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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of All American Telephone Co., e-Pinnacle Communications,
Inc., and ChaseCom, Complainants, v. AT&T Corp., Defendant. ) ) ) ) ) ) )
) ) ) ) ) ) File No. EB-10-MD-003
order ON RECONSIDERATION
Adopted: March 22, 2013 Released: March 25, 2013
By the Commission:
I. Introduction
1. All American Telephone Co., Inc., e-Pinnacle Communications, Inc., and
ChaseCom (collectively, the CLECs) filed a formal complaint with the
Commission under section 208(a) of the Communications Act of 1934, as
amended (the Act).^ On January 20, 2012, the Commission denied that
complaint in the Complaint Denial Order.^ Thereafter, the CLECs filed
a petition for reconsideration or clarification of the Complaint
Denial Order,^ under section 405(a) of the Act, and rule 1.106.^ For
the reasons explained below, the Petition is dismissed on procedural
grounds, and alternatively, denied on the merits.^
II. BACKGROUND
2. At all relevant times, the CLECs purported to provide terminating
interstate switched access services to AT&T Corp. (AT&T), an
interexchange carrier (IXC), pursuant to federal tariffs that the
CLECs filed with the Commission.^ The CLECs charged AT&T for
terminating interstate switched access services, but AT&T refused to
pay, asserting that the CLECs were not providing such services in
accordance with their federal tariffs.
3. The CLECs sued AT&T in federal district court to collect the access
charges billed, asserting claims alleging, inter alia, that AT&T's
refusal to pay violated the CLECs' federal tariffs, section 201(b) of
the Act, and section 203(c) of the Act.^ Upon the CLECs' request--to
which AT&T objected--the federal district court referred the following
issues, among others, to this Commission under the primary
jurisdiction doctrine:
(i) Did AT&T violate S 201(b), S 203(c), or any other provision of the
Communications Act by refusing to pay the billed charges for the calls at
issue?
(ii) Did AT&T violate any provision of the Communications Act by refusing
to pay the billed charges for the calls at issue and not filing a rate
complaint with the FCC?^
4. At the direction of Commission staff, the CLECs effectuated the
court's primary jurisdiction referral by filing a formal complaint
against AT&T under section 208 of the Act. The CLECs' complaint
alleges that, by refusing to pay the billed access charges rather than
paying those charges and filing a rate complaint against the CLECs
with this Commission, AT&T violated sections 201(b) and 203(c) of the
Act.
5. After the pleading cycle closed, the Commission released the Complaint
Denial Order denying the CLECs' claims. Specifically, the Commission
stated:
[T]he answer to both of the Court's questions addressed in this Order is
"no." AT&T did not violate sections 201(b), 203(c), or any other provision
of the Communications Act by refusing to pay the billed charges for the
calls at issue, regardless of whether it filed a rate complaint with the
FCC. Accordingly, the CLECs' claims are denied.
Under section 208 of the Act, the Commission has authority to adjudicate
only claims alleging that a carrier has somehow violated the Act
itself. . . . [T]he Commission has repeatedly held that an allegation by a
carrier that a customer has failed to pay charges specified in the
carrier's tariff fails to state a claim for violation of any provision of
the Act, including sections 201(b) and 203(c) - even if the carrier's
customer is another carrier. These holdings [the Collection Action
Orders^] stem from the fact that the Act generally governs a carrier's
obligations to its customers, and not vice versa. Thus, although a
customer-carrier's failure to pay another carrier's tariffed charges may
give rise to a claim in court for breach of tariff/contract, it does not
give rise to a claim at the Commission under section 208 (or in court
under section 206) for breach of the Act itself.
* * *
Applying the foregoing precedent to the instant case, the CLECs' claims
that AT&T violated the Act must be denied. Each of the CLECs' three claims
hinges on the contention that either section 201(b) or section 203(c) of
the Act requires AT&T to pay the CLECs' tariffed access charges. In other
words, each of the claims is exactly the kind of "collection action" that
the Commission has repeatedly held fails to state a claim for violation of
the Act.^
III. discussion
6. We have reviewed the CLECs' Petition and Reply. All of the CLECs'
arguments either (i) have been fully considered and rejected by the
Commission in the Complaint Denial Order,^ or (ii) could and thus
should have been made prior to the Complaint Denial Order.^ For
example, to support their contention that a failure to pay allegedly
tariffed charges constitutes a violation of the Act, the CLECs persist
in relying on the same out-of-context snippets from old Commission
orders^ that the Complaint Denial Order already distinguished or
reconciled.^ The Petition offers nothing to undermine the Complaint
Denial Order's conclusion. Accordingly, we summarily dismiss the
Petition on procedural grounds.^
7. Nevertheless, as an independent and alternative basis for this
decision, we deny the Petition on the merits to the extent described
below. First, it appears that underlying the Petition is a concern
that the Complaint Denial Order may deprive the CLECs (and other
similarly-situated local exchange carriers) of any forum in which to
pursue collection actions against AT&T (and other similarly-situated
IXCs) to recover access charges allegedly due under federal tariffs.^
The Complaint Denial Order does no such thing. The Complaint Denial
Order makes clear that "a customer-carrier's failure to pay another
carrier's tariffed access charges may give rise to a claim in court
for breach of tariff/contract . . . ."^ Thus, as even AT&T
acknowledges, the Complaint Denial Order does not hinder the CLECs'
ability to prosecute their court claims for breach of their federal
tariffs.^
8. Second, we are perplexed by the CLECs' request that we issue an order
(i) reversing the Complaint Denial Order, (ii) holding that "the
Commission lacks jurisdiction to hear the questions referred by the
SDNY Court, and [(iii)] dismissing the complaint without prejudice."^
After all, it was the CLECs who, over AT&T's objection, successfully
urged the federal district court to refer to the Commission the very
questions we addressed in the Complaint Denial Order.^ If it is true,
as the Petition strongly suggests,^ that the CLECs always understood
the Collection Action Orders as precluding the Commission from ruling
favorably on the merits of their claims, then it is troubling that the
CLECs put the court, the Commission, and AT&T through the time,
effort, and expense of this primary jurisdiction referral process
regarding the questions resolved in the Complaint Denial Order.
9. We give no credence to the CLECs' contention that the Collection
Action Orders apply only to the Commission's formal complaint
proceedings under section 208 of the Act, and not to other Commission
processes that the Commission could have employed, but chose not to
employ, to resolve the questions referred by the court.^ Even if the
Commission were to have decided the referred issues in a declaratory
ruling proceeding as the CLECs desired, the substantive answer to the
question whether certain conduct violates the Act would be the same.^
The answer does not turn on the procedural mechanism chosen by the
Commission to address the question.^
10. Similarly unfounded is the CLECs' assertion that an IXC's failure to
pay allegedly tariffed access charges can constitute a claim for
violation of the Act cognizable in a court proceeding, even though the
Collection Action Orders hold that the very same conduct does not
constitute a claim for violation of the Act cognizable in a Commission
proceeding under section 208 of the Act.^ Under the plain language of
sections 206-208 of the Act,^ both the Commission and courts can award
relief only upon finding a violation of the Act. Thus, just as the
substantive answer to a question concerning construction of the Act
does not turn on the Commission procedure employed to address the
question, the substantive answer also does not turn on whether the
Commission or a court is employed to address the question.
11. That said, as we explained in the Complaint Denial Order and in our
first point above, a court's authority does differ from the
Commission's in one relevant respect: A federal court can adjudicate a
local exchange carrier's claim seeking to enforce an IXC's access
charge payment obligations under a federal tariff, whereas the
Commission cannot under the long-standing precedent that "collection
actions" fail to state a claim for violation of the Act. And this
distinction is reinforced, not undermined, by the six court decisions
cited by the CLECs in their Petition.^ According to the CLECs, those
court decisions contradict the Complaint Denial Order's holding that
an IXC's failure to pay a local exchange carrier's tariffed access
charges cannot constitute a violation of the Act. We disagree. Those
court decisions simply hold that, because federal tariffs emanate from
federal law, i.e., section 203 of the Act, a federal tariff is itself
tantamount to "federal law," not merely a contract. Accordingly, a
claim for breach of the payment obligations of a federal tariff
"arises under" federal law within the meaning of 28 U.S.C. S 1331 and,
in turn, such a claim falls within the subject-matter jurisdiction of
federal courts.^ Those six court decisions are thus fully consistent
with the Complaint Denial Order's holding that a court, and not the
Commission, is the proper forum for local exchange carriers to raise
federal tariff collection action claims against their IXC customers.^
IV. ordering clause
12. Accordingly, IT IS HEREBY ORDERED, pursuant to Sections 201, 203, 208,
and 405 of the Communications Act of 1934, as amended, 47 U.S.C. SS
201, 203, 208, 405, and Sections 1.106 and 1.720-1.736 of the
Commission's rules, 47 C.F.R. SS 1.106, 1.720-1.736, that the Petition
for Reconsideration or Clarification of All American Telephone Co.,
Inc., e-Pinnacle Communications, Inc., and ChaseCom is DISMISSED on
procedural grounds and, in the alternative, DENIED for the reasons
stated herein.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
^ 47 U.S.C. S 208(a).
^ All American Tel. Co. v. AT&T Corp., Memorandum Opinion and Order, 26
FCC Rcd 723 (2011) (Complaint Denial Order).
^ Petition for Reconsideration or Clarification of All American Telephone
Co., Inc., e-Pinnacle Communications, Inc., and ChaseCom, File No.
EB-10-MD-003 (filed Feb. 22, 2011) (Petition); see also AT&T's Opposition
to Petition for Reconsideration, File No. EB-10-MD-003 (filed Mar. 4,
2011) (Opposition); Reply in Support of Petition for Reconsideration or
Clarification of All American Telephone Co., Inc., e-Pinnacle
Communications, Inc., and ChaseCom, File No. EB-10-MD-003 (filed Mar. 11,
2011) (Reply).
^ 47 U.S.C. S 405(a); 47 C.F.R. S 1.106.
^ The Commission previously dismissed the Petition for Reconsideration or
Clarification of Aventure Communication Technology, L.L.C. and Petition of
Qwest Communications Company, LLC to Accept Opposition Filing. Both
Aventure and Qwest were non-parties in this proceeding. See All American
Co. v. AT&T Corp., Order, File No. EB-10-MD-003 (Enf. Bur. Oct. 27, 2011).
See also Petition for Reconsideration or Clarification of Aventure
Communication Technology, L.L.C., File No. EB-10-MD-003 (filed Feb. 22,
2011); Petition of Qwest Communications Company, LLC to Accept Opposition
Filing, File No. EB-10-MD-003 (filed Mar. 4, 2011).
^ This is an abridged (and non-annotated) description of the factual and
legal background. The Complaint Denial Order, 26 FCC Rcd at 724-26, paras.
3-8, contains a more complete discussion of the background.
^ 47 U.S.C. SS 201(b), 203(c).
^ All American Tel. Co., Inc. v. AT&T Corp., Order Referring Issues to the
Federal Communications Commission, Case No. 1:07-cv-00861-WHP, at 3
(S.D.N.Y. Feb. 5, 2010) (Referral Order).
^ See Complaint Denial Order, 26 FCC Rcd at 727, n.32 (citing the
Collection Action Orders).
^ Complaint Denial Order, 26 FCC Rcd at 726-28, paras. 9-11 (footnotes
omitted).
^ Compare Petition at 10-11 (the Commission lacks authority to rule
dispositively on the court referral); id. at 12-19 (the Complaint Denial
Order is inconsistent with Commission and court precedent); id. at 19-22
(IXCs are not exempt from the obligations imposed by the Communications
Act when they act "as a customer"); Reply at 2-4 (the Complaint Denial
Order conflicts with Commission precedent); id. at 4-6 (the Commission
lacks authority to rule dispositively on the court referral); id. at 6-8
(the Complaint Denial Order is inconsistent with court precedent), with
Complaint Denial Order at 724-32, n.6, paras. 10-14, 16-20.
^ See Qwest Communications Company, LLC v. Northern Valley Communications,
LLC, Order on Reconsideration, 26 FCC Rcd 14520, 14522-23, paras. 5-6
(2011) (declining to revisit arguments that the Commission addressed and
rejected in the underlying order and finding reconsideration unwarranted
with respect to arguments that the petitioner previously had an
opportunity to present in response to the underlying complaint).
^ Petition at 7, 12-16, 21 (citing Communique Telecomms., Inc. d/b/a
LOGICALL, Declaratory Ruling and Order, 10 FCC Rcd 10399 (1995); Business
WATS, Inc. v. AT&T, Memorandum Opinion and Order, 7 FCC Rcd 7942 (Comm.
Car. Bur. 1992); MCI Telecomms. Corp. v. AT&T, Decision, 94 F.C.C.2d 332
(1983); Carpenter Radio Co., Memorandum Opinion and Order, 70 F.C.C.2d
1756 (1979); Bell Tel. of Pa., Memorandum Opinion and Order, 66 F.C.C.2d
227 (1977); MCI Telecomms. Corp., Memorandum Opinion and Order, 62
F.C.C.2d 703 (1976)); Reply at 3-6.
^ Complaint Denial Order, 26 FCC Rcd at 728, para. 13 & nn.37-41. In fact,
it was the Commission in the Complaint Denial Order--not the CLECs in
their pleadings--who first noted the existence of two of the Commission
orders on which the Petition mistakenly relies. Complaint Denial Order, 26
FCC Rcd at 729 n.41. In any event, we find these snippets to be no longer
good law, for the same reasons that the Complaint Denial Order explained
regarding MGC v. AT&T. MGC Communications, Inc. v. AT&T Corp., Memorandum
Opinion and Order, 14 FCC Rcd 11647 (Com. Car. Bur. 1999), aff'd, MGC
Communications, Inc. v. AT&T Corp., Memorandum Opinion and Order, 15 FCC
Rcd 308 (1999) (collectively, MGC v. AT&T). The Complaint Denial Order
cited the following reasons: (1) at least one federal district court had
already noted that the Commission "ha[d] questioned the continuing
validity and scope of the MGC decision" since its adoption, (2) the
Commission had re-affirmed the Collection Action Orders at least six
times, and noted the incongruity of MGC v. AT&T at least twice, and (3)
the only question discussed extensively in MGC v. AT&T was not whether a
failure to pay access charges was a violation of the Act, but "whether
AT&T took the appropriate steps effectively to terminate the arrangement
with MGC for the acceptance of originating access traffic." It then
expressly overruled MGC v. AT&T. Complaint Denial Order, 26 FCC Rcd at
731-32, para. 20.
^ See, e.g., 47 C.F.R. SS 1.106(c)(1), (p)(1)-(3). The CLECs argue that
the Complaint Denial Order is vague. See, e.g., Petition at ii-iii, 4,
22-24; Reply at 8-10 (claiming, among other things, that the Complaint
Denial Order is "rife with internal inconsistencies" because it (1)
creates in a complaint proceeding broad and dispositive legal principles
that have industry-wide effect, (2) makes several unsupported statements,
and (3) has been interpreted differently by various parties). However, the
CLECs' vagueness argument actually rests on the very same points that
either the Complaint Denial Order already considered or that the CLECs
could and should have made prior to the Complaint Denial Order. In other
words, the CLECs' assertions of vagueness really argue that the Complaint
Denial Order is wrong, not that the Complaint Denial Order is ambiguous.
Thus, the CLECs' assertions of vagueness warrant summary dismissal for the
same reasons that the rest of the CLECs' arguments do.
^ Petition at 5-6, 16-17, 19; Reply at 2, 7-8.
^ Complaint Denial Order, 26 FCC Rcd at 727, para. 10.
^ AT&T's Opposition at 2, 10-11, 18, 20-21. The CLECs also misread the
Complaint Denial Order as holding that one carrier's failure to pay
another carrier's charges can never constitute a violation of the Act.
See, e.g., Reply at 8. By its plain terms, the Complaint Denial Order
pertains only to circumstances governed by section 203 of the Act. See
Complaint Denial Order, 26 FCC Rcd at 726-28, paras. 9-11, 729, para. 14,
732, paras. 21-24.
^ Petition at iii, 10-12, 25; Reply at 3-5, nn.3, 10.
^ See Referral Order; see also All American Tel. Co., Inc. v. AT&T Corp.,
Memorandum in Support of Motion for Referral to Federal Communications
Commission, Case No. 1:07-cv-00861-WHP (filed Nov. 30, 2009); All American
Tel. Co., Inc. v. AT&T Corp., Reply Memorandum in Support of Plaintiffs'
Motion for Referral to Federal Communications Commission, Case No.
1:07-cv-00861-WHP (filed Dec. 22, 2009).
^ Petition at 7; Reply at 4-6; see Complaint Denial Order, 26 FCC Rcd at
728, para. 12.
^ Petition at ii-iii, 7-8, 10-11; Reply at 2-6.
^ See Complaint Denial Order, 26 FCC Rcd at 724, n.6 (addressing this
contention).
^ Id.
^ Petition at 12-19; Reply at 5-8.
^ 47 U.S.C. SS 206-208.
^ Petition at 16-19 (citing Cahnmann v. Sprint Corp., 133 F.3d 484 (7th
Cir. 1998); AT&T v. City of New York, 83 F.3d 549 (2d Cir. 1996); MCI
Telecomms. Corp. v. Teleconcepts, Inc., 71 F.3d 1086 (3d Cir. 1995);
Western Union Int'l Inc. v. Data Dev., Inc., 41 F.3d 1494 (11th Cir.
1995); MCI Telecomms. Corp. v. Graham, 7 F.3d 477 (6th Cir. 1993); MCI
Telecomms. Corp. v. Garden State Inv. Corp., 981 F.2d 385 (8th Cir. 1992);
MCI Telecomms. Corp. v. Credit Builders of America, Inc., 980 F.2d 1021
(5th Cir. 1993), vacated, 508 U.S. 957 (1993)); Reply at 7-8, n.19.
^ See WorldCom, Inc. v. Graphnet, Inc., 343 F.3d 651, 653-54 (3d Cir.
2003); Cahnmann v. Sprint Corp., 133 F.3d at 488; MCI Telecomms. Corp. v.
Teleconcepts, Inc., 71 F.3d at 1094; Ivy Broadcasting Co., Inc. v. AT&T,
391 F.2d 486, 490-91 (2d Cir. 1968).
^ Complaint Denial Order, 26 FCC Rcd at 727; see, e.g., Southern New
England Telephone Co. v. Global NAPs, 624 F.3d 123 (2d Cir. 2010) (federal
question jurisdiction exists over a suit to enforce the payment provisions
of a federal tariff).
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Federal Communications Commission FCC 13-36
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Federal Communications Commission FCC 13-36