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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
)
In the Matter of
)
Qwest Communications Company, LLC,
)
Complainant,
) File No. EB-11-MD-001
v.
)
Northern Valley Communications, LLC,
)
Defendant.
)
)
)
)
MEMORANDUM OPINION AND ORDER
Adopted: June 7, 2011 Released: June 7, 2011
By the Commission:
I. INTRODUCTION
1. This formal complaint proceeding represents the latest chapter in the
ongoing dispute between interexchange carriers ("IXCs") and local
exchange carriers ("LECs") involving "access stimulation." Qwest
Communications Company, LLC ("Qwest") filed a complaint against
Northern Valley Communications, LLC ("Northern Valley") under section
208 of the Communications Act of 1934, as amended ("Act"). In short,
Qwest alleges that Northern Valley's interstate access service tariff
violates section 201(b) of the Act and requests that the Commission
order Northern Valley to withdraw the tariff.
2. As explained below, we find that Northern Valley's tariff is unlawful.
As Qwest argues, and Northern Valley does not dispute, Northern
Valley's tariff purports to allow Northern Valley to impose tariffed
switched access charges on IXCs for calls placed or received by
individuals or entities to whom Northern Valley offers free services.
The tariff therefore violates Commission rule 61.26 as clarified by
the CLEC Access Charge Reform Reconsideration Order, and accordingly
also violates section 201(b) of the Act. Thus, we grant Qwest's
Complaint and direct Northern Valley to revise its tariff within ten
days of the date of release of this Order.
II. BACKGROUND
A. The Parties
3. Qwest is an IXC providing interstate telecommunications service
throughout the United States. Northern Valley is a competitive local
exchange carrier ("CLEC"), serving customers in South Dakota. Northern
Valley provides interstate exchange access service to IXCs such as
Qwest pursuant to tariffs filed with the Commission. Among the
entities to which Northern Valley terminates calls are conference
calling companies that maintain conference bridges located in Northern
Valley's telephone exchange area.
4. On July 8, 2010, Northern Valley filed a revised interstate access
service tariff ("Tariff"). In particular, Northern Valley revised the
Tariff's definition of "End User," which the Tariff previously had
defined, in relevant part, as "any Customer of an Interstate or
Foreign Telecommunications Service that is not a carrier." In the
revised Tariff, Northern Valley added the following sentence to the
"End User" definition: "An End User need not purchase any service
provided by [Northern Valley]." Northern Valley states that it revised
the "End User" definition because it believes 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 existing tariff.
A. The Commission's Access Charge Regime
5. Resolution of the present dispute requires an examination first of the
Commission's rules and orders governing incumbent local exchange
carrier ("ILEC") access services. ILECs are required to publish the
rates, terms, and conditions applicable to their access service in
tariffs filed with the Commission. The Commission's rules governing
these tariffs provide that ILECs may recover access service costs
through charges assessed on both IXCs and "end users." These rules
have, since their promulgation in 1983 in anticipation of the AT&T
divestiture, defined "end user" as "any customer of an interstate or
foreign telecommunications service that is not a carrier." The
Commission, since 1984, also has required that ILEC access tariffs
define "end user" as "any customer of an interstate or foreign
telecommunications service that is not a carrier."
6. In contrast to ILECs, CLECs may impose interstate access charges
either through tariffs or contracts negotiated with IXCs. In the CLEC
Access Charge Reform Order, the Commission found that CLEC access
rates were, on average, "well above the rates that ILECs charge for
similar service" and acknowledged that some CLECs were "refus[ing] to
enter meaningful negotiation on access rates, choosing instead simply
to file a tariff and bind IXCs ... to the rates therein." 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." Accordingly, the
Commission prohibited CLECs from tariffing switched access rates that
were higher than the switched access rates of the ILEC serving the
same geographic area in which the CLEC was located. In other words,
CLEC switched access rates would be "benchmarked" against ILEC rates.
If a CLEC wished to impose higher switched access rates, it could do
so only by negotiating with the affected IXCs. Finally, as discussed
more fully below, 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.
III. DISCUSSION
A. Northern Valley's Tariff Violates Section 201(b) of the Act.
7. As noted above, Northern Valley's tariff previously defined "End User"
to mean "any Customer of an Interstate or Foreign Telecommunications
Service that is not a carrier." Northern Valley revised that
definition by adding the statement that "an End User need not purchase
any service provided by [Northern Valley]." In its Complaint, Qwest
argues that the Tariff is unlawful because this new language purports
to allow Northern Valley to impose tariffed charges on Qwest for
terminating calls to entities to whom Northern Valley offers free
service. We agree with Qwest. Qwest's construction of the language at
issue is reasonable, and, moreover, is not disputed by Northern
Valley. The Tariff therefore is unlawful, because, as explained below,
the Commission's access service rules and orders establish that a CLEC
may tariff access charges only if those charges are for transporting
calls to or from an individual or entity to whom the CLEC offers
service for a fee.
8. The Commission in the CLEC Access Charge Reform Order promulgated
rules entitled "Tariffing of competitive [LEC] interstate switched
exchange access services." Section 61.26(a)(3) of these rules states
that "Interstate switched exchange access services shall include the
functional equivalent of the ILEC interstate exchange access services
typically associated with the ... rate elements [found in ILEC access
service tariffs.]" Thus, the Commission's rules require that tariffed
CLEC charges for "interstate switched exchange access services" be for
services that are "the functional equivalent" of ILEC interstate
switched exchange access services. As the Commission subsequently
explained in the CLEC Access Charge Reform Reconsideration Order, a
CLEC provides the "functional equivalent" of an ILEC's access services
only if the CLEC transmits the call to its own end user:
The rate elements identified in [the section defining "Interstate switched
exchange access services"] reflect those services needed to originate or
terminate a call to a LEC's end-user. When a competitive LEC originates or
terminates traffic to its own end-users it is providing the functional
equivalent of those services....
Moreover, the Commission has made clear that when a CLEC is not
transporting traffic to or from its own end user, the CLEC is not
providing the functional equivalent of ILEC access services and thus not
entitled to charge the full tariffed benchmark rate. The CLEC Access
Charge Reform Reconsideration Order explains:
[T]here have been a number of disputes regarding the appropriate
compensation to be paid by IXCs when a competitive LEC handles
interexchange traffic that is not originated or terminated by the
competitive LEC's own end-users.... [W]e now conclude that the benchmark
rate established in the CLEC Access Reform Order is available only when a
competitive LEC provides an IXC with access to the competitive LEC's own
end-users. As explained above, a competitive LEC that provides access to
its own end-users is providing the functional equivalent of the services
associated with the rate elements listed in section 61.26(a)(3) [i.e.,
ILEC interstate access services] and therefore is entitled to the full
benchmark rate.
9. A CLEC's "own end-users" do not include entities that receive free
services from the CLEC. As noted earlier, "end user" has been defined
by the Commission's ILEC access charge rules and orders for more than
25 years as a "customer of an interstate or foreign telecommunications
service." The Act, in turn, defines "telecommunications service" as
"the offering of telecommunications for a fee." Thus, under 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 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. Northern Valley's Tariff, however, purports to permit
Northern Valley to charge IXCs for calls to or from entities to whom
Northern Valley offers its services free of charge, because it states
that "an End User need not purchase any service provided by [Northern
Valley]". Therefore, the Tariff violates the Commission's CLEC access
charge rules as clarified by the CLEC Access Charge Reform
Reconsideration Order, and consequently also violates section 201(b)
of the Act.
10. Northern Valley disagrees with this analysis, arguing first that a
"customer of ... telecommunications service" need not pay for such
service. According to Northern Valley, the "Collins English Dictionary
recognizes that, in addition to `a person who buys,' a customer may
also be `a person with whom one has dealings.'" In the context
relevant to this dispute, however, "customer" clearly means a paying
customer. As discussed, the Commission defines "end user" to mean a
customer of a "telecommunications service," which, under the statute,
is "the offering of telecommunications for a fee." The Commission has
explained that, "in order to be a telecommunications service, the
service provider must assess a fee for its service."
11. Northern Valley argues further that the question of whether it charges
end users "is both logically and legally inapposite to a determination
of whether Qwest should be obligated to pay for the Access Service
that it receives." Northern Valley asserts that the Tariff is lawful
even if Northern Valley does not provide the "functional equivalent"
of ILEC exchange access, because Northern Valley provides "exchange
access" within the meaning of the Act. Specifically, Northern Valley
notes that the Act's "exchange access" definition imposes no
requirement that a LEC receive payment from the individual or entity
placing or receiving the call. Instead, the Act defines the term as
"the offering of access to telephone exchange services or facilities
for the purpose of the origination or termination of telephone toll
services," and defines "telephone toll service" as "telephone service
between stations in different exchange areas for which there is made a
separate charge not included in contracts with subscribers for
exchange service." Northern Valley, however, must comply not only with
the Act, but also with the Commission's rules and orders. As
discussed, the Commission has determined that a CLEC may not impose
switched access charges pursuant to tariff unless it is providing
interstate switched exchange access services to its own end users, and
that an entity to whom the CLEC offers free service is not an end
user. Thus, if Northern Valley wishes to charge IXCs for terminating
calls to entities that pay no fees, it must do so through a negotiated
contract.
A. Northern Valley's Remaining Defenses Are Not Valid.
12. Northern Valley asserts that the Tariff is lawful regardless of
Commission orders or rules. According to Northern Valley, there is no
"authority for why the definitions in Northern Valley's tariff must
mimic word-for-word the definitions in the Commission rules, or be
invalid." Rather, Northern Valley contends, the Commission is required
"to evaluate [Northern Valley's] tariff based on the definitions
contained therein, not by prior orders or rules...." As an example,
Northern Valley cites Qwest v. Farmers I, asserting that "the
Commission analyzed Qwest's complaint there, by reference to the terms
of the tariff at issue." Northern Valley's argument misses the mark.
LEC tariffs must comply with the Act and the Commission's rules and
orders; those that do not are subject to suspension, mandatory
withdrawal, revision, or challenge by formal complaint. The question
in Qwest v. Farmers I was whether Farmers' practices conformed to the
terms of its otherwise lawful tariff. There was no contention - as
there is in this case - that the terms of Farmers' tariff were
unlawful, and thus the Commission did not address that issue.
13. In addition, Northern Valley argues that the Complaint should be
denied because Qwest does not allege that Northern Valley has in fact
imposed charges for calls to entities that have not purchased services
from Northern Valley, or will do so in the future. Qwest is not
required to make any such showing. "Tariffs are to be interpreted
according to the reasonable construction of their language; neither
the intent of the framers nor the practice of the carrier
controls...." The Tariff states "[a]n End User need not purchase any
service provided by [Northern Valley]." This language is reasonably
construed to include entities to whom Northern Valley offers service
free of charge. As discussed, imposing tariffed charges on IXCs for
terminating calls to such entities violates the Commission's access
charge regime; therefore, the Tariff is unlawful. In any event,
Northern Valley's argument rings hollow. Northern Valley admits that
it revised its Tariff because Qwest v. Farmers II created "doubt" as
to whether Northern Valley could continue to impose access charges on
"portions of the traffic that Qwest was sending to Northern Valley"
(i.e., calls to conference calling companies). Further, in order to
meet its burden of proof, Qwest is not obligated to establish that
Northern Valley already has imposed unlawful access charges upon
Qwest. Section 208(a) of the Act states that complaints may not be
dismissed "because of the absence of direct damage to the
complainant."
14. Northern Valley's remaining defenses likewise are unavailing. Contrary
to Northern Valley's assertion, the fact that the Wireline Competition
Bureau did not act on Qwest's Petition to Reject or, in the
Alternative, Suspend and Investigate the Tariff presents no impediment
to granting the Complaint. As Northern Valley acknowledges, a
petitioner's burden of proof when seeking rejection or suspension of a
CLEC tariff is more demanding than a complainant's burden in a section
208 complaint proceeding. Similarly, there is no merit to Northern
Valley's assertion that Qwest, by failing to follow the dispute
resolution provisions of the Tariff (i.e., pay disputed charges)
violated Commission rule 1.721(a)(8). Compliance with the dispute
resolution provisions of a tariff is not the standard for determining
whether a complainant has satisfied rule 1.721(a)(8). Finally,
Northern Valley offers no factual or legal support whatsoever for its
affirmative defense that Qwest has "unclean hands."
15. In conclusion, we grant Qwest's Complaint because the Tariff's revised
"end user" definition allows Northern Valley to violate the
Commission's CLEC access rules and orders by imposing tariffed
switched access charges for terminating calls to entities to whom
Northern Valley offers free service. Accordingly, we conclude that the
Tariff violates section 201(b) of the Act, and must be revised.
IV. ORDERING CLAUSEs
16. Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), 4(j), 201,
203, and 208 of the Communications Act of 1934, as amended, 47 U.S.C.
S:S: 151, 154(i), 154(j), 201, 203, and 208, that the Complaint is
GRANTED.
17. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j), 201, 203,
and 208 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
151, 154(i), 154(j), 201, 203, and 208, that Northern Valley
Communications, LLC SHALL FILE tariff revisions within ten days of the
release of this Order 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.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
As described by this Commission, "access stimulation" is an "arbitrage
scheme" by which a telecommunications carrier "enters into an arrangement
with a provider of high volume operations such as chat lines, adult
entertainment calls, and `free' conference calls" in order to generate
elevated traffic volumes and maximize access charge revenues. Connect
America Fund, Notice of Proposed Rulemaking and Further Notice of Proposed
Rulemaking, 26 FCC Rcd 4554, 4758, P: 636 (2011) ("Connect America Fund").
Formal Complaint of Qwest Communications Company, LLC, File No.
EB-11-MD-001 (filed Jan. 6, 2011) ("Complaint").
47 U.S.C. S: 208.
Complaint at 13-17, P:P: 21-31 (citing section 201(b), 47 U.S.C. S: 201(b)
(prohibiting "unjust and unreasonable practices")); id. at 18, P: 34
(Prayer for Relief). Qwest's Complaint does not seek damages.
See 47 C.F.R. S: 61.26; Access Charge Reform, Reform of Access Charges
Imposed by Competitive Local Exchange Carriers, Eighth Report and Order
and Fifth Order on Reconsideration, 19 FCC Rcd 9108 (2004) ("CLEC Access
Charge Reform Reconsideration Order").
Joint Statement, File No. EB-11-MD-001 (filed Feb. 9, 2011) ("Joint
Statement") at 1, P: 2; Complaint at 3-4, P: 1. Qwest recently merged with
CenturyTel, Inc. See Applications filed by Qwest Communications
International Inc. and CenturyTel, Inc. d/b/a CenturyLink for Consent to
Transfer Control, Memorandum Opinion and Order, 2011 WL 972605 (rel. Mar.
18, 2011). See also Letter from David H. Solomon, Counsel for Qwest, to
Marlene H. Dortch, Secretary, FCC, File No. EB-11-MD-001 (filed Apr. 28,
2011).
Joint Statement at 1, P: 3; Answer of Northern Valley Communications, LLC,
File No. EB-11-MD-001 (filed Jan. 27, 2011) ("Answer"), Exhibit A
(Northern Valley Communications, LLC Legal Analysis in Opposition to
Formal Complaint ("Legal Analysis")) at 3.
See Joint Statement at 2-3, P:P: 3, 4, 7. Northern Valley contends that it
is a "rural CLEC." See Answer, Legal Analysis at 3. Rural CLECs are
permitted under the "rural exemption" contained in the CLEC access charge
rules to charge significantly higher rates than a non-rural CLEC. See
discussion below at paragraph 6 & n.24. Qwest does not concede that
Northern Valley qualifies for the "rural exemption." See Complaint at 8,
n.9.
Answer, Legal Analysis at 3-4.
Joint Statement at 2, P: 4. Complaint at 2 & Exhibit B (Northern Valley
Communications, LLC Tariff F.C.C. No. 3 ("Tariff")).
Joint Statement at 2, P: 4. Complaint at 2, 12, P: 18 & Exhibit B. See
Northern Valley F.C.C. Tariff No. 2 at Original Page 2-59 and Complaint,
Exhibit A (Legal Analysis in Support of Qwest Communications Company,
LLC's Complaint ("Legal Analysis")) at 4-6.
Complaint, Exhibit B (Tariff) at Original Page No. 8.
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 4. 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 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." Qwest v. Farmers II, 24 FCC Rcd at 14801, P: 1, 14806, P: 12.
47 U.S.C. S: 203(a); see Tariff Filing Requirements for Interstate Common
Carriers, Report and Order, 7 FCC Rcd 8072, 8072-73, P:P: 3-8 (1992); see
also Hyperion Telecommunications, Inc. Petition Requesting Forbearance,
Memorandum Opinion and Order and Notice of Proposed Rulemaking, 12 FCC Rcd
8596 (1997) ("Hyperion Forbearance Order") at 8596-8601, P:P: 1-9
(discussing the application of the section 203(a) tariff-filing
requirement to ILECs).
See, e.g., 47 C.F.R. S:S: 69.4(a) ("The end user charges for access
service filed with this Commission shall include charges for the End User
Common Line element ...."); 69.104 (end user common line charge for
non-price cap ILECs); 69.152 (end user common line charge for price cap
LECs).
47 C.F.R. S: 69.2(m); see MTS and WATS Market Structure, Third Report and
Order, 93 FCC 2d 241, 245-46, P: 10 (1983) ("Today we...adopt[ ] rules
that will determine the rates interexchange carriers and end users will
pay for access to local telephone company facilities used to complete
interstate service offerings."), 345, Appendix A, S: 69.2(m) (defining
"end user" as "any customer of an interstate or foreign telecommunications
service ... that is not a carrier ...").
See 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....").
See Hyperion Forbearance Order, 12 FCC Rcd at 8596, P: 1 (granting
"permissive detariffing for provision of interstate exchange access
services by providers other than the incumbent local exchange carrier").
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 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.
CLEC Access Charge Reform Order, 16 FCC Rcd at 9925, P: 3.
CLEC Access Charge Reform Order, 16 FCC Rcd at 9944-45, P: 52.
Id. The Commission has sought comment on revising the CLEC benchmark rule
for carriers with revenue-sharing arrangements. See Connect American
Fund, 26 FCC Rcd at 4762, P:P: 649-50.
CLEC Access Charge Reform Order, 16 FCC Rcd at 9925, P: 3, 9938, P: 40; 47
C.F.R. S: 61.26. 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.
See Northern Valley F.C.C. Tariff No. 2 at Original Page 2-59 and
Complaint, Exhibit B (Tariff No. 3) at Original Page No. 8.
Complaint, Exhibit B (Tariff) at Original Page No. 8.
See Answer, Legal Analysis at 12-14. See also n.34 below.
47 C.F.R. S: 61.26 (heading).
47 C.F.R. S: 61.26(a)(3).
Access Charge Reform Reconsideration Order, 19 FCC Rcd at 9114, P: 13
(emphasis added). Commission rule 61.26(f), 47 C.F.R. S: 61.26(f),
applying when "a CLEC provides some portion of the interstate switched
exchange access services used to send traffic to or from an end user not
served by that CLEC..." is not at issue here.
CLEC Access Charge Reform Reconsideration Order, 19 FCC Rcd at 9115, P: 15
(emphasis added).
See above at II.B. ("The Commission's Access Charge Regime") P: 5 (citing
47 C.F.R. S: 69.2(m), ECA Tariff Order, 97 FCC 2d at 1192, S: 2.6).
47 U.S.C. S: 153(53) (emphasis added).
Complaint, Exhibit B (Tariff) at Original Page No. 8. The Tariff's
definition of "End User" may be so inconsistent as to be ambiguous. On the
one hand, it defines "end user" as a paying customer (an end user is "any
customer of an interstate or foreign telecommunications service").
Complaint, Exhibit B (Tariff) at Original Page No. 8. On the other hand,
it defines "end user" as an entity that does not pay (an end user "need
not purchase any service provided by [Northern Valley]"). Id. This
inconsistency may violate the Commission's requirement that tariffs be
"clear and explicit." See 47 C.F.R. S: 61.2(a). We do not address this
issue, however, because Qwest did not raise it, and both parties assert
that the Tariff's "end user" definition establishes that Northern Valley
may impose charges for calls to or from parties that have not purchased
services from Northern Valley.
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"). The CLEC Access Charge Reform Reconsideration Order was
promulgated pursuant to section 201, 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).
See also Halprin, Temple, Goodman & Sugrue v. MCI Telecomm. Corp.,
Memorandum Opinion and Order, 13 FCC Rcd 22568, 22574-76, P:P: 8-13
("Halprin") (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 violations of section 201(b) of the Act...").
Answer, Legal Analysis at 18-22.
Answer, Legal Analysis at 19 (citing Collins English Dictionary - Complete
& Unabridged (10th ed. 2009)).
47 C.F.R. S: 69.2(m) (emphasis added); 47 U.S.C. S: 153(53) (emphasis
added). The Commission's defining "end user" as a customer of a service
offered for a fee furthers the Commission's goal of ensuring that neither
IXCs nor end users are charged an unfair share of the LEC's costs in
transporting interstate calls. The Commission has concluded that, to the
extent consistent with universal service, a reasonable portion of a LEC's
costs in providing the facilities linking a particular individual or
entity to a CLEC's central office (i.e., the "common line") should be paid
by that individual or entity: "The concept that users of the local
telephone network [for interstate calls] should be responsible for the
costs they actually cause is sound from a public policy perspective and
rings of fundamental fairness. It assures that ratepayers will be able to
make rational choices in their use of telephone service, and it allows the
burgeoning telecommunications industry to develop in a way that best
serves the needs of the country." MTS and WATS Market Structure,
Memorandum Opinion and Order, 97 FCC 2d 682, 686, P: 7 (1983) (discussing
the decision to impose the common line charge on end users); see also CLEC
Access Charge Reform Reconsideration Order, 19 FCC Rcd at 9127, n.132
(noting that price cap carriers "recover the majority of interstate common
line costs from their end users" and that rate-of-return carriers "recover
all of their interstate common line costs through a combination of
end-user charges and universal service") (citations omitted).
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). Thus, Northern
Valley's reliance on cases construing "customer" in dissimilar contexts is
misplaced. See Answer, Legal Analysis at 19 (citing Alhambra-Grantfork
Tel. Co. v. Ill. Commc'ns Comm'n, 832 N.E.2d 869, 873 (Ill. App. Ct. 2005)
(construing an Illinois statute permitting tariff revisions only if
adequate notice is given to "all potentially affected customers")); id. at
20 (citing Am. States Ins. Co. v. Hartford Cas. Ins. Co., 950 F. Supp.
885, 887 (C.D. Ill. 1997) (construing a car dealer's liability insurance
policy pursuant to Illinois law to determine whether a person who
test-drives a car is the car dealer's "customer")).
Answer, Legal Analysis at 14.
See Answer, Legal Analysis at 12, 15-16 & n.42 (citing 47 U.S.C. S:
153(20), (55)).
Answer, Legal Analysis at 12-13.
Answer, Legal Analysis at 12; 47 U.S.C. S: 153(20).
Answer, Legal Analysis at 12; 47 U.S.C. S: 153(55).
47 U.S.C. S: 416(c).
See CLEC Access Charge Reform Reconsideration Order, 19 FCC Rcd at 9114,
P:P: 13, 15.
Answer, Legal Analysis at 9-10.
Answer, Legal Analysis at 7-11. Id. at 10-11.
Answer, Legal Analysis at 9 (citing Qwest Communications Corp. v. Farmers
and Merchants Mut. Tel. Co., Memorandum Opinion and Order, 22 FCC Rcd
17973 (2007) ("Qwest v. Farmers I"), recon. granted in part Qwest v.
Farmers II, 24 FCC Rcd 14801).
See 47 C.F.R. S: 1.773 (establishing procedures for suspending entire
tariffs or particular provisions in a tariff); see also, e.g., Ameritech
Operating Companies Transmittal No. 1430, Revisions to Tariff F.C.C. No.
2, Order, 19 FCC Rcd 24932 (2004) (suspending tariffs for investigation);
Bell Atlantic Tel. Cos. Transmittal No. 418, Revisions to Tariff F.C.C.
No. 1, Order, 6 FCC Rcd 4794, 4795, P: 12 (Common Carrier Bur. 1991)
(rejecting an access tariff because it "would apply Carrier Common Line
Charges to a service which does not use common line facilities" even
though the tariff was filed precisely to authorize such charges); Halprin,
13 FCC Rcd at 22568, P: 1 (ordering tariff revisions in the context of a
section 208 proceeding).
Farmers I, 22 FCC Rcd at 17977, P: 13.
See Complaint at 1 ("The Complaint raises ... one issue of law: May a ...
LEC ... consistent with the existing access charge rules, tariff the full
panoply of switched access services (including `end office' switched
access services) covering the delivery of traffic to entities that are not
its end-user customers?").
See Qwest v. Farmers I, 22 FCC Rcd at 17987, P: 38 ("We find that Farmers'
payment of marketing fees to the conference calling companies does not
affect their status as customers, and thus end users, for purposes of
Farmers' tariff.").
Answer, Legal Analysis at 21 ("Qwest cannot meet its burden to show ...
that Northern Valley has violated the Act by merely arguing that Northern
Valley's Tariff could be unlawful under a contrived set of circumstances
and without any showing that those circumstances have actually occurred or
will occur.").
The Associated Press Request for Declaratory Ruling, Memorandum Opinion
and Order, 72 FCC2d 760, 762, P: 2 (1979).
Answer, Legal Analysis at 4. Revenue sharing is a key component of access
stimulation arrangements: Far from purchasing services from the LEC, the
conference calling company or other entity is paid by the LEC for the
increased revenues generated by the arrangement. See Connect America Fund,
26 FCC Rcd at 4758, P: 636; see also Farmers II, 24 FCC Rcd at 14809, P:
17. These inflated access costs are paid by unwilling IXCs - and
"ultimately borne by consumers" of interexchange services. See Connect
America Fund, 26 FCC Rcd at 4559, P: 7; see also id. at 4710, P: 507 ("The
record indicates that the impact of these arbitrage opportunities is
significant and may cost the industry hundreds of millions of dollars each
year.").
47 U.S.C. S: 208(a).
See Answer, Legal Analysis at 5; see also Joint Statement at 2, P: 5.
See Graphnet, Inc. v. AT&T Corp., Memorandum Opinion and Order, 17 FCC Rcd
1131, 1146, P: 43 (2002) ("Graphnet").
See Answer, Legal Analysis at 5, n.8; 47 C.F.R. S: 1.773(a)(ii) (providing
that tariff filings by nondominant carriers will be considered prima facie
lawful, and will not be suspended by the Commission unless the petition
requesting suspension shows: (a) that there is a high probability the
tariff would be found unlawful after investigation; (b) that the harm
alleged to competition would be more substantial than the injury to the
public arising from the unavailability of the service pursuant to the
rates and conditions proposed in the tariff filing; (c) that irreparable
injury will result if the tariff filing is not suspended; and (d) that the
suspension would not otherwise be contrary to the public interest). In
contrast, a complainant in a section 208 complaint proceeding need show a
violation of the Act only "by a preponderance of the evidence." Contel of
the South, Inc., et al. v. Operator Communications, Inc., Memorandum
Opinion and Order, 23 FCC Rcd 548, 552, P: 10 (2008); 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); Paul Demoss, Paul
Demoss Trading As 1-800-America, and America's Gift Foundation, Inc. v.
Sprint Communications Company, L.P., Memorandum Opinion and Order, 23 FCC
Rcd 5547, 5550, P: 15 (Enf. Bur. Apr. 7, 2008). See also Graphnet, 17 FCC
Rcd at 1146, P: 43.
47 C.F.R. S: 1.721(a)(8) (requiring complaints to contain a certification
that the complainant has, in good faith, discussed or attempted to discuss
the possibility of settlement with the defendant prior to the filing of
the formal complaint). See Answer at 9.
See Answer at 8 (Affirmative Defenses), P: 4.
See n.35 above.
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Federal Communications Commission FCC 11-87
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Federal Communications Commission FCC 11-87