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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, DC 20554
Metrocall, Inc., )
)
Complainant, )
)
v. ) File No. EB-01-MD-008
)
Concord Telephone Co., )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
Adopted: February 7, 2002 Released: February 8, 2002
By the Chief, Enforcement Bureau:
I. INTRODUCTION
In this Order, we grant in part and deny in part the
formal complaint that Metrocall, Inc. (``Metrocall'') filed against
Concord Telephone Co. (``Concord'') pursuant to section 208 of the
Communications Act of 1934, as amended (the ``Act'' or
``Communications Act'').1 We conclude that Concord violates
section 201(b) of the Act2 by charging Metrocall recurring fees
solely for the use of direct-inward-dial (``DID'') telephone
numbers. We further conclude, however, that Concord may lawfully
charge Metrocall for the DID trunks and trunk termination
facilities it provides to Metrocall apart from the DID numbers
themselves, to the extent that Concord uses the DID facilities in
question to transport ``transiting traffic'' to Metrocall's
network. Because the parties have not identified the extent to
which the DID facilities in question are used to transport
transiting traffic, we cannot ascertain on this record whether
Concord owes Metrocall any damages. Therefore, we bifurcate the
proceeding into separate liability and damages phases, and release
this order adjudicating liability issues only.3
II. BACKGROUND
Metrocall is a commercial mobile radio service (``CMRS'')
paging provider serving customers in the Charlotte, North Carolina
Metropolitan Statistical Area (``MSA''), among other places.
Concord is a local exchange carrier (``LEC'') in North Carolina
providing the telephone facilities necessary for Metrocall to
interconnect with the public switched telephone network in
Concord's region, including the Charlotte, North Carolina MSA.4
Concord has been providing interconnection services to Metrocall
and its predecessor A+ Network, Inc. (``A+'') since at least
January 1998.5
The services that Concord provides to Metrocall include a
``DID Service,'' which consists of DID trunks and trunk
terminations (``DID facilities'') and blocks of DID telephone
numbers.6 DID service allows a customer, typically a business with
multiple telephone numbers, to receive calls directed to blocks of
twenty numbers over a group of dedicated trunks, which reduces the
facilities needed to carry traffic from the LEC to that customer.7
DID numbers are the blocks or groups of telephone numbers assigned
by the LEC to the customer, and DID trunks and trunk terminations
are the physical facilities that transport the traffic from the LEC
to the customer.8 Concord charges its DID service customers for
both ``Block[s] of 20 DID Numbers'' and DID trunks and trunk
terminations.9
In early 1998, Metrocall requested that Concord cease
charging it for DID numbers and DID facilities, claiming that the
Commission's rules and orders prohibited Concord from assessing
such charges.10 Concord responded that its DID charges were lawful
because (1) the DID charges were not for the numbers themselves but
for the ``DID functionality in Concord's switch'';11 and (2) its
North Carolina state tariff, not the Commission's rules, governed
the legality of DID-related charges.12 On May 18, 2000, Concord
filed a complaint with the NCUC addressing the legality of the DID-
related charges that Metrocall was refusing to pay.13 Shortly
thereafter, this Commission released the TSR Wireless Order, in
which it resolved numerous issues relating to the propriety of LEC
charges to CMRS carriers.14 After the TSR Wireless Order, the NCUC
dismissed Concord's complaint.15 Independent of the NCUC
proceeding, Metrocall filed an informal complaint with the
Commission against Concord in August 2000 pursuant to section 1.716
of the Commission's rules.16 On April 6, 2001, Metrocall
``converted'' its informal complaint into the instant formal
complaint pursuant to section 1.718 of the Commission's rules.17
Metrocall's complaint asserts two claims: (1) that
Concord violates section 201(b) of the Act18 and Commission orders
by charging recurring fees to Metrocall solely for the use of DID
numbers;19 and (2) that Concord violates section 201(b) of the Act
and section 51.703(b) of the Commission's rules20 by charging
Metrocall for DID facilities used to transport traffic from
Concord's network to Metrocall's network.21 For the reasons
discussed below, we grant Metrocall's complaint as to the first
claim, and grant in part and deny in part Metrocall's complaint as
to the second claim.
III. DISCUSSION
A. The Commission Has Jurisdiction to Adjudicate
Metrocall's Complaint.
Concord argues that the Commission does not have
jurisdiction to resolve this dispute because it concerns the
application of terms set forth in a state tariff pre-dating the
Telecommunications Act of 1996 (``1996 Act'').22 According to
Concord, the requirements of the Local Competition Order and
section 51.703(b) of the Commission's rules dealing with
interconnection charges between LECs and CMRS providers apply only
to interconnection agreements entered into pursuant to sections 251
and 252 of the 1996 Act.23 Concord asserts that no such agreement
exists here and, therefore, its pre-existing state tariff governs
the rights and obligations of Metrocall and Concord in this case.24
Consequently, Concord argues that any disputes concerning these
tariff obligations should be resolved by the NCUC, not by this
Commission.25
The Commission considered and rejected this same argument
in the TSR Wireless Order. In that Order, the Commission concluded
that the requirements set forth in the Local Competition Order and
section 51.703(b) of the Commission's rules were effective
immediately;26 thus, ``any LEC efforts to continue charging CMRS or
other carriers for delivery of such traffic'' prohibited by the
Local Competition Order and section 51.703(b) ``would be unjust and
unreasonable and violate the Commission's rules, regardless of
whether the charges were contained in a federal or state
tariff.''27 Accordingly, for the same reasons as stated in the TSR
Wireless Order, we conclude that we have jurisdiction to resolve
Metrocall's complaint, notwithstanding the fact that the disputed
charges were contained in a pre-1996 Act state tariff.28
B. Concord May Not Charge Metrocall for DID Numbers.
Metrocall asserts that Concord violates section 201(b) of
the Act and the Commission's orders by charging Metrocall recurring
fees for DID numbers.29 The Commission squarely addressed and
resolved this issue in favor of the CMRS carriers in the TSR
Wireless Order. Relying on long-standing Commission precedent, the
Commission ruled that LECs could not impose on CMRS carriers
(including Metrocall) recurring charges for the use of DID
numbers.30
Concord does not take issue with this precedent. Concord
simply argues, instead, that the disputed charges are not solely
for the use of numbers but are for the functionality in Concord's
switch.31 Concord asserts that its ``tariffed DID charges recover
the costs of the local transport and switching functionality used
to receive and terminate calls . . .''; according to Concord,
``[t]hey do not constitute charges for the use or assignment of the
telephone numbers.''32 Concord cites no language from its tariff
to support this contention, however. In fact, Concord's tariff
unambiguously specifies rates for ``Block[s] of 20 DID Numbers.''33
Further, Concord's invoices to Metrocall contain itemized charges
for ``Block[s] of 20 DID #s.''34 Accordingly, we conclude that
Concord has imposed recurring charges on Metrocall solely for the
use of numbers, in violation of section 201(b) of the Act. Thus,
we grant Metrocall's complaint to the extent that it claims that
Concord imposes recurring charges for the use of DID numbers. The
extent to which Concord may owe Metrocall damages for this unlawful
conduct may be determined in a subsequent proceeding under section
1.722 of the Commission's rules.35
C. Concord May Charge Metrocall for DID Facilities to
the
Extent That They Are Used to Transport Transiting
Traffic.
Metrocall also claims that Concord violates section
201(b) of the Act and section 51.703(b) of the Commission's rules
by charging Metrocall for DID facilities.36 We agree with
Metrocall, in part. The Commission's rules state that a CMRS
provider is not required to pay an interconnecting LEC for traffic
that terminates on the CMRS provider's network, if the traffic
originated on the LEC's network.37 Furthermore, as the Commission
concluded in the TSR Wireless Order, there is no difference between
charges for the facilities used to transport this type of traffic
and charges for the traffic itself - both kinds of charges are
prohibited.38
The Commission also concluded in the TSR Wireless Order,
however, that paging carriers are ``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.''39 The Commission
subsequently confirmed this obligation in the Texcom Order.40
There, the Commission stated that an interconnecting LEC may charge
a paging carrier for the portion of the facilities used to carry
traffic from the interconnecting LEC's network to the paging
carrier's network, if the traffic did not originate on the LEC's
network.41
Here, Concord charges Metrocall for DID facilities used
to transport traffic from Concord's network to Metrocall's
network.42 This traffic appears to include both calls originated
by Concord's customers as well as calls originated by customers of
carriers other than Concord, i.e., transiting traffic.43 To the
extent that Concord charges Metrocall for the portions of the DID
facilities that are used to transport traffic originating on
Concord's network, Concord violates section 201(b) of the Act and
section 51.703(b) of the Commission's rules. However, Concord may
lawfully charge for the portions of the DID facilities that are
used to transport traffic that merely transits Concord's network.
Thus, we grant Metrocall's complaint to the extent that Concord
charges Metrocall for the portions of DID facilities that are used
to transport calls originated by Concord's customers, but deny
Metrocall's complaint to the extent that Concord charges Metrocall
for the portions of the DID facilities that are used to transport
transiting traffic.
The parties have presented no information regarding the
extent to which Concord charged Metrocall for non-transiting
traffic. Accordingly, we cannot decide in this Order the extent to
which Concord may owe Metrocall damages. Therefore, we bifurcate
this proceeding, and Metrocall may assert a claim for damages in a
subsequent proceeding brought under section 1.722 of the
Commission's rules.44
IV. ORDERING CLAUSES
Accordingly, IT IS ORDERED, pursuant to sections 4(i),
4(j), 201(b), 208, and 332 of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 154(i), 154(j), 201(b), 208, 332, section
51.703 of the Commission's rules, 47 C.F.R. § 51.703, 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 the above-referenced
complaint filed by Metrocall IS GRANTED IN PART to the extent
specified herein, and in all other respects is DENIED, as of the
Release Date of this Order.
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, section 1.722 of the Commission's rules, 47
C.F.R. § 1.722, 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
this proceeding is bifurcated and Metrocall may assert a claim for
damages in a subsequent proceeding brought under section 1.722 of
the Commission's rules.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 208.
2 47 U.S.C. § 201(b).
3 See 47 C.F.R. § 1.722(c). See also Implementation of the
Telecommunications Act of 1996, Amendment of Rules Governing
Procedures to Be Followed When Formal Complaints Are Filed Against
Common Carriers, Order on Reconsideration, 16 FCC Rcd 5681, 5692, ¶
24 (2001) (``Formal Complaints Reconsideration Order'') (``[T]he
Commission may, on its own motion, bifurcate the proceeding so that
only liability and prospective relief issues are before the
Commission initially, and damage issues come before the Commission
only if the complainant prevails and later chooses to initiate a
separate proceeding seeking damages.'').
4 See Revised Joint Statement, File No. EB-01-MD-008, at 2-3
(filed May 29, 2001) (``Joint Statement''); Metrocall, Inc.,
Complaint, File No. EB-01-MD-008, at 2 (filed Apr. 6, 2001)
(``Metrocall Complaint''); Answer of Concord Tel. Co., File No. EB-
01-008, at 3-4 (filed May 18, 2001) (``Concord Answer'').
5 See Metrocall Complaint at 13; Concord Answer at 3-4.
6 See Metrocall Complaint at 13-14; Concord Answer at 4.
7 See Concord Answer at 4. As Concord explains, DID service
benefits a customer by allowing calls to hundreds of DID numbers to
be translated and routed over a minimal group of DID trunks to the
customer's premises. Id.
8 See Concord Answer, App. A at ¶ A-14.1 (containing relevant
portions of the tariff that Concord filed with the North Carolina
Utilities Commission (``NCUC'') governing Concord's DID service).
9 See Metrocall Complaint at 13; Concord Answer, App. A at ¶¶ A-
14.1 to A-14.2. Concord also provides long distance service,
inside wire maintenance, and foreign exchange (``FX'') services to
Metrocall. Concord Answer at 3-4. FX service enables a customer
located in one particular local exchange area to make and receive
local calls through a central office that is outside the customer's
local exchange area. Id. at 5. Metrocall has not challenged
Concord's charges for any of these services in this proceeding.
See Metrocall Complaint at 24-25 and Exhibit 10 (calculating
damages based solely on DID-related charges and excluding charges
for long distance service, FX services, and other non-DID
services).
10 See Metrocall Complaint at Exhibit Ten (citing Letter from
Frederick Joyce & Ronald Quirk, Joyce & Jacobs, LLP, to Alan
Goodman, Concord Tel. Co., Feb. 13, 1998; Letter from Frederick
Joyce & Ronald Quirk, Alston & Bird, LLP, to Bill Terry, Concord
Tel. Co., Feb. 28, 2000; Letter from Frederick Joyce & Ronald
Quirk, Alston & Bird, LLP, to David Sieradzki, Hogan & Hartson,
LLP, Apr. 12, 2000; Letter from Frederick Joyce & Ronald Quirk,
Alston & Bird, LLP, to David Sieradzki, Hogan & Hartson, LLP, Apr.
24, 2000). Metrocall relied upon the Commission's Local
Competition Order to support its assertion that Concord's DID
charges were prohibited. 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, 16016 at
¶ 1042 (1996) (``Local Competition Order'') (subsequent history
omitted).
11 See Metrocall Complaint at 13-14; Concord Answer at 4-5.
12 See Metrocall Complaint at 13-14 and Exhibit Ten (citing
Letter from David Sieradzki & Ronnie London, Hogan & Hartson, LLP,
to Frederick Joyce & Ronald Quirk, Alston & Bird, LLP, Mar. 24,
2000; Letter from David Sieradzki & Ronnie London, Hogan & Hartson,
LLP, to Frederick Joyce & Ronald Quirk, Alston & Bird, LLP, Apr.
26, 2000).
13 See Metrocall Complaint at 14-15; Concord Answer at 9-10.
14 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 v. FCC, 252 F.3d 462 (D.C. Cir.
2001).
15 The NCUC held the proceeding in abeyance pending the outcome
of the appeal of the Commission's TSR Wireless Order. See Concord
Tel. Co. v. Metrocall, Inc., Docket No. P-921, Sub 1, Order Holding
Docket in Abeyance, NCUC (rel. Aug 8, 2000). The D.C. Circuit
upheld the TSR Wireless Order, and neither party requested that the
proceeding resume; therefore, the NCUC dismissed Metrocall's
complaint on July 3, 2001, after the pleading cycle closed in this
proceeding. See Concord Tel. Co. v. Metrocall, Inc., Docket No. P-
921, Sub 1, Order Closing Docket, NCUC (rel. July 3, 2001).
16 47 C.F.R. § 1.716. See Metrocall Complaint at Exhibit Ten
(Informal Complaint submitted by Frederick Joyce & Ronald Quirk,
Alston & Bird, LLP, to Raelynn Tibayan Remy, File No. EB-00-MDIC-
0055 (filed Aug. 23, 2000)). The informal complaint proceeding was
closed on February 27, 2001. See Letter from Faye Jeter-Bragg, FCC
Enforcement Bureau, to Frederick Joyce, Alston & Bird, LLP, File
No. EB-00-MDIC-0055 (rel. Feb. 27, 2001).
17 47 C.F.R. § 1.718. Although Metrocall filed the original
complaint against three defendants, two of them settled early in
the proceeding and their names were removed from the caption. See
Letter Ruling, File No. EB-01-MD-008 (rel. May 15, 2001)
(dismissing Coastal Communications, Inc.); Letter Ruling, File No.
EB-01-MD-008 (rel. May 17, 2001) (dismissing ACS of Fairbanks,
Inc.).
18 47 U.S.C. § 201(b) (declaring unlawful ``charges, practices,
classifications, and regulations'' that are unjust and
unreasonable).
19 See Metrocall Complaint at 18-19.
20 47 C.F.R. § 51.703(b) (``A LEC may not assess charges on any
other telecommunications carrier for telecommunications traffic
that originates on the LEC's network.'').
21 See Metrocall Complaint at 19-20.
22 See Concord Answer at 11-14, 18-20 (citing Telecommunications
Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (amending the
Communications Act of 1934)). Concord also contended that, because
this matter was already before the NCUC, the Commission should
dismiss the instant complaint and allow the state proceeding to
continue to its conclusion. Concord Answer at 11-14. Concord's
argument has since been mooted by the NCUC's dismissal of the
proceeding, as discussed above. See supra, note 15.
23 See Concord Answer at 11-14, 18-20.
24 Id.
25 Id. at 13-14, 18-19.
26 See TSR Wireless Order, 15 FCC Rcd at 11168, ¶ 3.
27 Id. at 11183, ¶ 29.
28 Id.; see also Local Competition Order, 11 FCC Rcd at 16016-17,
¶¶ 1041-43. Concord also contends, without support, that the
Commission lacks jurisdiction to decide this dispute because it
concerns intrastate communications. See Concord Answer at 14.
Concord cites no evidence that the communications traffic between
it and Metrocall is purely intrastate. Moreover, the Commission
concluded in the TSR Wireless Order that sections 2(b) and 332(c)
of the Act, 47 U.S.C. §§ 152(b), 332(c), granted the Commission
authority to issue rules governing interconnection between LECs and
CMRS carriers. See TSR Wireless Order, 15 FCC Rcd at 11168, ¶ 3,
11173, ¶ 14; see also Qwest, 252 F.3d at 465-66.
29 See Metrocall Complaint at 18-19.
30 See TSR Wireless Order, 15 FCC Rcd at11185-86, ¶ 33. Since
1986, the Commission has prohibited LECs from imposing recurring
charges for the use of telephone numbers. The Commission reasoned
that ``telephone companies may not impose recurring charges solely
for the use of numbers'' because ``they do not `own' codes or
numbers, but rather administer their distribution.'' The Need to
Promote Competition and Efficient Use of Spectrum for Radio Common
Carrier Services, Memorandum Opinion and Order, 59 R.R.2d 1275,
1284 (1986). See also Implementation of the Local Competition
Provisions of the Telecommunications Act of 1996, Second Report and
Order and Memorandum Opinion and Order, 11 FCC Rcd 19392, 19538,
¶ 333 (1996) (subsequent history omitted) (noting that the
Commission had ``already stated that telephone companies may not
impose recurring charges solely for the use of numbers.'').
31 See Concord Answer at 4, 23.
32 Id. at 4.
33 See id. at App. A at ¶¶ A-14.1 to A-14.2
34 Metrocall Complaint at Exhibit 10. See also Concord Answer at
Exhibit C (declaration of Pamela J. Genung that summarizes
Concord's billing detail for Metrocall's account in which recurring
charges for ``Block[s] of 20 Direct Inward Dialing Numbers'' are
plainly listed).
35 47 C.F.R. § 1.722.
36 Metrocall Complaint at 19-20.
37 See 47 C.F.R. § 51.703(b) (``A LEC may not assess charges on
any other telecommunications carrier for telecommunications traffic
that originates on the LEC's network.'').
38 See TSR Wireless Order, 15 FCC Rcd at11181, ¶ 25.
39 Id. at 11177, ¶ 19 n.70; see also 47 C.F.R. §§ 51.703(b),
51.709(b).
40 Texcom, Inc, d/b/a Answer Indiana v. Bell Atlantic Corp. d/b/a
Verizon Communications, Memorandum Opinion and Order, FCC No. 01-
347 (rel. Nov. 29, 2001) (``Texcom Order''), petition for
reconsideration pending.
41 See Texcom Order at 2-3, ¶¶ 4-6. The paging 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.
42 Joint Statement at 2-3.
43 Concord notes that Metrocall is a nation-wide paging provider
and that callers from outside the Concord service area may send
pages to Metrocall customers within the Concord area. Concord
Answer at 6-7.
44 See 47 C.F.R. § 1.722(c); see also Formal Complaints
Reconsideration Order, 16 FCC Rcd at 5692, ¶ 24. Thus, we do not
consider in this Order the damages issues Metrocall raises in its
complaint. See Metrocall Complaint at 24-26.