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

In the Matter of                 )
U.S. TELEPACIFIC CORP.,          )
d/b/a/ TELEPACIFIC               )
COMMUNICATIONS,                  )
                                )    File No. EB-04-MD-005
Complainant,                     )
v.                               )
INC., a wholly-owned subsidiary  )
of                               )



Adopted:  December 10, 2004             Released:  December 14, 

By the Commission:


     1.   In this Memorandum Opinion and Order, based on multiple 
Commission precedents directly on point, we dismiss without 
prejudice a formal complaint that U.S. TelePacific Corporation, 
d/b/a/ TelePacific Communications (``TelePacific'') filed against 
Tel-America of Salt Lake City, Inc. (``Tel-America'')1 pursuant 
to section 208 of the Communications Act of 1934, as amended 
(``Act'').2  TelePacific alleges that Tel-America's failure to 
pay tariffed access charges for which TelePacific has billed Tel-
America since 1999 constitutes an unjust practice under section 
201(b) of the Act.3  As discussed below, although TelePacific's 
Complaint is styled as an action under section 201(b) of the Act, 
it is, in reality, a collection action to recover monies 
allegedly owed under a federal tariff.  Because, as the 
Commission recently reiterated, ``the Commission does not act as 
a collection agent for carriers with respect to unpaid tariffed 
charges,''4 we dismiss the Complaint without prejudice.  
TelePacific is, of course, free to pursue its collection action 
in court.  


     II.A.     The Parties

     2.   The complainant, TelePacific, is a competitive local 
exchange carrier (``CLEC'') that provides access services through 
its six switches located in California and Nevada.5  Defendant, 
Tel-America, is a long distance carrier, or interexchange carrier 

     II.B.     Procedural History

     3.   On November 15, 2002, TelePacific filed an informal 
complaint7 with the Market Disputes Resolution Division of the 
Commission's Enforcement Bureau (``the Division'') pursuant to 
section 208 of the Act and section 1.711 of the Commission's 
rules.8  TelePacific  alleged in the Informal Complaint that Tel-
America's failure to pay access charges to TelePacific for 
services rendered violated sections 201(a) and 201(b) of the 
Act.9  On January 17, 2003, Tel-America filed a response to the 
Informal Complaint that denied TelePacific's claims on a variety 
of grounds.10  On February 26, 2003, the Division issued a letter 
order informing the parties that TelePacific had exhausted all 
remedies under the informal complaint process and that the 
Division would therefore close the file for the Informal 

     4.   On December 10, 2003, TelePacific filed a complaint 
against Tel-America in the United States District Court for the 
Central District of California (``District Court''), alleging 
that Tel-America's failure to pay access charges to TelePacific 
constituted a violation of TelePacific's federally filed tariffs 
and a violation of sections 201(a) and 201(b) of the Act.12  The 
District Court Complaint sought damages and a judicial 
determination that Tel-America's failure to pay the access 
charges constituted a violation of sections 201(a) and 201(b) of 
the Act.13  

     5.   On March 19, 2004, the District Court, on Tel-America's 
motion, issued an order dismissing TelePacific's action against 
Tel-America without prejudice on two grounds.  First, the 
District Court concluded that, when TelePacific filed its earlier 
Informal Complaint with the Commission, it had elected that forum 
under section 207 of the Act,14 and thereby divested the District 
Court of subject matter jurisdiction over the action.15  The 
District Court held that only if the Commission finds that it 
lacks jurisdiction over some of TelePacific's claims, and 
dismisses those claims without prejudice, would TelePacific be 
permitted to re-file its action in the District Court.16  

     6.   Second, the District Court held that TelePacific's 
complaint against Tel-America should be dismissed on primary 
jurisdiction grounds.17  The District Court noted that the 
Commission was then engaged in on-going rule-making proceedings 
that addressed the right of CLECs to recover access charges from 
IXCs under circumstances that were virtually identical to those 
at issue in TelePacific's action against Tel-America.18  Based on 
the pendency of those rulemaking proceedings, and what the 
District Court described as the ``highly technical nature of the 
dispute,'' the District Court concluded that ``the FCC enjoys 
primary jurisdiction over this dispute.''19

     7.   TelePacific filed the instant Complaint with the 
Commission on May 20, 2004.  TelePacific alleges that Tel-
America's refusal to pay TelePacific's tariffed access charges is 
a violation of section 201(b) of the Act and seeks to recover the 
unpaid charges as damages.20  TelePacific further alleges that 
the majority of the traffic at issue in this case, and for which 
TelePacific seeks to recover access charges, consists of toll-
free interstate calls originated by unaffiliated cellular 
carriers, universities, hotels, hospitals, and similar 
businesses.21  TelePacific contends that Tel-America has 
unlawfully refused to pay these access charges, based on the 
erroneous assertions that the cellular traffic at issue is not 
subject to access charges, and that TelePacific's practice of 
provisioning access jointly with cellular providers is a ``sham 
arrangement.22  Tel-America answered the Complaint, denying the 
violations alleged by TelePacific, and advancing various 
affirmative defenses.23  Two days before TelePacific filed the 
Complaint, the Commission issued its Fifth Order On 
Reconsideration24 which, inter alia, sets forth rules regarding 
CLEC access charges, including the types of charges allegedly at 
issue in this case. 


     8.   Although TelePacific's Complaint before the Commission 
purports to allege a violation of section 201(b) of the Act, the 
Complaint states an action for recovery of unpaid access charges 
that are allegedly due under the terms of a federal tariff.25  
The proper forum for such a dispute is the federal district 
court.  As noted by the D.C. Circuit,26 long-standing Commission 
precedent holds that ``under sections 206-209 of the Act, the 
Commission does not act as a collection agent for carriers with 
respect to unpaid tariffed charges, and that such claims should 
be filed in the appropriate state or federal courts.''27  
Accordingly, we dismiss this action without prejudice so that 
TelePacific can pursue its claims in federal court,28 if it so 

     9.   We note that the Commission's recent issuance of the 
Fifth Order On Reconsideration should provide the District Court 
with the guidance it sought regarding the lawfulness of the 
access charges at issue here.30  We therefore believe that the 
issuance of the Fifth Order On Reconsideration satisfies the 
District Court's primary jurisdiction referral.31  

     10.  Moreover, now that we have held that this collection 
action was not properly brought before the Commission in the 
first instance, neither TelePacific's filing of the instant 
Complaint, nor the filing of the earlier Informal Complaint, 
constitutes an election of forum under section 207 of the Act 
that would deprive the District Court of jurisdiction over this 
action.  The dismissal of the instant Complaint without prejudice 
should thus clarify that section 207 poses no bar to TelePacific 
proceeding in the District Court.32  


     11.  ACCORDINGLY, IT IS ORDERED, pursuant to sections 1, 
4(i), 4(j), and 208 of the Communications Act of 1934, as 
amended, 47 U.S.C.  151, 154(i), 154(j), 208, and section 1.728 
of the Commission's rules, 47 C.F.R.  1.728, that the Complaint 
that TelePacific filed against Tel-America is hereby DISMISSED 
without prejudice. 


                         Marlene H. Dortch



1 Amended Formal Complaint, File No. EB-04-MD-005 (filed May 20, 
2004) (``Complaint'').  TelePacific's original complaint was 
filed on May 5, 2004.  
247 U.S.C.  208. 
347 U.S.C.  201(b).
4See, e.g., In the Matter of Petition for Declaratory Ruling that 
AT&T's Phone-to-Phone IP Telephony Services are Exempt from 
Access Charges, Order, 19 FCC Rcd 7457, 7472 n. 93 (2004) (``IP 
Telephony Order'').  
5Complaint at 3-4,  5.
6Complaint at 4,  6; Answer of Tel-America of Salt Lake City, 
Inc., File No. EB-04-MD-005 (filed May 25, 2004) (``Answer'') at 
6-7,  6; Joint Statement of Stipulated Facts, Disputed Facts, 
and Key Legal Issues, File No. EB-04-MD-005 (filed June 15, 2004) 
(``Joint Statement'') at 2,  2.  The Complaint uses the term, 
``Tel-America'' to refer to either or both Tel-America or Tel-
America's parent company, TransTel Communications, Inc. Complaint 
at 1-2, n.1.
7Informal Complaint, File No. EB-02-MDIC-0093 (filed Nov. 15, 
2002) (``Informal Complaint''), attached to the Complaint as 
Exhibit 5.
847 U.S.C.  208; 47 C.F.R.  1.711.  See also 47 C.F.R.  
9Informal Complaint at 9; Joint Statement at 2,  3.  
10Response to Notice of Informal Complaint, File No. EB-02-MDIC-
0093 (filed Jan. 17, 2003), attached to the Complaint as Exhibit 
6, at 9; Joint Statement at 2,  3.
11Letter from Alexander P. Starr, Chief, Market Disputes 
Resolution Division, Enforcement Bureau, to Karen Brinkmann, 
counsel for TelePacific, EB-02-MDIC-0093 (rel. February 26, 
2003), attached to the Complaint as Exhibit 7, at 1; Joint 
Statement at 2,  4.  See also Letter from Christopher N. Olsen, 
Assistant Chief, Market Disputes Resolution Division, Enforcement 
Bureau, to counsel for TelePacific and Tel-America, EB-02-MDIC-
0093 (rel. July 23, 2003), attached to the Complaint as Exhibit 
10, at 1-2 (denying request for Accelerated Docket treatment); 
Joint Statement at 3,  8.
12U.S. TelePacific Corp. v. Tel-America of Salt Lake City, Inc., 
Complaint, Case No. CV 03-8972GAF (C.D. Cal. Dec. 10, 2003) 
(``District Court Complaint''), attached to the Complaint as 
Exhibit 11, at 3-5.  TransTel Communications, Inc. (``TransTel'') 
was also joined as a defendant in the District Court Complaint.  
Id. at 2.
13Complaint, Exhibit 11, at 5-8.
14Section 207 of the Act provides that ``[a]ny person claiming to 
be damaged by any common carrier subject to the provisions of 
this chapter may either make complaint to the Commission as 
hereinafter provided for, or may bring suit for the recovery of 
the damages for which such common carrier may be liable under the 
provisions of this chapter, in any district court of the United 
States of competent jurisdiction; but such person shall not have 
the right to pursue both such remedies.''  47 U.S.C.  207.
15U.S. TelePacific v. Tel-America of Salt Lake City, Order, Case 
No. CV 03-8972GAF (C.D. Cal. March 19, 2004) (``District Court 
Order''), attached to the Complaint as Exhibit 13, at 6-9.
16District Court Order at 10.  See Joint Statement at 3,  10.
17District Court Order at 10-11.
18District Court Order at 4-5.
19District Court Order at 11. 
20Complaint at 11-17,  25-36; 19,  45-46.
21Complaint at 12,  27.
22Complaint at 13-14,  30.
23See Answer.
24In the Matter of Access Charge Reform, Reform of Access Charges 
Imposed by Competitive Local Exchange Carriers, Eighth Report and 
Order and Fifth Order on Reconsideration, 19 FCC Rcd. 9108 (2004) 
(``Fifth Order On Reconsideration'').  See Answer at 20,  21 and 
n.92 (citing Fifth Order On Reconsideration and noting that Tel-
America's request for a primary jurisdiction referral in the 
District Court was ``due to the related issues pending in the 
Commission's rulemaking proceeding in CC Docket 96-262, which now 
have been decided''). 
25TelePacific's damages claim in this proceeding apparently also 
includes some intrastate charges that TelePacific cannot, in any 
event, recover in a complaint proceeding before the Commission.  
See TelePacific's Reply to Defendant's Answer, File No. EB-04-MD-
005 (filed June 2, 2004) at 25,  58 and n.40. 
26In MCI Telecommunications Corp. v. FCC, 59 F.3d 1407 (D.C. Cir. 
1995), cert. denied, 517 U.S. 1129 (1996), the court vacated 
Commission orders that calculated the amount of damages owed by 
rate-of-return LECs to IXCs by offsetting against the amount that 
an IXC had ``overpaid'' the LEC (i.e., paid a rate that yielded a 
return more than the allowed maximum) for one type of access 
service the amount that the same IXC had ``underpaid'' the LEC 
(i.e., paid a rate that yielded a return less than the allowed 
maximum) for any other type of access service.  The court did so 
because, inter alia, under FCC and Interstate Commerce Commission 
precedent, ``this would involve a determination of the carrier's 
rights against a subscriber [i.e., the IXC], over which this 
Commission has no jurisdiction.''  59 F.3d at 1418 (quoting 
Thornell Barnes Co. v. Illinois Bell Telephone Co., 1 F.C.C.2d 
1247, 1275 (1965)).  See AT&T Corp. v. BellAtlantic-Pennsylvania, 
Memorandum Opinion and Order, 14 FCC Rcd 556, 598-600 & n.240 
(1998) (acknowledging that "the Commission has no authority" to 
conduct "adjudications of carrier's rights against their 
27IP Telephony Order, 19 FCC Rcd at 7472 n. 93.  See Beehive 
Tele., Inc. v. Bell Operating Cos., Memorandum Opinion and Order, 
10 FCC Rcd 10562 at 10569,  37 and n.90 (1995) (``This 
Commission is not a collection agent for carriers with respect to 
unpaid tariffed charges;'' thus, ``[t]he BOCs' cross-claim does 
not allege a violation of the Act over which we have 
jurisdiction'')(interior quotation marks omitted); Illinois Bell 
Tel. Co. v. AT&T, Order, 4 FCC Rcd 5268 at 5270,  18 (``The 
complaints do not allege that AT&T, in its role as a carrier, 
acted or failed to act in contravention of the Communications Act 
. . . Rather, they allege conditionally that AT&T may have failed 
to pay the lawful charge for service.  Such allegations do not 
state a cause of action under the complaint procedures and are 
properly dismissed.''), recon. denied, 4 FCC Rcd 7759 at 7760,  
4 (1989) (``BOCs may not bring a complaint against AT & T in its 
capacity as a customer.''); Tel-Central v. United Tel. Co., 
Memorandum Opinion and Order, 4 FCC Rcd 8338 at 8340-41,  16 
(1989)(``th[e] statutory scheme does not constitute the 
Commission as collection agent for carriers with respect to 
unpaid tariffed charges.  In the normal situation, if a carrier 
has failed to pay the lawful charges for services or facilities 
obtained from another carrier, the recourse of the unpaid carrier 
is an action in contract to compel payment . . .'').  Accord 
American Sharecom, Inc. v. Mountain States Tele. & Telegraph Co., 
Memorandum Opinion and Order, 8 FCC Rcd 6727 (Com. Car. Bur. 
1993); C.F. Communs. Corp. v. Century Tele. of Wisconsin, 
Memorandum Opinion and Order, 8 FCC Rcd 7334 (Com. Car. Bur. 
1993) (subsequent history omitted); Long Distance/USA, Inc. v. 
Bell Tel. Co. of Pa., Memorandum Opinion and Order, 7 FCC Rcd 408 
(Com. Car. Bur. 1992);  see also American Telephone & Telegraph 
Co. v. The People's Network, Inc., 1993 WL 248165 (D.N.J. 1993) 
(``AT & T's only recourse against [its customer] TPN is in an 
action in contract to compel payment of the unpaid charges in 
this court.  Complete relief cannot be afforded before the FCC, 
which simply lacks the collection remedies for AT & T which this 
court provides.'') (interior quotation marks omitted);  but see 
MGC Comm., Inc., v. AT&T, Memorandum Opinion and Order, 15 FCC 
Rcd 308 (1999) (deciding claim for recovery of tariffed charges 
without discussing the issue of whether the Commission hears such 
claims, which neither party raised). 
28We note that the Commission does entertain claims to recover 
unpaid payphone compensation pursuant to section 276 of the Act, 
47 U.S.C.  276, and sections 64.1300 through 64.1320 of the 
Commission's rules, C.F.R.  64.1300-64.1320.  See, e.g. APCC 
Services, Inc., et al., v. TS Interactive, Order, 17 FCC Rcd 
25523 (2002)  Unlike the statutory provisions and Commission 
rules regarding access charges -- which speak only to the duties 
of the charging carrier and not to the duties of the customer-- 
section 276 of the Act and section 64.1300 of the Commission's 
rules specifically impose an obligation on the "customer" to pay 
payphone compensation charges.  Therefore, a failure to pay 
payphone compensation charges constitutes a violation of the Act 
itself, which is actionable under section 208.  
29In the CLEC Access Reform Order, on which TelePacific relies in 
its Complaint to establish that its access charges are lawful, 
the Commission expressly contemplated that actions to collect 
unpaid access charges due under a federal tariff would be brought 
in federal district court.  In the Matter of Reform of Access 
Charges Imposed by Competitive Local Exchange Carriers, CC Docket 
No. 96-262, Seventh Report and Order and Further Notice of 
Proposed Rulemaking, 16 FCC Rcd 9923 at 9948,  60 (2001) (``CLEC 
Access Reform Order'') (stating that ``an IXC that refused 
payment of tariffed rates within the safe harbor [established in 
the CLEC Access Reform Order] would be subject to suit on the 
tariff in the appropriate federal district court, without the 
impediment of a primary jurisdiction referral to this Commission 
to determine the reasonableness of the rate.'').  See Complaint 
at 13,  29 (citing CLEC Access Reform Order).  
30For example, the Commission established a new rule in the Fifth 
Order on Reconsideration that provided, on a prospective basis, 
that ``the rate that a competitive LEC charges for access 
components when it is not serving the end-user should be no 
higher than the rate charged by the competing incumbent LEC for 
the same functions.''  Id. at  17.  The Commission further 
stated that, with respect to access charges imposed on interstate 
traffic prior to the date of that Order, such as the charges 
allegedly at issue here, ``it would not have been unreasonable 
for a competitive LEC to charge the tariffed benchmark rate for 
traffic to or from end-users of other carriers, provided that the 
carrier serving the end-user did not also charge the IXC and 
provided that the competitive LEC's charges were otherwise in 
compliance with and supported by its tariff.''  Id. at  18.  
Cf., AT & T Communications of Virginia v. Bell Atlantic-Virginia, 
Inc., 35 F.Supp.2d 493, 498 (E.D.Va.1999) (stating that, where a 
case involves an issue that would otherwise be appropriate for a 
primary jurisdiction referral, there is no need to refer that 
issue to the agency if the agency has already ruled on it).
31To the extent that adjudication of TelePacific's claims 
requires interpretation of its federal tariffs, we note that such 
issues of tariff interpretation are well within the expertise of 
the District Court.  See, e.g., Advamtel, LLC v. AT & T Corp., 
105 F.Supp.2d 507 (E.D. Va. 2000) (holding that an action to 
enforce a tariff to collect amounts due under the tariff is 
``well within the ordinary competence of courts'').  See also ITC 
DeltaCom Communications, Inc. v. US LEC Corp., No. 3:02-CV-116-
JTC (N.D. Ga. March 15, 2004) (interpreting a CLEC's tariff in 
determining whether an IXC had a duty to pay access charges 
arguably similar to those at issue in TelePacific's Complaint).
32See District Court Order at 9 (observing that ``[a] dismissal 
without prejudice renders the previous action as though it had 
not been filed,'' and concluding that because TelePacific ``has 
not obtained such a dismissal without prejudice from the FCC . . 
. this Court cannot entertain [TelePacific's] suit as it lacks 
subject matter jurisdiction over the action'') (citation