution    Division,   FCC,   to    Brad   E. 
Mutschelknaus, Counsel for Premiere,  and William A. Brown, 
Counsel for SWBT, File No. EB-02-MD-032 (Dec. 10, 2002).

6    Motion at 2.  

7    Id. at 3.  

8    Id. at 4 - 5.

9    Defendant's  Opposition  to  Complainant's  Motion  to 
Dismiss  Without  Prejudice,  EB-02-MD-032 (filed  Dec.  5, 
2002) (``Opposition'').

10   Opposition at 1-2.

11   Id. at 2-3.

12   47 U.S.C.  4(i), (j). 

13   FED.  R.  CIV. P.  41(a)(2)  (providing  a court  with 
discretion to dismiss an  action at the plaintiff's request 
upon such terms and conditions as the court deems proper).

14   Opposition at 5.

15   Wright & Miller, Federal  Practice & Procedure:  Civil 
2d  2364 (citing cases).

16   Id.  Courts  generally consider a variety  of factors, 
but  do  not  accord  each factor  the  same  weight.   Id.  
Rather,  the concern  that  generally  weighs most  heavily 
among many courts in  making such determinations is whether 
a  dismissal will  substantially  prejudice the  defendant.  
Id.

17   Id. 

18   In  deciding  Premiere's  Motion,  we  considered  the 
parties'   oral  arguments   as  well   as  their   written 
submissions on the matter.

19   Motion at 3.

20   See  Letter from  Brad  E.  Mutschelknaus, Counsel  for 
Premiere, to  William A. Brown,  Counsel for SWBT,  File No. 
EB-02-MD-032  (filed Aug.  23,  2002) (``Mutschelknaus  Aug. 
23rd Letter'') at 3-4; Motion at 2.     

21   Commission staff ordered SWBT to correct all incorrect 
factual statements  in its  Amended Answer, explain  how it 
previously failed to  identify all of its  555 numbers, and 
identify  steps  it  had  taken  to  ensure  that  the  new 
submissions Commission staff ordered were complete.  Letter 
from  Anthony  J.  DeLaurentis, Attorney,  Market  Disputes 
Resolution Division, FCC, to Brad E. Mutschelknaus, Counsel 
for Premiere, and William A.  Brown, Counsel for SWBT, File 
No.  EB-02-MD-032   (Sept.  9,  2002)  (``MDRD   Sept.  9th 
Letter'').  In addition, the staff ordered SWBT ``to submit 
an  affidavit  under penalty  of  perjury  executed by  the 
appropriate   authorized   officer  of   the   corporation, 
verifying  the truth  and  accuracy of  the information  in 
SWBT's second amended answer,'' and stating that there were 
``no errors  or omissions  in its  amended answer  or other 
pleadings  in this  case.''  Id.   SWBT complied  with this 
request on September 20, 2002,  and stated that, based on a 
thorough review of  its records, it had found  one more 555 
number  in use  than the  numbers previously  identified by 
SWBT or found by Premiere.  See Second Amended Answer, File 
No. EB-02-MD-032 (filed Sept. 20, 2002); see also Affidavit 
of James C. Smith and  Wayne D. Masters, File No. EB-02-MD-
032  (filed Sept.  20, 2002);  and Letter  from William  A. 
Brown,  Counsel  for  SWBT,   to  Anthony  J.  DeLaurentis, 
Attorney,  Market Disputes  Resolution Division,  FCC, File 
No. EB-02-MD-032 (filed Sept. 20, 2002) at 1.  Premiere was 
permitted to file a  supplemental reply and seek additional 
discovery addressing any new factual or legal issues raised 
in SWBT's Second Amended Answer.  See MDRD Sept. 9th Letter 
Ruling at 2.

22   Also, we note  that at no point  during the procedural 
events that  followed SWBT's  correction of the  record did 
Premiere suggest that the record was somehow tainted beyond 
repair.  Then, one week before the opening briefs were due, 
Premiere filed its Motion.

23   In arguments made during  a telephone call on November 
21, 2002,  Premiere's counsel advised Commission  staff and 
counsel for SWBT  that his client had  had discussions with 
SWBT  business representatives  on other  disputed matters, 
and  believed  that a  resolution  of  this case  could  be 
reached in the context  of resolving other issues unrelated 
to Premiere's formal complaint.  

24   Opposition at 2.

25   Opposition  at  5.    SWBT maintains  that  Premiere's 
Motion  should be  considered  a  voluntary dismissal  with 
prejudice under Rule 41(a)(1) of the Federal Rules of Civil 
Procedure, because  Premiere's prior withdrawal of  a Texas 
PUC proceeding which involved the same claims would operate 
under Rule  41(a)(1) ``as  an adjudication upon  the merits 
when filed  by a  plaintiff who has  once dismissed  in any 
court of  the United  States .  . . an  action based  on or 
including the same claim.''  Id. at 5-6.

26   Id. at 6.

27   Opposition at 2.

28   See  note  16  supra.  Courts  have  considered  other 
prejudice arguments  in granting motions to  dismiss (e.g., 
dismissal  will  prejudice   the  non-movant,  because  its 
ability to  defend itself  in a  subsequent action  will be 
hindered  by  the  loss   of  evidence,  unavailability  of 
witnesses or loss of legal defenses).  SWBT, however, makes 
no such claims here.

29   We would also  expect SWBT to argue  in any subsequent 
complaint  proceeding  that   the  statute  of  limitations 
severely limits, if not  precludes, any attempt by Premiere 
to recover damages.  Although we take no position on future 
damage claims in this Order,  we note that such an argument 
would merit serious consideration.

30   See FED.  R. CIV. P. 41(a)(2)  (providing that courts, 
in  dismissing  complaints  under  this  rule,  may  impose 
conditions on the  movant as a means of  being equitable to 
the defendant).

31   As stated  above, we  find that  the Federal  Rules of 
Civil Procedure are instructive on issues such as this, but 
not controlling.

32   For example, we note that the arbitrators in the Texas 
PUC proceeding issued an  order that instructed the parties 
to  comply with  the  special request  provisions of  their 
interconnection  agreement  before pursuing  the  requested 
relief.  Complaint, Exhibit 15 at VI.

33   Although Premiere suggests in  its Motion that, rather 
than dismiss its complaint, we  convert it into an informal 
complaint,  it  provides  no  explanation for  why  such  a 
conversion is  preferable to a dismissal,  and we therefore 
decline to do so.