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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                            )                          
                                                                       
                                            )                          
                                                                       
                                            )                          
     In the Matter of                                                  
                                            )                          
     Sprint Communications Company L.P.,                               
                                            )                          
     Complainant,                                                      
                                            )   File No. EB-11-MD-003  
     v.                                                                
                                            )                          
     Northern Valley Communications, LLC,                              
                                            )                          
     Defendant.                                                        
                                            )                          
                                                                       
                                            )                          
                                                                       
                                            )                          


                          MEMORANDUM OPINION AND ORDER

   Adopted: July 18, 2011 Released: July 18, 2011

   By the Commission:

   I. INTRODUCTION

    1. This Memorandum Opinion and Order grants in part and denies in part a
       formal complaint filed by Sprint Communications Company L.P.
       ("Sprint") against Northern Valley Communications, LLC ("Northern
       Valley") under section 208 of the Communications Act of 1934, as
       amended ("Act"). The Complaint alleges that Northern Valley's
       interstate switched access service tariff ("Tariff") violates section
       201(b) of the Act, and it requests that the Commission declare the
       Tariff void ab initio or, in the alternative, find that the Tariff's
       access rates are unreasonable and, therefore, unlawful. As discussed
       below, we find that the Tariff violates Commission rule 61.26, as
       clarified by the CLEC Access Charge Reform Reconsideration Order; 
       that the Tariff is not "clear and explicit" as required by Commission
       rule 61.2(a); and that the Tariff contains a number of unreasonable
       payment and billing provisions. Accordingly, we grant the Complaint to
       the extent we find that the Tariff violates section 201(b) of the Act,
       and we direct Northern Valley to revise its Tariff within ten days of
       release of this Order. We decline, however, to declare the Tariff void
       ab initio or to set aside its rates.

   II. BACKGROUND

         A. Factual Background

    2. Sprint is an interexchange carrier ("IXC") providing interstate
       telecommunications service throughout the United States. Northern
       Valley is a competitive local exchange carrier ("CLEC") serving
       residential and business customers in South Dakota. In addition,
       Northern Valley terminates calls to conference calling companies.
       Northern Valley provides interstate switched exchange access services
       to IXCs such as Sprint pursuant to tariffs filed with the Commission.

    3. On July 8, 2010, Northern Valley filed the Tariff on 15 days' notice,
       and it became effective on July 23, 2010. Northern Valley states that
       it filed the Tariff because it believed that the Commission's decision
       in Qwest v. Farmers II created "doubt" as to whether Northern Valley
       could impose access charges for terminating calls to conference
       calling companies under its prior, existing tariff.

     A. Legal Background

    4. Since 1997, CLECs have been allowed to assess interstate switched
       exchange access service charges upon IXCs either by filing tariffs
       with the Commission or by negotiating contracts with the affected
       IXCs. (In contrast, incumbent local exchange carriers ("ILECs") may
       assess interstate switched exchange access charges only by filing
       federal tariffs.) Section 204(a)(3) of the Act provides that LEC
       tariffs are "deemed lawful" unless suspended by the Commission within
       certain time periods.

    5. In 2001, the Commission found that CLEC access rates were, on average,
       "well above the rates that ILECs charge for similar service" and noted
       that some CLECs "refused to enter meaningful negotiations on access
       rates, choosing instead simply to file a tariff and bind IXCs ... to
       the rates therein." Accordingly, the CLEC Access Charge Reform Order
       promulgated rule 61.26, which provides that a CLEC may tariff access
       charges only for services that are the "functional equivalent" of ILEC
       access services, and only if the rates are no higher than those of the
       ILEC serving the same geographic area in which the CLEC is located. In
       this way, CLEC access rates are "benchmarked" against ILEC access
       rates.  If a CLEC wishes to impose higher rates, it may do so only by
       negotiating with the affected IXCs. Subsequently, in the CLEC Access
       Charge Reform Reconsideration Order, the Commission clarified that a
       CLEC may assess tariffed switched access charges at the appropriate
       benchmark rate only for calls to or from the CLEC's own end users.

    6. Very recently, the Commission found that the Tariff at issue here
       violated rule 61.26, as clarified by the CLEC Access Charge Reform
       Reconsideration Order.  The Commission reasoned that, to the extent
       the Tariff purported to charge for providing access to individuals or
       entities to whom Northern Valley offered its services for free, it
       impermissibly charged for services that were not being offered to "end
       users" and thus were not the "functional equivalent" of ILEC services.
       The Commission explained:

   [U]nder the Commission's ILEC access charge regime, an "end user" is a
   customer of a service that is offered for a fee. The Commission provided
   no alternative definition for "end user" when stating, in the CLEC Access
   Charge Reform Reconsideration Order, that a CLEC provides the functional
   equivalent of ILEC services [within the meaning of rule 61.26] only if the
   CLEC provides access to its "own end users." Accordingly, that order
   establishes that a CLEC's access service is functionally equivalent only
   if the CLEC provides access to customers to whom the CLEC offers its
   services for a fee.

   The Commission ordered Northern Valley to "file tariff revisions ... to
   provide that interstate switched access service charges will apply only to
   the origination or termination of calls to or from an individual or entity
   to whom Northern Valley offers telecommunications services for a fee."

   III. DISCUSSION

          A. The Tariff Violates Section 201(b) of the Act.

               1. The Tariff Violates Commission Rule 61.26.

    7. In its Complaint, Sprint contends that the Tariff violates Commission
       rule 61.26 because it purports to charge IXCs for calls to or from
       individuals or entities to whom Northern Valley offers its services
       for free. Sprint is correct. As the Commission explained in finding
       the Tariff unlawful in Qwest v. Northern Valley,  rule 61.26 (as
       clarified by the CLEC Access Charge Reform Reconsideration Order)
       establishes that a CLEC may assess tariffed access charges at the
       appropriate benchmark rate only for calls that are to or from an
       individual or entity to whom the CLEC offers its services for a fee.
       Therefore, we grant Sprint's claim that the Tariff violates rule
       61.26, and, accordingly, violates section 201(b) of the Act.

      1. The Tariff Terms Are Not Clear and Explicit.

    8. Commission rule 61.2(a) requires that tariffs contain "clear and
       explicit explanatory statements regarding rates and regulations." The
       Complaint asserts that the Tariff violates the rule 61.2(a) stricture
       in a number of ways, most significantly with respect to its definition
       of "End User." We agree.

    9. The Tariff defines "End User" in a contradictory manner. On the one
       hand, the first sentence of the "End User" definition states that an
       "End User" is "any Customer of an Interstate or Foreign
       Telecommunications Service that is not a carrier." Under the Act,
       "telecommunications service" is the "offering of telecommunications
       for a fee." Thus, according to the first sentence of the Tariff's "End
       User" definition, an "End User" is a user to whom Northern Valley
       offers its services for a fee. On the other hand, the last sentence of
       the Tariff's "End User" definition states that "[a]n End User need not
       purchase any service provided by [Northern Valley]." Unlike the first
       sentence, this last sentence seems to define "End User" as an
       individual or entity to whom Northern Valley offers its services free
       of charge. Thus, the Tariff's "End User" definition is internally
       inconsistent and therefore is not "clear and explicit" as required by
       rule 61.2(a).

   10. Moreover, other Tariff provisions repeatedly use the term "End User,"
       or define other terms with reference to "End User." Thus, for example,
       the Tariff defines "Access Charge" as "Charges assessed to the Buyer,"
       and defines "Buyer" as an IXC "utilizing [Northern Valley's] Access
       Service to complete a call to or from End Users." Similarly, the
       Tariff purports to charge IXCs for originating or terminating traffic
       to "Volume End Users." In short, the lack of clarity in the "End User"
       definition has a significant impact upon the entire Tariff.
       Accordingly, we find that the Tariff is not "clear and explicit" as
       required by rule 61.2(a), and, therefore, that the Tariff violates
       section 201(b) of the Act.

      1. The Tariff's Payment and Billing Provisions Are Unreasonable.

   11. Sprint contends that several provisions of the "Payment and Billing"
       section of the Tariff violate section 201(b). We review these
       provisions to determine whether they are reasonable in compliance with
       the requirements of section 201 of the Act and the Commission's rules.

   12. Sprint alleges that Northern Valley's "Jurisdictional Reporting
       Requirements" are unreasonably vague and violate section 201(b) of the
       Act. Under those provisions, when the jurisdiction of a call is
       indeterminate, Northern Valley may request a percent of interstate use
       factor ("PIU Factor") from its IXC customer. Northern Valley is not
       obligated to use the PIU Factor supplied by the IXC, however, and "at
       its sole discretion, may use a different PIU Factor." Northern Valley
       contends that the Tariff reserves Northern Valley's right to use a
       different PIU Factor than that provided by the IXC only when Northern
       Valley believes the IXC's PIU Factor is inaccurate. But the Tariff
       language is not so limited. It gives Northern Valley unfettered
       discretion to use a different PIU Factor and, therefore, the ability
       to rely on unspecified and potentially arbitrary and discriminatory
       factors to establish the jurisdiction of the traffic. This may result
       in a PIU Factor that bears no relationship to the actual percentage of
       the Buyer's interstate and intrastate traffic, and allows Northern
       Valley to manipulate the PIU Factor so as to maximize its access
       charges by choosing the jurisdiction with higher rates for most or all
       of the traffic. Accordingly, the Jurisdictional Reporting Requirements
       provisions are unreasonable under section 201(b) of the Act.

   13. Sprint further challenges the "Deposit" provisions in the Tariff,
       which provide in part that "[t]o safeguard its interests, the company
       may require a Buyer to make a deposit to be held as a guarantee for
       the payment of charges. A deposit may be requested prior to providing
       Service(s) or at any time after the provision of service to a Buyer."
       These provisions establish no standard as to when a deposit will be
       required. Such unconstrained ability to impose deposit obligations is
       susceptible to potentially discriminatory application. Consequently,
       we conclude that the provisions are unreasonable under section 201.

   14. In addition, Northern Valley's "Billing Disputes" provision requiring
       carriers to dispute bills within 90 days or waive "any and all rights
       and claims with respect to the bill and the underlying dispute" is
       unreasonable. This provision contravenes the two-year statute of
       limitations in the Communications Act, and, by its terms, purports
       unilaterally to bar a customer from exercising its statutory right to
       file a complaint within that limitations period. Similarly, the Tariff
       provision that requires all disputed charges to be paid "in full prior
       to or at the time of submitting a good faith dispute" is unreasonable.
       As written, this provision requires everyone to whom Northern Valley
       sends an access bill to pay that bill, no matter what the
       circumstances (including, for example, if no services were provided at
       all), in order to dispute a charge. Further, the Billing Disputes
       provision states that Northern Valley is "the sole judge of whether
       any bill dispute has merit." This provision is unreasonable, because
       it conflicts with sections 206 to 208 of the Act, which allow a
       customer to complain to the Commission or bring suit in federal
       district court for the recovery of damages regarding a carrier's
       alleged violation of the Act.

   15. In contrast, however, we conclude that Northern Valley's "Late Payment
       Fee" provision regarding "Adjustments or Refunds to the Buyer" is
       reasonable. Sprint maintains that the Tariff imposes late fees on
       withheld amounts even if it is ultimately decided that Northern
       Valley's billing is erroneous. We read the challenged Tariff
       provision, however, to require Northern Valley to refund and pay
       simple interest on all disputed amounts paid pursuant to the Tariff,
       including any associated late payment fees.

   16. Finally, we conclude that Northern Valley's "Attorneys' Fees"
       provision is unreasonable because it permits Northern Valley to
       recover its attorneys' fees regardless of whether Northern Valley
       prevails on a claim. A Buyer who successfully demonstrates in
       litigation that Northern Valley improperly billed should not be
       obligated to pay Northern Valley's attorneys' fees. 

     A. We Deny Sprint's Remaining Claims.

   17. Citing the Tariff's numerous flaws, Sprint requests that the
       Commission declare the Tariff void ab initio. We decline to do so.
       Pursuant to section 204(a)(3) of the Act, the Tariff is "deemed
       lawful" until found otherwise by this Commission or a court of law.
       Sprint argues that "there are limits to the scope of the deemed lawful
       provision," and that a "deemed lawful" tariff may be declared void ab
       initio in a section 208 complaint proceeding. Even if Sprint is
       correct, Sprint has not established that Northern Valley engaged in
       furtive concealment, or any other deceptive conduct that might justify
       removing the protection afforded by section 204(a)(3).

   18. In the alternative, Sprint requests that, if the Commission does not
       declare the Tariff void ab initio, it find that the Tariff's rates are
       excessive and prescribe lower rates "on a going-forward basis." We
       deny this request. As Sprint admits, the Tariff's rates are no higher
       than the ILEC rates against which they are benchmarked pursuant to
       rule 61.26. The Commission has emphasized that tariffed rates within
       the rule 61.26 benchmark are accorded a "conclusive presumption of
       reasonableness." This Order requires Northern Valley to revise the
       Tariff to state "clear[ly] and explicit[ly]" that charges will be
       imposed only for providing access to individuals or entities to whom
       Northern Valley offers its services for a fee. As so revised, the
       Tariff will comport with rule 61.26, and its rates will therefore be
       conclusively presumed reasonable.

   19. Sprint disagrees with this analysis, arguing that Northern Valley's
       rates may be challenged in a formal complaint proceeding. We need not
       decide whether Sprint is correct, because Sprint has not shown in this
       proceeding that Northern Valley's rates will prove to be unreasonable
       after Northern Valley revises its Tariff. Sprint asserts that Northern
       Valley's rates are excessive given Northern Valley's high traffic
       volumes. Yet Sprint has not established that Northern Valley's traffic
       volume will remain high after the Tariff is revised, in accordance
       with this Order, to impose access charges only for calls to or from
       paying end users. Indeed, Sprint alleges that Northern Valley's
       traffic volume is elevated precisely because the Tariff charges for
       providing access to entities that do not pay Northern Valley for its
       services.

     A. Northern Valley's Affirmative Defenses Lack Merit.

   20. Northern Valley asserts as an affirmative defense that Sprint has
       "unclean hands," alleging that Sprint has not paid Northern Valley
       amounts owing under Northern Valleys' tariffs. Even if this defense
       were available in a section 208 formal complaint proceeding, it would
       fail in this case. The unclean hands doctrine does not apply unless
       the alleged misconduct relates directly to the transaction that is the
       subject of the complaint. Northern Valley has not established that
       Sprint refuses to pay amounts invoiced pursuant to the Tariff at issue
       here, as opposed to prior Northern Valley tariffs.

   21. Northern Valley further argues that Sprint failed to negotiate in good
       faith because the pre-complaint letter that Sprint sent Northern
       Valley pursuant to Commission rule 1.721(a)(8) stated that a complaint
       would not be filed if Northern Valley withdrew the Tariff. Northern
       Valley views this statement as a "precondition" that is inconsistent
       with "good faith negotiations." This defense also fails. Before filing
       the Complaint, Sprint informed Northern Valley that it was "willing to
       listen" to "other idea[s] of how the issues we raise can be resolved."
       Further, Sprint's letter complied with rule 1.721(a)(8), because it
       outlined the allegations that form the basis of the Complaint and gave
       Northern Valley a reasonable opportunity to respond.

   22. In conclusion, Northern Valley's Tariff violates Commission rule
       61.26, as clarified by the CLEC Access Charge Reform Reconsideration
       Order, because it purports to charge for providing access to
       individuals or entities to whom Northern Valley offers its services
       for free. Moreover, the Tariff's terms are not "clear and explicit" as
       required by Commission rule 61.2(a). Finally, the Tariff contains a
       number of unreasonable payment and billing provisions. Accordingly, we
       conclude that the Tariff violates section 201(b) of the Act,  and
       Northern Valley must revise it to make "clear and explicit" that
       Northern Valley will charge IXCs for providing access only to
       individuals or entities to whom Northern Valley offers its services
       for a fee, and to remove the Tariff's unreasonable payment and billing
       provisions.

   IV. ORDERING CLAUSEs

   23. Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), 4(j), 201,
       203, 204, 205, 206, 208, and 415 of the Communications Act of 1934, as
       amended, 47 U.S.C. S:S: 151, 154(i), 154(j), 201, 203, 204, 205, 206,
       208, and 415, and sections 61.2 and 61.26 of the Commission's rules,
       47 C.F.R. S:S: 61.2 and 61.26, that the Complaint is GRANTED in part
       and DENIED in part.

   24. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j), 201, 203,
       204, 205, 206, 208, and 415 of the Communications Act of 1934, as
       amended, 47 U.S.C. S:S: 151, 154(i), 154(j), 201, 203, 204, 205, 206,
       208, and 415, and sections 61.2 and 61.26 of the Commission's rules,
       47 C.F.R. S:S: 61.2 and 61.26, that Northern Valley Communications,
       LLC SHALL FILE tariff revisions consistent with this Order within ten
       days of the release of this Order.

   FEDERAL COMMUNICATIONS COMMISSION

   Marlene H. Dortch

   Secretary

   Formal Complaint of Sprint Communications Company L.P., File No.
   EB-11-MD-003 (filed Feb. 18, 2011) ("Complaint").

   47 U.S.C. S: 208.

   See Complaint Ex. 1 (Northern Valley Communications, LLC Access Service
   Tariff No. 3, effective July 23, 2010) ("Tariff").

   Complaint at 35-37, P:P: 73-81 (Count I) (citing 47 U.S.C. S:S: 201(b)
   (prohibiting "unjust and unreasonable practices") and 205 (authorizing
   Commission to "prescribe just and reasonable charges")); id. at 37-38, P:
   82 (Prayer for Relief). Sprint states that it "is not requesting damages,"
   Complaint at 4, P: 5, but adds that it "reserves the right to seek damages
   at a later time," id. at 4 n.8. Sprint's conflicting statements fail to
   comply with the requirements of Commission rule 1.722(d) regarding
   requests for damages in a subsequent proceeding. See 47 C.F.R. S: 1.722(d)
   (requiring that requests for damages be "clear and unequivocal").

   47 C.F.R. S: 61.26; Access Charge Reform, Reform of Access Charges Imposed
   by Local Exchange Carriers, Eighth Report and Order and Fifth Order on
   Reconsideration, 19 FCC Rcd 9108 (2004) ("CLEC Access Charge Reform
   Reconsideration Order").

   47 C.F.R. S: 61.2(a) ("In order to remove all doubt as to their proper
   application, all tariff publications must contain clear and explicit
   explanatory statements regarding the rates and regulations.").

   Complaint at 4, P: 7; Answer of Northern Valley Communications, LLC, File
   No. EB-11-MD-003 (filed Mar. 21, 2011) ("Answer") at 4, P: 7.

   Sprint's Proposed Findings of Fact and Conclusions of Law, Ex. 1
   (Stipulations of Fact), File No. EB-11-MD-003 (filed Feb. 18, 2011)
   ("Stipulations") at 1, P: 1, 3, P:P: 14-16; Complaint at 5, P: 8; Answer
   at 4, P: 8; Answer, Legal Analysis at 4.

   Answer, Ex. 1 (Tariff); Stipulations at 1, P: 1, 2-3, P:P: 11-12; Answer,
   Legal Analysis at 4-5.

   Complaint, Ex. 1 (Tariff); Answer, Ex. 1 (Tariff); Stipulations at 3, P:P:
   17, 19.

   Complaint at 8, P: 17 & Ex. 1 (Tariff); Answer at 5, P: 17 & Ex. 1
   (Tariff).

   Qwest Communications Corp. v. Farmers and Merchants Mut. Tel. Co., Second
   Order on Reconsideration, 24 FCC Rcd 14801 (2009) ("Qwest v. Farmers II").

   Answer, Legal Analysis at 5. In Qwest v. Farmers II, the Commission
   granted a section 208 complaint against Farmers and Merchants Mutual
   Telephone Company of Wayland, Iowa ("Farmers"), a rural LEC that was
   engaged in access stimulation. Farmers' tariff imposed access charges for
   transporting calls to or from an "end user's premises" and defined "end
   user" as "any customer of an interstate or foreign telecommunications
   service other than a carrier." Qwest v. Farmers II, 24 FCC Rcd at 14801,
   P: 1, 14805, P: 10. The Commission concluded that, because the conference
   calling companies did not purchase any services from Farmers, they were
   not "end users" within the meaning of Farmers' tariff. Accordingly, the
   Commission found that Farmers had violated sections 201(b) and 203(c) of
   the Act because it had imposed charges that were inconsistent with its
   tariff: "[N]othing in the contracts [between Farmers and the conference
   calling companies] suggests that the conference calling companies would
   subscribe to any tariffed Farmers' service or pay Farmers for their
   connections to the interexchange network, as would ordinary end-user
   customers under the tariff." Id. at 14801, P: 1, 14806, P: 12.

   See Hyperion Telecommunications, Inc. Petition Requesting Forbearance,
   Memorandum Opinion and Order and Notice of Proposed Rulemaking, 12 FCC Rcd
   8596, 8596, P: 1 (1997) ("Hyperion Forbearance Order") (granting
   "permissive detariffing for provision of interstate exchange access
   services by providers other than the incumbent local exchange carrier").

   47 U.S.C. S: 204(a)(3) ("A [LEC] may file with the Commission a new or
   revised charge, classification, regulation, or practice on a streamlined
   basis. Any such charge, classification, regulation, or practice shall be
   deemed lawful and shall be effective 7 days (in the case of a reduction in
   rates) or 15 days (in the case of an increase in rates) after the date on
   which it is filed with the Commission unless the Commission takes action
   ... before the end of that 7-day or 15-day period ... ").

   Access Charge Reform, Reform of Access Charges Imposed by Competitive
   Local Exchange Carriers, Seventh Report and Order and Further Notice of
   Proposed Rulemaking, 16 FCC Rcd 9923, 9931, P: 22, 9934, P: 28 (2001)
   ("CLEC Access Charge Reform Order"). The Commission declared further that
   its goal was "ultimately to eliminate regulatory arbitrage opportunities
   that previously have existed with respect to tariffed CLEC switched access
   services." Id. at 9925, P: 3. The Commission expressed concern that CLECs
   were using high access rates to shift a substantial portion of their costs
   onto long distance carriers and subscribers who chose an access provider
   with lower rates. Id. at 9948, P: 59. Recently, moreover, the Commission
   sought comment on revisions to the CLEC benchmarking rule for CLECs
   engaging in revenue sharing agreements. See Connect America Fund, Notice
   of Proposed Rulemaking and Further Notice of Proposed Rulemaking, 26 FCC
   Rcd 4554 (2011) ("Connect America Fund").

   47 C.F.R. S: 61.26. See CLEC Access Charge Reform Order,  16 FCC Rcd  at
   9925, P: 3, 9938, P:P: 40-41 (describing the "bright line" that a
   "benchmark" would provide). The Commission made an exception for those
   small rural CLECs whose rates would otherwise be benchmarked against those
   of larger ILECs serving both rural and more urban communities. The
   Commission permitted these "rural CLECs" to benchmark their rates against
   the significantly higher rates found in the tariff to which small,
   generally rural ILECs subscribe. CLEC Access Charge Reform Order, 16 FCC
   Rcd at 9953, P: 73; 47 C.F.R. S: 61.26 (e) (rural exemption).

   CLEC Access Charge Reform Order, 16 FCC Rcd at 9925, P: 3, 9938, P: 40; 47
   C.F.R. S: 61.26.

   CLEC Access Charge Reform Reconsideration Order, 19 FCC Rcd 9114, P: 13,
   9115, P: 15.

   Qwest Communications Company, LLC v. Northern Valley Communications, LLC,
   Memorandum Opinion and Order, 2011 WL 2258081 (June 7, 2011), petition for
   recon. filed ("Qwest v. Northern Valley").

   Qwest v. Northern Valley at P: 9.

   Qwest v. Northern Valley at P: 17 (emphasis added). On June 14, 2011,
   Northern Valley filed revisions to the Tariff, which the Pricing Policy
   Division of the Wireline Competition Bureau rejected on June 28, 2011. See
   Northern Valley Communications, LLC Revisions to Tariff No. 3, Memorandum
   Opinion and Order, 2011 WL 2577786 (WCB/PPD rel. June 28, 2011). Northern
   Valley again filed revisions to the Tariff on July 7, 2011. Letter from G.
   David Carter, Counsel for Northern Valley Communications, LLC, to
   Marlene H. Dortch, Secretary, Federal Communications Commission, 
   Transmittal No. 7 (filed July 7, 2011). Sprint's Complaint, and this
   order, address the Tariff that took effect on July 23, 2010, and do not
   address any Tariff revisions attempted or effected after that date.

   Complaint at 1-2, P: 2, 10, P: 21, 16-20, P:P: 34-41, 23-26, P:P: 49-52;
   Complaint, Legal Analysis at 10-12; Sprint Communications Company L.P.'s
   Reply in Support of Formal Complaint, File No. EB-11-MD-003 (filed Apr. 4,
   2011("Reply") at 17-20.

   In an effort to defeat Sprint's rule 61.26 claim, Northern Valley repeats
   many of the same arguments it made in Qwest v. Northern Valley. Thus,
   Northern Valley argues here, as in Qwest v. Northern Valley, that the
   question of whether the Tariff purports to charge for providing access to
   users who have purchased services from Northern Valley is irrelevant as a
   matter of law and logic; that the Commission should evaluate the Tariff
   solely on the basis of the definitions contained therein, not in the light
   of Commission orders and rules; that Sprint has not alleged that Northern
   Valley has in fact imposed charges for entities that have not purchased
   services from Northern Valley; and that the Wireline Competition Bureau
   did not act on various IXC petitions to reject or suspend the Tariff. See
   Answer, Legal Analysis at 12-26. We reject these arguments for the same
   reasons we rejected them in Qwest v. Northern Valley. See Qwest v.
   Northern Valley at P:P: 10-14.

   The CLEC Access Charge Reform Reconsideration Order was promulgated
   pursuant to, among other provisions, section 201 of the Act, see CLEC
   Access Charge Reform Reconsideration Order, 19 FCC Rcd at 9166, P: 136, in
   furtherance of the Commission's obligation to ensure that "[a]ll charges,
   practices, classifications, and regulations for and in connection with ...
   communication service [are] just and reasonable." 47 U.S.C. S: 201(b).

   47 C.F.R. S: 61.2(a). This rule was promulgated pursuant to, among other
   provisions, section 201 of the Act, 47 U.S.C. S: 201. See CLEC Access
   Charge Reform Order, 16 FCC Rcd at 9975, P: 145; id. at 9931, P: 21
   ("section 201 gives us the authority to ensure that CLEC rates are just
   and reasonable.").

   See Complaint at 11-12, P: 24, 13, P: 28; Complaint, Legal Analysis at
   8-10; Reply at 11-13.

   Tariff, Original Page No. 8, Definitions.

   47 U.S.C. S: 153(53). See Petition for Declaratory Ruling that
   pulver.com's Free World Dialup is Neither Telecommunications Nor a
   Telecommunications Service, Memorandum Opinion and Order, 19 FCC Rcd 3307,
   3312-13, P: 10 (2004) ("In order to be a telecommunications service, the
   service provider must assess a fee for its service."). The Act's
   definition of "telecommunications service" applies to our construction of
   the Tariff's "end user" definition. 17A Am. Jur. 2d Contracts S: 359
   (2004) ("where words or terms having a definite legal meaning and effect
   are knowingly used in a contract or other instrument, the parties thereto
   will be presumed to have intended such words or terms to have their proper
   legal meaning and effect ...."). See also id. at S: 371 ("Contracting
   parties are presumed to contract in reference to the existing law, and to
   have in mind all the existing laws relating to the contract ...."). These
   principles apply with particular force here, because the Tariff adopts the
   precise definition of "end user" found in Commission rules and orders
   governing ILEC tariffs. See 47 C.F.R. S: 69.2(m) (defining "end user" as
   "any customer of an interstate or foreign telecommunications service that
   is not a carrier ..."); Investigation of Access and Divestiture Related
   Tariffs, Memorandum Opinion and Order, 97 FCC 2d 1082, 1192, S: 2.6 (1984)
   ("ECA Tariff Order") (requiring that the Exchange Carriers' Association
   tariff, as the model tariff for exchange access tariffs, so define "end
   user"); Access and Divestiture Related Tariffs (Non-ECA Filings),
   Memorandum Opinion and Order, 55 Rad. Reg. 2d 869, 870, P: 2 (1984)
   (requiring Bell Operating Companies and independent LECs "to implement the
   directives of the ECA Tariff Order ...").

   Tariff, Original Page No. 8, Definitions.

   Similarly, the Tariff defines "Customer of an Interstate or Foreign
   Telecommunications Service" as "any person or entity who sends or receives
   an interstate or foreign Telecommunications service transmitted to or from
   a Buyer across the Company's network, without regard to whether ...
   payment is tendered to ... [Northern Valley]." Tariff, Original Page No.
   7, Definitions (emphasis added).

   Tariff, Original Page No. 7, Definitions (emphasis added).

   Tariff, Original Page No. 46, S: 7.2.2 (emphasis added). See also, e.g.,
   Tariff at Original Page No. 8 ("End User Designated Premises") (emphasis
   added); id. (defining "Minutes of Use" as "the number of minutes for which
   a Buyer is billed" while, as noted, defining "Buyer" as an IXC that
   completes a call to End Users") (emphasis added); id. at Original Page 36,
   S: 5.1 (stating that "Switched Access Service" will "enable a Buyer to
   utilize [Northern Valley's] network") (emphasis added).

   See 1998 Biennial Regulatory Review - Part 61 of the Commission's Rules
   and Related Tariffing Requirements, Report and Order and First Order on
   Reconsideration, 14 FCC Rcd 12293, 12326, P:P: 98-99 (1999) (adopting rule
   61.2 pursuant to section 201, among other provisions); Halprin, Temple,
   Goodman & Sugrue v. MCI Telecomm. Corp., Memorandum Opinion and Order, 13
   FCC Rcd 22568, 22574-76, P:P: 8-13 (1998) (finding that "the Tariff is not
   clear and explicit as required by section 61.2 of the Commission's rules,
   which renders the Tariff unreasonable in violation of section 201(b) of
   the Act"). Sprint argues that additional Tariff provisions, which also
   purport to charge for calls to entities that do not purchase services from
   Northern Valley, violate rule 61.2(a). See Complaint at 11-16, P:P: 23-33;
   Complaint, Legal Analysis at 4-14; Reply at 7-14. We do not address these
   provisions here, because our finding that the Tariff must be revised to
   make "clear and explicit" that it imposes access charges only for
   providing access to Northern Valley's own, paying end users will afford
   Sprint all the relief to which it is entitled.

   See Complaint at 31-35, P:P: 64-72.

   Contrary to Northern Valley's contention (see Answer, Legal Analysis at
   49), the Commission has determined that CLEC access tariffs are subject to
   the just and reasonable standard of section 201. See In the Matter of
   Access Charge Reform, First Report and Order, 12 FCC Rcd 15982, 16141, P:
   363 (1997); CLEC Access Charge Reform Order, 16 FCC Rcd at 9929, P: 15;
   CLEC Access Charge Reform Reconsideration Order, 19 FCC Rcd at 9117, P: 18
   & n.61. See, e.g., 47 C.F.R. S: 61, Subpart A (General), Subpart C
   (General Rules for Nondominant Carriers), Subpart F (Specific Rules for
   Tariff Publications of Dominant and Nondominant Carriers), Subpart G
   (Concurrences), and Subpart J (Suspensions).

   See Tariff, Original Page No. 29, S:S: 3.1.4.1 & 3.1.4.2 ("Jurisdictional
   Reporting Requirements").

   Complaint at 34-35, P: 72.

   The Tariff describes the PIU Factor as a projected estimate by the Buyer
   of the split between the Buyer's interstate and intrastate traffic. See
   Tariff, Original Page 29, S: 3.1.4.1.

   See Tariff, Original Page No. 29, S: 3.1.4.2 .

   Answer, Legal Analysis at 50.

   Tariff, Original Page No. 30, S: 3.1.5.1. See Complaint at 34, P: 71;
   Complaint, Legal Analysis at 44-45; Reply at 32.

   Tariff, Original Page No. 30, S: 3.1.5.

   The Commission has determined that deposit requirements should be
   "narrowly tailored" to address specific risks of nonpayment and to
   eliminate broad authority to require deposits without objective criteria,
   which "are particularly susceptible to discriminatory application." In re
   Verizon Petition for Emergency Declaratory and Other Relief, Policy
   Statement, 17 FCC Rcd 26884, 26894, P:P: 21-22 (2002) ("Verizon
   Declaratory Policy Statement") (tariffs are not properly drafted when they
   provide LECs a "great deal of discretion in determining which customers
   will or will not be subjected to these [deposit] burdens"). Because we
   find Northern Valley's deposit provisions unreasonable, we also find the
   deposit provisions in section 3.2.3.1 to be unreasonable. See Tariff,
   Original Page No. 35, S: 3.2.3.1 ("Service may be suspended or terminated
   for nonpayment of any bill or deposit until such bill or deposit is
   paid."). See also Investigation of Access and Divestiture Related Tariffs,
   Phase I Order, 97 FCC 2d 1082, 1169 (1984).

   See Tariff, Original Page No. 32, S: 3.1.7.1(a) (the "Buyer shall be
   deemed to have waived any and all rights and claims ... if a good faith
   dispute is not timely filed").

   47 U.S.C. S: 415.

   See 47 U.S.C. S: 415. Northern Valley's contention that the dispute notice
   provision does not modify the statute of limitations period is
   inconsistent with the waiver language of the provision. See Answer, Legal
   Analysis at 45. Indeed, this tariff language is indistinguishable from
   tariff language that a federal district court recently invalidated. See
   Paetec Communications, Inc. v. MCI Communications Services, Inc., 712 F.
   Supp. 2d 405, 416-17 (E.D. Pa. 2010) (construing identical tariff language
   and finding that "the 90-day dispute resolution provision in Paetec's
   tariff could not preempt the federal statute of limitations in the context
   of a tariff because the terms of a tariff are not negotiated like the
   terms of a contract. If a term in the tariff could supersede the statute
   of limitations, it would mean that a carrier could unilaterally void
   federally codified consumer protections simply by filing a tariff."). See
   also MCI WorldCom Network Services, Inc. v. Paetec Communications, Inc.,
   204 Fed.Appx. 271, 272 (4th Cir. 2006) ("a party could not use a tariff to
   shorten unilaterally the two-year statute of limitations"). None of the
   cases cited by Northern Valley involved a challenge to the reasonableness
   of a tariff provision under section 201(b) of the Act. See Answer, Legal
   Analysis at 43-45.

   See Tariff, Original Page No. 32, S: 3.1.7.1(b) ("Any disputed charges
   must be paid in full prior to or at the time of submitting a good faith
   dispute and failure to tender payment for disputed invoices ... is
   sufficient basis ... to deny a dispute ....").

   See Tariff, Original Page No. 33, S: 3.1.7.1(d) (emphasis added).

   47 U.S.C. S:S: 206-208.

   See Tariff, Original Page No. 33, S: 3.1.7.1(c) ("Buyer will incur a Late
   Payment Fee on the unpaid amount at the rate of 1.5% per month on the
   total unpaid balance"). See also Tariff, Original Page No. 33, S: 3.1.73
   ("Adjustments or Refunds to the Buyer").

   Reply at 31.

   See Tariff, Original Page No. 33, S: 3.1.7.3(a) ("In the event that the
   Company resolves the billing dispute in favor of a Buyer who has paid the
   total amount of the disputed bill as required by this Tariff, the Company
   will credit the Buyer's account for any overpayment by the Buyer, together
   with Simple Interest"). See also Tariff Original Page No. 33, S:
   3.1.7.3.(b).

   See Tariff Original Page No. 34, S: 3.1.7.4 ("In the event that [Northern
   Valley] pursues a claim in Court or before any regulatory body ... Buyer
   shall be liable for the payment of [Northern Valley's] ... attorneys'
   fees").

   Complaint at 37, P: 82 (Count I); Complaint, Legal Analysis at 3-4; Reply
   at 23-26.

   See Qwest Communications Corp. v. Farmers and Merchants Mut. Tel. Co.,
   Memorandum Opinion and Order, 22 FCC Rcd 17973-80, P:P: 26-27 & n.52
   (2007) ("Qwest v. Farmers I"); Virgin Islands Tel. Co. v. FCC, 444 F.3d
   666, 673 (D.C. Cir. 2006).

   Reply at 34. See generally Reply at 33-36.

   See ACS of Anchorage, Inc. v. FCC, 290 F.3d 403, 412 (D.C. Cir. 2002) (the
   court, in reversing a Commission decision finding that a tariff did not
   qualify for "deemed lawful" status, notes that it was not addressing "the
   case of a carrier that furtively employs improper accounting techniques in
   a tariff filing, thereby concealing potential rate-of-return violations").

   Complaint, Legal Analysis at 33. Accord id. at 30-39. See also Complaint
   at 27-31, P:P: 56-64, 36, P: 77; Reply at 22-26. A tariff's rates may not
   be set aside during the time that the tariff enjoyed "deemed lawful"
   status under section 204(a)(3). Qwest v. Farmers I, 22 FCC Rcd at 17978
   n.52 ("Since the passage of section 204(a)(3) of the Act, the Commission
   cannot award refunds in connection with tariffs that are `deemed
   lawful.'").

   Complaint, Legal Analysis at 32 ("Northern Valley has set its new rates
   below the benchmark rate in 47 C.F.R. S: 61.26 ....").

   CLEC Access Charge Reform Order, 16 FCC Rcd at 9948, P: 60. Accord id. at
   9938, P: 40 (stating that the order "establish[es] a benchmark level at
   which CLEC access rates will be conclusively presumed to be just and
   reasonable ...") (emphasis added).

   Sprint's argument that the Tariff's rates are not presumed reasonable
   because the Tariff violates rule 61.26 therefore does not succeed. See
   Complaint, Legal Analysis at 32-34; Reply at 26. Northern Valley filed
   Tariff revisions on June 14, 2011, which the Pricing Policy Division of
   the Wireline Competition Bureau rejected on June 28, 2011. Northern Valley
   then filed Tariff revisions on July 7, 2011. See n.22, supra.

   See Complaint, Legal Analysis at 32-33; Reply at 22-26 (citing CLEC Access
   Charge Reform Order, 16 FCC Rcd at 9955, P: 77 (the Commission "will be
   able to address, on a case-by-case basis, the improper exploitation of
   [the rural exemption]..."); CLEC Access Charge Reform Reconsideration
   Order, 19 FCC Rcd at 9143-44, P: 72) (if a carrier "believes that any
   particular LEC rate or practice is unlawful, it may bring a challenge
   under section 208 of the Act").

   A complainant in a section 208 complaint proceeding must show a violation
   of the Act "by a preponderance of the evidence." Contel of the South, Inc.
   v. Operator Communications, Inc., Memorandum Opinion and Order, 23 FCC Rcd
   548, 552, P: 10 (2008). See, e.g., Consumer.Net v. AT&T Corp., Order, 15
   FCC Rcd 281, 284-85, P: 6 (1999); Consumer.Net, LLC and Russ Smith v.
   Verizon Communications, Inc., Memorandum Opinion and Order, 25 FCC Rcd
   2737, 2740, P: 10 (Enf. Bur. Apr. 1, 2010).

   See Complaint, Legal Analysis at 35-39; Reply at 22-26.

   Sprint alleges that Northern Valley's traffic volume is elevated because
   Northern Valley enters into "traffic-pumping schemes" with providers of
   high-volume services such as a conference calling companies and chat lines
   (collectively "CCCs") that direct large volumes of interstate traffic to
   Northern Valley. Northern Valley allegedly uses the Tariff to force IXCs
   to pay excessive access charges for terminating this traffic, and then
   pays a portion of its concomitantly increased access revenues to the CCCs.
   See Complaint at 2-3, P: 3, 5-7, P:P: 10-15; Complaint, Legal Analysis at
   1-2, 31-32, 35, 39; Reply at 25. Thus, the arrangements described by
   Sprint require that Northern Valley be able to impose charges upon IXCs by
   tariff rather than negotiation, and that those charges are for terminating
   calls to entities (i.e., the CCCs) to which Northern Valley offers its
   services for free.

   See Answer at 19, P: 4 (Affirmative Defenses); id., Legal Analysis at 7-9.

   See Marzec v. Power, Order, 15 FCC Rcd 4475, 4480 n.35 (2000) ("the
   Commission has expressed doubt that the unclean hands defense is available
   in section 208 proceedings") (citing AT&T Corp. v. Bell
   Atlantic-Pennsylvania, Memorandum Opinion and Order, 14 FCC Rcd 556, 598 &
   n.233 (1998) (same)).

   See, e.g., Marzec, 15 FCC Rcd at 4480 (rejecting unclean hands defense
   because the complainant's alleged misconduct was "irrelevant" to the
   defendant's violations); Wolff v. Westwood Management, LLC, 558 F.3d 517,
   521 (D.C. Cir. 2009) (assertion of unclean hands as defense against claim
   that dispute is subject to arbitration cannot succeed where "[t]here is no
   allegation that appellees have unclean hands with respect to the agreement
   to arbitrate itself"); Sellar Agency Council, Inc. v. Kennedy Center for
   Real Estate Education, Inc., 621 F.3d 981, 986 (9th Cir. 2010) ("It is
   fundamental to the operation of the [unclean hands] doctrine that the
   alleged misconduct by the party relate directly to the transaction
   concerning which the complaint is made.") (citations and brackets
   omitted).

   See Answer, Legal Analysis at 8 (stating that Sprint began paying Northern
   Valley's invoices "at the end of 2010"); id. at 25 (arguing that Sprint
   has not shown that Northern Valley has charged Sprint for calls to
   entities that do not purchase services from Northern Valley). In any
   event, Sprint's alleged "unclean hands" may not defeat a challenge to a
   tariff that applies to an entire industry, not just to Sprint. See
   McKennon v. Nashville Banner Pub. Co., 513 U.S. 352, 361 (1995) (unclean
   hands doctrine does not apply "`where a private suit serves important
   public purposes'") (quoting Perma Life Mufflers, Inc. v. Int'l Parts
   Corp., 392 U.S. 134, 138 (1968)).

   See Answer, Legal Analysis at 10 (citing 47 C.F.R. S: 1.721(a)(8), which
   requires that complaints include "certification that the complainant has,
   in good faith, discussed or attempted to discuss the possibility of
   settlement," as well as a statement that the complainant mailed a letter
   to the defendant outlining the allegations of the complaint).

   Answer, Legal Analysis at 10.

   Complaint, Ex. 12 (email from counsel to Sprint to counsel to Northern
   Valley sent Jan. 5, 2011).

   See Complaint, Ex. 10 (outlining the allegations that form the basis of
   the Complaint).

   See, e.g., Global Crossing Telecommunications, Inc. v. Metrophones
   Telecommunications, Inc., 550 U.S. 45, 52-55 (2007) (citations omitted)
   ("The FCC has long implemented S: 201(b) through the issuance of rules and
   regulations"). See also nn. 25 & 34 above.

   Because this Order provides Sprint all the relief to which it would be
   entitled if we were to grant Sprint's claim that Northern Valley violates
   sections 251 and 252 of the Act, 47 U.S.C. S:S: 251-252, we need not
   address that claim. See Complaint at 16-17, P: 34, 26, P: 55, 36, P: 76,
   Complaint, Legal Analysis at 29-30; Reply at 20-22 (arguing that, to the
   extent that the Tariff purports to charge IXCs for providing access to
   entities that are not Northern Valley's end users, it violates the
   reciprocal compensation requirements of sections 251 and 252).

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   Federal Communications Commission FCC 11-111

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   Federal Communications Commission FCC 11-111