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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
North County Communications Corp.,
)
Complainant,
)
v. File No. EB-06-MD-007
)
MetroPCS California, LLC,
)
Defendant.
)
)
)
order on review
Adopted: November 19, 2009 Released: November 19, 2009
By the Commission:
I. introduction
1. In this Order on Review, we grant in part and otherwise deny the
Application for Review filed pursuant to rule 1.115 by North County
Communications Corp. ("North County") challenging one holding of the
Bureau Merits Order in this proceeding. We also deny the similar
Application for Review filed by MetroPCS California, LLC ("MetroPCS").
In short, according to the parties, the Bureau Merits Order erred by
holding that, before North County may seek to enforce whatever right
to compensation it may have here at the Commission under rule 20.11,
North County must first obtain from the California Public Utilities
Commission ("California PUC") a determination of a reasonable rate for
North County's termination of intrastate, intraMTA traffic originated
by MetroPCS. For the reasons explained below, we affirm the finding in
the Bureau Merits Order that under the current rules as interpreted by
Commission precedent, the California PUC is the more appropriate forum
for determining a reasonable rate for North County's termination of
intrastate, intraMTA traffic originated by MetroPCS, and that North
County should seek to obtain such a determination from the California
PUC before seeking to enforce whatever right to compensation it may
have here at the Commission under rule 20.11. Rather than dismiss
North County's claim without prejudice (as the Bureau Merits Order
did), however, we will hold the claim in abeyance (in the form of an
informal complaint) pending the California PUC's determination of a
reasonable termination rate to avoid any prejudice to North County's
alleged claim for compensation.
II. background
2. The parties do not challenge the factual findings of the Bureau Merits
Order (with one exception discussed below). Therefore, we incorporate
those findings by reference. We provide a summary of those findings
below before addressing the parties' legal arguments on review.
3. North County is a licensed competitive local exchange carrier ("CLEC")
that provides switched and non-switched local exchange, exchange
access, and other telecommunications services in California. Most, if
not all, of North County's end user customers are either chat-line
providers or telemarketers.
4. MetroPCS is a Commercial Mobile Radio Service ("CMRS") carrier that
provides wireless communications services in California. MetroPCS is
indirectly interconnected with North County in California through the
switching facilities of other local exchange carriers ("LECs").
MetroPCS does not have a written interconnection agreement with North
County.
5. The traffic exchanged between North County and MetroPCS is
jurisdictionally intraMTA and intrastate (hereinafter "intrastate"
traffic). Moreover, all of the traffic exchanged between the parties
is in-bound to North County from MetroPCS. That is because North
County's chat line provider customers generate no outbound calls, and,
according to North County, legal restrictions preclude its
telemarketer customers from calling wireless phones.
6. Despite the absence of a written interconnection agreement with
MetroPCS, North County began billing MetroPCS for the termination of
intrastate traffic sometime in 2003. MetroPCS has not paid North
County any amount of money for the traffic terminated by North County.
In MetroPCS' view, a default "bill-and-keep" arrangement exists,
whereby neither party pays the other for traffic termination. Between
August 2005 and approximately June 2006, North County and MetroPCS
attempted to negotiate a written interconnection agreement, without
success.
7. Upon reaching an impasse in its negotiations with MetroPCS regarding a
written interconnection agreement, North County filed a formal
complaint against MetroPCS pursuant to section 208 of the
Communications Act of 1934, as amended (the "Act"). Count I of the
Complaint alleged that MetroPCS is violating rule 20.11(b) by failing
to pay North County for terminating traffic originated on MetroPCS'
network. Count II of the Complaint alleged that MetroPCS is violating
section 251(b)(5) of the Act and rule 51.301 by failing to negotiate
and execute a written interconnection agreement with North County in
good faith. Counts III and V of the Complaint alleged that MetroPCS is
violating sections 201(b) and 202(a) of the Act, respectively, by
refusing to enter into a written interconnection agreement with North
County. Count IV of the Complaint alleged that MetroPCS is violating
rule 51.715 by refusing to enter into an interim interconnection
agreement with North County.
8. Based upon thorough and well-reasoned analyses, the Bureau Merits
Order denied Counts II, III, IV, and V of the Complaint. Neither the
North County AFR nor the MetroPCS AFR challenges those denials.
Therefore, those denials are final, and we do not address them here.
The only challenged portion of the Bureau Merits Order concerns the
dismissal without prejudice of Count I, which we discuss below.
III. Discussion
9. Rule 20.11(b) provides, in pertinent part, that "[a] commercial mobile
radio service provider shall pay reasonable compensation to a local
exchange carrier in connection with terminating traffic that
originates on the facilities of the commercial mobile radio service
provider." As stated above, Count I of the Complaint alleged that
MetroPCS is violating rule 20.11(b) by failing to pay reasonable
compensation for North County's termination of intrastate traffic
originated by MetroPCS. The Complaint asked the Commission to issue an
order (i) prescribing a rate (under section 205 of the Act) for
terminating intrastate traffic between the parties at or above the
rate billed by North County to MetroPCS, and (ii) awarding North
County past due amounts consistent with the Commission's prescribed
intrastate termination rate, plus reasonable interest.
10. The Bureau Merits Order declined to determine what constitutes
"reasonable compensation" in this case and thus declined to prescribe
a rate or award damages. In doing so, the Bureau Merits Order relied
on the Commission's repeated holdings that (i) states have authority
to establish rates charged by LECs for termination of intrastate
traffic from CMRS providers, and (ii) the Commission has not preempted
such state authority. Thus, according to the Bureau Merits Order, the
more appropriate venue for determining what rate will result in
"reasonable compensation" for North County's termination of intrastate
traffic originated by MetroPCS is not this Commission, but rather the
California PUC, via whatever procedural mechanism it deems appropriate
under state law (e.g., complaint proceeding, declaratory ruling
proceeding, generic cost or rulemaking proceeding). In turn, unless
and until what constitutes reasonable compensation for North County's
termination of intrastate traffic originated by MetroPCS is
determined, the Commission cannot determine whether or to what extent
MetroPCS has violated its duty under rule 20.11(b)(2) to pay such
compensation. Accordingly, the Bureau Merits Order dismissed without
prejudice Count I of the Complaint, and stated that, if after the
California PUC prescribes a reasonable termination rate North County
believes MetroPCS has failed to pay what is owed pursuant to that rate
under rule 20.11(b)(2), North County may then seek resolution of such
dispute.
11. North County asks us to either (i) reverse the Bureau Merits Order in
its entirety, prescribe a reasonable compensation rate under section
205 of the Act, and award damages based on that rate; or (ii) reverse
the Bureau Merits Order as applied to the period prior to April 29,
2005, award damages for that period based on the rates then contained
in North County's California tariff, and hold Count I in abeyance,
rather than dismiss it, pending a determination by the California PUC
of a reasonable compensation rate for the post-April 29, 2005 period;
or (iii) hold Count I in abeyance, rather than dismiss it, pending a
determination by the California PUC of a reasonable compensation rate
for the whole period at issue. MetroPCS asks us to either (i) reverse
the Bureau Merits Order and remand Count I to the Enforcement Bureau
with instructions to prescribe a reasonable compensation rate and
award damages (if any) based on that rate, or (ii) provide guidance to
the California PUC about how to determine a reasonable compensation
rate.
12. We have carefully examined the record before the Enforcement Bureau,
the Bureau Merits Order, and the record on review. In our view, for
the reasons set forth in the Bureau Merits Order itself, the Bureau
Merits Order was correct to conclude that the California PUC is the
more appropriate forum for determining the reasonable compensation
rate for North County's termination of intrastate, intraMTA traffic
originated by MetroPCS. In addition, the parties' arguments on review
regarding the forum issue largely mirror those they already made
before the Bureau. Therefore, we deny the parties' Applications for
Review regarding the forum issue primarily by affirming and
incorporating by reference the reasoning and holdings of the Bureau
Merits Order. Only a few of the parties' positions on the forum issue
warrant further discussion, which we provide below.
13. Most of the parties' arguments on review (that warrant express
discussion here) rest on one fundamental proposition: the Bureau
Merits Order allegedly misinterpreted the Commission's holdings and
purposes in the T-Mobile Declaratory Ruling. In the T-Mobile
Declaratory Ruling, the Commission established, inter alia, that after
the effective date of that order, (i) LECs could not impose
compensation obligations for non-access CMRS traffic pursuant to
tariff, and (ii) an incumbent LEC could request interconnection from a
CMRS carrier and invoke the negotiation and arbitration procedures set
forth in section 252 of the Act. According to North County and
MetroPCS, those two holdings, read together, mean that the Commission
intended to reserve for itself, and exclude the states from, the task
of establishing rates for a CLEC's termination of CMRS traffic. Thus,
in the parties' view, the Bureau Merits Order conflicts with the
Commission's T-Mobile Declaratory Ruling by allowing a state (the
California PUC) to establish rates for North County's (a CLEC's)
termination of MetroPCS traffic (CMRS traffic).
14. We disagree with the parties. As the Bureau Merits Order aptly
observes, the T-Mobile Declaratory Ruling expressly acknowledges the
Commission's many prior orders declining to preempt state regulation
of intrastate rates that LECs charge CMRS providers for termination,
and then does not alter or amend those orders. Moreover, the T-Mobile
Declaratory Ruling does not purport to limit the states' general
authority to regulate rates for intrastate traffic as preserved by
section 2(b) of the Act, except that LECs cannot impose compensation
obligations for non-access CMRS traffic pursuant to state tariff.
Therefore, the better application of the T-Mobile Declaratory Ruling
to the situation here is the one reached by the Bureau Merits Order:
consistent with the Commission's repeated refusals to preempt state
authority in this regard, the California PUC is the more appropriate
venue for determining what constitutes a "reasonable compensation"
rate under rule 20.11 for North County's termination of intrastate
traffic originated by MetroPCS; and the California PUC may employ
whatever non-tariff procedural mechanism it deems appropriate under
state law, as long as such mechanism affords interested parties an
opportunity to be heard prior to the determination of the rate.
15. The parties lament that the Bureau Merits Order creates the risk of
piecemeal litigation, which could be cumbersome, time-consuming, and
expensive. The parties point out that they (and any future parties who
are similarly situated) may have to litigate once to establish a rate,
and then perhaps again to establish other interconnection terms and a
damages amount. However, as the T-Mobile Declaratory Ruling observes,
most small LECs, such as CLECs like North County, are only indirectly
interconnected with CMRS carriers like MetroPCS. Consequently, if and
when CLECs and CMRS carriers have interconnection disputes, it is
likely that those disputes will largely, if not entirely, concern only
compensation. Indeed, North County states here that the parties have
agreed to all interconnection terms except North County's termination
rate. Thus, we expect that, in most instances, litigation following a
state commission's rate determination will either be unnecessary or
relatively limited in scope. Accordingly, we do not find persuasive
the parties' contention that allowing state commissions to establish
rates governing CLECs' termination of intrastate CMRS traffic will be
procedurally onerous.
16. The parties proffer several other policy arguments why, despite past
Commission orders to the contrary, we should in this complaint
proceeding effectively preempt the California PUC's authority to
regulate North County's intrastate termination rates as applied to
MetroPCS's traffic. The Bureau Merits Order correctly responded to
those arguments as follows:
Without commenting one way or another on the merits of MetroPCS's policy
arguments, we decline MetroPCS's suggestion to preempt such state
authority in the context of this complaint proceeding. Whether to depart
so substantially from such long-standing and significant Commission
precedent is a complex question better suited to a more general rulemaking
proceeding.
MetroPCS expresses special concern that allowing state commissions to set
CLEC rates for termination of intrastate CMRS traffic will undermine the
policy of promoting national uniformity of CMRS regulation. We disagree
with MetroPCS's premise. Moreover, by ruling that incumbent LECs may
invoke state processes under section 252 of the Act to reach
interconnection agreements with CMRS carriers, the Commission in the
T-Mobile Declaratory Ruling has already demonstrated that, under current
law, other interests can sometimes take priority over complete, national
uniformity of CMRS regulation.
17. North County argues in the alternative that we should distinguish
between the period before April 29, 2005 and the period after April
29, 2005. Specifically, according to North County, we should reverse
the Bureau Merits Order as applied to the period before April 29,
2005, enforce the termination rates contained in North County's
California state tariff before April 29, 2005, and award damages
accordingly -- even if we affirm the Bureau Merits Order as applied to
the period after April 29, 2005.
18. We disagree with North County. The Bureau Merits Order relied on a
long line of Commission orders dating back to 1986 in which the
Commission declined to preempt the states' authority to set rates for
a LEC's termination of intrastate CMRS traffic, and we find that the
effective date of the T-Mobile Declaratory Ruling has no bearing on
that determination. Consistent with those orders, we find that the
California PUC is the more appropriate forum for determining a
reasonable rate for North County's termination of MetroPCS's
intrastate traffic. Therefore, we reject North County's assertion that
we, rather than the California PUC, should determine a pre-April 29,
2005 termination rate by simply enforcing the termination rates
contained in North County's California state tariff at that time.
19. Finally, the parties assert that we should reverse the Bureau Merits
Order because some portion of the traffic at issue is allegedly
interstate, intraMTA traffic and thus subject only to our exclusive
rate-making jurisdiction. Neither party made this assertion in any of
its numerous and voluminous filings prior to the Bureau Merits Order.
Consequently, section 1.115 of the Commission's rules plainly
precludes the parties from now arguing - for the first time on review
- that any of the traffic at issue is interstate. Accordingly, we
summarily reject this argument and dismiss it as untimely and thus not
properly raised.
20. In any event, even if this contention were properly before us, we
would reject it. Based on the record before the Bureau and now before
us on review, any assertion that the amount of interstate, intraMTA
traffic at issue, if any, is anything but trivial is simply not
credible. Neither party has provided specific evidence on the record
to demonstrate that any of the traffic at issue is, in fact,
interstate. As the Bureau Merits Order correctly notes, the record is
replete with explicit and implicit references to the traffic at issue
as traveling between end users within the State of California. Despite
multiple opportunities to present evidence to the Bureau and on
review, the parties have failed to provide any factual basis for the
conclusory statements they now make. Moreover, the parties never
before described any of the traffic at issue as interstate intraMTA,
despite being directed by Commission staff to address whether the
California PUC is a proper forum for this dispute. Even now, on
review, the parties make their interstate assertion cursorily,
belatedly, and with no specific evidentiary support, as required by
our rules. Tellingly, neither party provides any indication - not even
a rough estimate - as to the amount of traffic at issue that is
allegedly interstate, intraMTA. Thus, the record permits no other
conclusion than that the amount of interstate, intraMTA traffic at
issue - if any - is de minimus. Therefore, even if the parties'
interstate claim were properly presented, we would affirm the
conclusion of the Bureau Merits Order that the traffic at issue is
intrastate, intraMTA and thus subject to the general rate-making
jurisdiction of the California PUC.
21. Recognizing that we might affirm the Bureau Merits Order, MetroPCS
asks, in the alternative, that we provide guidance to the California
PUC about how to establish a reasonable termination rate under the
particular facts of this case. MetroPCS focuses especially on the
facts that the traffic at issue is unidirectional towards North County
and routed entirely to chat-lines. We decline MetroPCS's request. We
believe that the California PUC is fully equipped to determine a
reasonable termination rate under the specific circumstances
presented.
22. Notwithstanding all of the foregoing, we do believe that one aspect of
the Bureau Merits Order warrants modification. The Bureau Merits Order
dismissed without prejudice Count I of the Complaint, stating that the
California PUC is the more appropriate venue for determining a
reasonable rate for terminating MetroPCS's traffic, and that if North
County believes that MetroPCS has failed to pay what is owed pursuant
to that rate, it may seek enforcement of any payment obligation under
rule 20.11. Instead, to prevent the possibility that North County may
be prejudiced in any way during the pendency of its proceeding to seek
a rate determination from the California PUC, we believe the better
course is to hold Count I in abeyance rather than dismiss it without
prejudice.
23. To effectuate the abeyance, Count I of the Complaint will be converted
to an informal complaint, with the File Number of EB-09-MDIC-0041.
This conversion is for internal administrative purposes only, and has
no effect on the rights of the parties. Once the California PUC
determines a reasonable termination rate and its decision is final and
no longer subject to judicial review, North County may convert the
informal complaint back to a formal complaint by notifying the
Commission of its intent to do so within 90 days of the California PUC
decision's finality (subject to waiver and extension of such deadline
for good cause).
24. We note that the purpose of converting North County's claim back into
a formal complaint would not be to review the propriety of the
termination rate prescribed by the California PUC. Such a review, if
any, of the California PUC's rate prescription would proceed according
to whatever mechanism is provided by applicable California law. The
purpose of any conversion of North County's claim back into a formal
complaint would, instead, be limited to determining whether, despite
the application of the termination rate prescribed by California law,
MetroPCS has still failed to pay North County "reasonable
compensation" under rule 20.11. Such a dispute could arise from a
myriad of factors, including but not limited to a continuing
disagreement between the parties about whether and to what extent (i)
North County's recovery should be limited by the statute of
limitations, or (ii) North County is entitled to an award of
prejudgment interest.
25. Finally, we note that, in a cursory e-mail submitted long after the
formal pleading cycle concluded, North County apparently suggests that
the D.C. Circuit's decision in AT&T Corp. v. FCC, 978 F.2d 727 (D.C.
Cir. 1992) ("AT&T v. FCC") establishes a statutory duty on the
Commission's part to determine in this section 208 complaint
proceeding what a reasonable termination rate would be for traffic
that MetroPCS delivers to North County. Because neither party
presented this argument predicated upon AT&T v. FCC to the Bureau in
advance of the Bureau Merits Order, this argument is not properly
before the Commission in this review proceeding.
26. AT&T v. FCC would not be controlling here, in any event. That case
involved a section 208 complaint for injunctive relief and damages
that AT&T filed against MCI alleging that MCI had violated the
Communications Act by charging rates that were not filed in federal
tariffs. The FCC had dismissed that complaint without determining
whether AT&T's conduct violated the Act (and, thus, without
determining whether damages were warranted), concluding instead that
the lawfulness of MCI's conduct should be resolved in a broader
rulemaking proceeding. The Court of Appeals set the Commission's order
aside, holding that because the agency's contemplated rulemaking
proceeding, by definition, could develop rules that would "operate[]
only prospectively," it was "a logical non sequitur" to address in
such a proceeding a complaint challenging the lawfulness of (and
seeking damages for) conduct "under present law." Here, by contrast,
we are not dismissing North County's complaint at all, but rather
holding it in abeyance while the parties seek a determination by the
California PUC of what is a reasonable rate under Rule 20.11. Unlike
in AT&T v. FCC, that determination will be made under existing law,
and North County may later seek redress (and possible retrospective
relief) - again under existing law - if MetroPCS has not been paying
the rate that the California PUC determines to be reasonable.
IV. ordering clauses
27. IT IS ORDERED, pursuant to sections 4(i), 4(j), 201, 208, and 332 of
the Communications Act of 1934, as amended, 47 U.S.C. S:S: 154(i),
154(j), 201, 208, and 332, and sections 1.115, 1.721-1.736, and 20.11,
of the Commission's rules, 47 C.F.R. S:S: 1.115, 1.721-1.736, and
20.11, that North County's Application for Review is GRANTED in part
and otherwise DENIED, as described herein.
28. IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), 201, 208, and
332 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
154(i), 154(j), 201, 208, and 332, and sections 1.115, 1.721-1.736,
and 20.11, of the Commission's rules, 47 C.F.R. S:S: 1.115,
1.721-1.736, and 20.11, that MetroPCS's Application for Review is
DENIED.
29. IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), 201, 208, and
332 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
154(i), 154(j), 201, 208, and 332, and sections 1.115, 1.721-1.736,
and 20.11, of the Commission's rules, 47 C.F.R. S:S: 1.115,
1.721-1.736, and 20.11, that the Bureau Merits Order in MODIFIED in
part and otherwise AFFIRMED, as described herein.
30. IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), 201, 208, and
332 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
154(i), 154(j), 201, 208, and 332, and sections 1.115, 1.711-1.736,
and 20.11, of the Commission's rules, 47 C.F.R. S:S: 1.115,
1.711-1.736, and 20.11, that (i) Count I of the Complaint shall be
held in abeyance pending the California PUC's determination of a
reasonable rate for North County's termination of MetroPCS's
intrastate traffic; (ii) such abeyance is hereby effectuated by
converting Count I of the Complaint into an informal complaint with
the File Number of EB-09-MDIC-0041; and (iii) once North County has
exhausted its administrative remedies with the California PUC and the
California PUC's order is no longer subject to judicial review, North
County may convert the informal complaint back to a formal complaint
by notifying the Commission of its intent to do so within 90 days of
the California PUC's final action.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Application for Review, File No. EB-06-MD-007 (filed Apr. 29, 2009)
("North County AFR"). See North County Communications Corp.'s Response to
MetroPCS California, LLC's Application for Review, File No. EB-06-MD-007
(filed May 14, 2009) ("North County Response"); North County
Communications Corp.'s Reply to Response of MetroPCS of California, LLC,
File No. EB-06-MD-007 (filed May 26, 2009) ("North County Reply").
47 C.F.R. S: 1.115.
North County Communications Corp. v. MetroPCS California, LLC, Memorandum
Opinion and Order, 24 FCC Rcd 3807 (Enf. Bur. rel. Mar. 30, 2009) ("Bureau
Merits Order").
Application for Review of MetroPCS California, LLC, File No. EB-06-MD-007
(filed Apr. 29, 2009) ("MetroPCS AFR"). See Response of MetroPCS
California, LLC to the Application for Review of North County
Communications Corp., File No. EB-06-MD-007 (filed May 14, 2009)
("MetroPCS Response"); Reply of MetroPCS California, LLC to the North
County Communications Corp. Response to MetroPCS California, LLC's
Application for Review, File No. EB-06-MD-007 (filed May 26, 2009)
("MetroPCS Reply").
47 C.F.R. S: 20.11.
See, e.g., 47 C.F.R. S: 24.202(a) (defining "MTA").
See P:P: 19-20, infra (discussing the parties' cursory, belated, and
scantily supported assertion that some unspecified portion of the traffic
at issue is jurisdictionally interstate).
See Bureau Merits Order, 24 FCC Rcd at 3808-3810, P:P: 3-7.
Bureau Merits Order, 24 FCC Rcd at 3808, P: 3.
Id. For purposes of this Order, a "chat-line provider" offers a service
that "combine[s] multiple incoming calls that happen to arrive in a common
time frame, but are otherwise unscheduled by the parties and may result in
connecting callers who are unknown to one another." Bureau Merits Order,
24 FCC Rcd at 3808, n.7.
Bureau Merits Order, 24 FCC Rcd at 3808, P: 4. See 47 C.F.R. S: 20.3
(defining "commercial mobile radio service").
Bureau Merits Order, 24 FCC Rcd at 3808, P: 4.
Id.
Bureau Merits Order, 24 FCC Rcd at 3808-3809, P: 5 and nn.11-12. See P:P:
19-20, infra.
Bureau Merits Order, 24 FCC Rcd at 3808-3809, P: 5 and n.13.
Bureau Merits Order, 24 FCC Rcd at 3808-3809, P: 5 and n.14. See 47 U.S.C.
S: 227(b)(1)(A)(iii); Rules and Regulations Implementing the Telephone
Consumer Protection Act (TCPA) of 1991, Report and Order, 18 FCC Rcd 14014
(2003) (subsequent history omitted); 47 C.F.R. S: 64.1200(a)(1)(iii).
Bureau Merits Order, 24 FCC Rcd at 3809, P: 6 and n.15.
Bureau Merits Order, 24 FCC Rcd at 3809, P: 6 and n.16.
Bureau Merits Order, 24 FCC Rcd at 3809, P: 6 and n.17.
Bureau Merits Order, 24 FCC Rcd at 3809, P: 6.
See, e.g., Second Amended Complaint, File No. EB-06-MD-007 (filed Aug. 24,
2006) ("Complaint").
47 U.S.C. S: 208. See Bureau Merits Order, 24 FCC Rcd at 3809-3810, P: 7.
See, e.g., 47 C.F.R. S: 20.11(b) (providing that "[l]ocal exchange
carriers and commercial mobile radio service providers shall comply with
principles of mutual compensation"); 47 C.F.R. S: 20.11(b)(2) (providing
that "[a] commercial mobile radio service provider shall pay reasonable
compensation to a local exchange carrier in connection with terminating
traffic that originates on the facilities of the commercial mobile radio
service provider").
See, e.g., Complaint at 15-16, P:P: 64-68.
47 U.S.C. S: 251(b)(5) (providing that "[e]ach local exchange carrier has
... [t]he duty to establish reciprocal compensation arrangements for the
transport and termination of telecommunications").
47 C.F.R. S: 51.301 (providing, in pertinent part, that "[a]n incumbent
LEC shall negotiate in good faith the terms and conditions of agreements
to fulfill the duties established by sections 251(b) and (c) of the Act").
See, e.g., Complaint at 16-19, P:P: 69-76.
47 U.S.C. S:S: 201(b) (barring any "unjust and unreasonable" practice in
connection with communication service), 202(a) (barring "unjust and
unreasonable discrimination" by any carrier "in connection with like
communication service").
See, e.g., Complaint at 19-20, P:P: 77-86; 22-23, P:P: 95-103.
47 C.F.R. S: 51.715(b) (providing, in pertinent part, that "an incumbent
LEC must, without unreasonable delay, establish an interim arrangement for
transport and termination of telecommunications traffic at symmetrical
rates").
See, e.g., Complaint at 20-22, P:P: 87-94.
See, e.g., Bureau Merits Order, 24 FCC Rcd at 3814-3817, P:P: 16-23.
See, e.g., 47 C.F.R. S:S: 0.203(b), 1.102(b), 1.115.
47 C.F.R. S: 20.11(b)(2) (emphasis added).
See, e.g., Complaint at 15-16, P:P: 64-68. For purposes of this Order
only, we assume, without deciding, that a violation of rule 20.11 would be
a violation of the Act cognizable under section 208 of the Act. See Center
for Communications Management Information v. AT&T Corporation, Memorandum
Opinion and Order, 23 FCC Rcd 12249, 12253 at P: 11, n.29 (2008); Global
Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.,
550 U.S. 45 (2007); Alexander v. Sandoval, 532 U.S. 275, 284 (2001).
47 U.S.C. S: 205.
See, e.g., Complaint at 23-26, P:P: 104-119; Bureau Merits Order, 24 FCC
Rcd at 3809-3810, P: 7.
Bureau Merits Order, 24 FCC Rcd at 3810-3811, P: 9.
Bureau Merits Order, 24 FCC Rcd at 3810-3811, P: 9, citing In the Matter
of Developing a Unified Intercarrier Compensation Regime; T-Mobile et al.
Petition for Declaratory Ruling Regarding Incumbent LEC Wireless
Termination Tariffs, Declaratory Ruling and Report and Order, 20 FCC Rcd
4855, 4861 at P: 10 n.41 (2005) ("T-Mobile Declaratory Ruling")
(subsequent history omitted) (stating that "the Commission preempted state
and local regulations governing the kind of interconnection to which CMRS
providers are entitled, but it specifically declined to preempt state
regulation of LEC intrastate interconnection rates applicable to CMRS
providers"); Airtouch Cellular v. Pacific Bell, Memorandum Opinion and
Order, 16 FCC Rcd 13502, 13507 at P: 14 (2001) (stating that the
determination of the actual rates charged for intrastate LEC-CMRS
interconnection is left to the states); In the Matter of Interconnection
Between Local Exchange Carriers and Commercial Mobile Radio Service
Providers, Notice of Proposed Rulemaking, 11 FCC Rcd 5020, 5072 at P: 109
(1996) (subsequent history omitted) (stating that the Commission's
LEC-CMRS mutual compensation rules do not preclude the states from setting
the actual interconnection rates that LECs and CMRS providers charge);
Equal Access and Interconnection Obligations Pertaining to CMRS, Notice of
Proposed Rulemaking and Notice of Inquiry, 9 FCC Rcd 5408, 5451 at P: 104
(1994) (noting that the Commission has declined to preempt state
regulation of LEC rates for intrastate interconnection with cellular
carriers); In the Matter of Implementation of Sections 3(N) and 332 of the
Communications Act, Regulatory Treatment of Mobile Services, Second
Report and Order, 9 FCC Rcd 1411, 1498 at P:P: 231-232 (1994) (subsequent
history omitted) (adopting rule 20.11, but declining to preempt state
regulation of LEC intrastate interconnection rates); The Need To Promote
Competition and Efficient Use of Spectrum for Radio Common Carrier
Services, Memorandum Opinion and Order on Reconsideration, 4 FCC Rcd 2369,
2372 at P: 25 (1989) (noting that compensation arrangements regarding
intrastate traffic between landline telephone companies and cellular
carriers are subject to state regulatory jurisdiction); The Need To
Promote Competition and Efficient Use of Spectrum for Radio Common Carrier
Services, Declaratory Ruling, 2 FCC Rcd 2910, 2912 at P: 18, 2915 at P:P:
44-45 (1987) (noting that intrastate charges for cellular interconnection
with landline carriers is subject to intrastate regulation); Indianapolis
Telephone Company v. Indiana Bell Telephone Company Inc., Memorandum
Opinion and Order, 1 FCC Rcd 228, 229-30 at P: 10 (1986) (stating that
financial arrangements between cellular and landline carriers regarding
intrastate traffic fall with the purview of state regulatory authorities).
See Rural Iowa Independent Telephone Association v. Iowa Utilities Board,
385 F. Supp.2d 797, 825 (S.D. Iowa 2005), aff'd, 476 F.3d 572 (8th Cir.
2007) (holding that state commissions may arbitrate indirect
interconnection agreements between LECs and CMRS carriers); Iowa Network
Services, Inc. v. Qwest Corporation, 385 F. Supp.2d 850, 893 (S.D. Iowa
2005) (holding that state commissions may arbitrate indirect
interconnection agreements between LECs and CMRS carriers).
Bureau Merits Order, 24 FCC Rcd at 3810-3811, P: 9.
Id.
Id.
April 29, 2005 is the effective date of the T-Mobile Declaratory Ruling,
according to North County. See, e.g., North County AFR at 15, n.55. We
accept North County's assertion for purposes of this Order.
See North County AFR; North County Response; North County Reply.
See MetroPCS AFR; MetroPCS Response; MetroPCS Reply.
Contrary to the parties' contention, the Enforcement Bureau did not hold
that only a state commission has jurisdiction to determine what
constitutes "reasonable compensation" under section 20.11 of the
Commission's rules. See, e.g., North County AFR at 1, 6, MetroPCS AFR at
3, 5. Thus, by affirming the Bureau Merits Order, we do not hold that the
Commission lacks such jurisdiction. Rather, we merely affirm the Bureau's
finding that the state commission, in this instance, is the more
appropriate forum.
Bureau Merits Order, 24 FCC Rcd at 3810-3814, P:P: 8-15.
See, e.g., T-Mobile Declaratory Ruling, 20 FCC Rcd at 4860, P: 9.
See, e.g., North County AFR at 12 and n.46.
See, e.g., North County AFR at 8-13; MetroPCS AFR at 13-15.
Bureau Merits Order, 24 FCC Rcd at 3812-3813, P: 12. See, e.g., T-Mobile
Declaratory Ruling, 20 FCC Rcd at 4860-61, P: 10.
Bureau Merits Order, 24 FCC Rcd at 3812-3813, P: 12; 47 U.S.C. S: 152(b).
Despite the parties' protestations to the contrary, see, e.g., North
County AFR at 2, 6-7, 12-13; MetroPCS AFR at 3-5, 8-15; MetroPCS Response
at 5-6, there is nothing anomalous about a state commission establishing
an intrastate rate to effectuate a compensation right arising from federal
law. See, e.g., 47 U.S.C. S:S: 251-252.
See, e.g., Bureau Merits Order, 24 FCC Rcd at 3810-3811, P: 9 (listing as
procedural examples a complaint proceeding, a declaratory ruling
proceeding, and a generic cost or rulemaking proceeding, all of which
historically have afforded interested parties an opportunity to be heard
before a ruling is rendered). See also T-Mobile Declaratory Ruling, 20 FCC
Rcd at 4858-4859, P: 7 n.32 (noting that many state commissions had
allowed LECs' wireless termination tariffs to go into effect without prior
investigations). The parties point out that, since the T-Mobile
Declaratory Ruling, a few state commissions have declined to arbitrate
interconnection agreements between CLECs and CMRS providers. See, e.g.,
North County AFR at 5, 9. As the Bureau Merits Order correctly observes,
however, those state commission decisions have only concerned processes
authorized by section 252 of the Act; thus, those state commission
decisions do not indicate that state commissions will decline to exercise
their general authority under state law to regulate rates for intrastate
traffic as preserved by section 2(b) of the Act. Bureau Merits Order, 24
FCC Rcd at 3813, P: 12, n.45.
See, e.g., MetroPCS AFR at 9-12; North County AFR at 12.
See, e.g., North County AFR at 6-7, 12-13; MetroPCS AFR at 4, 13, 19-20;
MetroPCS Response at 5-6.
Bureau Merits Order, 24 FCC Rcd at 3808, P: 4; T-Mobile Declaratory
Ruling, 20 FCC Rcd at 4857-4858, P: 5.
See, e.g., North County AFR at 4.
See, e.g., North County AFR at 12-13; MetroPCS AFR at 3-5; 8-15; MetroPCS
Response at 5-6.
Bureau Merits Order, 24 FCC Rcd at 3814, P: 14, citing In the Matter of
Developing a Unified Intercarrier Compensation Regime, Order on Remand and
Report and Order and Further Notice of Proposed Rulemaking, 2008 WL
4821547 (2008); In the Matter of Developing a Unified Intercarrier
Compensation Regime, Further Notice of Proposed Rulemaking, 20 FCC Rcd
4685 (2005); In the Matter of Developing a Unified Intercarrier
Compensation Regime, Comment Sought on Missoula Intercarrier Compensation
Reform Plan, 20 FCC Rcd 4855 (2005); In the Matter of Developing a Unified
Intercarrier Compensation Regime, Notice of Proposed Rulemaking, 16 FCC
Rcd 9610 (2001). The parties point out that no Commission order or court
decision precludes the Commission from changing course and deciding to
preempt state authority over the termination rates that LECs charge CMRS
providers for intrastate traffic. See, e.g., North County AFR at 5, 8-10,
12-13; MetroPCS AFR at 3-5, 8-15. Again, that may be true, but we decline
to take such action in this complaint proceeding. See, e.g., Bell
Atlantic-Delaware, Inc. v. Frontier Communications Services, Inc.,
Memorandum Opinion and Order, 16 FCC Rcd 8112, 8120 (2001) ("We are
mindful that the Commission has been asked to clarify or revise existing
regulations governing the per-call compensation scheme on a going-forward
basis. But because this issue has come before us as part of a section 208
complaint proceeding regarding past behavior, we are constrained to
interpret our current regulations and orders.").
See, e.g., MetroPCS AFR at 3-4, 7-15.
North County AFR at 13-15. As previously mentioned, North County contends
that April 29, 2005 is the effective date of the T-Mobile Declaratory
Ruling. North County AFR at 15, n.55.
See, e.g., North County AFR at 13-15; North County Reply at 6-9.
Because we reject North County's assertion on that ground, we need not and
do not address MetroPCS's contentions that (i) North County's assertion is
barred by rule 1.115(c); (ii) North County's California state tariff was
unlawful as applied to MetroPCS traffic even before April 29, 2005; (iii)
North County's California state tariff, by its own terms, did not apply to
termination of MetroPCS's traffic; (iv) North County's claim for damages
arising prior to April 29, 2005 is wholly or partially barred by the
two-year statute of limitations in 47 U.S.C. S: 415; and (v) awarding
damages based on traffic terminated prior to April 29, 2005 would
undermine Commission policies favoring negotiated interconnection
agreements and limiting interim compensation to incumbent LECs. See, e.g.,
MetroPCS Response at 7-15.
See North County AFR at 8 n.30; MetroPCS Response at 4-5.
Rule 1.115(c) provides: "No application for review will be granted if it
relies on questions of fact or law upon which the designated authority has
been afforded no opportunity to pass." 47 C.F.R. S: 1.115(c).
We expressly dismiss this claim on procedural grounds. Cf. BDFCS, Inc. v.
FCC, 351 F.3d 1177, 1183-84 (D.C. Cir. 2003) (upholding the Commission's
dismissal on procedural grounds of arguments not first presented to the
bureau).
For example, North County belatedly asserts in a single, unsupported
footnote in its Application for Review that the parties have never
stipulated that the traffic at issue is all intrastate, and that "this is
simply not the case." North County AFR at 8, n.30. Similarly, MetroPCS now
contends, in response to North County's belated assertion, that some
unspecified portion of the traffic is interstate. MetroPCS Response at
4-5.
Bureau Merits Order, 24 FCC Rcd at 3808, P: 5, n.12.
North County makes the assertion in a single, unsupported footnote. See
North County AFR at 8 n.30.
MetroPCS did not make the assertion until its Response. See Metro Response
at 4-5. Indeed, MetroPCS's Application refers to the traffic at issue as
intrastate several times. See MetroPCS AFR at ii, 1, 17.
Rule 1.720(c) provides: "Facts must be supported by relevant documentation
or affidavit." 47 C.F.R.S: 1.720(c). See 47 C.F.R. S:S: 1.721(a)(5),
1.724(g), 1.726(e), 1.732(b) (all requiring that factual assertions in
formal complaint proceedings be supported by declarations and/or
documents).
Given the parties' failure to preserve or support their claim that there
is any interstate traffic at issue here, we have no occasion in this
adjudicatory proceeding to address whether it would be appropriate for the
state commission to determine a rate for any such traffic.
MetroPCS AFR at 16-17.
See, e.g., MetroPCS AFR at 17-24.
After the pleading cycle closed in this review process, CTIA - The
Wireless Association ("CTIA") sought leave to file an "amicus curiae
letter" supporting the parties' Applications for Review and asking that
this proceeding be converted from "restricted" to "permit-but-disclose"
for purposes of the Commission's ex parte rules. Letter dated July 10,
2009 from Christopher Guttman-McCabe, Vice President, Regulatory Affairs,
CTIA, to Marlene Dortch, Secretary, FCC ("CTIA Letter"). See 47 C.F.R.
S:S: 1.1200-1.1216 (setting forth the Commission's ex parte rules). We
hereby grant CTIA's request to file the CTIA Letter, and we have carefully
considered the Letter's contents. See, e.g., AT&T Corp. v. BellSouth
Telecommunications, Inc., Order on Reconsideration, 20 FCC Rcd 8578, 8580,
at P: 6 n.16 (2005) (subsequent history omitted). We deny CTIA's request
to convert this proceeding from "restricted" to "permit-but-disclose,"
because CTIA has not shown that the public interest supports changing the
ex parte status of this adjudicatory proceeding from "restricted" to
"permit-but-disclose." For example, CTIA has not shown that such a
conversion is necessary to provide us with a comprehensive record on which
to base our decisions. Indeed, all of the arguments asserted in the CTIA
Letter were already made by the parties themselves and are expressly
addressed either in the Bureau Merits Order or in this Order on Review or
in both.
See, e.g., Bureau Merits Order, 24 FCC Rcd at 3810-3811, P: 9.
Cf., e.g., Reiter v. Cooper, 507 U.S. 258, 267-68 (1993); American
Association of Cruise Passengers v. Cunard Line, Ltd., 31 F.3d 1184,
1187-88 (D.C. Cir. 1994) (both holding that a federal court should stay
rather than dismiss a complaint if doing so is necessary to prevent
prejudice to the plaintiff during the pendency of a primary jurisdiction
referral).
See Letter from Michael Hazzard, Counsel for North County, to Marlene H.
Dortch, Secretary, FCC, File No. EB-06-MD-007 (filed Nov. 16, 2009),
Exhibit A.
See 47 C.F.R. S: 1.115(c) (providing that "[n]o application for review
will be granted if it relies on questions of fact or law upon which the
designated authority has been afforded to opportunity to pass").
AT&T v. FCC, 978 F.2d at 732 (emphasis added to "prospectively") (citing
Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988)).
See P:P: 23-24, supra. Other decisions make clear that the AT&T v. FCC
decision also was predicated in large measure on the court's view that, by
deferring to a separate rulemaking the question of whether MCI's practice
of charging non-tariffed rates violated the Communications Act, the
Commission was consciously attempting to insulate previously adopted
policies from judicial review. See AT&T Corp. v. FCC, 220 F.3d 607, 631
(D.C. Cir. 2000); American Message Centers v. FCC, 50 F.3d 35, 41 (D.C.
Cir. 1995). No such concern is presented here.
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Federal Communications Commission FCC 09-100