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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Qwest Corporation ) File No. EB-03-IH-0263
) NAL Acct. No. 200432080022
Apparent Liability for ) FRN No. 0001-6056-25
Forfeiture )
NOTICE OF APPARENT LIABILITY
FOR FORFEITURE
Adopted: March 11, 2004 Released: March 12,
2004
By the Commission: Chairman Powell issuing a statement.
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture (``NAL'') we find that Qwest Corporation
(``Qwest'')1 is apparently liable for willfully and
repeatedly violating its statutory obligations in section
252(a)(1) of the Communications Act of 1934, as amended (the
``Act'')2 by failing to file 46 interconnection agreements
with the Minnesota Public Utilities Commission (``Minnesota
Commission'') and Arizona Corporation Commission (``Arizona
Commission'') for approval under section 252.3 Based on our
review of the facts and circumstances surrounding this
matter, we find that Qwest is apparently liable for a total
forfeiture of $9 million.
2. We propose a forfeiture of such size against Qwest
because of Qwest's disregard for the filing requirements of
section 252(a) of the Act and the Commission's orders and
the potential anticompetitive effects of Qwest's conduct.
Qwest's failure to comply with section 252(a) of the Act
undermines the effectiveness of the Act and our rules by
preventing competitive LECs (or ``CLECs'') from adopting
interconnection terms otherwise available only to certain
favored CLECs. Despite our clear and repeated instruction
regarding the section 252(a) filing obligations, Qwest
apparently withheld dozens of interconnection agreements
from state commissions until it was ready to seek our
approval to provide in-region, interLATA service for the
relevant states.4 In Minnesota and Arizona, the last two
states for which Qwest sought section 271 approval, Qwest
delayed filing 46 interconnection agreements until several
years after the agreements were executed and months after
filing similar agreements in other states. These agreements
were filed long after we had clarified, and reiterated, the
filing requirements of section 252(a)(1). Indeed, months
after Qwest assured us that it had filed all of its
previously unfiled interconnection agreements, Qwest filed
an additional 53 agreements in six states, some of which
date back to 1998.5
3. Qwest's actions are egregious because, according
to Qwest documents, Qwest company policy since May 2002
explicitly requires filing such agreements with the state
commissions, in compliance with section 252(a). Rather than
filing the agreements at issue here, however, Qwest withheld
them apparently until it was ready to seek section 271
approval from the Commission. As we discuss below, Qwest
admits that its decision to file its 34 unfiled agreements
in Minnesota ``was influenced by the fact that it was
preparing to file its application for 271 authority in
Minnesota.''6 Qwest further admits that the impetus for
filing twelve previously unfiled agreements with the Arizona
Commission was not to comply with the Act but rather because
``[b]y May, Qwest was less concerned that such a filing
might be treated as an admission of liability and result in
material penalties.''7 Qwest's cavalier attitude toward the
Act's filing requirements shows a disregard for Congress's
goals of opening local markets to competition and permitting
interconnection on just, reasonable, and nondiscriminatory
terms. As we have stated previously, we ``consider any
filing delays to be extremely serious.''8 The forfeiture we
propose here today reflects the gravity and scope of Qwest's
apparent violations.
II. BACKGROUND
4. Section 252(a)(1) of the Communications Act
requires incumbent LECs to negotiate interconnection
agreements with CLECs.9 Once finalized, the agreements must
be submitted to state commissions for approval under section
252(e).10 As we observed in the Local Competition Order,
requiring filing of all interconnection agreements
best promotes Congress's stated goals of opening
up local markets to competition, and permitting
interconnection on just, reasonable, and
nondiscriminatory terms. State commissions should
have the opportunity to review all agreements . .
. to ensure that such agreements do not
discriminate against third parties, and are not
contrary to the public interest.11
After an interconnection agreement is approved by the state
commission, other carriers may adopt the terms, conditions,
and rates in the agreement pursuant to section 252(i).12
5. For more than two years, we and states throughout
Qwest's region have examined whether Qwest has violated its
statutory duty to file its interconnection agreements. This
scrutiny began during the summer of 2001, when the Minnesota
Department of Commerce (``Minnesota DOC'') sought to
determine if Qwest was engaging in anticompetitive
conduct.13 On February 14, 2002, the Minnesota DOC filed a
complaint with the Minnesota Commission claiming Qwest had
violated state and federal law by not seeking section 252
approval for eleven agreements between Qwest and competitive
LECs.14 Soon thereafter, several other state commissions in
Qwest's region, including the Arizona Commission, initiated
similar investigations.15
6. As the state investigations proceeded, Qwest filed
a petition with this Commission on April 23, 2002, seeking a
declaratory ruling on what types of agreements between
incumbent LECs and their competitors are subject to the
mandatory filing and state commission approval requirements
of section 252.16 Qwest argued that section 252(a)(1)
required filing and state approval only for a ``schedule of
itemized charges'' and related service descriptions.17
7. Notwithstanding the position taken in its
petition, in May 2002, Qwest informed the state commissions
in its region of a new policy of filing all new ``contracts,
agreements, and letters of understanding'' between Qwest and
competitive LECs that ``create obligations to meet the
requirements of Section 251(b) or (c) on a going-forward
basis.''18 Qwest also announced the formation of a ``new
committee comprised of senior managers from Legal Affairs,
Public Policy, Wholesale Business Development, Wholesale
Service Delivery, and Network as well as a Policy and Law
Regulatory Attorney'' to review and determine whether Qwest
must file particular agreements under section 252.19
According to Qwest, ``[t]hrough the new committee process,
and the broad standard it applies, Qwest is ensuring that it
will file and obtain necessary PUC approval for all future
negotiated agreements with CLECs.''20
8. On August 1, 2002, this committee ? referred to in
Qwest documents as the ``Wholesale Agreement Review
Committee'' ? met via conference call. According to various
drafts of the minutes of this meeting, the committee
discussed the treatment of new agreements versus preexisting
agreements.21 The minutes indicate that Qwest had decided
to treat pre-existing unfiled agreements differently from
new agreements. 22 According to an early draft of the
minutes, ``[p]ast ancillary agreements are being handled by
the litigation team. Going forward, all future ancillary
agreements are to be filed with the respective state
commission(s) out of an abundance of caution though they may
be `form contracts' not subject to [section] 252.''23 The
minutes also state: ``Issue: do we need to go back and
file old agreements handled by the litigation team?''24
Handwritten notes next to this question state: ``Litigation
to analyze.''25 A subsequent draft of the meeting minutes
deletes these references to the ``litigation team.''26
9. On August 20, 2002, as the Commission considered
Qwest's applications for section 271 approval for nine of
its fourteen in-region states, 27 Qwest informed us of its
May 2002 letters to the state commissions.28 Qwest
indicated that pursuant to its May 2002 policy, it would
file all new agreements that include provisions creating on-
going obligations that relate to Section 251(b) or (c).29
Qwest did not, however, commit to file all such prior
unfiled agreements for all states.30
10. Soon thereafter, in late September 2002, the Qwest
Wholesale Agreement Review Committee provided Qwest
employees with a ``Training Outline for CLEC Agreements.''31
Qwest told its employees that ``[s]ection 252(a) of the
Telecommunications Act requires that all agreements with
CLECs in Qwest's fourteen state region relating to
`interconnection, services or network elements' shall be
filed with the state commissions for approval under Section
252(e).''32 The outline also gave nearly two dozen examples
``of the types of agreements with CLECs in Qwest's fourteen-
state region that need to be filed,'' including ``services
that are also reflected in the SGATs [Statements of
Generally Acceptable Terms].''33
11. On October 4, 2002, we ruled on Qwest's petition
for a declaratory ruling.34 As noted above, notwithstanding
its more recent statements, Qwest had argued in its petition
that section 252(a)(1) required filing and state approval
only for a ``schedule of itemized charges'' and related
service descriptions.35 We rejected this ``cramped
reading'' of section 252, noting that ``on its face, section
252(a)(1) does not further limit the types of agreements
that carriers must submit to state commissions.''36
Instead, we broadly construed section 252's use of the term
``interconnection agreement,'' holding that carriers must
file with state commissions for review and approval under
section 252 any ``agreement that creates an ongoing
obligation pertaining to resale, number portability, dialing
parity, access to rights-of-way, reciprocal compensation,
interconnection, unbundled network elements, or collocation
. . . .''37
12. Shortly after release of the Declaratory Ruling,
on November 1, 2002, the Minnesota Commission adopted in
full a recommended decision by a Minnesota administrative
law judge (``ALJ'') that Qwest had committed 26 individual
violations of the Act and Minnesota statutes by failing to
file 26 distinct provisions found in twelve separate
agreements with CLECs for interconnection, access to
unbundled network elements (``UNEs'') and/or access to
services.38 After Qwest rejected a proposal for paying
restitution to CLECs for the damage caused by the secret
deals, the Minnesota Commission ordered Qwest to pay a $26
million fine and undertake various compliance measures,
including retroactive discounts to competitors.39 Qwest
subsequently filed a complaint in federal district court
challenging the Minnesota Commission's authority to impose
such a penalty.40
13. On December 23, 2002, we released the Qwest 9-
State 271 Order, granting Qwest's section 271 applications
for in-region interLATA service in nine of its fourteen in-
region states.41 We discussed the various state
investigations, including the Minnesota proceeding, and
expressed concern about Qwest's failure to file its
agreements with the states.42 Qwest assured us, however,
that ``in August 2002 Qwest filed with utility commissions
in the application states all previously-unfiled contracts
with CLECs that contained currently-effective going forward
terms related to section 251(b) or (c) matters.''43 Based
on the record in that proceeding, we concluded that Qwest
had filed all of its interconnection agreements with the
relevant state commissions at issue in the proceeding, with
one exception: an Internetwork Calling Name Delivery
Service Agreement (``ICNAM'')44 with Allegiance.45 We
rejected Qwest's claim that, because the terms were
available through Qwest's SGATs, it did not have to file
this agreement in Colorado and Washington.46 We held that
the ICNAM agreement ``does not appear on its face to fall
within the scope of the filing requirement exceptions set
forth in the Commission's declaratory ruling, and
accordingly, it likely should have been filed with the
states.''47 While we ultimately determined that Qwest's
failure to file this agreement did not affect its section
271 application, we also noted that ``failure to file this
agreement ... could subject Qwest to federal and/or state
enforcement action....''48
14. Following the release of the Qwest 9-State 271
Order, Qwest filed ICNAM contracts in New Mexico on January
9 and January 10, 2003;49 in Oregon on January 9, 2003;50
and in South Dakota on January 13, 2003.51 On January 14,
2003, Qwest filed a section 271 application with the
Commission for authorization to provide in-region, interLATA
service in the states of New Mexico, Oregon, and South
Dakota.52
15. On March 25-26, 2003, more than four months after
the Declaratory Ruling, Qwest sought the Minnesota
Commission's section 252 approval for 34 previously unfiled
agreements, including four agreements that had been the
subject of the Minnesota enforcement proceedings.53 On
March 28, 2003, Qwest filed a section 271 application with
the Commission for authorization to provide in-region
interLATA service in Minnesota.54 The Minnesota Commission
subsequently found all 34 agreements, in whole or in part,
constituted ``interconnection agreements'' under section
252.55
16. As noted above, the state of Arizona also
investigated the Qwest unfiled agreements issue.56 On May
23, 2003, more than seven months after the Declaratory
Ruling, Qwest filed twelve previously unfiled Arizona
interconnection agreements with the Arizona Commission. In
the cover letter accompanying each agreement, Qwest's
counsel stated that the agreements reflected form, standard
provisions that were available to CLECs on Qwest's website
and SGATs and ``very well may not be agreements subject to
the filing requirement under the FCC's October 4, 2002
[Declaratory Ruling] Order; however, the FCC's subsequent
order granting 271 relief to Qwest's 9-state application
suggested the contrary.''57 On September 4, 2003, Qwest
filed a section 271 application with the Commission for
authorization to provide in-region interLATA service in the
state of Arizona.58
17. While the Arizona Commission investigation was
still ongoing, we granted Qwest's 271 application for
Minnesota. In the Qwest Minnesota 271 Order, we did not
decide whether Qwest had violated section 252(a) by delaying
its filing of interconnection agreements with the Minnesota
Commission. Nevertheless, we expressed grave concerns with
Qwest's conduct:
At the same time, we are seriously troubled by
Qwest's decision to delay filing 34 agreements
with the Minnesota Commission until March 25-26,
2003, and refer this matter to the Enforcement
Bureau for investigation and appropriate
enforcement action. The Commission clarified the
incumbent LECs' obligation to file interconnection
agreements under section 252(a)(1) in a
Declaratory Ruling on October 4, 2002, nearly six
months before Qwest filed the Minnesota
agreements. We note that Qwest has provided no
explanation in the record for this delay in filing
the interconnection agreements. Given that it had
adequate notice of its legal obligations under
section 252(a), we intend to review with careful
scrutiny any explanation that Qwest may provide in
the context of a potential enforcement action.59
That same day, the Enforcement Bureau issued an LOI to Qwest
regarding the unfiled agreements issue. 60 Shortly
thereafter, Qwest filed 53 additional agreements dating back
to 1996 in six of its in-region states.61 Qwest responded
to the LOI on July 31, 2003.
III. DISCUSSION
III.A. Qwest Apparently Willfully and Repeatedly
Failed to File Its Interconnection Agreements in
Minnesota and Arizona
18. Under section 503(b)(1) of the Act, any person who
is determined by the Commission to have willfully or
repeatedly failed to comply with any provision of the Act or
any rule, regulation, or order issued by the Commission
shall be liable to the United States for a forfeiture
penalty.62 In order to impose such a forfeiture penalty,
the Commission must issue a notice of apparent liability,
the notice must be received, and the person against whom the
notice has been issued must have an opportunity to show, in
writing, why no such forfeiture penalty should be imposed.63
The Commission will then issue a forfeiture if it finds by a
preponderance of the evidence that the person has willfully
or repeatedly violated the Act or a Commission rule.64 As
we set forth in greater detail below, we conclude under this
standard that Qwest is liable for a $9 million forfeiture
for 46 apparent violations of section 252(a)(1) of the Act.
III.A.1. The Commission Has Established Clear
Standards Under Section 252(a)(1) of the Act
19. The fundamental issue in this case is whether
Qwest apparently willfully or repeatedly violated the Act by
delaying its filing of the Minnesota and Arizona
interconnection agreements. The filing requirement is in
section 252(a)(1) of the Act, which states:
Upon receiving a request for interconnection,
services, or network elements pursuant to section
251, an incumbent local exchange carrier may
negotiate and enter into a binding agreement with
the requesting telecommunications carrier or
carriers without regard to the standards set forth
in subsections (b) and (c) of section 251. The
agreement shall include a detailed schedule of
itemized charges for interconnection and each
service or network element included in the
agreement. The agreement . . . shall be submitted
to the State commission under subsection (e) of
this section.65
20. Once submitted, if an interconnection agreement is
approved by the state commission, other carriers may also
adopt the terms and conditions or the rates in the agreement
pursuant to section 252(i).66 Through this mechanism,
competitive carriers avoid the delay and expense of
negotiating new agreements with the incumbent LEC and then
awaiting state commission approval. Absent such a
mechanism, ``the nondiscriminatory, pro-competition purpose
of section 252(i) would be defeated . . . .''67
21. We have historically given a broad construction to
section 252(a)(1). As noted above, in the Local Competition
Order, we found that
requiring filing of all interconnection agreements
best promotes Congress's stated goals of opening
up local markets to competition, and permitting
interconnection on just, reasonable, and
nondiscriminatory terms. State commissions should
have the opportunity to review all agreements . .
. to ensure that such agreements do not
discriminate against third parties, and are not
contrary to the public interest.68
In that same order, we applied this broad construction in
adopting the ``pick and choose'' construction of section
252(i), under which CLECs may adopt parts of interconnection
agreements with incumbent LECs, rather than adopting those
agreements in their entirety.69
22. Although section 252(a)(1) is explicit in its
filing requirements, the Declaratory Ruling provided
certainty to those requirements by stating that any
``agreement that creates an ongoing obligation pertaining to
resale, number portability, dialing parity, access to
rights-of-way, reciprocal compensation, interconnection,
unbundled network elements, or collocation is an
interconnection agreement that must be filed pursuant to
section 252(a)(1).''70 We further stated:
This interpretation, which directly flows from the
language of the Act, is consistent with the pro-
competitive, deregulatory framework set forth in
the Act. This standard recognizes the statutory
balance between the rights of competitive LECs to
obtain interconnection terms pursuant to section
252(i) and removing unnecessary regulatory
impairments to commercial relations between
incumbent and competitive LECs . . . . Indeed, on
its face, section 252(a)(1) does not further limit
the types of agreements that carriers must submit
to state commissions.71
23. The Declaratory Ruling noted some reasonable but
narrow exceptions to the general rule that any agreement
relating to the duties outlined in sections 251(b) and (c)
falls within section 252(a)'s filing requirement. Such
exceptions, however, flow from the general standard of
ongoing obligations. Specifically, we found that agreements
addressing dispute resolution and escalation provisions
relating to the obligations set forth in sections 251(b) and
(c) do not have to be filed if the information is generally
available to carriers.72 We stated that settlement
agreements that simply provide for backward-looking
consideration that do not affect an incumbent LEC's ongoing
obligations relating to section 251 do not need to be
filed.73 In addition, we found that forms completed by
carriers to obtain service pursuant to terms and conditions
of a underlying interconnection agreement do not constitute
either an amendment to that agreement or a new
interconnection agreement that must be filed under section
252.74 Finally, we held that agreements with bankrupt
competitors that are entered into at the direction of a
bankruptcy court and that do not otherwise change the terms
and conditions of the underlying interconnection agreement
are not themselves interconnection agreements or amendments
to interconnection agreements that must be filed under
section 252(a).75
24. As discussed above, we again dealt with the filing
requirements of section 252(a)(1) in the Qwest 9-State 271
Order. There we referred to the Declaratory Ruling in
concluding that all but one of the twelve agreements brought
to our attention ``need not be filed with state commissions
under the standards enunciated in the Commission's
declaratory ruling.''76 With regard to that one agreement,
we stated that Qwest likely should have filed an ICNAM
agreement, even though Qwest claimed that the Declaratory
Ruling did not require that filing because the agreement was
a ``form agreement'' the terms of which were available
through SGATs in two states. 77 We reiterated this finding
in the Qwest 3-State Order.78
III.A.2. Qwest Withheld Interconnection
Agreements from the Minnesota and Arizona
Commissions in Apparent Willful and Repeated
Violation of Section 252(a)(1)
25. By January 14, 2003, when Qwest filed its three-
state application with the Commission, Qwest had filed
previously unfiled agreements in twelve of the fourteen
states in its region either pursuant to state commission
order, in accordance with the Qwest August 20 Letter ? in
which Qwest announced that it would file ``all such
agreements that include provisions creating on-going
obligations that relate to Section 251(b) or (c) which have
not been terminated or superseded by agreement, commission
order, or otherwise'' ? or following the Commission's
rulings regarding unfiled agreements in the Declaratory
Ruling and the Qwest 9-State 271 Order.79 Despite Qwest's
pronouncements that it was complying with section 252 with
respect to new agreements, Qwest did not file the unfiled
Minnesota and Arizona agreements until several months later,
filing 34 agreements with the Minnesota Commission on March
25 and 26, 2003 and filing twelve agreements with the
Arizona Commission on May 23, 2003.80
26. Qwest executed the Minnesota agreements with
various CLECs between 1997 and 2002.81 The Minnesota
Commission approved all 34 agreements, in whole or in part,
pursuant to section 252(e) of the Act.82 The Arizona
agreements date from 1998 to 2001.83 As noted above, all
twelve Arizona agreements were approved by operation of law
pursuant to section 252(e).84 As a general matter, many of
the Minnesota and Arizona agreements are the same types of
agreements that Qwest filed earlier in other states, 85 and
meet the standards Qwest described to its employees in its
September 2002 Training Outline for CLEC Agreements.86
Indeed, seven of these agreements are ICNAM agreements,
which we explicitly declared ``likely should have been
filed'' in the Qwest 9-State Order. 87
27. Qwest raises several arguments to support its
delayed filing of the 46 agreements at issue here. As an
initial matter, however, we emphasize Qwest's inconsistent
approach towards the filing of its interconnection
agreements - an inconsistency that underscores the egregious
nature of Qwest's actions at issue here. While Qwest argues
that the Minnesota and Arizona agreements are not
interconnection agreements subject to the requirements of
section 252(a)(1), the carrier's documents indicate that
Qwest has taken a different approach towards the same or
similar types of previously unfiled interconnection
agreements in the states for which it was seeking section
271 approval and for new agreements.
28. As discussed above, as early as May 2002, Qwest
claimed a policy of ``broadly filing all contracts,
agreements, or letters of understanding between Qwest
Corporation and CLECs that create obligations to meet the
requirements of Section 251(b) or (c) on a going forward
basis.''88 On August 21 and August 22, 2002, Qwest
submitted previously unfiled agreements with the state
commissions in all nine states for which it was seeking
section 271 approval at the time.89 Accordingly, with
respect to selected states, i.e., those with section 271
applications pending before this Commission, Qwest claimed
to have identified and submitted all its previously unfiled
agreements in August 2002. In addition, following the
release of the Qwest 9-State 271 Order, Qwest filed ICNAM
contracts in New Mexico on January 9 and January 10, 2003;90
in Oregon on January 9, 2003;91 and in South Dakota on
January 13, 2003.92 Shortly thereafter, on January 14,
2003, Qwest filed a section 271 application with the
Commission for authorization to provide in-region, interLATA
service in those three states.93 Qwest's treatment of
interconnection agreements depended on when the agreement
was executed, and for the pre-May 2002 agreements, on
whether a section 271 application was imminent. Because
Qwest only filed the previously unfiled agreements as the
date approached for its section 271 applications in a
particular state, we believe these filings were not made
``out of an abundance of caution,'' as Qwest suggests. With
respect to Minnesota and Arizona, Qwest took no action to
file its pre-existing unfiled agreements until it was
preparing to file its section 271 application with this
Commission.
29. Citing the Declaratory Ruling, Qwest argues that
many of the Minnesota and Arizona agreements at issue here
are ``form'' agreements for ordering services available
through its SGATs, and as such did not warrant filing under
section 252(a).94 Contrary to Qwest's assertions, however,
the Declaratory Ruling does not contain a filing exception
for form or standardized agreements. While the Declaratory
Ruling stated that section 252(a) did not require the filing
of ordering forms completed by carriers pursuant to an
underlying agreement, it did not create an exception for
``form'' interconnection agreements. Specifically, the
Commission stated that ``forms completed by carriers to
obtain services pursuant to terms and conditions set forth
in an interconnection agreement do not constitute either an
amendment to that interconnection agreement or a new
interconnection agreement that must be filed under section
252(a)(1).''95
30. This language nowhere suggests that an
interconnection agreement memorialized by way of a
standardized contractual form is not required to be filed
pursuant to section 252(a)(1). Indeed, we rejected this
argument in the Qwest 9-State 271 Order with respect to an
ICNAM agreement between Qwest and Allegiance. In response
to CLEC criticism that the ICNAM agreement and others should
have been filed under section 252(a), Qwest referred to the
Declaratory Ruling's language exempting ordering forms from
section 252(a)'s requirement.96 In rejecting this argument,
we held that Qwest ``likely should have'' filed the ICNAM
agreement with the Colorado and Washington state
commissions, despite its alleged ``form'' status and Qwest's
allegation that its terms were available through Qwest's
SGATs for those states.97
31. Moreover, Qwest's alleged ``form interconnection
agreement'' exemption is the veritable exception that
swallows the rule, since virtually all terms and conditions
of interconnection could be reduced to such a form or
standardized agreement. Additionally, any such ``form''
agreement in use by Qwest today could be revised tomorrow.98
Unless such agreements are made available to other carriers
via the process outlined in section 252, Qwest's competitors
would not be able to opt into these agreements pursuant to
section 252(i) because they would be unaware of the previous
agreements' existence, not to mention the specific terms and
conditions. The Declaratory Ruling ensures that the
agreement terms are memorialized in a public document,
subject to state approval, which permits other carriers to
opt into the terms of the agreement under section 252(i).
Under Qwest's interpretation, there would be no publicly
available document. Furthermore, as noted above, Qwest's
internal policy conflicts with this argument. Qwest's
September 2002 ``Training Outline for CLEC Agreements''
explicitly states that ``services that are also reflected in
the SGATs'' are among ``the types of agreements with CLECs
in Qwest's fourteen-state region that need to be filed.''99
32. Qwest further contends that ``the [Declaratory]
Ruling states that if information on service offerings is
generally available to CLECs, such as through posting on a
website, agreements covering these matters need not be
filed.''100 Once again, Qwest misreads our order. In
rejecting Qwest's argument that ``dispute resolution and
escalation provisions'' are per se outside the scope of
section 252(a)(1), we held ``[u]nless this information is
generally available to carriers (e.g., made available on an
incumbent LEC's wholesale website), we find that agreements
addressing dispute resolution and escalation provisions
relating to the obligations set forth in sections 251(b) and
(c) are appropriately deemed interconnection
agreements.''101 This exception is for contact lists and
procedures for escalation, posted on websites and available
to all carriers. This exception does not apply to ``service
offerings,'' as Qwest contends. At no point did we create a
general ``web-posting exception'' to section 252(a). As
with Qwest's asserted ``form agreement'' exception to
section 252(a)(1), a ``web-posting exception'' would render
that provision meaningless, since CLECs could not rely on a
website to contain all agreements on a permanent basis.
Moreover, unlike the terms of an SGAT, web-posted materials
are not subject to state commission review, further
undermining the congressionally established mechanisms of
section 252(e).102
33. Qwest contends that it had no legal obligation to
``rush out and file any and all contracts with CLECs that
might arguably be deemed interconnection agreements under
the [Declaratory] Ruling.''103 Qwest takes the position
that until a state commission tells Qwest that a certain
agreement must be filed, Qwest has no obligation to file the
agreement.104 We emphatically disagree. The statute
clearly contradicts Qwest's argument. Under section
252(a)(1), LECs must file interconnection agreements with
state commissions for approval. In the Declaratory Ruling,
the Commission clarified the types of agreements that must
be filed. Any interconnection agreement filed and approved
by the state commission under section 252 must be made
available to any other requesting carrier upon the same
terms and conditions, in accordance with section 252(i).
Section 252(a)(1) does not condition filing on a state
commission first telling a carrier that a certain agreement
(which has not yet been seen) must be filed.
34. Nor does Qwest's argument find any support in our
Declaratory Ruling or other orders. Qwest's reliance on the
statement in the Declaratory Ruling that ``state commissions
are well positioned to decide on a case-by-case basis
whether a particular agreement is required to be filed'' is
misplaced.105 After an agreement is filed with a state
commission, the commission may approve or reject that
agreement. The state commission can advise the carrier
whether a certain type of agreement is considered an
interconnection agreement that requires filing in that
state. 106 Until an agreement is filed, however, the state
commission would not be in a position to approve, reject, or
determine whether a certain type of agreement does not
require filing.107
35. Moreover, Qwest has not even followed its asserted
construction of section 252(a)(1). Qwest claims that it
``appropriately deferred more formal filing of the four MN
DOC contracts in that state until after the PUC at least
issued its first order on remedies.''108 But Qwest did not
file the Minnesota agreements until March 25 and 26, 2003.
By that point, nearly five months had passed since the
Minnesota Commission held that Qwest had violated section
252(a) by withholding the agreements in question,109 and
more than seven months had passed since the initial ALJ
finding to the same effect. 110 We find that Qwest's timing
appears to have had more to do with litigation strategy and
its impending section 271 application (which it filed on
March 28, 2003) than instructions from the Minnesota PUC.
As noted above, Qwest internal documents refer to pre-
existing unfiled interconnection agreements being handled by
the ``litigation team.'' Additionally, Qwest admits that
its decision ``was influenced by the fact that it was
preparing to file its application for 271 authority in
Minnesota,'' and that it had earlier followed the same
procedure of filing previously unfiled agreements in
connection with the three-state application.111
36. Qwest also argues that it provided the Minnesota
agreements to the Minnesota Commission in the context of the
investigation.112 According to Qwest, its provision of
these agreements to the Minnesota DOC investigative staff
provided adequate notice to the Minnesota Commission of
these agreements. Additionally, Qwest argues, the Minnesota
DOC's decision not to include all 34 agreements in its
enforcement proceeding amounts to a finding that those
agreements did not have to be filed under section 252. We
disagree with Qwest's position. Qwest's compliance with
investigative demands from the Minnesota Commission staff is
irrelevant to its compliance with section 252. Section
252(e)(1) of the Act unambiguously states: ``Any
interconnection agreement adopted by negotiation or
arbitration shall be submitted for approval to the State
commission. A State commission to which an agreement is
submitted shall approve or reject the agreement, with
written findings as to any deficiencies.''113 Until Qwest
submitted the agreements to the state commission, the
agreements did not have state approval and other CLECs did
not have the opportunity to adopt those agreements.
Providing interconnection agreements to state commission
staff in an investigation does not satisfy the requirements
of section 252.
37. Moreover, we note that Qwest's argument is belied
by the Minnesota DOC's finding, adopted by the Minnesota
Commission, with respect to each of the late-filed
agreements, that ``[a]lthough this agreement was not one of
the agreements that the Department chose to use as part of
its complaint, this should not suggest that Commission
approval of this agreement is not necessary. The agreements
selected by the Department were limited for the purposes of
the contested case process in Docket No. P421/IC-02-197. It
is the position of the Department that Qwest has always been
obligated to file this agreement.''114
38. Regarding the Arizona agreements, Qwest again
appears to concede that its litigation strategy ? not its
construction of the Act or our orders ? controlled its
decision to delay filing. Qwest contends that in light of
the Arizona Commission investigation into the unfiled
agreements the carrier ``has been cautious about making
filings that could be viewed as a concession.''115 Qwest
admits that in May 2003, it was negotiating a settlement
with Arizona Commission staff and preparing to file its
section 271 application with this Commission; therefore, it
decided to file the twelve unfiled agreements in Arizona.116
In addition, Qwest's documents indicate that
contemporaneously with filing the Arizona agreements on May
23, 2003, Qwest's counsel effectively conceded that the
Qwest 9-State 271 Order required filing those agreements.
In the cover letter attached to each of the twelve Arizona
interconnection agreements filed on May 23, 2003, Qwest's
counsel stated that each agreement reflects form, standard
provisions that are available to CLECs through Qwest's
website and the SGAT and ``very well may not be agreements
subject to the filing requirement under the FCC's October 4,
2002 Order; however, the FCC's subsequent order granting 271
relief to Qwest's 9-state application suggested the
contrary.''117
39. We conclude that Qwest apparently failed to comply
with section 252(a)(1) of the Act regarding 34
interconnection agreements in Minnesota and twelve
interconnection agreements in Arizona. Rather than promptly
seeking state commission review of its agreements, as
required under section 252(a)(1), Qwest apparently withheld
nearly four dozen agreements to avoid the negative reaction
that would accompany such a filing. Qwest apparently
calculated that compliance with section 252(a)(1) only for
pending application states would suffice to avoid our denial
of its section 271 applications. Thus, during the nine-
state application process, Qwest agreed to follow section
252 for new agreements, formed the Wholesale Contract Review
Team, and filed previously unfiled agreements in the nine
application states. Similarly, just before filing its
three-state application, Qwest filed previously unfiled
agreements in those states. Immediately prior to filing the
Minnesota section 271 application, Qwest filed the
previously unfiled Minnesota agreements, and as Qwest was
settling with the Arizona Commission, and prior to
submitting the Arizona section 271 application, Qwest filed
the previously unfiled Arizona agreements. Finally, shortly
after receiving the Enforcement Bureau's LOI, Qwest filed an
additional 53 agreements in six states ? seven months after
Qwest had assured us that it had filed ``all previously-
unfiled agreements'' for those same jurisdictions.118
40. We find that Qwest's apparent violations were
willful and repeated, as described in section 503(b) of the
Act. The Commission has previously held that ``willful,''
as used in section 503(b), means the conscious and
deliberate commission or omission of any act, irrespective
of any intent to violate the law.119 Thus, even if the
record did not contain ample evidence that Qwest knew that
it was violating section 252(a)(1) by withholding the
agreements, Qwest would be subject to a forfeiture. In
addition, Qwest's actions were ``repeated,'' as that term is
used in section 503(b), since Qwest withheld more than 40
interconnection agreements from the state commissions of
Arizona and Minnesota.120
41. The Commission's Declaratory Ruling and the Qwest
9-State 271 Order made clear our filing requirements. Qwest
nevertheless apparently delayed filing the Minnesota and
Arizona agreements, while at the same time filing similar
unfiled agreements with the state commissions for which it
had pending 271 applications before the Commission. During
this time period, Qwest was also filing new agreements, in
compliance with section 252(a) and the Declaratory Ruling.
In pursuit of section 271 approval, Qwest repeatedly told
this Commission that it had implemented new processes to
ensure section 252 compliance with respect to new agreements
in some states, but at the same time apparently
intentionally withheld filing of dozens of agreements in
Minnesota and Arizona. We conclude that Qwest apparently
willfully and repeatedly violated section 252(a)(1) of the
Act by failing to timely file 46 interconnection agreements
in Minnesota and Arizona.
III.B. Proposed Action
42. Section 503(b)(2)(B) of the Act authorizes the
Commission to assess a forfeiture of up to $120,000 for each
violation or each day of a continuing violation, up to a
statutory maximum of $1.2 million for a single act or
failure to act.121 In determining the appropriate
forfeiture amount, we consider the factors enumerated in
section 503(b)(2)(D) of the Act, including ``the nature,
circumstances, extent and gravity of the violation, and,
with respect to the violator, the degree of culpability, any
history of prior offenses, ability to pay, and such other
matters as justice may require.''122
43. Qwest argues that it should not be subject to
forfeiture for any violations of section 252(a) because
``neither the Act itself, nor any FCC rule or order, sets
forth with `ascertainable certainty' any deadline by which
an agreement subject to Section 252(a)(1)'s filing
requirement must actually be filed with the state.'' 123
Qwest's reliance on the notice requirement in Trinity
Broadcasting is misplaced. With respect to notice of a
filing deadline, Qwest overlooks the point that the filing
requirement is part of the section 251 interconnection
obligation, not a separate requirement with a separate
deadline. Qwest, as an incumbent LEC, has certain
interconnection obligations set forth in section 251.124
Agreements to provide the services listed in section 251
must be filed with the state commission for approval.125
Until the agreements are approved by the state commission,
they are not valid interconnection agreements.126 Executing
agreements with CLECs does not fulfill Qwest's section 251
obligations until the agreements are filed and approved.
Thus, Qwest cannot meet its section 251 obligations without
filing and obtaining approval of interconnection agreements.
For Qwest to claim that it was not required to file
agreements because neither the Act nor the Commission
provided a specific deadline for filing ignores the fact
that filing (and approval) of agreements is a prerequisite
for a valid interconnection agreement.127 Furthermore, we
note that interconnection agreements are only effective for
a term, often three years. Under Qwest's logic, it could
delay filing for an indefinite period of time. In fact,
Qwest's failure to file agreements for the entire length of
the agreement - which appears to have happened with the
expired Minnesota agreements - could lead to a permanent
alteration in the competitive landscape or a skewing of the
market in favor of certain competitors.
44. In any event, we also find that Qwest had ample
notice of the filing requirements under section 252(a)(1),
but complied only selectively with these requirements.
Qwest has been on notice of its potential violation of
section 252(a)(1) since initiation of the Minnesota
investigation into Qwest's unfiled agreements in 2001.
While Qwest adopted in May 2002 a policy of filing all new
interconnection agreements with CLECs, and created the
Wholesale Agreement Review Committee to file new
agreements,128 Qwest did not file its unfiled agreements in
Minnesota or Arizona. Qwest then sought to clarify the
filing requirements of section 252 by filing the Qwest
Petition; but even after release of the Declaratory Ruling,
Qwest still failed to file the Minnesota and Arizona unfiled
agreements. Subsequently, we discussed the unfiled
agreements issue in the Qwest 9-State 271 Order, in which we
held that Qwest ``likely should have filed'' an ICNAM
agreement even though the terms were available through
Qwest's SGATs for the relevant jurisdictions, and that
``failure to file this agreement ... could subject Qwest to
federal and/or state enforcement action....''129 Qwest
apparently took the Commission's instructions in the Qwest
9-State 271 Order seriously, but only with respect to the
three states for which it intended to file 271 applications
in the near future.130
45. Qwest did not file the 34 Minnesota agreements
until March 25 and 26, 2003, more than three months after
release of the Qwest 9-State 271 Order, more than five
months after release of the Declaratory Ruling, and more
than ten months after implementing its May 2002 policy of
filing unfiled agreements. Qwest's conduct is more
egregious with respect to the twelve Arizona agreements,
which it did not file until May 23, 2003. Even if we assume
that Qwest did not realize that the Minnesota and Arizona
agreements should have been filed when the contracts were
executed, by any reasonable measure Qwest should have filed
those agreements shortly after October 4, 2002, under the
guidance of the Declaratory Ruling and in keeping with its
own internal policy of section 252(a) compliance, initiated
in May 2002. As we held in the SBC Michigan 271 Order,
``incumbent LECs have had adequate notice of their legal
obligations under section 252(a)'' since the Declaratory
Ruling.131
46. As discussed above, these apparent violations
merit a substantial forfeiture. In the SBC Michigan 271
Order, we noted that ``if such proceedings find that this or
other agreements should have been filed ... under section
252(a)(1), we would consider any filing delays to be
extremely serious.''132 Section 252(a)(1) is not just a
filing requirement. Compliance with section 252(a)(1) is
the first and strongest protection under the Act against
discrimination by the incumbent LEC against its competitors.
47. Indeed, the Minnesota Commission found that Qwest
had discriminated against CLECs by failing to file
interconnection agreements:
In each of the twelve interconnection agreements
cited by the Minnesota Department of Commerce,
Qwest provided terms, condition, or rates to
certain CLECs that were better than the terms,
rates, and conditions that it made available to
the other CLECs and, in fact, it kept those better
terms, conditions, and rates a secret from the
other CLECs. In so doing, Qwest unquestionably
treated those select CLECs better than the other
CLECs. In short, Qwest knowingly and
intentionally discriminated against the other
CLECs in violation of Section 251.133
Similarly, the Arizona Commission's proposed settlement with
Qwest also reflects allegations that Qwest discriminated
against CLECs by failing to file its interconnection
agreements.134 Although we do not determine here whether
Qwest engaged in unlawful discrimination with respect to the
46 agreements at issue in this proceeding, the potential for
such discrimination underlies our concerns regarding Qwest's
apparent violations of section 252(a)(1).135 Even if no
such discrimination took place, Qwest may not ignore the
requirements of the Act and our repeated instructions
regarding section 252(a)(1).
48. Qwest ignored the potential for discrimination and
competitive harm by withholding the agreements at issue
here. Qwest concedes that it delayed filing the
interconnection agreements at issue primarily because it
wished to minimize any damage to its positions in state or
federal regulatory proceedings. Qwest admits that its
decision to file its agreements in Minnesota ``was
influenced by the fact that it was preparing to file its
application for 271 authority in Minnesota.''136 Similarly,
Qwest admits that it ``decided in May to proceed with filing
of the 12 form contracts before the ACC [Arizona Corporation
Commission]. By May, Qwest was less concerned that such a
filing might be treated as an admission of liability and
result in material penalties.''137
49. As noted above, pursuant to section 503(b)(2)(B),
we may propose a forfeiture against a common carrier of no
more than $120,000 per violation or per day of a continuing
violation, up to a maximum of $1.2 million. In the
Minnesota proceeding, after the state assessed a $26 million
penalty against Qwest, the carrier delayed filing until
several days before submitting its application for section
271 authority with this Commission. Similarly, the
Minnesota penalty did not convince Qwest to file the Arizona
agreements. Rather, Qwest took nearly three months to file
the Arizona agreements, and did so not to comply with the
law, but because it no longer feared that such a filing
would compromise its litigation posture in the Arizona
enforcement proceeding. Moreover, despite the Minnesota
fine and the Arizona proposed settlement on the unfiled
agreements at issue and having advised us that all unfiled
agreements had been filed in the states covered by the nine
and three-state section 271 applications, Qwest only
recently filed an additional 53 agreements in six of those
states. In order to deter future violations of this and
other important market-opening obligations under the 1996
Act, we believe a substantial penalty is warranted.
50. Qwest delayed filing 46 agreements with the
Arizona and Minnesota Commissions, in apparent violation of
section 252(a)(1). Even if we assume that Qwest did not
have clear notice of its obligations under section 252(a)(1)
until release of the Declaratory Ruling, Qwest delayed
filing the Minnesota and Arizona agreements for at least an
additional five and seven months, respectively. Thus,
Qwest's apparent violations of section 252(a)(1) are
continuing violations,138 and we could potentially subject
the carrier to a penalty of $1.2 million per agreement, for
a total proposed forfeiture of $55.2 million. We find,
however, that the maximum penalty for each unfiled agreement
would be excessive under the circumstances.139 Therefore,
based on the circumstances of this case, including pending
penalties at the state commissions, we exercise our
discretion to propose a total forfeiture of $9 million for
Qwest's 46 apparent violations of section 252(a)(1).
51. The Commission has made clear that it will take
into account a violator's ability to pay in determining the
amount of a forfeiture so that forfeitures against ``large
or highly profitable entities are not considered merely an
affordable cost of doing business.''140 In second quarter
2003, Qwest Communications International, Inc. (the parent
company of Qwest Corporation) had total operating revenues
of $3.601 billion.141 For a company of this size, a $9
million forfeiture is not excessive. Indeed, a smaller
forfeiture would lack adequate deterrent effect.
52. Therefore, based on the above discussion and
pursuant to section 503(b)(2) of the Act and our rules, we
find that Qwest is apparently liable for each of its 46
apparent violations of section 252(a)(1) of the Act, for a
total proposed forfeiture of $9 million.
IV. ORDERING CLAUSES
53. ACCORDINGLY, IT IS ORDERED THAT, pursuant to
section 503(b) of the Communications Act of 1934, as
amended, 47 U.S.C. § 503(b), and section 1.80 of the
Commission's rules, 47 C.F.R. § 1.80, that Qwest Corporation
is hereby NOTIFIED of its APPARENT LIABILITY FOR A
FORFEITURE in the amount of $9 million for willfully and
repeatedly violating the Act and the Commission's rules.
54. IT IS FURTHER ORDERED THAT, pursuant to section
1.80 of the Commission's rules, 47 C.F.R. § 1.80, within
thirty days of the release date of this NOTICE OF APPARENT
LIABILITY, Qwest Corporation SHALL PAY the full amount of
the proposed forfeiture currently outstanding on that date
or shall file a written statement seeking reduction or
cancellation of the proposed forfeiture.
55. Payment of the forfeiture may be made by check or
similar instrument, payable to the order of the Federal
Communications Commission. Such remittance should be made
to Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois
60673-7482. The payment should note the NAL/Acct. No.
referenced above and FRN No. 0001-6056-25.
56. The response, if any, to this NOTICE OF APPARENT
LIABILITY must be mailed to William H. Davenport, Chief,
Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, 445 12th Street, S.W.,
Washington, D.C. 20554 and must include the NAL/Acct. No.
referenced above.
57. The Commission will not consider reducing or
canceling a forfeiture in response to a claim of inability
to pay unless the petitioner submits: (1) federal tax
returns for the most recent three-year period; (2) financial
statements prepared according to generally accepted
accounting practices (``GAAP''); or (3) some other reliable
and objective documentation that accurately reflects the
petitioner's current financial status. Any claim of
inability to pay must specifically identify the basis for
the claim by reference to the financial documentation
submitted.
58. Requests for payment of the full amount of this
NAL under an installment plan should be sent to Chief,
Credit and Management Center, 445 12th Street, S.W.,
Washington, D.C. 20554.142
59. Under the Small Business Paperwork Relief Act of
2002, Pub.L.No. 107-198, 116 Stat. 729 (June 28, 2002), the
Commission is engaged in a two-year tracking process
regarding the size of entities involved in forfeitures. If
you qualify as a small entity and if you wish to be treated
as a small entity for tracking purposes, please so certify
to us within 30 days of this NAL, either in your response to
the NAL or in a separate filing to be sent to the
Investigations and Hearings Division, Enforcement Bureau,
445 12th Street, S.W., Washington, D.C. 20054. Your
certification should indicate whether you, including your
parent entity and its subsidiaries, meet one of the
definitions set forth in the list in Appendix B of this NAL.
This information will be used for tracking purposes only.
Your response or failure to respond to this question will
have no effect on your rights and responsibilities pursuant
to section 503(b) of the Communications Act. If you have
any questions regarding any of the information contained in
Appendix B, please contact the Commission's Office of
Communications Business Opportunities at (202) 418-0990.
60. IT IS FURTHER ORDERED that a copy of this NOTICE
OF APPARENT LIABILITY AND ORDER shall be sent by certified
mail, return receipt requested, to Qwest, 607 14th Street
NW, Suite 950, Washington, D.C. 20005.
FEDERAL COMMUNICATIONS
COMMISSION
Marlene H. Dortch
Secretary APPENDIX A
Qwest agreements filed after LOI issued
9/30/99 Transient Interim Signaling Capability Service
agreement with Aliant Cellular (Nebraska); 2/10/98 Custom
Local Area Signaling Services (``CLASS'') Network
Interconnection Agreement with Aliant Midwest (Nebraska);
4/20/01 Line Information Data Base (``LIDB'') Storage
Agreement with Adelphia (Colorado); 7/12/01 Custom Local
Area Signaling Services (``CLASS'') Network Interconnection
agreement with Adelphia (Colorado); 11/23/99 Internetwork
Calling Name Delivery Service (``ICNAM'') agreement with
Allegiance (Colorado); 3/2/98 Transient Interim Signaling
Capability Service agreement with Qwest Wireless (Colorado);
3/7/00 Centralized Message Data System (``CMDS'') Hosting
and Message Distribution for Co-Providers (In-Region with
Operator Services) agreement & Addendum with Eschelon
(Colorado); 2/01/01 Centralized Message Data System
(``CMDS'') Hosting and Message Distribution for Co-Providers
(In-Region with Operator Services) agreement with Integra
(Colorado); 3/31/98 Transient Interim Signaling Capability
Service agreement with CommNet (Iowa); 12/13/99 Transit
Record Exchange Agreement with Goldfield (Iowa); 2/11/98
Custom Local Area Signaling Services (``CLASS'') Network
Interconnection Agreement with Aliant Midwest (Iowa);
5/02/02 Transit Record Exchange Agreement to Co-Carriers
(Wireless Service Provider - Transit Qwest - CLEC) with
Consolidated Communications Networks (North Dakota); 5/02/02
Transit Record Exchange Agreement to Co-Carriers (Wireline -
Transit Qwest - CLEC) with Consolidated Communications
Networks (North Dakota); 1/18/00 Transient Interim Signaling
Capability Service Agreement with IdeaOne (North Dakota);
2/1/01 Centralized Message Data System (``CMDS'') Hosting
and In-Region Message Distribution for CLECs agreement &
Addendum with Integra Telecom of Minnesota and Integra
Telecom of North Dakota (North Dakota); 5/22/02 Transit
Record Exchange Agreement to Co-Carriers (Wireless Service
Provider - Transit Qwest - CLEC) with Midcontinent
Communications (North Dakota); 5/22/02 Transit Record
Exchange Agreement to Co-Carriers (Wireline - Transit
Traffic - CLEC) with Midcontinent Communications (North
Dakota); 1/5/01 Centralized Message Data System (``CMDS'')
Hosting and In-Region Message Distribution for Co-Providers
agreement & Addendum with Skyland Technologies (North
Dakota); 1/18/00 Transit Record Exchange Agreement to Co-
Carriers (Wireless Service Provider - Transit Qwest - CLEC)
with Val-ed Joint Venture (North Dakota); 1/18/00 Transit
Record Exchange Agreement to Co-Carriers (Wireline - Transit
Traffic - CLEC) with Val-ed Joint Venture (North Dakota);
2/1/01 Centralized Message Data System (``CMDS'') Hosting
and In-Region Message Distribution for CLECs agreement &
Addendum with Integra (Utah); 8/7/01 Custom Local Area
Signaling Services (``CLASS'') Network Interconnection
Agreement with FirstDigital (Utah); 8/7/01 Internetwork
Calling Name Delivery Service (``ICNAM'') agreement with
FirstDigital (Utah); 8/7/01 Line Information Data Base
(``LIDB'') Storage Agreement with FirstDigital (Utah);
10/14/96 Basic and Enhanced 911 Emergency Communications
Systems Agreement with NextLink (Utah); 10/14/96 Home
Numbering Plan Area Directory Assistance Agreement with
NextLink (Utah); 1/25/02 Centralized Message Data System
(``CMDS'') Hosting and In-Region Message Distribution for
Co-Providers agreement with Skyland Technologies (North
Dakota); 1/25/02 Centralized Message Data System (``CMDS'')
Hosting and In-Region Message Distribution for CLECs
agreement with Town of Eagle Mountain (Utah); 7/22/01 Custom
Local Area Signaling Services (``CLASS'') Network
Interconnection Agreement with Town of Eagle Mountain
(Utah); 1/11/02 Line Information Data Base (``LIDB'')
Storage Agreement with Town of Eagle Mountain (Utah);
4/20/01 Line Information Data Base (``LIDB'') Storage
Agreement with Adelphia (Washington); 7/12/01 Custom Local
Area Signaling Services (``CLASS'') Network Interconnection
Agreement with Adelphia (Washington); 9/11/01 Custom Local
Area Signaling Services (``CLASS'') Network Interconnection
Agreement with Allegiance (Washington); 11/2/99 Internetwork
Calling Name Delivery Service (``ICNAM'') agreement with
Allegiance (Washington); 5/1/01 Internetwork Calling Name
Delivery Service (``ICNAM'') agreement with Computer 5* dba
LocalTel (Washington); 5/1/01 Line Information Data Base
(``LIDB'') Storage Agreement with Computer 5* dba LocalTel
(Washington); 5/1/01 Custom Local Area Signaling Services
(``CLASS'') Network Interconnection Agreement with Computer
5* dba LocalTel (Washington); 4/9/01 Transient Interim
Signaling Capability Service agreement with Computer 5* dba
LocalTel (Washington); 6/24/99 Custom Local Area Signaling
Services (``CLASS'') Network Interconnection Agreement with
Focal (Washington); 2/8/00 Internetwork Calling Name
Delivery Service (``ICNAM'') agreement with Focal
(Washington); 2/8/00 Transient Interim Signaling Capability
Service agreement with Focal (Washington); 6/7/99 Custom
Local Area Signaling Services (``CLASS'') Network
Interconnection Agreement with Fox (Washington); 6/7/99
Internetwork Calling Name Delivery Service (``ICNAM'')
agreement with Fox (Washington); 6/7/99 Centralized Message
Data System (``CMDS'') Hosting and Message Distribution for
Co-Providers agreement with Fox (Washington); 6/7/99 Line
Information Data Base (``LIDB'') Storage Agreement with Fox
(Washington); 2/1/01 Centralized Message Data System
(``CMDS'') Hosting and Message Distribution for Co-Providers
agreement & Addendum with Integra (Washington); 2/8/00
Transient Interim Signaling Capability Service agreement
with Focal (Washington); 12/16/98 Transient Interim
Signaling Capability Service agreement with Qwest Wireless
(Washington); 9/15/99 Transit Record Exchange Agreement to
Co-Carriers (Wireline - Transit Traffic - CLEC) with
International Telecom (Washington). See Documents Q-PUB-
001341 through Q-PUB-001740. APPENDIX B
FCC List of Small Entities
As described below, a ``small entity'' may be a small
organization,
a small governmental jurisdiction, or a small business.
(1) Small Organization
Any not-for-profit enterprise that is independently owned
and operated and
is not dominant in its field.
(2) Small Governmental Jurisdiction
Governments of cities, counties, towns, townships, villages,
school districts, or
special districts, with a population of less than fifty
thousand.
(3) Small Business
Any business concern that is independently owned and
operated and
is not dominant in its field, and meets the pertinent size
criterion described below.
Industry Type Description of Small Business
Size Standards
Cable Services or Systems
Special Size Standard -
Cable Systems Small Cable Company has 400,000
Subscribers Nationwide or Fewer
Cable and Other Program
Distribution $12.5 Million in Annual
Receipts or Less
Open Video Systems
Common Carrier Services and Related Entities
Wireline Carriers and
Service providers
1,500 Employees or Fewer
Local Exchange Carriers,
Competitive Access
Providers, Interexchange
Carriers, Operator Service
Providers, Payphone
Providers, and Resellers
Note: With the exception of Cable Systems, all size
standards are expressed in either millions of dollars or
number of employees and are generally the average annual
receipts or the average employment of a firm. Directions
for calculating average annual receipts and average
employment of a firm can be found in
13 CFR 121.104 and 13 CFR 121.106, respectively.
International Services
International Broadcast
Stations
$12.5 Million in Annual
Receipts or Less
International Public Fixed
Radio (Public and Control
Stations)
Fixed Satellite
Transmit/Receive Earth
Stations
Fixed Satellite Very Small
Aperture Terminal Systems
Mobile Satellite Earth
Stations
Radio Determination
Satellite Earth Stations
Geostationary Space Stations
Non-Geostationary Space
Stations
Direct Broadcast Satellites
Home Satellite Dish Service
Mass Media Services
Television Services
$12 Million in Annual Receipts
or Less
Low Power Television
Services and Television
Translator Stations
TV Auxiliary, Special
Broadcast and Other Program
Distribution Services
Radio Services
$6 Million in Annual Receipts
or Less
Radio Auxiliary, Special
Broadcast and Other Program
Distribution Services
Multipoint Distribution Auction Special Size Standard -
Service Small Business is less than
$40M in annual gross revenues
for three preceding years
Wireless and Commercial Mobile Services
Cellular Licensees
1,500 Employees or Fewer
220 MHz Radio Service -
Phase I Licensees
220 MHz Radio Service - Auction special size standard -
Phase II Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
controlling principals)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
controlling principals)
700 MHZ Guard Band Licensees
Private and Common Carrier
Paging
Broadband Personal
Communications Services 1,500 Employees or Fewer
(Blocks A, B, D, and E)
Broadband Personal Auction special size standard -
Communications Services Small Business is $40M or less
(Block C) in annual gross revenues for
three previous calendar years
Very Small Business is average
gross revenues of $15M or less
for the preceding three
calendar years (includes
affiliates and persons or
entities that hold interest in
such entity and their
affiliates)
Broadband Personal
Communications Services
(Block F)
Narrowband Personal
Communications Services
Rural Radiotelephone Service 1,500 Employees or Fewer
Air-Ground Radiotelephone
Service
800 MHz Specialized Mobile Auction special size standard -
Radio Small Business is $15M or less
average annual gross revenues
for three preceding calendar
years
900 MHz Specialized Mobile
Radio
Private Land Mobile Radio 1,500 Employees or Fewer
Amateur Radio Service N/A
Aviation and Marine Radio
Service 1,500 Employees or Fewer
Fixed Microwave Services
Small Business is 1,500
Public Safety Radio Services employees or less
Small Government Entities has
population of less than 50,000
persons
Wireless Telephony and
Paging and Messaging 1,500 Employees or Fewer
Personal Radio Services N/A
Offshore Radiotelephone 1,500 Employees or Fewer
Service
Wireless Communications Small Business is $40M or less
Services average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
39 GHz Service
Auction special size standard
(1996) -
Multipoint Distribution Small Business is $40M or less
Service average annual gross revenues
for three preceding calendar
years
Prior to Auction -
Small Business has annual
revenue of $12.5M or less
Multichannel Multipoint
Distribution Service $12.5 Million in Annual
Receipts or Less
Instructional Television
Fixed Service
Auction special size standard
(1998) -
Local Multipoint Small Business is $40M or less
Distribution Service average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
First Auction special size
standard (1994) -
Small Business is an entity
that, together with its
affiliates, has no more than a
218-219 MHZ Service $6M net worth and, after
federal income taxes (excluding
carryover losses) has no more
than $2M in annual profits each
year for the previous two years
New Standard -
Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Satellite Master Antenna
Television Systems $12.5 Million in Annual
Receipts or Less
24 GHz - Incumbent Licensees 1,500 Employees or Fewer
24 GHz - Future Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Miscellaneous
On-Line Information Services $18 Million in Annual Receipts
or Less
Radio and Television
Broadcasting and Wireless
Communications Equipment 750 Employees or Fewer
Manufacturers
Audio and Video Equipment
Manufacturers
Telephone Apparatus
Manufacturers (Except 1,000 Employees or Fewer
Cellular)
Medical Implant Device 500 Employees or Fewer
Manufacturers
Hospitals $29 Million in Annual Receipts
or Less
Nursing Homes $11.5 Million in Annual
Receipts or Less
Hotels and Motels $6 Million in Annual Receipts
or Less
Tower Owners (See Lessee's Type of Business)
STATEMENT OF CHAIRMAN MICHAEL POWELL
Re: In the Matter of Qwest Corporation Apparent Liability
for Forfeiture
Today we release a Notice of Apparent Liability for
Forfeiture against Qwest, containing the largest proposed
forfeiture in the Commission's history. We propose a
forfeiture of this size, $9 million, due to Qwest's apparent
non-compliance with the pro-competitive requirements of
section 252 of the Communications Act and Commission orders.
I would like to emphasize that our action complements
state enforcement actions in Minnesota and Arizona. This
action sends a clear message, along with the complementary
state actions, that violations of the key pro-competitive
provisions of the Act will not be tolerated.
_________________________
1 Qwest Corporation, an incumbent local exchange carrier
(``LEC'') that provides local telephone service in 14
midwestern and western states, was formerly US West, Inc.
(one of the original Regional Bell Operating Companies).
See Qwest Communications International Inc. and US 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, CC Docket 99-272, Memorandum Opinion and Order, 15
FCC Rcd 5376 (2000); Memorandum Opinion and Order, 15 FCC
Rcd 11909 (2000). References to Qwest include its
predecessor, US West, Inc.
2 47 U.S.C. § 252(a)(1).
3 As discussed below, these agreements were executed
several years earlier, but not filed with the state
commissions pursuant to section 252(a)(1) of the Act until
mid-2003. See infra nn.81 & 83.
4 In the 1996 amendments to the Act, Congress required Bell
Operating Companies (``BOCs'') to demonstrate compliance
with certain market-opening requirements in section 271 of
the Act before providing in-region, interLATA service. See
47 U.S.C. § 271(d)(2)(A), (B). On June 13, 2002, Qwest
Communications International Inc. filed section 271 multi-
state applications for authorization to provide in-region,
interLATA service in Colorado, Idaho, Iowa, Nebraska, and
North Dakota (``Qwest I''); and on July 12, 2002, for
Montana, Utah, Washington, and Wyoming (``Qwest II''). Many
of the ex parte letters and other documents cited in this
NAL were filed in one or both of those dockets. At times,
herein, Qwest Communications International Inc. and Qwest
Communications Corporation are referred to as ``Qwest.''
5 See infra para. 17 & n.61.
6 Qwest Memo at 12. The Qwest Memo was part of Qwest's
response to the Bureau's letter of inquiry. See infra n.21.
7 Qwest Memo at 13.
8 See Application by SBC Communications Inc., Michigan Bell
Telephone Company, and Southwestern Bell Communications
Services, Inc. for Authorization to Provide In-Region,
InterLATA Services in Michigan, WC Docket No. 03-138,
Memorandum Opinion and Order, 18 FCC Rcd 19024, 19123, ¶ 180
(2003) (``SBC Michigan 271 Order''). In the SBC Michigan
271 Order, we said that incumbent LECs had adequate notice
of their legal obligations under section 252(a) and that we
would consider appropriate enforcement action when carriers
fail to meet these obligations. Id.
9 47 U.S.C. § 252(a)(1).
10 47 U.S.C. § 252(e).
11 Implementation of the Local Competition Provisions in
the Telecommunications Act of 1996, First Report and Order,
11 FCC Rcd 15499, 15583, ¶ 167 (1996) (subsequent history
omitted, emphasis in original) (``Local Competition
Order'').
12 47 U.S.C. § 252(i). See also 47 C.F.R. § 51.809(a).
One of the key purposes of the section 252(a) filing
requirement is that carriers will know which interconnection
agreements (and terms) are available under section 252(i).
13 See Findings of Fact, Conclusions, Recommendation and
Memorandum, Minn. Docket No. P-421/C-02-197 at 10 (Sept. 20,
2002).
14 Id.
15 For a summary of the state investigations into unfiled
agreements in the first nine application states, see
Application by Qwest Communications International, Inc. for
Authorization to Provide In-Region, InterLATA Services in
the States of Colorado, Idaho, Iowa, Montana, Nebraska,
North Dakota, Utah, Washington and Wyoming, WC Docket No.
02-314, Memorandum Opinion and Order, 17 FCC Rcd 26303,
26559-66, ¶¶ 460-471 (2002) (``Qwest 9-State 271 Order'').
For a summary of the state investigations into unfiled
agreements in New Mexico, Oregon, and South Dakota, see
Application by Qwest Communications International, Inc. for
Authorization to Provide In-Region, InterLATA Services in
New Mexico, Oregon and South Dakota, WC Docket No. 03-11,
Memorandum Opinion and Order, 18 FCC Rcd 7325, 7397-400, ¶¶
127-131 (2003) (``Qwest 3-State 271 Order'').
More recently, the Washington Utilities and Transportation
Commission (``Washington Commission'') initiated an
enforcement proceeding against Qwest and thirteen CLECs,
alleging, inter alia, that Qwest and the other carriers had
not filed all their interconnection agreements for state
review; that Qwest had given certain carriers an undue or
unreasonable preference; that Qwest had discriminated
against carriers; and that carriers had agreed not to oppose
Qwest positions in various proceedings. See Washington
Utilities and Transportation Commission, v. Advanced Telecom
Group, Inc., et al., Complaint and Notice of Prehearing
Conference (Sept. 8, 2003), Docket No. UT-033011, filed Aug.
13, 2003. The Washington Commission also issued an order
regarding section 252(e)(1) filing requirements. See
Washington Utilities and Transportation Commission, v.
Advanced Telecom Group, Inc., et al., Order Granting
Commission Staff's Motion for Partial Summary Determination;
Granting in Part and Denying in Part the Motions to Dismiss
and for Summary Determination of Qwest, ATG, AT&T/TCG,
Eschelon, Fairpoint, Global Crossing, Integra, MCI,
McLeodUSA, SBC, and XO (Feb. 12, 2004). In addition, the
staff of the Colorado Public Utilities Commission submitted
initial comments in Docket No. 02I-572T, ``In the Matter of
the Investigation into Unfiled Agreements Executed by Qwest
Corporation,'' (Feb. 27, 2004), recommending, inter alia,
that the Colorado Commission conduct a hearing on Qwest's
willful and intentional violations of state and federal law.
16 Qwest Communications International Inc. Petition for
Declaratory Ruling on the Scope of the Duty to File and
Obtain Prior Approval of Negotiated Contractual Arrangements
under Section 252(a)(1), WC Docket No. 02-89 (filed Apr. 23,
2002) (``Qwest Petition'').
17 Qwest Petition at 6.
18 See Letter from Peter A. Rohrbach, Mace J. Rosenstein,
Yaron Dori, Attorneys for Qwest, to Marlene H. Dortch,
Secretary, Federal Communications Commission, WC Docket No.
02-148 (filed Aug. 13, 2002) (including letters to the
commissions of Colorado, Idaho, Iowa, Nebraska, and North
Dakota ? the Qwest I application states ? and the Larry
Brotherson Qwest I Reply Declaration (``Brotherson
Declaration'')). Qwest's letters to the state commissions
provided that: (1) Qwest would file all agreements with
CLECs that create obligations to meet the
requirements of section 251(b) or (c) on a going forward
basis and (2) Qwest was forming a committee to review such
agreements with CLECs and make the necessary filings. See
Documents Q-PUB-000449 through Q-PUB-000477. The Commission
sought comment on Qwest's proposal. See ``Comments
Requested in Connection with Qwest's Section 271 Application
for Colorado, Idaho, Iowa, Nebraska, and North Dakota,''
Public Notice, 17 FCC Rcd 16234 (2002).
19 Brotherson Declaration at ¶ 7; Letter from Melissa E.
Newman, Vice President - Federal Regulatory, Qwest, to
Marlene H. Dortch, Secretary, Federal Communications
Commission, WC Dockets 02-148 and 02-189, at 2 (filed Aug.
20, 2002) (``Qwest August 20 Letter'').
20 Brotherson Declaration at ¶ 9.
21 These drafts of the minutes were provided to the
Commission in response to a letter of inquiry from the
Enforcement Bureau. See Letter from William H. Davenport,
Deputy Division Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, to
Sharon J. Devine, Qwest Communications International, Inc.,
dated June 26, 2003 (``LOI''). The LOI response contained a
letter from Sharon J. Devine, Qwest Communications
International, Inc. to William H. Davenport, Deputy Division
Chief, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, dated July 31,
2003 (``Qwest July 31 Letter''); a Confidentiality Request,
seeking confidential treatment of the LOI response; a
memorandum (``Qwest Memo''); declarations from R. Steven
Davis, Todd Lundy, Dan Hult, and Larry Christensen; a
lengthy privilege log; and three boxes of documents. The
declarations were all properly notarized, with the exception
of the Christensen declaration which was signed by the
declarant two days after the notarization. Qwest's request
for confidential treatment was denied by the Enforcement
Bureau. See Qwest Communications International, Inc., DA
03-3521 (Enf. Bur. rel. Nov. 4, 2003). Subsequently, Qwest
narrowed the range of documents for which it claimed
confidential treatment; the documents cited herein are no
longer deemed confidential by Qwest. See Qwest
Communications International, Inc. File No. EB-03-IH-0500,
Application for Review in Part (filed Nov. 12, 2003).
22 Qwest apparently recognizes this inconsistency. In
Qwest's response to the Bureau's LOI, Declarant Todd Lundy
states: ``it is Qwest's understanding that agreements
relating to operator services and directory assistance do
not have to be filed.'' Lundy Declaration at 14.
Nevertheless, Lundy continues, the ``Wholesale Contract
Review Committee out of an abundance of caution has directed
the filing of these types of operator services and directory
assistance agreements executed since the committee's
formation in June of 2002.'' Id. See also Qwest Wholesale
Agreement Review Committee Settlement Tracking Sheet, which
provides that agreements for directory assistance list
information should be filed. Documents Q-CONF-000933,
000936, 000939, 000942, 000948, 000954, 000960, 000966.
Several of the unfiled Arizona agreements were for directory
assistance.
23 Document Q-CONF-003506.
24 Id.
25 Document Q-CONF-000909.
26 Document Q-CONF-004082.
27 On September 10, 2002, Qwest withdrew its Qwest I and
Qwest II pending section 271 applications. Ten days later,
Qwest filed a single application with the Commission for
authorization to provide in-region, interLATA service in all
of the nine states covered in the previous section 271
applications. The Commission granted Qwest's nine-state 271
application on December 23, 2002. See Qwest 9-State 271
Order, 17 FCC Rcd 26303.
28 Qwest August 20 Letter at 2. See supra n.18
(describing the letters).
29 Qwest August 20 Letter at 2.
30 Id. at 1-4. Qwest stated that it would file agreements
with CLECs for approval by state commissions in the Qwest II
states to supplement the plan announced in its reply
comments in the Qwest I proceeding, WC Docket No. 02-148.
Id. at 1.
31 Documents Q-CONF-002147 through Q-CONF-002149.
32 Document Q-CONF-002148.
33 Id. An SGAT contains interconnection terms and
conditions available to CLECs operating in that state. See
47 U.S.C. § 252(f)(1). The submission or approval of an
SGAT does not relieve a BOC of its duty to negotiate the
terms and conditions of an agreement under section 251. 47
U.S.C. § 252(f)(5).
34 Qwest Communications International Inc. Petition for
Declaratory Ruling on the Scope of the Duty to File and
Obtain Prior Approval of Negotiated Contractual Arrangements
under Section 252(a)(1), WC Docket No. 02-89, Memorandum
Opinion and Order, 17 FCC Rcd 19337 (2002) (``Declaratory
Ruling'').
35 Qwest Petition at 6.
36 Declaratory Ruling, 17 FCC Rcd at 19340-41, ¶ 8.
37 Id. (emphasis omitted).
38 See Order Adopting ALJ's Report and Establishing
Comment Period Regarding Remedies, Minn. Docket No. P-421/C-
02-197 (Nov. 1, 2002). Among other things, the ALJ found
five different public interest implications arising from the
unfiled agreements: (1) Qwest's attempt to subvert the
``pick and choose'' provisions of the Act; (2) Qwest's
attempt to prohibit CLECs from participating in section 271
proceedings; (3) Qwest's attempt to prohibit CLECs from
participating in the Qwest/US West merger proceeding; (4)
Qwest's attempt to prevent disclosure of negative
performance information in the section 271 proceeding; and
(5) Qwest's attempt to have a CLEC become an advocate for
Qwest in various proceedings, at Qwest's request. See
Findings of Fact, Conclusions, Recommendation and
Memorandum, Minn. Docket No. P-421/C-02-197 (Sept. 20, 2002)
at 48.
39 On February 28, 2003, the Minnesota Commission issued
an Order Assessing Penalties, Minnesota Docket No. P-421/C-
02-197 (Feb. 28, 2003). After considering petitions for
reconsideration, the Minnesota Commission issued, on its own
motion, modifications to the February 28, 2003 Penalties
Order. See Order after Reconsideration on Own Motion, Minn.
Docket No. P-421/C-02-197 (Apr. 30, 2003).
40 See Qwest Corporation v. Minnesota Public Utilities
Commission, et at., Complaint for Declaratory Judgment and
Injunctive Relief to Prevent Enforcement of Public Utilities
Commission Orders, Civ. File No. 03-3476, D. MN. (filed June
19, 2003).
41 See Qwest 9-State 271 Order, 17 FCC Rcd 26303.
42 See id. at 26553-77, ¶¶ 453-486.
43 Letter from Melissa E. Newman, Vice President - Federal
Regulatory, Qwest, to Marlene H. Dortch, Secretary, Federal
Communications Commission, WC Docket No. 02-314, at 1 (filed
Dec. 13, 2002) (``Qwest December 13 Letter'').
44 Calling Name Delivery (``CNAM'') allows a subscriber to
receive the calling party name information and date and time
of the call on a specialized display device before the call
is answered. The calling party name is retrieved from a
database accessible by the terminating central office
switch, using non-call-associated signaling. See Telcordia
Notes on the Networks, Network Architecture and Services,
SR-2275, Issue 4, § 14.3 ``CLASS Features'' (Oct. 2000).
45 See Qwest 9-State 271 Order, 17 FCC Rcd at 26571-72, ¶
478 n.1746. In the nine-state proceeding, AT&T alleged that
twelve unfiled agreements should have been filed under
section 252. Id. After reviewing the agreements, we
concluded that all but the ICNAM agreement had been filed,
terminated, superseded, or were not related to the duties
imposed under section 251 of the Act. Id.
46 Id. The Declaratory Ruling does not create such an
exception, but provides that any ``agreement that creates an
ongoing obligation pertaining to resale, number portability,
dialing parity, access to rights-of-way, reciprocal
compensation, interconnection, unbundled network elements,
or collocation is an interconnection agreement that must be
filed pursuant to section 252(a)(1).'' Declaratory Ruling,
17 FCC Rcd at 19340-41, ¶ 8 (emphasis omitted).
47 See Qwest 9-State 271 Order, 17 FCC Rcd at 26571-72, ¶
478 n.1746. This was also reiterated in the Qwest 3-State
271 Order, 18 FCC Rcd at 7397, ¶ 126.
48 Qwest 9-State 271 Order, 17 FCC Rcd at 26571-72, ¶ 478
n.1746.
49 These three agreements were approved by the New Mexico
Commission, as were four of the five agreements filed by
Qwest on September 9, 2002. See Qwest 3-State 271 Order, 18
FCC Rcd at 7398-99, ¶ 129.
50 The Oregon Commission approved the three agreements
filed on January 9, 2003, as well as sixteen agreements
filed on September 4, 2002. See id., 18 FCC Rcd at 7399, ¶
130.
51 The South Dakota Commission approved the eight
agreements filed on January 13, 2003, as well as the four
agreements filed on September 24, 2002. See id., 18 FCC Rcd
at 7399-400, ¶ 131.
52 The three-state application wa
53 Letter from Melissa E. Newman, Vice President ? Federal
Regulatory, Qwest, to Marlene H. Dortch, Secretary, Federal
Communications Commission, WC Docket No. 03-90, at 1 (filed
May 23, 2003) (including a summary of the agreements).
54 The Minnesota 271 application was granted on June 26,
2003. See Application by Qwest Communications International
Inc. for Authorization to Provide In-Region, InterLATA
Services in Minnesota, WC Docket No. 03-90, Memorandum
Opinion and Order, 18 FCC Rcd 13323 (2003) (``Qwest
Minnesota 271 Order''). We note that the Minnesota
commissioners did not reach a consensus on whether the
Commission should approve Qwest's application. The Chair
recommended approval; however, the remaining three voting
commissioners recommended denial. See Minnesota Comments in
WC Docket No. 03-90 at 18.
55 On June 12, 2003, the Minnesota Commission approved
thirteen of the agreements and approved in part and rejected
in part the other 21 previously unfiled agreements. See
Letter from Melissa E. Newman, Vice President - Federal
Regulatory, Qwest to Marlene H. Dortch, Secretary, Federal
Communications Commission, WC Docket No. 03-90 (filed June
20, 2003).
56 Qwest and the Arizona Commission staff proposed to
settle the Arizona investigation. Under the terms of the
consent decree, which also included other matters, Qwest
agreed to make a total of more than $20 million in payments
and CLEC credits. We note that this consent decree remains
under review by the Arizona Commission. We further note
that the reviewing ALJ recommended denial because the
settlement was too lenient. See In re Qwest Corporation's
Compliance with Section 252(e) of the Telecommunications Act
of 1996, Arizona Corporation Commission Docket No. RT-
00000F-02-0271; In re US West Communications, Inc.'s
Compliance with Section 271 of the Communications Act of
1996, Arizona Corporation Commission Docket No. T-00000A-97-
0238; Arizona Corporation Commission v. Qwest Corporation,
Arizona Corporation Commission Docket No. T01051B-02-0871,
Opinion and Order (filed Dec. 2, 2003).
57 See, e.g., Letter from Timothy Berg, Fennemore Craig
Law Offices, to Docket Control, Arizona Corporation
Commission, filed May 23, 2003 (Document Q-PUB-000436).
58 We note that the Arizona Commission did not reach a
unanimous conclusion on whether we should approve Qwest's
271 application; Qwest's application was found to be in the
public interest by a vote of three to two. See Evaluation
of the Arizona Corporation Commission in WC Docket No. 03-
194 at 23.
59 Qwest Minnesota 271 Order, 18 FCC Rcd at 13371, ¶ 93
(citations omitted).
60 See supra n.21.
61 See Lundy Declaration at 15-20. These agreements are
listed in Appendix A.
62 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); see
also 47 U.S.C. § 503(b)(1)(D) (forfeitures for violation of
14 U.S.C. § 1464). Section 312(f)(1) of the Act defines
willful as ``the conscious and deliberate commission or
omission of [any] act, irrespective of any intent to
violate'' the law. 47 U.S.C. § 312(f)(1). The legislative
history to section 312(f)(1) of the Act indicates that this
definition of willful applies to both sections 312 and
503(b) of the Act, H.R. Rep. No. 97-765, 97th Cong. 2d Sess.
51 (1982), and the Commission has so interpreted the term in
the section 503(b) context. See, e.g., Application for
Review of Southern California Broadcasting Co., Memorandum
Opinion and Order, 6 FCC Rcd 4387, 4388 (1991) (``Southern
California Broadcasting''). The Commission may also assess
a forfeiture for violations that are merely repeated, and
not willful. See, e.g., Callais Cablevision, Inc., Grand
Isle, Louisiana, Notice of Apparent Liability for Monetary
Forfeiture, 16 FCC Rcd 1359 (2001) (``Callais Cablevision'')
(issuing a Notice of Apparent Liability for, inter alia, a
cable television operator's repeated signal leakage).
``Repeated'' means that the act was committed or omitted
more than once, or lasts more than one day. Southern
California Broadcasting, 6 FCC Rcd at 4388, ¶ 5; Callais
Cablevision., 16 FCC Rcd at 1362, ¶ 9.
63 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
64 See, e.g., SBC Communications, Inc., Apparent Liability
for Forfeiture, Forfeiture Order, 17 FCC Rcd 7589, 7591, ¶ 4
(2002).
65 47 U.S.C. § 252(a)(1). In addition, section 252(e)(1)
of the Act states:
Any interconnection agreement adopted by
negotiation or arbitration shall be submitted for
approval to the State commission. A State
commission to which an agreement is submitted
shall approve or reject the agreement, with
written findings as to any deficiencies.
47 U.S.C. § 252(e)(1).
66 47 U.S.C. § 252(i). See also section 51.809(a) of the
Commission's rules, 47 C.F.R. § 51.809(a), which provides:
An incumbent LEC shall make available without
unreasonable delay to any requesting telecommunications
carrier any individual interconnection, service, or
network element arrangement contained in any agreement
to which it is a party that is approved by a state
commission pursuant to section 252 of the Act, upon the
same rates, terms, and conditions as those provided in
the agreement. An incumbent LEC may not limit the
availability of any individual interconnection,
service, or network element only to those requesting
carriers serving a comparable class of subscribers or
providing the same service (i.e., local, access, or
interexchange) as the original party to the agreement.
47 C.F.R. § 51.809(a).
67 Local Competition Order, 11 FCC Rcd at 16141, ¶ 1321.
68 Id. at 15583-84, ¶ 167 (emphasis in original).
69 Id. at 16137-42, ¶¶ 1309-23.
70 Declaratory Ruling, 17 FCC Rcd at 19340-41, ¶ 8
(emphasis omitted). The sentence quoted in the text is a
summary of the interconnection obligations listed in section
251 of the Act. 47 U.S.C. § 251. With respect to directory
assistance, listed under ``dialing parity'' in section
251(b)(3), we concluded earlier that LECs must provide
nondiscriminatory access to local directory assistance
databases at nondiscriminatory and reasonable rates. See
Provision of Directory Listing Information under the
Telecommunications Act of 1934, as amended, First Report and
Order, 16 FCC Rcd 2736, 2752, ¶ 35 (2001). We also stated
that ``[c]arriers have an obligation to provide
nondiscriminatory access to that data, and that, to carry
out that obligation, section 252 creates a mechanism for
public disclosure of the rates, terms, and conditions
contained in interconnection agreements. Carriers and
competitive [directory assistance] providers should then be
able to opt into those rates and terms. Thus, in order to
make this nondiscrimination requirement meaningful, we would
expect carriers to comply with section 252 and make rates,
terms, and conditions data available to requesting parties
in a timely manner.'' Id. at 2752, ¶ 36.
71 Declaratory Ruling, 17 FCC Rcd at 19340-41, ¶ 8.
72 Id. at 19341, ¶ 9.
73 Id. at 19342-43, ¶ 12.
74 Id. at 19343, ¶ 13.
75 Id. at 19343, ¶ 14. In addition, we recently held that
to the extent that the Declaratory Ruling requires an
agreement pertaining solely to wireline-to-wireless porting
to be filed as an interconnection agreement with a state
commission pursuant to sections 251 and 252 of the Act, we
forbear from those requirements. See Telephone Number
Portability, CTIA Petitions for Declaratory Ruling on
Wireline-Wireless Porting Issues, CC Docket No. 95-116,
Memorandum Opinion and Order and Further Notice of Proposed
Rulemaking, 18 FCC Rcd 23697, 23711-12, ¶¶ 35-37 (2003).
76 Qwest 9-State 271 Order, 17 FCC Rcd at 26571-72, ¶ 478
n.1746.
77 Id.
78 See Qwest 3-State 271 Order, 18 FCC Rcd at 7397, ¶ 126.
79 In addition, Qwest filed 53 unfiled agreements after
receipt of the LOI. See supra n.61.
80 On September 4, 2003, Qwest filed an application for
authorization to provide in-region, interLATA service in the
state of Arizona.
81 The Minnesota agreements filed on March 25 and 26,
2003, consist of the following: June 9, 2000 ICNAM
agreement with Allegiance; December 27, 2001 Facility
Decommissioning Reimbursement agreement with AT&T; December
22, 1999 agreement for CMDS hosting and message distribution
for co-providers (in-region with operator services) with
Cady & addendum to agreement for CMDS hosting and message
distribution for co-providers with Cady; November 15, 2001
Facility Decommissioning Reimbursement agreement with DSLnet
Communications; March 1, 2002 settlement agreement with
Eschelon; July 13, 2001 billing settlement agreement with
Global Crossing; October 3, 2001 Facility Decommissioning
Reimbursement agreement with Hickory Tech; January 15, 2000
Transient Interim Signaling Capability Service Agreement
with IdeaOne; August 6, 1999 LIDB storage agreement with
InfoTel; July 9, 1999 ICNAM agreement with InfoTel;
September 29, 2000 ICNAM agreement with MainStreet; May 1,
2000 settlement agreement with McLeod; April 28, 2000
billing settlement agreement with McLeod; October 26, 2000
confidential agreement with McLeod; June 29, 2001 business
escalation agreement with MCI; June 29, 2001 billing
settlement agreement with MCI; December 27, 2001 Facility
Decommissioning Reimbursement agreement with MCI; October
13, 1999 8XX Database Query Service agreement with MediaOne;
October 13, 1999 ICNAM agreement with MediaOne; October 13,
1999 LIDB storage agreement with MediaOne; November 5, 1997
ICNAM agreement with OCI; October 22, 1997 agreement for
CMDS hosting and in-region message distribution for
alternately billed messages for co-providers (with operator
services) with OCI & addendum; October 22, 1997 Physical
Collocation Agreement with OCI; January 8, 2001 Transit
Record Exchange Agreement to Co-Carriers (Wireline-Transit
Qwest-CLEC) with Otter Tail; January 8, 2001 Transit Record
Exchange Agreement to Co-Carriers (WSP-Transit Qwest-CLEC)
with Otter Tail; June 1, 2000 settlement with SBC; October
5, 2001 Facility Decommissioning Reimbursement agreement
with SBC; April 18, 2000 confidential stipulation for Toll
Services and OSS with Small Minnesota CLECs; July 14, 1999
letter with US Link/InfoTel re/ extended area service;
November 14, 2000 ICNAM agreement with Val-ed Joint Venture;
January 18, 2000 Transit Record Exchange Agreement to Co-
Carriers (WSP-Transit USW-CLEC) with Val-ed Joint Venture;
January 18, 2000 Transit Record Exchange Agreement to Co-
Carriers (Wireline-Transit USW-CLEC) with Val-ed Joint
Venture; December 31, 2001 billing settlement agreement with
XO. Documents Q-PUB-001087 through Q-PUB-001339.
82 See supra n.55.
83 The Arizona agreements consist of the following: March
23, 2000 ICNAM agreement with Allegiance; June 29, 2000
directory assistance agreement with Allegiance; July 12,
2001 Custom Local Area Signaling Services agreement with
Adelphia; July 14, 1999 directory assistance agreement with
Frontier; July 14, 1999 operator services agreement with
Frontier; March 14, 2001 operator services agreement with
Ionex; March 14, 2001 directory assistance agreement with
Ionex; April 20, 2001 LIDB storage agreement with Adelphia;
October 4, 1999 operator services agreement with OnePoint;
October 4, 1999 directory assistance agreement with
OnePoint; December 16, 1998 Transient Interim Signaling
Capability Service Agreement with US West Wireless; and
February 26, 1999 operator services agreement with Winstar
Wireless. Documents Q-PUB-000318 through Q-PUB-000447.
84 See Application by Qwest Communications International
Inc. for Authorization to Provide In-Region, InterLATA
Services in Arizona, WC Docket No. 03-194, Memorandum
Opinion and Order, 18 FCC Rcd 25504, 25534, ¶ 55 n.205
(2003); Qwest Memo at 13. See also Qwest Application, WC
Docket No. 03-194, at 124 (explaining that these agreements
``have been approved by the Arizona Commission by operation
of law.'')
85 See Lundy Declaration at 6-11, listing the states in
which the terms of 32 of the Minnesota unfiled agreements
were also available.
86 See, e.g., Qwest ``Training Outline for CLEC
Agreements.'' Documents Q-CONF-002147 through Q-CONF-
002149.
87 See Qwest 9-State 271 Order, 17 FCC Rcd at 26571-72, ¶
478 n.1746; Qwest 3-State 271 Order, 18 FCC Rcd at 7397, ¶
126.
88 Qwest August 20 Letter at 2.
89 Qwest August 20 Letter. In Iowa, Qwest filed its
previously unfiled agreements on July 29, 2002, pursuant to
an order from the Iowa Board. The Colorado Commission
reviewed sixteen agreements, found that all sixteen met the
definition of interconnection agreements, and approved two
of the sixteen agreements, and rejected twelve due to
provisions that ``violate the public policy'' and two as
incomplete. See Qwest 9-State 271 Order, 17 FCC Rcd at
26559-60, ¶ 461. The Idaho Commission approved all seven
agreements. See id. at 26560-61, ¶ 463. The Iowa Board
concluded, in its own investigation of Qwest's unfiled
agreements, that Qwest had violated section 252, as well as
a state rule, by failing to file the agreements with the
Board. See id. at 26561-62, ¶ 464-65. Pursuant to the Iowa
Board's order, Qwest filed fourteen agreements, which were
subsequently approved. Id. The Montana Commission approved
four agreements and denied three agreements. See id. at
26563, ¶ 466. The Nebraska Commission approved the ten
agreements that Qwest filed. See id. at 26563-64, ¶ 467.
North Dakota approved the three agreements Qwest filed. Id.
at 26564, ¶ 468. The Utah Commission approved the eleven
agreements Qwest filed, by operation of law. Id. at 26564,
¶ 469. The Washington Commission approved the sixteen
agreements Qwest filed. Id. at 26565, ¶ 470. The Wyoming
Commission approved the four agreements Qwest filed. Id. at
26566, ¶ 471.
90 These three agreements were approved by the New Mexico
Commission, as were four of the five agreements filed by
Qwest on September 9, 2002. See Qwest 3-State 271 Order, 18
FCC Rcd at 7398-99, ¶ 129.
91 The Oregon Commission approved the three agreements
filed on January 9, 2003, as well as sixteen agreements
filed on September 4, 2002. See id., 18 FCC Rcd at 7399, ¶
130.
92 The South Dakota Commission approved the eight
agreements filed on January 13, 2003, as well as the four
agreements filed on September 24, 2002. See id., 18 FCC Rcd
at 7399-400, ¶ 131.
93 We granted the three-state application on April 15,
2003.
94 Qwest July 31, 2003 Letter.
95 Declaratory Ruling, 17 FCC Rcd at 19343, ¶ 13. See,
e.g., Core Communications, Inc. v. Verizon Maryland, Inc.,
Memorandum Opinion and Order, 18 FCC Rcd 7962, 7971, ¶ 24
(2003) (explaining that Core accepted the terms of Verizon's
Maryland SGAT; Core and Verizon signed a schedule to the
SGAT entitled ``Request for Interconnection''; and,
therefore, the Maryland SGAT served as the parties'
interconnection agreement).
96 See Qwest December 13 Letter at 2 & Attachment 1, at 1
(attaching matrix of agreements with explanation as to why
Qwest did not file each agreement; stating with respect to
the Allegiance ICNAM agreement, ``[t]he FCC's Declaratory
Ruling held that order and contract forms `completed by
carriers to obtain service pursuant to terms and conditions
set forth in an interconnection agreement do not constitute
either an amendment to that interconnection agreement or a
new interconnection agreement that must be filed under
section 252(a)(1)' . . . . ''). Attachment 1, at 2 (quoting
Declaratory Ruling, 17 FCC Rcd at 19343, ¶ 13).
97 Qwest 9-State 271 Order, 17 FCC Rcd at 26571-73, ¶ 478
n.1746.
98 See, e.g., Qwest Memo at n.30 (explaining that the
``form'' contract for CMDS had changed in June 2003). We
also note that a carrier's SGAT may change.
99 Document Q-CONF-002148.
100 Qwest July 31, 2003 Letter at 2-3.
101 Declaratory Ruling, 17 FCC Rcd at 19341, ¶ 9.
102 See 47 U.S.C. § 252(f).
103 Qwest Memo at 4.
104 Qwest Memo at 10.
105 Qwest Memo at 10 (citing Declaratory Ruling, 17 FCC Rcd
at 19341-42, ¶ 10).
106 Declaratory Ruling,17 FCC Rcd at 19341-42, ¶ 10.
107 We also note that in the Qwest August 20 Letter, in
which Qwest discussed filing the previously unfiled
agreements in Colorado, Idaho, Nebraska, and North Dakota,
Qwest asserted that the filings would be made to comply with
the requirements of section 252. Qwest August 20 Letter at
1-2.
108 Qwest Memo at 10.
109 See supra n.38.
110 See Findings of Fact, Conclusions, Recommendation and
Memorandum, Minn. Docket No. P-421/C-02-197 (Sept. 20, 2002)
at 52.
111 Qwest Memo at 12.
112 Qwest July 31, 2003 Letter at 2. We note that Qwest
provided these agreements to the Minnesota DOC, not the
Minnesota Commission per se. The Minnesota DOC is an
independent arm of the Minnesota Commission, charged with
representing ``the broad public interest in all
telecommunications matters before the [Minnesota
Commission].'' See Minnesota DOC website:
http://www.state.mn.us/cgi-
bin/portal/mn/jsp/content.do?subchannel=-
536881735&programid=536884839&sc3=null&sc2=null&id=-
536881351&agency=Commerce.
113 47 U.S.C. § 252(e)(1).
114 See, e.g., Application for Approval of the March 26,
2003 Amendment to the Interconnection Agreement between U.S.
Link, Inc. and Qwest Corporation (Originally Approved in
Docket No. P-465,421/M-97-1316); Incorporating the Ability
to Use Local Tandem Functionality to Transport Calls to and
from Extended Area Service (EAS) Calling Areas, Minnesota
Public Utilities Commission Docket No. P-465,421/IC-03-456
(Jun. 12, 2003).
115 Qwest Memo at 13.
116 Id.
117 See, e.g., Letter from Timothy Berg, Fennemore Craig
Law Offices, to Docket Control, Arizona Corporation
Commission, filed May 23, 2003 (Document Q-PUB-000436).
118 See Qwest December 13 Letter.
119 See, e.g., Southern California Broadcasting Co., 6 FCC
Rcd at 4388.
120 Southern California Broadcasting, 6 FCC Rcd at 4388, ¶
5; Callais Cablevision., 16 FCC Rcd at 1362, ¶ 9.
121 47 U.S.C. § 503(b)(2)(B); see also 47 C.F.R. §
1.80(b)(2); see also Amendment of Section 1.80(b) of the
Commission's Rules, Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, 15 FCC Rcd 18221 (2000).
122 47 U.S.C. § 503(b)(2)(B).
123 Qwest Memo at 4 (quoting Trinity Broadcasting Corp. v.
FCC, 211 F.3d 618, 628 (D.C. Cir. 2000)).
124 These obligations are, in brief: the duty to provide
resale, number portability, dialing parity, access to
rights-of-way; to establish reciprocal compensation; to
negotiate in good faith the section 251 duties; to provide
interconnection; to provide access to unbundled network
elements; and to provide collocation. See 47 U.S.C. §
251(b) & (c).
125 47 U.S.C. § 251(a), (e).
126 See Qwest 9-State 271 Order, 17 FCC Rcd at 26569, ¶ 475
(addressing the issue that an agreement is not an
``interconnection agreement'' until the state commission has
made that determination).
127 See, e.g., AT&T Corporation Apparent Liability for
Forfeiture, Notice of Apparent Liability for Forfeiture, 18
FCC Rcd 23398, 23402, ¶ 9 (2003) (explaining that AT&T did
not comply with the requirement that it place consumers'
names on the do-not-call list within a reasonable time; that
AT&T's own policy of placing customers' names on the list
within 30 days was the outer limit of reasonableness; and
that AT&T apparently did not even meet this standard).
128 See Qwest August 20 Letter at 2. The Qwest proposal is
summarized at Qwest 9-State 271 Order, 17 FCC Rcd 26555-56,
¶ 457. Qwest's May 2002 policy also involved filing
previously unfiled agreements for states that were subject
to section 271 applications. See id. at 26569, n.1738. The
fact that Qwest assured the Commission that it had filed or
was filing previously unfiled interconnection agreements in
application states does not justify its failure to file
previously unfiled interconnection agreements in other
states.
129 Id. at 26571-72, ¶ 478 n.1746.
130 See supra para. 14.
131 SBC Michigan 271 Order, 18 FCC Rcd at 19122-23, ¶ 180.
132 Id.
133 Order Adopting ALJ's Report and Establishing Comment
Period Regarding Remedies, Minnesota Docket No. P-421/C-02-
197, at 5 (Nov. 1, 2002).
134 Specifically, the proposed settlement agreement
contains an allegation that ``Qwest violated section 252(e)
of the Telecommunications Act by failing to file for
Commission review and approval certain agreements with
Competitive Local Exchange Carriers (``CLECs'') operating in
the state of Arizona'' and an allegation that ``Qwest
improperly entered into settlement agreements with CLECs
that resulted in nonparticipation by such CLECs in the
Commission docket evaluating Qwest's application under
Section 271 of the Telecommunications Act ....'' See July
25, 2003 Settlement Agreement between Qwest Corporation and
Arizona Corporation Commission. We note that this
settlement has not been approved by the Arizona Commission.
See supra n.56.
135 See SBC Communications, Inc. Apparent Liability for
Forfeiture, Forfeiture Order, 17 FCC Rcd 19923, 19935, ¶ 24
(2002) (assessing a significant penalty due to the potential
competitive impact of SBC's violations).
136 Qwest Memo at 12.
137 Qwest Memo at 13.
138 Our action today covers the twelve-month period prior
to the release data of this NAL.
139 See Verizon Telephone Companies, Inc. Apparent
Liability for Forfeiture, Notice of Apparent Liability for
Forfeiture, 18 FCC Rcd 18796, 18803, ¶ 17 (2003) (explaining
that we would not propose the maximum possible forfeiture
because that would result in an excessive amount under the
circumstances).
140 See Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087,
17099-100, ¶ 24 (1997); recon. denied, 15 FCC Rcd 303
(1999).
141 See ``Qwest Communications Reports Second Quarter 2003
Net Loss Per Share of $0.05; Financial Statements
Essentially Complete,'' Press Release, Sept. 3, 2003.
142 See 47 C.F.R. § 1.1914.