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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                                 )                           
                                                                             
                                                 )                           
                                                                             
                                                 )                           
     In the Matter of                                                        
                                                 )                           
     AT&T Corp.,                                                             
                                                 )                           
     Complainant,                                                            
                                                 )                           
     v.                                                                      
                                                 )                           
     Alpine Communications, LLC, Clear Lake                                  
                                                 )   File No.: EB-12-MD-003  
     Independent Telephone Co., Mutual                                       
     Telephone Co. of Sioux Center, Iowa,        )                           
     Preston Telephone                                                       
                                                 )                           
     Co., and Winnebago Cooperative Telephone                                
     Association,                                )                           
                                                                             
     Defendants.                                 )                           
                                                                             
                                                 )                           
                                                                             
                                                 )                           
                                                                             
                                                 )                           


                          MEMORANDUM OPINION AND ORDER

   Adopted: September 11, 2012 Released: September 12, 2012

   By the Commission:

   I. INTRODUCTION

    1. In this complaint proceeding, AT&T Corp. (AT&T) asks the Commission to
       find that five Iowa local exchange carriers-Alpine Communications, LLC
       (Alpine), Clear Lake Independent Telephone Company (Clear Lake),
       Mutual Telephone Company of Sioux Center, Iowa (Mutual), Preston
       Telephone Company (Preston), and Winnebago Cooperative Telecom
       Association (Winnebago) (collectively, the Iowa LECs)-have violated
       Sections 201(b) and 203 of the Communications Act of 1934, as amended
       (Act). AT&T alleges that the Iowa LECs have engaged in an unlawful
       "mileage-pumping" scheme that has allowed them to impose over one
       hundred miles of distance-sensitive charges for the transport of
       traffic that the Centralized Equal Access (CEA) provider in Iowa, Iowa
       Network Services (INS), is required to provide at a flat,
       distance-insensitive rate. For the reasons explained below, we grant
       Counts I and II of the Complaint.

   II. BACKGROUND

         A. The Parties

    2. AT&T is a New York corporation with its principal place of business in
       Bedminster, New Jersey. Among other things, AT&T is an interexchange
       carrier (IXC) providing telecommunications services that enable
       customers from one local exchange area to call customers in other
       local exchange areas.

    3. Alpine, Clear Lake, Mutual, and Preston are Iowa corporations, with
       principal places of business in Elkader, Clear Lake, Sioux Center, and
       Preston, Iowa, respectively. Winnebago is a cooperative association
       incorporated under Iowa law, with its principal place of business in
       Lake Mills, Iowa. These five entities-the Iowa LECs-are incumbent
       local exchange carriers (ILECs) that provide local exchange
       telecommunications services in rural areas of Iowa.

    4. Like other IXCs, AT&T does not have facilities extending to end user
       customers. As a result, AT&T relies upon local exchange carriers
       (LECs), which have such facilities, to provide "switched access
       service" for the origination, transport, or termination of calls to or
       from customers in a local exchange area. Generally speaking, IXCs pay
       originating access charges to LECs that serve customers who initiate
       long-distance calls within their local calling area and terminating
       access charges to LECs that serve customers who receive long-distance
       calls within their local calling area.

     A. Iowa Network Services

    5. In states in which there are multiple rural LECs each serving a
       separate rural area, the Commission sometimes has approved and ordered
       centralized equal access (CEA) arrangements. CEA service provides
       presubscription and equal access capabilities through a centralized
       switching system rather than through each end office switch. The
       Commission first approved such a CEA arrangement in 1986, for the
       state of Indiana.

    6. In order to implement a CEA arrangement to carry long-distance traffic
       efficiently to remote local exchanges in Iowa, about 135 rural Iowa
       carriers formed a CEA provider called Iowa Network Services (INS) that
       would own and operate a centralized switch in Des Moines and a fiber
       "ring" that connects the centralized switch to points of
       interconnection (POIs) located throughout Iowa. They developed this
       arrangement in part because the costs of hauling long-distance traffic
       to and from each of the many small rural carriers were high, and
       competing IXCs found it too "expensive . . . to provide their own
       facilities to each of these small exchanges, given the relatively low
       amount of [long-distance] traffic they generate." The Commission
       approved the CEA arrangement for Iowa in 1988. With the exception of
       Alpine, the Iowa LECs in this case were among the carriers that formed
       INS, and they remain INS shareholders.

    7. Today, INS is a statewide fiber-optic network and switching system
       that "offers and provides" CEA telecommunication services used to
       facilitate the delivery of interstate (and intrastate) calls in Iowa.
       Its central access tandem switching system is in Des Moines. Under the
       INS CEA arrangement, IXCs must deliver their traffic to INS, and IXCs
       generally do so by interconnecting with the INS access tandem in Des
       Moines. INS then delivers the long-distance traffic received from IXCs
       over its fiber ring to one of sixteen POIs located across the state.
       At the POIs, the Iowa LECs connect with the INS network and transport
       interstate switched access traffic between their POIs and their end
       office switches. In short, IXCs and the Iowa LECs are indirectly
       connected to each other through the facilities of INS.

     A. The Relevant Tariffs and Traffic Agreements

    8. This case concerns two tariffs. The first tariff is NECA Tariff F.C.C.
       No. 5 (NECA Tariff), under which the Iowa LECs provide switched access
       service to IXCs (such as AT&T) and bill the IXCs for such service. In
       the NECA Tariff, "Switched Access Service" consists of three rate
       categories: "End Office," "Local Transport," and "Chargeable Optional
       Features." The type of Local Transport at issue in this litigation is
       "Tandem Switched Transport."

    9. The second tariff is the Iowa Network Access Division Tariff F.C.C.
       No. 1 (INAD Tariff), under which INS provides CEA services to IXCs and
       bills IXCs for such service. The terms of the INAD Tariff require IXCs
       to pay INS a flat, non-distance-sensitive charge for every minute of
       traffic transported on the INS fiber ring to the sixteen POIs
       throughout Iowa. "Point of Interconnection" under the INAD Tariff
       "denotes the demarcation point or network interface, on an Iowa
       Network premises at which Iowa Network's responsibility for the
       provision of [CEA] ends." The INAD Tariff imposes no charges on the
       Iowa LECs.

   10. All five of the Iowa LECs participate in the INS CEA arrangement.
       Individual Traffic Agreements govern the services INS provides to them
       in connection with originating and terminating long distance traffic.
       The Traffic Agreements obligate the Iowa LECs to use INS's CEA service
       for all interexchange traffic bound to or from the Iowa LECs'
       customers. The Traffic Agreements do not limit the amount of
       interexchange traffic that INS will carry for the Iowa LECs under the
       CEA arrangement, nor do they impose any charge on the Iowa LECs for
       traffic carried to their POI on the INS ring, regardless of the
       distance INS carries the traffic. The Traffic Agreements define "Point
       of Interconnection" in an identical manner to the INAD Tariff.

     A. The Iowa LECs' Effort to Increase Transport Charges

   11. The Iowa LECs initially established POIs with the INS network at toll
       centers in close physical proximity to their operating territories.
       Then, between 2001 and 2005, each of the Iowa LECs changed its POI
       with INS from the original location to Des Moines where the INS access
       tandem is located. The Iowa LECs began billing AT&T mileage-based
       transport charges for carrying the traffic between their local
       exchanges and Des Moines. This created a significant increase in the
       transport mileage used to calculate the Iowa LECs' switched access
       charges. In particular, before the POI changes, none of the Iowa LECs
       billed more than 65 miles of transport, and one billed only 9 miles of
       transport; after the POI changes, each Iowa LEC billed over 100 miles
       of transport charges. The additional transport mileage that the Iowa
       LECs billed AT&T varied from a low of 79 additional miles to a high of
       135 additional miles, as depicted in the following chart:


                                                      Miles To               
                       Principal     Closest POI    Closest POI    Miles To  
          Iowa LEC      Place of       In LATA        In LATA        Des     
                        Business                                    Moines   
                                                    POI in LATA              

           Alpine       Elkader      Cedar Rapids        65          144     

         Clear Lake    Clear Lake     Mason City         9           107     

           Mutual     Sioux Center    Sioux City         42          166     

          Preston       Preston       Davenport          38          173     

         Winnebago     Lake Mills     Mason City         25          126     


        12. The Iowa LECs did not build or deploy their own transport
            facilities to Des Moines. Rather, they entered into what they
            characterize as "leases" of virtual capacity on the INS fiber
            ring facilities. Two of the Iowa LECs (Alpine and Preston)
            maintain that their leases with INS are oral. The other three
            Iowa LECs (Clear Lake, Mutual, and Winnebago) have written
            agreements with INS titled "Agreement for Services," which list
            services and corresponding prices. The Iowa LECs and INS did not
            negotiate terms in any of the five purported leases, including
            with respect to price. Rather, they derived the price for the
            capacity leases from a pricing schedule established by INS for
            participating telephone companies. INS sent bills to the Iowa
            LECs for the virtual fiber capacity, and the Iowa LECs paid them.

        13. The leases did not alter the functionality of INS's or the Iowa
            LECs' networks. The traffic has continued to flow over precisely
            the same facilities and routes as it did prior to the Iowa LECs'
            purported POI changes, and INS has remained responsible for the
            maintenance and operation of the leased facilities. In fact, the
            Iowa LECs have no knowledge about what happened to the traffic
            while it was on the INS leased facilities other than that it
            reached the desired destinations, and they depended on INS to
            ensure that the traffic was delivered between Des Moines and
            their local exchanges.

        14. The Iowa LECs entered into the lease arrangements and purported
            to change their POIs with INS because, in part, they determined
            that doing so would increase their net revenues and profits. And,
            in fact, the leases have resulted in significant net increases in
            the access charges that the Iowa LECs billed. The leases brought
            about no benefits for the Iowa LECs' end user customers and no
            benefits for IXCs.

          A. The Parties' Dispute and the Primary Jurisdiction Referral

        15. The Iowa LECs billed AT&T for, among other things, transport
            service charges between Des Moines and their local exchanges.
            Beginning in April 2007, AT&T contacted each of the Iowa LECs
            objecting to the increased mileage charges and, pursuant to the
            provisions in the NECA Tariff, notified the Iowa LECs that it was
            withholding amounts that it claimed had been improperly billed as
            a result of the purported move of the POIs to Des Moines. Until
            about April 2008, AT&T paid these invoices in full. AT&T
            subsequently began withholding payment for transport services,
            and it continues to do so.

        16. On December 5, 2008, the Iowa LECs filed a complaint against AT&T
            in the United States District Court for the Northern District of
            Iowa, seeking recovery of the access charges AT&T refused to pay.
            AT&T subsequently filed counterclaims, alleging, among other
            things, that the Iowa LECs have violated Sections 201(b) and 203
            of the Act. The parties engaged in discovery and filed
            cross-motions for summary judgment. In response to these motions,
            the District Court issued an order referring "this matter . . .
            to the FCC for resolution of the issues herein to the full extent
            of the FCC's jurisdiction." At the Commission's instruction, the
            parties prepared an agreed List of Issues that they believe the
            Court's referral encompasses. They also submitted an extensive
            statement of Stipulations.

        17. As the Commission requested, AT&T filed the Complaint in response
            to the Court's referral. In Count I of the Complaint, AT&T
            alleges that the Iowa LECs have violated Sections 203 and 201(b)
            of the Act by billing AT&T mileage charges not authorized under
            the NECA Tariff. In Count II of the Complaint, AT&T alleges that
            Iowa LECs have violated Section 201(b) of the Act because the
            NECA Tariff, if construed as they propose, is unreasonable and
            because they operate under "sham" arrangements.

        III. DISCUSSION

               A. The Iowa LECS Have Violated Sections 203 and 201(b) of the
                  Act.

        18. In this section, we address the tariff violations alleged by
            AT&T. First, AT&T claims that the Iowa LECs violated the NECA
            Tariff by billing for mileage charges not authorized by the
            tariff. Second, AT&T alleges that the defendants Mutual, Alpine,
            and Preston violated the NECA Tariff by charging AT&T for
            transport outside their LATAs. And third, AT&T contends that the
            Iowa LECs violated the NECA Tariff by failing to give AT&T
            reasonable notice of the POI change.

           1. The Iowa LECs Billed AT&T Mileage Charges That Are Not
              Authorized Under the NECA Tariff.

        19. According to AT&T, the Iowa LECs do not have unfettered
            discretion under the NECA Tariff to select a POI. Rather, the
            NECA Tariff expressly incorporates the INAD Tariff's provisions
            regarding location of the POI. In AT&T's view, under the INAD
            Tariff, the location of the POI turns on where "responsibility"
            for the traffic shifts from INS to the Iowa LECs, and AT&T
            asserts that the Iowa LECs never assumed responsibility for the
            traffic at Des Moines. AT&T argues that INS was responsible for
            providing transport between Des Moines and the original POIs, and
            that the Iowa LECs thus violated Sections 203 and 201(b) of the
            Act by billing AT&T mileage charges associated with the changed
            POIs. Alternatively, AT&T argues that, even if the tariff
            provisions are ambiguous, the Commission should construe them in
            AT&T's favor.

        20. As discussed below, we find that the NECA Tariff does not provide
            the Iowa LECs an unqualified right to select a POI, but rather
            incorporates the INAD Tariff's terms regarding POI selection. We
            further find that the term "responsibility" in the INAD Tariff is
            ambiguous, thereby rendering the NECA Tariff ambiguous as well.
            Accordingly, we construe the tariff language against the Iowa
            LECs.

            a. The NECA Tariff Provides that the INAD Tariff Establishes the
               POI.

        21. AT&T argues that Section 6.1.3(A) of the NECA Tariff "specifies
            the POI[s] by referencing the INAD Tariff," and that no other
            provision of the NECA Tariff addresses the Iowa LECs' POIs with
            INS or otherwise authorizes the Iowa LECs to bill for transport
            provided over INS's fiber ring. According to AT&T, the third
            sentence of the relevant paragraph in Section 6.1.3(A) applies
            and states that:

       [w]hen service is provided in cooperation with a non telephone company
       provider of Centralized Equal Access, the SWC will be that wire center
       which would normally provide dial tone to the telephone company point
       of interconnection with the non telephone company provider of
       Centralized Equal Access specified in the tariff of the Centralized
       Equal Access provider.

        22. The Iowa LECs argue that AT&T improperly ignores the first
            sentence of the relevant paragraph of Section 6.1.3(A), which
            states that "where the Telephone Company elects to provide equal
            access through a Centralized Equal Access arrangement, the
            Telephone Company will designate the serving wire center."  This
            sentence, the Iowa LECs maintain, gives them the right to
            designate the POI, because the SWC and the POI "will be at the
            same place." We agree with AT&T that the first sentence of this
            Section is not applicable, however, given the parties'
            stipulation that INS is a "non telephone company" provider of
            CEA.  Thus, we find that, in order to determine the location of
            the POI under the NECA tariff, we must look to the language of
            the INAD Tariff.

            a. We Construe the INAD Tariff's Definition of POI Against the
               Iowa LECs.

        23. The INAD Tariff does not describe how the POI should be selected,
            but rather provides, by way of definition, that "Point of
            Interconnection" denotes:

       the demarcation point or network interface, on an Iowa Network
       premises at which Iowa Network's responsibility for the provision of
       [CEA] ends.

       Thus, under the INAD Tariff, the POI is where "responsibility" for
       handling traffic shifts between INS and the Iowa LECs. According to
       AT&T, the "most natural and straightforward reading of the INS
       Tariff's definition of POI is that INS's responsibility ends when the
       traffic is handed off by INS from its fiber ring to the facilities of
       another carrier. For the Iowa LECs, AT&T says, that is not at Des
       Moines but at the Iowa LECs' "traditional" POIs (which were located
       close to their operating territories).

        24. Although they repeatedly note in their Answer that the INAD
            Tariff lists sixteen potential POIs (including Des Moines), the
            Iowa LECs accept AT&T's proposition that ascertaining which
            carrier has responsibility for handling traffic is key to
            determining the actual POI. In other words, they acknowledge that
            if the Commission finds that INS retained responsibility for the
            traffic between Des Moines and the former POIs, the Iowa LECs'
            POIs cannot be in Des Moines. Where the Iowa LECs differ with
            AT&T is in their interpretation of the term "responsibility."

        25. Relying upon the leases they entered into with INS, the Iowa LECs
            contend that "responsibility" means "accountability" for CEA
            service. The Iowa LECs maintain that, by virtue of the leases,
            they had "exclusive" use of fiber and therefore acquired the
            means to transport the traffic. Leased facilities, the Iowa LECs
            say, are a telecommunication carrier's facilities for purposes of
            imposing charges under a tariff. They further note that AT&T
            itself does not own all the facilities it uses to conduct its
            business and that AT&T leases facilities and recovers a portion
            of its leased costs in its pricing to its customers.  Thus, the
            Iowa LECs argue that they assumed "responsibility" when they
            entered into the leases within INS, and they are entitled to
            impose access charges. In their view, whether they physically
            maintained the network facilities is irrelevant.

        26. In contrast, AT&T argues that construing the term
            "responsibility" to mean strictly legal "accountability" is too
            narrow. According to AT&T, it would be an "unnatural reading of
            the tariff provision to contend that INS has `end[ed]' its
            responsibility for the provision of CEA services even though INS
            . . . continues to own, control, operate, and maintain the
            facilities that are used to provide the CEA service." AT&T
            asserts that the leases between INS and the Iowa LECs neither
            ended INS's "responsibility" for the provision of CEA service nor
            provided the Iowa LECs with responsibility and control of INS's
            network. The oral leases, AT&T argues, were merely "paper
            changes" supported by only vague evidence that the Commission
            should discount, and the written leases expressly provided that
            ownership and control of the INS network remained with INS.

        27. We find that both the Iowa LECs and AT&T have presented
            reasonable constructions of the term "responsibility." On the one
            hand, the Iowa LECs make a valid point that it is not uncommon
            for carriers to use leased facilities and impose charges for
            traffic sent over them. On the other hand, AT&T plausibly asserts
            that, notwithstanding the leases, INS retained control of its
            facilities, and INS handled the traffic in the same manner. Thus,
            we find the term "responsibility" to be ambiguous in this
            context. In such circumstances, it is "well-established . . .
            that any ambiguity in a tariff is construed against the party who
            filed the tariff." Consequently, we construe the language in the
            INAD Tariff and, in turn, the NECA Tariff, against the Iowa LECs.

        28. In this instance, then, the POI is the point at which the Iowa
            LECs connect with INS. The parties stipulated that the "leases"
            did not alter the functionality of INS's or the Iowa LECs'
            networks, and traffic continued to flow over precisely the same
            facilities as it did prior to the Iowa LECs purported POI
            changes. INS remained responsible for the maintenance and
            operation of the lease facilities and, indeed, the Iowa LECs have
            no knowledge about what happened to the traffic while it was on
            the leased facilities. Just as before the purported POI change,
            the Iowa LECs relied entirely upon INS to deliver traffic between
            Des Moines and their local exchanges. Any notion that the Iowa
            LECs validly changed their POIs by virtue of these "leases" is
            further belied by the fact that INS continued to charge AT&T a
            flat rate that covers switching and transport.

        29. Moreover, tariffs should be construed to avoid "unfair, unusual,
            absurd or improbable results" and should be interpreted to
            "advance the purpose for which the tariff was imposed." We find
            that this principle has applicability here. As explained in more
            detail below, the Iowa LECs stipulate that moving their POIs to
            Des Moines had no benefits for their end user customers or IXCs,
            yet substantially increased access charges billed to IXCs. This
            outcome is directly contrary to the purpose of the Iowa CEA
            arrangement. That is, the Commission approved the creation of INS
            in order to lower the cost of transporting traffic from Des
            Moines to the various remote rural exchanges, and thus encourage
            more IXCs to compete in those areas. Accordingly, the ambiguous
            tariff provisions should be construed against the Iowa LECs.

        30. For all of the foregoing reasons, we grant Count I of the
            Complaint because the Iowa LECs' billed mileage charges are not
            authorized under the NECA Tariff.

           1. Mutual, Alpine, and Preston Violated the NECA Tariff by
              Charging AT&T for Transport Service Outside Their LATAs.

        31. AT&T contends that defendants Mutual, Alpine, and Preston
            violated the NECA Tariff by charging for transport service
            outside their local access and transport areas (LATA). AT&T
            maintains that two independently dispositive clauses of the NECA
            Tariff support its contention that the billing of transport
            services outside a LEC's LATA falls outside the scope of the
            tariff. According to AT&T, the NECA Tariff authorizes charges
            only for access "within a LATA," yet these three defendants have
            billed AT&T for transport to and from Des Moines, which is
            outside the LATAs in which they serve their local customers (and
            have local exchanges).

        32. First, AT&T argues that the title page of the NECA Tariff
            expressly circumscribes the area in which the access service
            (including transport) may be provided, stating that the tariff
            governs "the provision of Access Services within a Local Access
            and Transport Area (LATA) or equivalent Market Area." AT&T
            maintains that, by its plain terms, the NECA Tariff does not
            apply to services like the transport services provided by Mutual,
            Alpine, and Preston, that extend beyond their LATA boundaries.
            Mutual, Alpine, and Preston have stipulated that Des Moines is
            outside the LATAs in which they serve their local customers.
            Although they disagree with AT&T's interpretation of this tariff
            language, the Iowa LECs have offered nothing to counter its
            argument.

        33. Second, AT&T relies upon Section 6.1 of the tariff, which states:

       Switched Access Service provides for the ability to originate calls
       from an end user's premises to a customer designated premises, and to
       terminate calls from a customer designated premises to an end user's
       premises in the LATA where it is provided.

        34. AT&T argues that this provision requires switched access services
            to be provided in the same LATA as the end user's premises where
            the calls originate or terminate. The Iowa LECs contend that this
            sentence does not require them to provide access facilities in a
            single LATA. Rather, according to the Iowa LECs, the LATA
            reference in Section 6.1 is limited to the location of the LECs'
            local exchange customers. On its face, however, Section 6.1
            provides that Switched Access Service (which includes transport)
            entails the ability to originate and terminate calls "to an end
            user's premises in the LATA where it is provided." "It" refers to
            the switched access service, which must be provided in the same
            LATA as the end user's premises where the calls originate or
            terminate. As noted above, the parties stipulate that Des Moines
            is outside the LATAs in which Mutual, Alpine, and Preston service
            their end users. Thus, they are charging AT&T for access services
            (transport) that they provide, in part, outside the LATA of their
            end users. Therefore, we agree with AT&T that the disputed
            mileage charges for transport outside the LATA by these three
            LECs are not authorized by the language in the NECA Tariff and
            thus are unlawful.

           1. The Iowa LECs Also Violated the NECA Tariff by Failing to
              Provide AT&T with Reasonable Notice of Any Purported POI
              Changes.

        35. AT&T also argues that the Iowa LECs failed to abide by the NECA
            Tariff's requirements that they provide reasonable notice to AT&T
            of POI changes. Section 2.1.9, entitled "Notification of
            Service-Affecting Activities," states:

       The Telephone Company will provide the customer reasonable
       notification of service-affecting activities that may occur in the
       normal operation of its business. Such activities may include, but are
       not limited to the following:

       - equipment or facilities additions,

       - removals or rearrangements,

       - routine preventative maintenance, and

       - major switching machine change-out.

       Generally, such activities are not individual customer service
       specific, but may affect many customer services. No specific advance
       notification period is applicable to all service activities. The
       Telephone Company will work cooperatively with the customer to
       determine reasonable notification requirements.

        36. AT&T claims that the change of POIs is necessarily a
            "service-affecting activity" under the NECA Tariff. We agree. The
            NECA Tariff provides examples of service-affecting activities.
            Although "change of POI" is not one of them, the list includes
            "rearrangements," which we believe applies. The Iowa LECs
            characterize the POI as the "location where the facilities of
            INAD meet the facilities of the LEC." A change in that
            location-especially when accompanied by a significant increase in
            mileage charges-is tantamount to a "rearrangement" affecting
            service. Consequently, the NECA Tariff obligated the Iowa LECs to
            provide reasonable notice to AT&T when they changed their POIs.

        37. AT&T argues that it did not receive actual notice of the POI
            changes. However, two of the Iowa LECs contend that they in fact
            gave actual notice of the changes to AT&T in the form of
            correspondence. Specifically, Winnebago asserts that it notified
            AT&T by including a letter with its October 2, 2001, bill that
            stated: "Winnebago Cooperative Telephone Association will be
            changing its POP location from Mason City, Iowa to Des Moines,
            Iowa. This will become effective on October 11, 2001 and the
            carrier access bills for usage after that date starting with the
            December 1, 2001 CABS bill will reflect the change in the
            transport facility." Although the letter was not signed,
            addressed, or accompanied by proof of delivery, AT&T does not
            deny receiving it, and we find that it adequately alerted AT&T to
            the POI change. Preston asserts that it sent a letter to AT&T
            apprising AT&T of the POI change, but Preston could not produce a
            copy of the purported letter or any specific information about
            the letter. Rather, Preston relied exclusively upon the
            deposition testimony of Roger Kilburg who, without the benefit of
            any documentary evidence, claimed to have detailed recollection
            about mailing the letter more than eight years earlier. Given the
            lack of documentary evidence supporting Mr. Kilburg's assertion,
            we decline to credit his testimony, and we find no basis to
            conclude that there was a letter providing notice to AT&T.

        38. Further, we find that the adjustments that the Iowa LECs made to
            the Local Exchange Routing Guide (LERG) and to another NECA
            tariff did not provide constructive notice to AT&T. The
            Commission's formal complaint rules require parties to plead all
            facts in support of their claims and defenses fully and with
            specificity. The Iowa LECs, however, did not specify the language
            in the LERG or the tariff that they claim satisfies their notice
            obligations. In the absence of any specific evidence/explanation
            by the Iowa LECs, we cannot find that updates to the LERG and
            revisions to NECA Tariff No. 4 constitute "reasonable" notice.
            Thus, even if the Iowa LECs changed their POIs, those changes
            were done in violation of the NECA Tariff because, with the
            exception of Winnebago, the Iowa LECs failed to provide AT&T with
            reasonable notice of the changes as required by the Tariff.

          A. Alternatively, The Iowa LECs Have Violated Section 201(b) of the
             Act Because the NECA Tariff is Unreasonable to the Extent It
             Allows the Iowa LECs to Change Their POIs for the Sole Purpose
             of Inflating Mileage Charges Paid by IXCs.

        39. In Count II of the Complaint, AT&T alleges that if the NECA
            Tariff is interpreted to grant the Iowa LECs an "unqualified"
            right to change POIs, and thereby authorize billing vastly
            increased mileage charges without corresponding benefit to
            customers, the Iowa LECs have violated Section 201(b) of the Act
            because the Tariff is unreasonable. AT&T further alleges that the
            Iowa LECs have violated Section 201(b) by engaging in "sham
            arrangements" designed to inflate mileage charges. We agree that,
            if the NECA Tariff were to be interpreted (contrary to our
            findings in part III.A) to allow the Iowa LECs to change their
            POIs as proposed, the NECA Tariff would be unreasonable in the
            respect AT&T identifies. Because this determination affords AT&T
            all the relief it seeks in Count II, we do not reach the "sham
            arrangements" allegations.

           1. The Section 201(b) Claims Are Properly Before the Commission.

        40. Before reaching the merits of Count II, we address the Iowa LECs'
            contention that the Section 201(b) claims that are the subject of
            Count II of the Complaint are not properly before the Commission.
            Specifically, the Iowa LECs maintain that the federal courts do
            not have authority to determine the reasonableness of a tariff
            that has been approved by the Commission, as have both the NECA
            Tariff and the INAD Tariff. The tariff of a telecommunications
            carrier, they assert, becomes "legal" when it is filed with an
            agency and becomes effective, and a carrier cannot be said to
            have engaged in unjust and unreasonable practices if it was
            exercising rights afforded to it under a legal tariff. In the
            Iowa LECs' view, the Court on referral accordingly has not sought
            guidance on the reasonableness of the tariffs, and the scope of
            this proceeding is limited to issues of tariff interpretation.

        41. This argument fails in several respects. To begin, under Section
            206 of the Act, the federal courts have subject matter
            jurisdiction over claims that common carriers have committed any
            "act, matter or thing in this Act prohibited or declared to be
            unlawful." Thus, AT&T properly brought its Section 201 claims in
            federal court, and the court was within its discretion to refer
            them to the Commission under the primary jurisdiction doctrine.
            The Commission, too, has authority under Section 208 of the Act
            to resolve formal complaints alleging violations of Section
            201(b).

        42. Moreover, the scope of the issues referred included AT&T's
            Section 201(b) claims. Although it denied summary judgment, the
            district court noted that AT&T had sought referral of its
            counterclaims, "including" (i.e., not limited to) "interpretation
            of a number of technical terms within tariffs." The court stayed
            the case and stated that the "matter is referred to the FCC for
            resolution of the issue herein to the full extent of the FCC's
            jurisdiction." The parties' Joint List of Issues included Issue
            3, which broadly asked whether the LECs are "engaged in unjust
            and unreasonable practices in violation of Section 201(b) of the
            Act in connection with the furnishing of interstate communication
            services." The parties did not limit Issue 3 to Section 201(b)
            violations arising from billing in violation of the NECA Tariff,
            and the Commission instructed AT&T simply to "file a formal
            complaint against the LECs that raises issues 1 and 3 above."

        43. Finally, in asserting that the NECA tariff is immune from review
            for reasonableness because it is "legal," the Iowa LECs confuse
            "legality" and "lawfulness":

       "Legality" mainly addresses procedural validity. . . . A particular
       rate . . . becomes "legal" when it is filed with an agency and becomes
       effective. But a rate's legality is not enough to establish its
       substantive reasonableness or "lawfulness." . . . A carrier charging a
       merely legal rate may be subject to refund liability if customers can
       later show that the rate was unreasonable. . . . Should an agency
       declare a rate to be lawful, however, refunds are thereafter
       impermissible as a form of retroactive ratemaking.

       What's more, although tariffs that are "deemed" lawful are not subject
       to refunds, if a "later reexamination shows them to be unreasonable,"
       the Commission may afford prospective relief.

           1. The Uncontroverted Evidence Demonstrates that the Iowa LECs'
              Purported POI Changes Significantly Increased AT&T's Operating
              Costs Without Providing Any Enhanced Service Choices or
              Benefits to Customers.

        44. Should the Commission interpret the NECA Tariff to permit the
            Iowa LECs to change their POIs to Des Moines, AT&T argues that "a
            tariff that provides a LEC with an `unqualified' or `absolute'
            right to select a POI with a CEA provider directly contravenes
            the Commission's orders authorizing CEA arrangements."
            Specifically, AT&T relies upon the Commission's statements in
            Indiana Switch rejecting AT&T's challenge to the ability of
            independent LECs (ITCs) to "control . . . the designation of
            [POIs]." The Commission stated:

       [T]he cost increases ISAD's proposed arrangement imposes on AT&T are
       outweighed by the proposal's benefits to thousands of subscribers in
       Indiana. . . . If in some future case an IXC demonstrates that an
       ISAD-like proposal significantly increases IXCs' operating costs
       without significant increases in service choices or benefits to
       subscribers, or unreasonably designates ITC points of interconnection
       with IXCs, we may reach a different result. In other words, our
       decision permitting ISAD to proceed should not be interpreted as
       unbounded authority on the part of ITCs, or their affiliates, to
       determine points of interconnection with IXCs.

       According to AT&T, the NECA Tariff cannot reasonably authorize the
       Iowa LECs to change POIs and increase costs on the IXCs unless there
       are also significant increases in service choices or other benefits.
       AT&T further asserts that there are no such benefits in this case. The
       undisputed evidence confirms AT&T's assertion.

        45. The Iowa LECs make several important admissions in this case. To
            begin, they concede that they "entered into the lease agreements
            and purported to change their POIs with INS because, in part,
            they determined that they would increase their net revenues and
            profits." Moreover, the relocated POIs and leases with INS
            admittedly have "resulted in net increases in the access charges"
            they billed. Indeed, the Iowa LECs acknowledge that, as a result
            of their conduct, IXCs' local transport costs have increased by
            as much as seven times. Finally, the Iowa LECs admit that their
            relocated POIs and leases "brought about no benefits for the[ir]
            end user customers ... and no benefits for IXCs." In other words,
            the stipulated record demonstrates that the Iowa LECs' conduct is
            precisely the type of future questionable behavior that the
            Commission contemplated in Indiana Switch. We conclude that the
            NECA Tariff is unjust and unreasonable in violation of Section
            201(b) to the extent it allows the Iowa LECs' admitted
            manipulation of POIs undertaken with the intent and effect of
            "pumping" mileage charges.

        46. Citing interrogatory responses filed in the underlying
            litigation, the Iowa LECs make a fleeting attempt at the end of
            the Answer to identify "various advantages" they accrued from
            changing their POI to Des Moines. Specifically, the Iowa LECs
            posit that these advantages include: "cost savings; more
            efficient aggregation of traffic; the ability to provide a wider
            variety of increased, future service, redundancy and the ability
            to interface with the networks of other telecommunications
            providers." Having reviewed the interrogatory answers, as well as
            deposition testimony of the Iowa LECs concerning the purported
            "advantages" of relocating their POIs, we conclude that their
            strained attempts to manufacture other reasons for moving the POI
            utterly lack credibility and do not support the merits of their
            contention. Indeed, most of the purported "advantages" touted by
            the Iowa LECs relate to improvements on the LEC side of the
            POI-i.e., efficiencies that have nothing to do with the
            facilities/services that are the subject of the leases between
            INS and the Iowa LECs.

        47. The Iowa LECs' remaining defenses fare no better. First, the Iowa
            LECs protest that Indiana Switch does not represent a Commission
            "blanket policy" concerning CEA arrangements and the rights of
            LECs to designate POIs. We agree. Our decision today rests not
            upon an overarching rule, but upon the particular stipulated
            record in this case. The Iowa LECs further argue that, "[w]hile
            the specific costs do increase on these routes, there is no
            indication that the cost of CEA in Iowa is greater than if all
            the IXCs had to make connection with all the LECs in Iowa." Even
            if true, that does not justify a tariff provision that allows the
            Iowa LECs to change their POIs solely to inflate mileage charges.
            A justification for imposing costs on IXCs without corresponding
            benefits to consumers undermines the goal of the Iowa CEA
            arrangement, which was to "speed the availability of high
            quality, varied competitive services to small towns and rural
            areas."

        48. Second, the Iowa LECs contend that INS reduced its cable and wire
            facility expenses to reflect the reduction in its transport
            facilities in circumstances where the transport service is
            provided by the Iowa LECs. The parties stipulated, however, that
            "INS has not quantified any resulting actual reduction in the
            rates paid by IXCs." Moreover, INS's flat rate still covers both
            tandem switching and transport, INS has continued to bill AT&T
            that CEA rate, and the Iowa LECs are also billing AT&T for
            transport. Finally, any reduction in INS's rate does not offset
            the substantial increases in billed transport.

        IV. ORDERING CLAUSEs

        49. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j),
            201, 203, 206, and 208, of the Communications Act of 1934, as
            amended, 47 U.S.C. S:S: 151, 154(i), 154(j), 201, 203, 206, 208,
            that Count I of the Complaint is GRANTED to the extent indicated
            herein.

        50. IT IS FURTHER ORDERED, pursuant to Sections 1, 4(i), 4(j), 201,
            203, 206, and 208, of the Communications Act of 1934, as amended,
            47 U.S.C. S:S: 151, 154(i), 154(j), 201, 203, 206, 208, that
            Count II of the Complaint is GRANTED to the extent indicated
            herein.

       FEDERAL COMMUNICATIONS COMMISSION

       Marlene H. Dortch

       Secretary

       47 U.S.C. S:S: 201(b), 203; Formal Complaint of AT&T Corp., File No.
       EB-12-MD-003 (filed Apr. 13, 2012) (Complaint).

       In accordance with Section 1.722(d) of the Commission's rules, AT&T
       requests that the Commission determine damages in a separate
       proceeding.  Complaint at 29, para. 75, 31, para. 83 (citing 47 C.F.R.
       S: 1.722(d) (setting forth the requirements a complainant must satisfy
       if it "wishes a determination of damages to be made in a proceeding
       that is separate from and subsequent to the proceeding in which the
       determinations of liability and prospective relief are made"). 
       Because this Order finds in AT&T's favor on liability, AT&T may file
       with the Commission a supplemental complaint for damages in accordance
       with 47 C.F.R. S: 1.722(e) ("If a complainant proceeds pursuant to
       paragraph (d) of this section . . . the complainant may initiate a
       separate proceeding to obtain a determination of damages by filing a
       supplemental complaint . . . . ").

       Complaint, Ex. 3 (Stipulations with Regard to Referred Matters in
       Alpine et al. v. AT&T (Stipulations)) at 2, para. 6.

       Stipulations at 2, para. 9.

       Stipulations at 1-2, paras. 1-4.

       Stipulations at 2, para. 5.

       Stipulations at 2, para. 8.

       Stipulations at 2, para. 10.

       Stipulations at 2-3, paras. 11-13.

       Stipulations at 3, para. 15, 18, para. 114.

       Stipulations at 4, para. 21.

       See Coon Valley Telephone Company, et al., Petitions for Waiver of the
       Four Digit Carrier Identification Code (CIC) Implementation Schedule,
       Order, 13 FCC Rcd 17490, 17494, para. 8 (Com. Car. Bur., Network
       Services Div. 1998).

       Stipulations at 4, para. 22. See Application of Indiana Switch Access
       Div., Memorandum Opinion & Order, 1 FCC Rcd 634 (1986) (Indiana
       Switch).

       Stipulations at 4, para. 25.

       Stipulations at 5, para. 34 (citing Application of Iowa Network Access
       Division, Memorandum Opinion, Order, and Certificate, 3 FCC Rcd 1468,
       1468, para. 3 (Com. Car. Bur. 1988) (INAD Application Order)).

       Stipulations at 4, para. 22. See INAD Application Order.

       Stipulations at 4, paras. 23-24.

       No intrastate calls - i.e., calls originated and terminated in the
       same state-are at issue in this proceeding. Stipulations at 4, para.
       20.

       Stipulations at 5, paras. 27-28. INS is a single legal entity with
       three divisions: netINS, which provides internet access services; the
       Interexchange Carrier Division (INICD), which owns the INS facilities;
       and the Access Division (INAD), which leases digital switching, fiber
       optic transmission capacity, and certain related services from INICD
       to provide CEA service. Stipulations at 6, para. 37.

       Stipulations at 5, para. 29.

       Stipulations at 6, para. 38.

       Stipulations at 5, para. 33, 6, para. 39, 25, para. 156. INS will
       deliver traffic to any of the sixteen POIs, which include Cedar
       Rapids, Clarinda, Creston, Davenport, Des Moines, Fort Dodge,
       Grinnell, Knoxville, Mason City, Mount Ayr, Mount Pleasant, Newton,
       Osceola, Omaha, Sioux City, and Spencer. Stipulations at 7, paras.
       44-45.

       Stipulations at 5, para. 32, 6, para. 41, 25, para. 157.

       Stipulations at 6, para. 41.

       As explained below in section III.A.1, the parties disagree about
       whether and how the tariffs interrelate regarding the right of the
       Iowa LECs to determine the POI.

       Stipulations at 3-4, paras. 14, 19. The Iowa LECs do not file
       individual tariffs. Rather, they utilize tariffs administered by the
       National Exchange Carrier Association (NECA). Qualifying carriers are
       permitted to participate in the traffic-sensitive cost and revenue
       pool that NECA administers on behalf of the vast majority of small
       telephone companies. See 47 C.F.R. S:S: 69.601-69.610. NECA files
       tariffed access rates that apply whenever an IXC uses any pool
       member's NECA-tariffed access services. See 47 C.F.R. S: 69.3(d).

       Complaint, Ex. 6 (NECA Tariff S: 6.1.3, 4th Rev. Page 6-5).

       Stipulations at 3, para. 14. See Complaint, Ex. 6 (NECA Tariff S:
       6.1.3, 4th Rev. Page 6-5). AT&T originally challenged the Iowa LECs'
       practices and charges relating to an additional element of Local
       Transport called "Tandem Switched Termination."  Complaint at 20-22,
       paras. 51-54 & n.58.  However, AT&T subsequently moved to sever these
       claims and convert them into an informal complaint, which it requested
       be stayed.  See Motion of AT&T Corp. to Sever Claims Relating to
       Multiple Termination Charges, File No. EB-12-MD-003 (filed May 31,
       2012).  Defendants did not oppose AT&T's motion, and we granted it. 
       See Defendants' Response to Motion of AT&T Corp. to Sever Claims
       Relating to Multiple Termination Charges, File No. EB-12-MD-003 (filed
       June 7, 2012); see also Letter from Rosemary McEnery, FCC, to Counsel
       for the Parties, File No. EB-12-MD-003 (filed June 11, 2012).

       Stipulations at 5, para. 26.

       Complaint at 2-3, paras. 4-5; Defendants' Answer to Formal Complaint
       of AT&T Corp., File No. EB-12-MD-003 (filed May 3, 2012) (Answer) at
       4, paras. 4-5.  See Iowa Network Access Div. Tariff F.C.C. No. 1.,
       Order, 4 FCC Rcd. 3947, paras. 2, 5 (1989).

       Reply, Legal Analysis at 7 (citing INAD Tariff S: 2.5, 1st Rev. Page
       62).

       Stipulations at 7, para. 48.

       Stipulations at 7, paras. 47-48. Because Alpine is not an INS
       shareholder, its agreement with INS is titled "Traffic Agreement."
       Stipulations at 8, para. 49. See Complaint Conf. Ex. 19 (Alpine
       agreement). The other Iowa LECs' agreements with INS are titled
       "Shareholder Traffic Agreements." Stipulations at 7, para. 47. See
       Complaint Conf. Exs. 20, 21, 22, and 23 (agreements of Clear Lake,
       Mutual, Preston, and Winnebago). The Traffic Agreement does not differ
       in any material way from the Shareholder Traffic Agreements.
       Stipulations at 8, paras. 49-50.

       Stipulations at 8, para. 51.

       Stipulations at 8, paras. 54-55.

       Stipulations at 8, para. 55.

       Stipulations at 8, para. 56 (citing Traffic Agreements, S: 1(D) and
       INAD Tariff F.C.C. No. 1 S: 2.6). The NECA Tariff does not define the
       term POI.

       Stipulations at 9, para. 57. Specifically, the initial POIs were as
       follows: Alpine - Cedar Rapids - established in 1997; Clear Lake -
       Mason City - established in 1989; Mutual - Sioux City - established in
       1989; Preston -Davenport - established in 1989; Winnebago - Mason City
       - established in 1987. Stipulations at 9, para. 58.

       Stipulations at 9, paras. 60-61.

       Stipulations at 9, para. 60.

       Stipulations at 9, para. 61, 19, para. 120.

       Stipulations at 9, para. 61, 19, para. 120.

       Stipulations at 14, para. 84, 15-17, paras. 92, 94-96, 98-99.

       See Stipulations at 55, para. 91.

       Stipulations at 12, para. 74.

       Stipulations at 11, para. 73.

       Stipulations at 12, para. 77.

       Stipulations at 12, para. 77, 15, para. 88. The one exception is that
       INS did not bill Preston for its purported lease from its inception in
       November 2005 until April 2009, and has never charged Preston for
       those prior months. Stipulations at 12, paras. 75-76, 15, para. 88.

       Stipulations at 14, para. 84.

       Stipulations at 16, paras. 94-95.

       Stipulations at 16-17, paras. 98-99.

       Stipulations at 11, para. 71.

       Stipulations at 19, para. 120.

       Stipulations at 17, para. 100. Indeed, INS continues to bill AT&T its
       flat, distance-insensitive charge, which covers transport to any point
       on the INS ring, regardless of distance. Stipulations at 17, para.
       101. Although INS stated that, after entering into the lease
       arrangements with the Iowa LECs, it excluded from the costs used by
       the Commission to determine INS's CEA rate the internal costs
       associated with the leases, INS has not quantified any resulting
       actual reduction in the rates paid by IXCs. Stipulations at 18, para.
       109.

       Stipulations at 22, para. 142.

       Stipulations at 22, para. 143.

       Stipulations at 22, para. 144.

       Stipulations at 22-23, paras. 144-46.

       Stipulations at 23, para. 147.

       Complaint, Ex. 10 (Complaint, Alpine Commc'ns, LLC, et al. v. AT&T
       Corp., No. 08-1042 (N.D. Iowa filed Dec. 5, 2008)).

       Complaint, Ex. 2 (AT&T Counterclaims, Alpine Commc'ns, LLC, et al. v.
       AT&T Corp., No. 08-1042 (filed Jan. 15, 2009)).

       See Complaint at 9, paras. 21-22; Answer at 10-11, paras. 21-22;
       Order, Alpine Commc'ns, LLC, et al. v. AT&T Corp., No. 08-1042 (N.D.
       Iowa Dec. 16, 2010) (Alpine Primary Jurisdiction Order) at 4.

       Alpine Primary Jurisdiction Order at 5.

       Complaint Ex. 5, Alpine v. AT&T - Issues List Re FCC Referral (Joint
       List of Issues). The Joint List of Issues identifies three issues (the
       first of which contains seven subparts) that the parties agree were
       the subject of the Court's referral. The first two issues ask whether
       the Iowa LECs violated the terms of the NECA Tariff and/or Section 203
       of the Act. The third issue inquires whether the Iowa LECs engaged in
       unjust and unreasonable practices in violation of Section 201(b) of
       the Act.

       Complaint Ex. 3, Stipulations.

       Complaint at 4, para. 8. See Reply and Reply Legal Analysis of AT&T
       Corp., File No. EB-12-MD-003 (filed May 10, 2012), Ex. 1 (Letter from
       Lisa B. Griffin, FCC, to Counsel for the Parties, File No.
       EB-12-MD-003 (Jan. 17, 2012) (January 17th Letter Ruling)).

       Complaint at 4-5, paras. 10-11, 27-28, paras. 67-72; Reply at 6-7.

       Complaint at 5, para. 12, 27-28, paras. 67-71, 73; Reply at 22-23.

       Complaint at 5-6, para. 13, 27-28, paras. 67-71, 74; Reply at 23-24.

       Complaint at 5, para. 10, 6, para. 15, 45, para. 111, 47, para. 114,
       53, para. 128, 54-5, paras. 130-31.

       Complaint at 41-42, para. 106.

       Complaint at 36-40, paras. 93-103

       Complaint 38, para. 98, 40, para. 102.

       Complaint at 32-49, paras. 86-118; Reply, Legal Analysis at 6.

       Complaint at 5, para. 11, 45-49, paras. 112-18.

       See footnote 101 below.

       Complaint, Legal Analysis at 33, para. 88, 41-42, para. 106 (citing
       NECA Tariff S: 6.1.3(A), Original Page 6-7.3); Reply, Legal Analysis
       at 7. In its entirety, the relevant paragraph of Section 6.1.3(A) of
       the NECA Tariff states:

       Unless otherwise ordered by the F.C.C., where the Telephone Company
       elects to provide equal access through a Centralized Equal Access
       arrangement, the Telephone Company will designate the serving wire
       center. The designated SWC will normally be that wire center which
       provides dial tone to the telephone company Centralized Equal Access
       tandem office identified in NATIONAL EXCHANGE CARRIER ASSOCIATION,
       INC. TARIFF F.C.C. NO. 4. When service is provided in cooperation with
       a non telephone company provider of Centralized Equal Access, the SWC
       will be that wire center which would normally provide dial tone to the
       telephone company point of interconnection with the non telephone
       company provider of Centralized Equal Access specified in the tariff
       of the Centralized Equal Access provider. Those Telephone Company
       offices providing equal access through centralized arrangements are
       identified in NATIONAL EXCHANGE CARRIER ASSOCIATION, INC. TARIFF
       F.C.C. NO. 4.

       Complaint, Legal Analysis at 33, para. 88, 41-42, paras. 105-06;
       Reply, Legal Analysis at 9.

       Complaint, Legal Analysis at 33, para. 88, 41-42, para. 106 (citing
       NECA Tariff S: 6.1.3(A), Original Page 6-7.3 (emphasis added)).

       Answer, Legal Analysis at 35, paras. 106-07 (citing NECA Tariff S:
       6.1.3(A), Original Page 6-7.3 (emphasis added)), 36, para. 108.

       Answer, Legal Analysis at 36, para. 108.

       Stipulations at 21, para. 129. The Iowa LECs further maintain that
       sections 6.4.7 and 6.8.3 of the NECA Tariff, which state that the
       "Telephone Company will designate the . . . routing to be used where
       equal access traffic is provided through a centralized equal access
       arrangement," give them discretion to select any POI. Answer, Legal
       Analysis at 34, para. 105. Routing of calls referenced in those
       sections describes only the call path and not the designation of the
       POI. Indeed, the Iowa LECs appear to have conceded as much by
       stipulating that, regardless of whether the POIs were the original
       POIs or Des Moines, the traffic "has continued to flow over precisely
       the same . . . route." Stipulations at 16, para. 94.

       Reply, Legal Analysis at 7 (citing INAD Tariff S: 2.5, 1st Rev. Page
       62).

       Complaint, Legal Analysis at 35, para. 91.

       Complaint, Legal Analysis at 35, para. 91.

       Answer, Legal Analysis at 27, para. 90, 28, para. 91, 35, para. 106,
       43-44, para. 129, 45, para. 132.

       Answer, Legal Analysis at 27-33, paras. 90-101, 36, para. 108.  In
       light of this acknowledgement, we find other evidence regarding LECs'
       POI selections and the views of third party "experts" to be
       irrelevant. See Answer, Legal Analysis at 34, para. 105; Answer Ex. H,
       Affidavit of Burnie E. Snoddy at 2, paras. 3-4.

       See Answer, Legal Analysis at 25, para. 86 & n.24, 27-28, para. 90.

       Answer, Legal Analysis at 25, para. 86, 28, para. 91, 29-33, paras.
       93, 96-98, 100. In other words, "if AT&T [had] an issue with the
       traffic," it would contact the Iowa LECs. Answer, Legal Analysis at
       29-30, paras. 93, 94. See Stipulations at 16-17, paras. 94-99.

       Answer at 6, para. 10, 21, para. 72, 25, para. 86, 27, para. 90,
       29-30, para. 93-94, 31, para. 97, 33-34, paras. 103-04

       Answer, Legal Analysis at 25, para. 86.

       Answer, Legal Analysis at 25, para. 86 & n.24.

       Answer, Legal Analysis at 27-30, paras. 90, 93-94, 33-34, para. 103.

       Answer, Legal Analysis at 30-33, paras. 96-98, 100, 101.

       Reply, Legal Analysis at 17.

       Reply, Legal Analysis at 17. See also Reply, Legal Analysis at 16-17
       (the INS Tariff's reference to "responsibility" is "most naturally and
       sensibly read to mean that [INS] has `responsibility' for the
       provision of CEA service whenever the underlying facilities used to
       provide the service are owned, controlled, operated, and maintained by
       any part of INS."). The Iowa LECs spend considerable time in the
       Answer making distinctions between two divisions of INS-INICD and
       INAD. Specifically, they argue that INAD "removed the facilities
       leased by the Iowa LECs from their facilities leased from" INICD, and
       thus that INAD no longer has responsibility for the services provided
       between Des Moines and the "traditional" POIs. See Answer at 3, para.
       2, 6-7, para. 10, 17-19, paras. 59-62, 21, para. 72, 25-31, paras. 86,
       89-96, 33-34, paras. 103-04, 47-49, para. 43. The Iowa LECs further
       claim that their leases with INICD provide them with "responsibility"
       over the INS facilities and the authority to bill for transport. See
       Answer at 5-7, paras. 7, 10, 10, para. 18, 16-18, paras. 57-58, 60,
       61, 24, para. 83, 25, para. 86, 26-27, paras. 89-90, 30-31, para. 96,
       33-34, para. 103, 38, para. 113, 51-52, paras. 154-55. Because this
       Order analyzes whether the Iowa LECs, as opposed to any part of INS,
       exercised "responsibility" (as used in the INAD Tariff), we agree with
       AT&T that there is no need to focus extensively on the relationship
       between INICD and INAD. See Reply, Legal Analysis at 13 ("the Iowa
       LECs place far too much weight on the existence of INS' internal
       divisions and the use of leases between those divisions").

       Reply, Legal Analysis at 13.

       Complaint, Legal Analysis at 37, para. 85; Reply, Legal Analysis at
       20-21, n.28.

       Reply, Legal Analysis at 18-20. AT&T claims that the leases actually
       were "agreements for services." Reply, Legal Analysis at 20.

       Answer at 18 & Answer Ex. F., Supplement Expert Witness Report of
       Burnie Snoddy at 2 (noting that the leasing of network capacity and
       facilities is a standard industry practice). See also Joint Statement
       at 14-15, Stipulations 85-87, Reply at 21 (noting the use of leases to
       provide "wholesale transport service").

       Complaint, Legal Analysis at 36-40; Reply at 5, 18-22.

       AT&T Corp. v. Ymax Communications Corp., Memorandum Opinion and Order,
       26 FCC Rcd 5742, 5755, para. 33 (2011) (citing Associated Press v.
       FCC, 452 F.2d 1290, 1299 (D.C. Cir. 1971); Qwest Commc'ns Corp. v.
       Farmers & Merchants Mut. Tel. Co., Memorandum Opinion and Order, 24
       FCC Rcd 14801, 14810, n.83 (2009), recon. denied, 25 FCC Rcd 3422
       (2010), pet. for review denied, Farmers & Merchants Mut. Tel. Co. v.
       FCC, 668 F.3d 714 (D.C. Cir. 2011); American Satellite Corp. v. MCI
       Telecommunications Corp., Memorandum Opinion and Order, 57 FCC2d 1165,
       1167, para. 6 (1976)).

       Stipulations at 14, para. 84.

       Stipulations at 16, para. 94.

       Stipulations at 16, para. 95.

       Stipulations at 16, para. 98.

       Stipulations at 17, para. 99.

       Stipulations at 17, para. 101. As a result, AT&T is being billed twice
       for transport-once under the INAD Tariff (via the CEA flat,
       non-distance-sensitive charge) and once under the NECA Tariff (via the
       mileage-based transport charges).  See also discussion below in
       paragraph 48.

       See Penn. Cent. Co. v. General Mills, 439 F.2d 1338, 1341 (8th Cir.
       1986); Carrier Serv., Inc. v. Boise Cascade, 795 F.2d 640, 642 (8th
       Cir. 1986); see also Complaint at 45-49; Reply at 10-12.

       See Consol. Gas Trans. Corp. v. FERC, 771 F.2d 1536, 1545 (D.C. Cir.
       1985); Nat'l Van Lines, Inc. v. U.S., 355 F.2d 326, 333 (7th Cir.
       1966) ("[A]n interpretation which is reasonable and consistent with
       the purposes of the tariff should be preferred to a construction which
       is impractical or which leads to absurd consequences").

       See discussion supra Section II.B.2; Stipulations at 17, para. 100,
       and 19, para. 120.

       See Application of Iowa Network Access Division, 3 FCC Rcd 1468
       (C.C.B. 1989) at para. 3.

       Complaint at 28-29, para. 73; Complaint, Legal Analysis at 49-50,
       paras. 119-21; Reply, Legal Analysis at 22-23.

       Complaint, Legal Analysis at 49, para. 119; Stipulations at 22, para.
       137.

       Complaint at 9, para. 12; Complaint Legal Analysis at 19, para. 49;
       Reply at 23; Complaint Ex. 6, Tariff FCC No. 5, Original Title Page 1,
       Access Service (emphasis added).

       Complaint Legal Analysis at 49-50; Reply at 22-23.

       Stipulations at 22, para. 137.

       See Answer at 7, para. 12, 15, para. 49; Answer Legal Analysis at
       39-40, paras 119-21.

       Complaint Ex. 6, NECA Tariff No. 5, S: 6.1, Original Page 6-1
       (emphasis added); Reply Legal Analysis at 22-23.

       Complaint Legal Analysis at 50; Reply at 22-23.

       Answer at 15, para. 49, 7, para. 12, 39, para. 119.

       Answer at 15, para. 49 & Ex. C, Affidavit of Norman St. Laurent (St.
       Laurent Affidavit) at 7-8, para. 35.

       Complaint Ex. 6, NECA Tariff No. 5, S: 6.1.

       Stipulations at 22, para. 137.

       Complaint at 29, para. 74; Complaint Legal Analysis at 50-52, paras.
       122-25 n.130; Reply at 23-24.

       Complaint Ex. 6, NECA Tariff No. 5, S: 2.1.9.

       Reply at 23.

       Complaint Ex. 6, NECA Tariff No. 5, S: 2.1.9.

       Answer, Legal Analysis at 30, para. 93.

       Cf. Reply at 23 (characterizing as a "remarkable admission" the Iowa
       LECs' contention that the POI changes did not affect service because
       the traffic continued to flow over the same routes and facilities as
       before (citing Answer at 8, para. 13, 19-20, para. 63).

       Complaint at 50-51, para. 122; Reply at 23-24.

       Answer at 7, para. 13, 40-42, paras. 122-25. See Complaint Ex. 26,
       Deposition of Terry Wegener (Wegener Deposition) at page 89, Answer
       Ex. D (sample notice setter), Answer Ex. U, Deposition of Roger
       Kilburg (Kilburg Deposition) at pages 42-43.

       Complaint Ex. 25, Wegener Deposition at 89, Answer Ex. D (sample
       notice letter).

       See Reply, Legal Analysis at 24, n.35.

       Answer Ex. U, Kilburg Deposition at pages 42-43.

       Answer at 8, para. 13.

       Answer Ex. U, Kilburg Deposition at pages 42-43.

       The LERG is an industry guide generally used by carriers in their
       network planning and engineering and numbering administration. It
       contains information regarding all North American central offices and
       end offices. See Answer, Ex. C, St. Laurent Affidavit at 7.

       Answer at 19-20, para. 63 & n.15. Specifically, the Iowa LECs contend
       that NECA F.C.C. Tariff No. 4 (Tariff 4), which describes, among other
       things, the location and technical capabilities of wire centers
       providing interstate access telecommunications service, was modified
       via some unspecified adjustments. Answer at 19-20, n.15.

       See 47 C.F.R. S:S: 1.720(a), (c), (h), 1.721(a)(5), (a)(11), 1.724(b),
       (g), 1.726(e) (noting, among other things, that a party must attach
       copies of all documents it intends to rely upon to support facts
       alleged and legal arguments made by it). See also Implementation of
       the Telecommunications Act of 1996, Amendment of Rules Governing
       Procedures to Be Followed When Formal Complaints Are Filed Against
       Common Carriers, Report and Order, 12 FCC Rcd 22497, 22534-37, paras.
       81-88 (1997).

       Answer at 7-8, para. 13, 19-20, para. 63 & n.15. The Iowa LECs did not
       include a copy of the relevant pages from NECA Tariff No. 4 or the
       LERG with their Answer.

       Complaint, Legal Analysis at 52-57.

       Complaint, Legal Analysis at 61-67.

       Answer at 10, para. 20, 22-23, paras. 78-79; Answer, Legal Analysis at
       42-43, paras. 126, 128, 44-45, para. 132, 47, para. 138.

       Answer, Legal Analysis at 42, para. 125, 45, para. 132, 46, para. 135.

       Answer, Legal Analysis at 42, para. 126.

       Answer, Legal Analysis at 42, para. 126.

       Answer, Legal Analysis at 42, para. 125.

       Answer, Legal Analysis at 42, para. 125, 43, para. 128, 44, para. 132,
       46, para. 135, 47, para. 138, 53, para. 157, 53 (Prayer for Relief),
       54 (Second Affirmative Defense).

       47 U.S.C. S: 206. Cahnmann v. Sprint Corp., 133 F.3d 484, 488 (7th
       Cir. 1998), cited by the Iowa LECs, is inapposite. That case held that
       the Act extinguishes the right of a party to bring suit for breach of
       contract under state law when the effect of the suit would be to
       challenge a federal tariff. Similarly, the filed-rate cases cited by
       the Iowa LECs-see Answer at 43, n.52-are inapplicable because they do
       not concern a challenge to the justness or reasonableness of the
       tariffs at issue in those cases.

       See Reiter v. Cooper, 506 U.S. 258, 268 (1993) (the primary
       jurisdiction doctrine is "specifically applicable to claims properly
       cognizable in court that contain some issue within the special
       competence of an administrative agency").

       47 U.S.C. S: 208.

       Alpine Primary Jurisdiction Order at 4.

       Alpine Primary Jurisdiction Order at 5.

       January 17th Letter Ruling at 3.

       January 17th Letter Ruling at 3. The Iowa LECs read too much into a
       statement in the January 17th Letter Ruling that AT&T's "motion to
       refer the matter to the FCC was limited to `issues of tariff
       interpretation.'" January 17th Letter Ruling at 4. That statement,
       which drew a distinction between the preemption question and the other
       matters that had been referred to the Commission, was merely quoting
       from the heading of AT&T's argument beginning on page 18 of its brief
       in support of its summary judgment motion. See Defendant's Brief in
       Support of Motion for Summary Judgment (AT&T's Summary Judgment Brief)
       at 18. The statement cited to the entirety of AT&T's argument at pages
       18-20 of that brief, however, which clearly encompassed all of AT&T's
       section 201(b) claims. See AT&T's Summary Judgment Brief at 19-20
       ("Fina1ly, if the Court does decide to refer issues of tariff
       interpretation to the FCC, then the referral should also include
       AT&T's counterclaims arising under Section 201. In Count II of its
       counterclaims, AT&T alleges that Plaintiffs have committed an
       unreasonable practice . . . [because] . . . the tariffs are
       unreasonable under Section 201 . . . [and] Plaintiffs have engaged in
       a sham transaction").

       ACS of Anchorage, Inc. v. FCC, 290 F.3d 403, 410-11 (D.C. Cir. 2002)
       (ACS of Anchorage) (citations omitted).

       ACS of Anchorage, 290 F.3d at 411.

       Complaint, Legal Analysis at 53, para. 129.

       Indiana Switch, 1 FCC Rcd at 635, para. 5.

       Indiana Switch, 1 FCC Rcd at 635, para. 5.

       Complaint at 6, para. 16, 13-14, para. 35.

       Complaint at 6, para. 16.

       Stipulations at 11, para. 71.

       Stipulations at 19, para. 120.

       Complaint, Legal Analysis at 21, para. 53; Answer, Legal Analysis at
       16, para. 53.

       Stipulations at 17, para. 100.

       See paragraph 44 & n.160 above.

       Because we find that a carrier changing POIs for the sole  purpose of
       inflating mileage charges is an unjust and unreasonable practice, we
       would have similar concerns regarding, and thus examine closely, any
       tariff revisions that appear to permit this practice.

       Answer, Legal Analysis at 51-52, paras. 155-56. The Iowa LECs made
       these assertions in response to AT&T's "sham arrangements" argument,
       which we do not reach in this Order. Nonetheless, given the potential
       subject matter overlap, we consider the Iowa LECs' contentions in
       deciding AT&T's tariff illegality argument. See discussion supra
       Section III.A.1.b.

       Answer, Legal Analysis at 51-52, paras. 155-56.

       Alpine is the only Defendant that even purports to demonstrate cost
       savings in its interrogatory answer, yet its own deposition testimony
       refutes the claimed savings. In fact, Alpine admits that it could have
       gained the improvements it sought in its network without moving the
       POI to Des Moines, but that it would not have gained the increased
       mileage charges from the IXCs. Complaint, Exhibit 28, Deposition of
       Christopher James Hopp (Alpine) at 63-67.

       Answer, Legal Analysis at 43-45, paras. 129, 132.

       Answer at 45-46, paras. 134, 136.

       INAD Application Order, 3 FCC Rcd at 1468, para. 4.

       Answer, Legal Analysis at 47, para. 142, 52, para. 156 (citing
       Stipulations at 19, para. 109).

       Stipulations at 19, para. 109.

       Stipulations at 17, para. 101, 18, paras. 107, 109.

       Stipulations at 17, para. 101, 18, paras. 107, 109-10.

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       Federal Communications Commission FCC 12-110