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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, DC 20554
) )
Mountain Communications, Inc., )
) )
)
Complainant, ) File No. EB-00-MD-017
)
v. )
Qwest Communications )
International, Inc., )
Defendant.
MEMORANDUM OPINION AND ORDER
Adopted: January 31, 2002 Released: February 4, 2002
By the Chief, Enforcement Bureau:
I. INTRODUCTION
In this Memorandum Opinion and Order, we deny the
above-captioned formal complaint that Mountain Communications,
Inc. (``Mountain'') filed against Qwest Communications
International, Inc. (``Qwest'', formerly U S West Communications,
Inc.) pursuant to section 208 of the Communications Act of 1934,
as amended (the ``Act'').1 Mountain, a Commercial Mobile Radio
Service (``CMRS'') paging provider, alleges that Qwest violated
sections 51.703(b) and 51.709(b) of the Commission's rules2 by
charging Mountain for transporting certain traffic.3 Based on
the principles established in the TSR Wireless Order4 and the
Texcom Order,5 we deny Mountain's claims. In short, we find that
Qwest may lawfully charge Mountain for costs associated with
``transiting traffic'' and for facilities used to provide ``wide
area calling.''
II. BACKGROUND
2. Mountain offers one-way paging services to its
customers in the state of Colorado.6 Qwest is the incumbent
local exchange carrier (``LEC'') offering local telephone service
to the public in Colorado.7 Qwest serves as the interconnecting
LEC for Mountain's paging facilities and transports calls from
the public switched network to Mountain's network.8 Qwest has
been providing such interconnection services to Mountain since at
least November 1996.9
3. The services that Mountain obtains from Qwest include a
``wide area calling'' service.10 With respect to service
provided to paging carriers, wide area calling refers generally
to an arrangement that allows a paging carrier to subsidize the
cost of calls from a LEC's customers to the paging carrier's
customers, when completing such calls requires the LEC to
transport them from one of its local calling areas to another of
its local calling areas.11 One example of a wide area calling
arrangement is known as ``reverse billing'' or ``reverse toll,''
in which a LEC agrees with a paging carrier not to assess toll
charges on calls from the LEC's end users to the paging carrier's
end users, in exchange for the paging carrier paying the LEC a
per-minute fee to recover the LEC's toll carriage costs.12 The
wide area calling arrangement at issue here involves Qwest's
provision of dedicated toll facilities to Mountain that connect
the Direct Inward Dialing (``DID'')13 numbers that Mountain has
obtained in each of Qwest's local calling areas to Mountain's
interconnection point in another Qwest local calling area. This
enables the calling customer in each of Qwest's local calling
areas to dial a local number to reach a Mountain subscriber and
avoid incurring toll charges.14
4. As part of the interconnection services it provided to
Mountain beginning in 1996, Qwest transported calls made by its
customers to Mountain's customers. 15 Qwest also transported
``transiting traffic'' to Mountain, i.e., calls to Mountain's
customers originating from customers of carriers other than
Qwest.16
5. Beginning in 1998, Mountain requested that Qwest cease
assessing Mountain any charges associated with the delivery of
traffic to Mountain's network and issue refunds for all such
charges paid by Mountain since August 1996.17 Over the course of
the next two years, the parties attempted to resolve their
dispute regarding the charges at issue, but were unsuccessful.18
Mountain then filed the instant complaint.
6. Mountain's complaint alleges two claims that we must
address in this order:
1) that Qwest violated sections 51.703(b) and 51.709(b) of the
Commission's rules by charging Mountain for the transport of
transiting traffic to Mountain's network;19 and 2) that Qwest
violated sections 51.703(b) and 51.709(b) of the Commission's
rules by charging Mountain for the facilities used to transport
certain Qwest-originated traffic to Mountain's network.20 For
the reasons discussed below, we deny both claims.
III. DISCUSSION
A. The Commission Has Jurisdiction to Adjudicate
Mountain's Complaint
7. Qwest asserts that we lack jurisdiction to adjudicate
disputes concerning sections 51.703(b) and 51.709(b) of the
Commission's rules where, as here, the disputing parties lack an
interconnection agreement under sections 251 and 252 of the
Act.21 The Commission has already rejected this argument.22
Consequently, we do so here, as well, and rule that we have
jurisdiction to adjudicate Mountain's claims.
B. Qwest May Lawfully Charge Mountain for Transiting
Traffic.
8. Section 51.703(b) of the Commission's rules provides
that ``[a] LEC may not assess charges on any other
telecommunications carrier [including a paging carrier] for local
telecommunications traffic that originates on the LEC's
network.''23 Moreover, section 51.709(b) of the Commission's
rules requires 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 that the
connecting carrier sends back to the LEC.24 In the TSR Wireless
Order and the Texcom Order, the Commission construed these rules
to mean that an interconnecting LEC may charge a paging carrier
for the transport of transiting traffic.25
9. Mountain contends that Qwest violates sections
51.703(b) and 51.709(b) of the Commission's rules by charging
Mountain for the transport of transiting traffic.26 In
particular, Mountain argues that: 1) the TSR Wireless Order
misconstrued section 51.703(b), because the Commission's rules do
not allow LECs to charge for transiting traffic;27 2) we should
consider all traffic that terminates on Mountain's network to
have originated on Qwest's network;28 and 3) permitting Qwest to
charge for transiting traffic would allow it to recover its costs
twice, because Qwest already receives adequate compensation for
carrying this traffic from other sources, such as long distance
carriers and other interconnecting LECs.29
10. Mountain's arguments mirror those that the Commission
recently rejected in the Texcom case.30 Because Mountain raises
no issues of law or fact that were not fully considered in
Texcom, we apply Texcom's reasoning here and reject Mountain's
arguments regarding Qwest's treatment of transiting traffic.
Accordingly, we conclude that Qwest does not violate sections
51.703(b) and 51.709(b) of the Commission's rules by assessing
Mountain charges associated with transiting traffic.31
C. Qwest May Lawfully Charge Mountain for Wide Area
Calling.
11. As discussed earlier, section 51.703(b) of the
Commission's rules bars a LEC from charging for the delivery of
traffic that originates on the LEC's own network.32 In the TSR
Wireless Order, the Commission found that, pursuant to section
51.703(b), a LEC may not charge CMRS providers for the delivery
of LEC-originated traffic that originates and terminates within
the same Major Trading Area (``MTA''), as this constituted local
traffic under the Commission's rules.33 The Commission noted,
however, that nothing prevents a LEC from charging its end users
for intraLATA toll calls that originate on its network and
terminate over facilities that are situated entirely within a
single MTA.34 Thus, if a LEC end user makes a call from one
local calling area to a paging customer whose number is assigned
to a central office in another local calling area of the LEC, the
LEC may assess the caller the appropriate toll set forth in its
local tariff, even if both LEC calling areas are within the same
MTA. Importantly, however, the Commission acknowledged in the
TSR Wireless Order the possibility that a paging carrier might
want to avoid having callers to its customers pay such toll
charges. Thus, the Commission concluded that section 51.703(b)
does not preclude a CMRS carrier and a LEC from entering into
wide area calling or reverse billing arrangements where the CMRS
carrier can ``buy down'' the cost of such calls to make it appear
to the LECs' end users that they have made a local call rather
than a toll call.35 Moreover, the Commission concluded that its
rules do not prohibit a LEC from charging the paging carriers for
those services.36 The Commission's conclusion that section
51.703(b) allows a LEC to charge for wide area calling or similar
services was based on the fact that wide area calling services
are not necessary for interconnection or for the provision of
service by a paging provider to its customers, as well as the
recognition that the Commission's rules do not require LECs to
offer such services at all.37
12. As noted above, the wide area calling arrangement at
issue here involves Qwest's provision of dedicated toll
facilities that connect Mountain's DID numbers in each of Qwest's
local calling areas to Mountain's interconnection point in
another Qwest local calling area. Thus, the calling customer in
each of the local calling areas calls a local number to reach a
Mountain subscriber and avoids incurring toll charges.38
Mountain contends that Qwest violates the Commission's rules by
charging Mountain for the dedicated toll facilities that Qwest
uses to transport calls made to Mountain's interconnection point
from outside of the Qwest local calling area where Mountain's
interconnection point resides.39 Mountain argues that, because a
CMRS carrier's local calling area is an MTA, Qwest is not
permitted to charge Mountain for facilities used by Qwest to
deliver calls from anywhere within the MTA to Mountain's
interconnection point.40 Mountain similarly maintains that Qwest
cannot charge it for facilities Qwest uses to deliver to
Mountain's interconnection point calls made to DID numbers that
are outside the Qwest-defined local calling area but within the
same MTA, and the same LATA, because those facilities are used to
deliver Qwest-originated traffic to Mountain.41
13. Based on the Commission's analysis of wide area calling
arrangements in TSR Wireless, we agree with Qwest that the
provision of dedicated toll facilities by Qwest to enable
Mountain to offer its customers a local number in several local
calling areas is an optional service that is not necessary for
interconnection.42 We note that Mountain does not dispute that
this service is not necessary for interconnection.43 Moreover,
although Qwest concedes that it must allow Mountain to
interconnect without charge at any point within an MTA that is
within the LATA,44 Qwest disagrees that it must transport, free
of charge, all calls made to Mountain within the MTA to
Mountain's interconnection point. Qwest points out that, for
those calls made by its end users in local calling areas outside
the local calling area where Mountain's interconnection point
resides, Qwest would ordinarily assess toll charges to those end
users, pursuant to Qwest's General Exchange tariff in Colorado.45
We agree with Qwest that, pursuant to the TSR Wireless Order, if
Mountain wants to avoid having callers to its customers pay such
charges to access Mountain's network, it may enter into a wide
area calling arrangement with Qwest. Mountain has effectively
entered into such an arrangement with Qwest by requesting
dedicated toll facilities to transport calls made to DID numbers
provided to Mountain's customers, free of charge to Qwest's
customers. We, therefore, conclude that Qwest is not prohibited
from assessing Mountain charges for such services.
IV. ORDERING CLAUSES
14. 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), 208, and sections 51.703(b) and
51.709(b) of the Commission's rules, 47 C.F.R. §§ 51.703(b) and
51.709(b), that Mountain's Complaint IS DENIED and that this
proceeding IS TERMINATED as of the Release Date of this Order.
15. 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), 208, that Qwest's Motion to Dismiss IS DENIED
as moot.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 208. Qwest is the successor to U S WEST
Communications, Inc., following the companies' June 30, 2000
merger. See Qwest Communications International, Inc. and U S
WEST, Inc., Applications for Transfer of Control of Domestic and
International Sections 214 and 310 Authorizations and Application
to Transfer Control of a Submarine Cable Landing License,
Memorandum Opinion and Order, 15 FCC Rcd 11909 (2000). Although
much of the conduct at issue occurred before the merger, we refer
to the defendant only as ``Qwest'' in this order.
2 See 47 C.F.R. §§ 51.703(b) and 51.709(b).
3 Mountain also alleged in its complaint that Qwest violated
section 51.305 of the Commission's rules, 47 C.F.R. § 51.305, and
sections 201, 251, and 252 of the Act, 47 U.S.C. §§ 201, 251,
252, by failing to negotiate an interconnection agreement with
Mountain in good faith. See Formal Complaint of Mountain
Communications, Inc, File No. EB-00-MD-017, at 12-18 (filed Sep.
11, 2000) (``Mountain Complaint''). However, we previously
dismissed these claims without prejudice on procedural grounds.
See Letter Ruling from Frank G. Lamancusa, Deputy Chief, Market
Disputes Resolution Division, File No. EB-00-MD-017 (Sep. 19,
2001) (``Letter Ruling'').
4 TSR Wireless, LLC v. U S West Communications, Inc.,
Memorandum Opinion and Order, 15 FCC Rcd 11166 (2000) (``TSR
Wireless Order''), aff'd sub. nom., Qwest Corp. v. FCC, 252 F.3d
462 (D.C. Cir. 2001).
5 Texcom, Inc., d/b/a Answer Indiana v. Bell Atlantic Corp.,
d/b/a Verizon Communications, Memorandum Opinion and Order, FCC
01-347 (rel. Nov. 28, 2001) (``Texcom Order'' or ``Texcom''),
Petition for Reconsideration pending.
6 See Joint Statement of Mountain Communications, Inc. and
Qwest Communications International, Inc., File No. EB-00-MD-017,
at 5 (filed Oct. 16, 2000) (``Joint Statement''); Mountain
Complaint at 3; Answer of Qwest Communications International,
Inc., File No. EB-00-MD-017, at 12 (filed Oct. 2, 2000) (``Qwest
Answer'').
7 See Joint Statement at 5; Mountain Complaint at 3; Qwest
Answer at 12.
8 Mountain Complaint at 3; Qwest Answer at i, 13; Joint
Statement at 8.
9 See Mountain Complaint, Exhibit III at 2; Qwest Answer at 1,
13.
10 See Qwest Corporation's Brief on the Disputed Material
Issues, File No. EB-00-MD-017, at 10-13 (filed Jan. 19, 2001)
(``Qwest Brief'').
11 See TSR Wireless Order, 15 FCC Rcd at 11169, ¶ 6 n.6.
During the relevant period, section 51.701(b)(1) of the
Commission's rules defined a LEC's ``local'' calling area as the
service area, defined by state commissions, within which calls
are not subject to toll charges. 47 C.F.R. § 51.701(b)(1)
(2000). (The Commission has since amended section 51.701(b)(1),
but not in a manner relevant here. See Implementation of the
Local Competition Provisions in the Telecommunications Act of
1996, Order on Remand and Report and Order, 16 FCC Rcd 9151,
9167, ¶ 34, and 9173, ¶ 46 (2001) (``Reciprocal Compensation
Remand Order'')). Local service areas for CMRS carriers, by
contrast, are generally referred to as Major Trading Areas
(``MTAs''). 47 C.F.R. § 51.701(b)(2). MTAs are based on the
Rand McNally 1992 Commercial Atlas and Marketing Guide, 123rd
edition, at pages 38-39, with several exceptions and additions
set forth in 47 C.F.R. §24.202(a). 47 C.F.R. §24.202(a). MTAs
are typically larger than ``local'' calling areas applicable to
LECs. TSR Wireless Order, 15 FCC Rcd at 11177, ¶ 31.
12 See TSR Wireless Order, 15 FCC Rcd at 11169, ¶ 6 n.6.
13 ``Direct Inward Dialing" or "DID" is a service that reduces
the facilities needed (and thus the cost) to carry traffic
between a local exchange carrier and a customer with multiple
telephone numbers by transporting that traffic over significantly
fewer lines. Unlike normal telephone service, which requires
dedicated facilities for each number, a DID service transports
traffic over shared facilities to the customer's premises. For
example, a 100-telephone number customer purchasing DID service
might need only 10 lines to carry traffic between its premises
and the network, as opposed to the 100 individual lines needed
for traditional service. DID service also supports additional
features that can result in further cost savings. See generally
Annabel Z. Dodd, The Essential Guide to Telecommunications, 48-49
(2d ed. 1999); Harry Newton, Newton's Telecom Dictionary, 264-65
(16th ed. 2000).
14 See Qwest Brief at 10-12, Second Supplemental Declaration of
Sheryl R. Fraser, at ¶¶ 7-8. Mountain contends that the service
described above is not a ``wide area calling'' service within the
meaning of the TSR Wireless Order. Mountain Communications, Inc.
Reply to Qwest Corporation's Brief on the Disputed Material
Issues, File No. EB-00-MD-017, at 8-10 (filed Jan. 26, 2001)
(``Mountain Reply''). As discussed, infra, we disagree with
Mountain.
15 Mountain Complaint at 3; Qwest Answer at 13.
16 See TSR Wireless Order, 15 FCC Rcd at 11177, ¶ 19 n.70;
Mountain Complaint at 11; Exhibit 23, at 2; Qwest Answer at 10;
23; Joint Statement at 8.
17 See Mountain Complaint at 3, 22, Exhibits III and IV.
18 As of February 16, 1998, Mountain ceased to pay any charges
Qwest billed it for its continuing receipt of interconnection
services. See Qwest Answer at 4.
19 See Mountain Complaint at 9-11; Joint Statement at 10;
Mountain Communications, Inc. Brief, File No. EB-00-MD-017, at 1-
6 (filed Jan. 8, 2001) (``Mountain Brief''); Mountain Reply at 4-
7; Mountain Communication, Inc.'s Opposition to Qwest's Motion to
Dismiss, File No. EB-00-MD-017, at 3-10 (filed Jan. 10, 2001)
(``Mountain Opposition'').
20 See Mountain Complaint at 10-12; Joint Statement at 10;
Mountain Brief at 7-9; Mountain Reply at 7-9. Mountain
improperly uses the term ``termination'' to characterize the
transport function that Qwest provides Mountain. Qwest does not
``terminate'' the traffic it carries to Mountain's network within
the meaning of the Commission's rules. See, e.g., 47 C.F.R. §
51.701(d) (termination is the switching of telecommunications
traffic from the terminating carrier's end office switch and
delivery of such traffic to the called party's premises). Thus,
we view Mountain's claim as addressing the lawfulness of Qwest's
charges for the transport of certain traffic to Mountain, not the
termination of such traffic.
21 See Qwest Answer at 32. See 47 U.S.C. §§ 251 and 252.
22 See TSR Wireless Order, 15 FCC Rcd at 11172, ¶ 13; Qwest
Corp. v. FCC, 252 F.3d at 463.
23 47 C.F.R. § 51.703(b).
24 47 C.F.R. § 51.709(b) (``The rate of a carrier providing
transmission facilities dedicated to the transmission of traffic
between two carriers' networks 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'').
25 TSR Wireless Order, 15 FCC Rcd at 11177, ¶ 19 n.70.
26 See Mountain Complaint at 9-11; Mountain Brief at 1-6;
Mountain Reply at 4-7; Mountain Opposition at 3-10. Mountain
contends for the first time in its briefs that Qwest's 26.2
percent ``transiting factor'' -- which estimates how much of the
total traffic that Qwest transports to Mountain is transiting
traffic -- is unreasonably high. See Mountain Communications,
Inc.'s Opposition to Qwest's Motion to Dismiss, File No. EB-00-
MD-017, at 10-11 (filed Jan. 10, 2001) (``Mountain Opposition);
Mountain Reply at 7; Mountain Complaint, Exhibit XXIII. Mountain
failed to raise this issue in its complaint. Therefore, the
record provides an inadequate basis on which to assess the merits
of this potentially complex argument. Accordingly, we decline to
address this assertion in this order. See, e.g., AT&T Corp. v.
Jefferson Telephone Co., Memorandum Opinion and Order, 16 FCC Rcd
16130, 16133 n.18 (2001) (declining to address an issue raised
for the first time in the brief).
27 See Mountain Complaint at 9-10; Mountain Brief at 3-5;
Mountain Opposition at 4-5.
28 See Mountain Complaint at 2-4, 6-7; Mountain Opposition at
5-6; Mountain Brief at 4.
29 See Mountain Complaint at 5; Mountain Opposition at 7-8.
30 See Texcom Order, ¶¶ 5-13. As the Commission indicated in
Texcom, the CMRS carrier pays the interconnecting LEC for the
costs of the portion of facilities used to transport transiting
traffic from the interconnecting LEC's network to the CMRS
carrier's network. The CMRS carrier may then seek reimbursement
of the costs associated with transport and termination of that
traffic from the carriers that originated the transiting traffic
in question. See 47 U.S.C. § 251(b)(5); 47 C.F.R. §§ 51.701, et
seq.
31 Our ruling effectively moots Qwest's Motion to Dismiss, in
which Qwest sought dismissal of Mountain's claims that Qwest
could not charge for transiting traffic. See Qwest Corporation's
Motion to Dismiss Mountain Communication, Inc.'s Transit Claims,
File No. EB-00-MD-017, at 14 (filed Jan. 2, 2001) (``Motion to
Dismiss''). Accordingly, we dismiss the Motion to Dismiss.
32 47 C.F.R. § 51.703(b).
33 TSR Wireless Order, 15 FCC Rcd at 11177, ¶ 31. Mountain
notes that section 51.701(b)(2) defined ``local
telecommunications traffic'' as ``telecommunications traffic
between a LEC and a CMRS provider that, at the beginning of a
call, originates and terminates within the same MTA. Id. The
Commission's recent removal of the word ``local'' from section
51.703 does not alter the definition contained in section
51.701(b)(2). See Reciprocal Compensation Remand Order, 16 FCC
Rcd at 9167, ¶ 34, and 9173, ¶ 46.
34 TSR Wireless Order, 15 FCC Rcd at 11177, ¶ 31.
35 Id.
36 Id.
37 Id. at 11177, ¶ 30.
38 See Qwest Brief at 10-12, Second Supplemental Declaration of
Sheryl R. Fraser, at ¶¶ 7-8.
39 Mountain Brief at 7-9.
40 Id. at 8.
41 Mountain Brief at 8.
42 See Qwest Brief at 10-12.
43 See Mountain Brief at 7-9.
44 Qwest Brief at 11.
45 Id.