20040618Qwest Response & Motion to Dismiss Arbitration.pdf

, .
William J. Batt
James B. Alderman
Batt & Fisher, LLP
U S Bank Plaza, 5th Floor
101 South Capital Blvd.
Boise, Idaho 83702
[phone]
Adam Sherr
Qwest Communications, Inc.
1600 7th Avenue.. Room 3206
Seattle, W A 98191
[phone]
Attorneys for
Respondent Qwest Corporation
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Case No. GNR- T -04-IN THE MATTER OF PAGEDATA'
PETITION FOR ARBITRATION OF
INTERCONNECTION RATES, TERMS AND
CONDITIONS AND RELATED
ARRANGEMENTS WITH QWEST
CORPORATION PURSUANT TO SECTION
252(B) OF THE FEDERAL
TELECOMMUNICATIONS ACT.
IN THE MATTER OF W A VESENT'
PETITION FOR ARBITRATION OF
INTERCONNECTION RATES, TERMS AND
CONDITIONS AND RELATED
ARRANGEMENTS WITH QWEST
CORPORATION PURSUANT TO SECTION
252(B) OF THE FEDERAL
TELECOMMUNICATIONS ACT.
RESPONSE AND
MOTION TO DISMISS
PETITIONS FOR
ARBITRATION
Case No. GNR-04-
Qwest Corporation ("Qwest") hereby (l) responds to the Petitions for Arbitration
filed by Joseph McNeal d/b/a PageData and WaveSent, LLC (the "Pagers ) and, (2)
moves the Commission to dismiss the Petitions, for the reasons set forth below.
ORIGINAL
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 1
INTRODUCTION AND BACKGROUND
Petitions for Arbitration On March 23 , 2004 PageData filed a Petition for
Arbitration of interconnection agreement terms and conditions with Qwest pursuant to
Section 252(b) of the 1996 Act, and WaveSent filed a nearly identical Petition two days
later. 1 The Pagers filed their Petitions for Arbitration even though they had only
requested negotiations a few days earlier, and despite the fact that no negotiations
whatsoever had yet taken place. In their Petitions, the Pagers also requested the
Commission s "arbitration of requests to adopt contract language from other
agreements.
Order No. 29463.On April 2 , 2004, the Commission consolidated the cases and
issued a procedural order. 2 The Commission (l) ordered the Pagers to provide a citation
to any case which purports to allow the Commission to entertain arbitration petitions filed
prior to the 135th day after a request for negotiations, and (2) ordered Qwest to file its
response to the petitions, separately addressing the Pagers' unresolved arbitration issues
and those terms the Pagers desired to adopt under Section 252(i) of the Act.
Amendment to Petition.The Pagers did not provide a citation of law to support
their attempts to invoke the Commission s jurisdiction prior to the 135th day as required
by Order No. 29463. Instead, on April 12, 2004, the Pagers filed a joint document
entitled "Amendment to Petition" in which they requested that the Commission first
Petition of Joseph B. McNeal, d/b/a PageData filed a Petition for Arbitration of Interconnection
Rates, Terms and Conditions and Related Arrangements with Qwest Corporation Pursuant to
Section 252(b), filed March 23 2004; Petition of Wave Sent, LLC for Arbitration of
Interconnection Rates, Terms and Conditions and Related Arrangements with Qwest Corporation
Pursuant to Section 252(b), filed March 25, 2004. Mr. McNeal acts as "Attorney Pro Se" for both
Pagers.
2 Order 29463, issued April 2, 2004.
Id. at 4.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 2
decide a dispute under their existing interconnection agreements with Qwest before
proceeding to consider the Arbitration Petitions.4 The Amendment stated:
4. WaveSent and PageData seek to amend the Petition to request that the
Commission first make a ruling on the current interconnection agreement
and whether WaveSent and PageData s position is correct or whether
Qwest's position is correct , and then if necessary proceed with the 252(i)
and 252(b) requests. . . . .
5. WaveSent and PageData seek arbitration under Sections 252(i) and
252(b) if the Commission determines that WaveSent and PageData
interpretation of Section 2.4 of the interconnection agreements is in error
and accepts Qwest's interpretation of Section 2.4.
In the Amendment, unlike the Petition, the Pagers appear to ask the Commission
to resolve a dispute under their current agreement, rather than to decide unresolved
interconnection issues for a new agreement. The Amendment seeks resolution of a
dispute whether the Pagers may, under their current agreements, use paging
interconnection facilities and services to terminate Internet/enhanced services traffic
including:
whether the Pagers are entitled to route traffic for termination to
Internet Service Providers (ISPs) over paging facilities;
whether Qwest must provide free facilities for transporting such
ISP-bound traffic
whether ISP-bound traffic is subject to reciprocal compensation.
Thus the Commission is asked to decide:
. whether Qwest interpretation of the current interconnection
agreements is correct, which necessitates WaveSent and PageData s taking
advantage of the Commission s Order No. 29140 allowing for the adoption
of the terms and conditions from the Verizon agreement under 252(i).
WaveSent and PageData seek the Commission to adopt the proposed
interconnection agreement (provided as Exhibit F) that incorporates the
252(i) adoptions, without changes. WaveSent and PageData would seek an
instant and retroactive adoption of the Verizon ISP-Bound traffic
amendment per attachment A of the amendment; as well as including the
4 Wave Sent and PageData s Amendment to Petition, filed April 12, 2004.
5 Amendment, ~~ 4-
Id.~~ 6-15.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 3
Commission ruling on incorporating the flat rate 6000 MOU of local
paging traffic into Sections 2.2.1 and 3 of the amendment; dispute
resolution clause, and ASR ordering process terms and conditions under
252(i), the Commission ruling on whether continuous paging is local
paging, and possible 252(b) negotiations.
The Pagers' confusing amalgam of requests for dispute resolution , arbitration
under the Act, and "pick-and-choose" issues, leaves the parties and the Commission
in an unusual and confusing situation. If, and only if, the Commission rules against
the Pagers on the dispute under the current agreements, then the Pagers apparently
would return to the arbitration or 252(i) process - however, not with the proposed
agreement, contract language, and list of issues set forth in the Petitions. The Pagers
provided new different proposed agreements and contract language in the
Amendment, and appear to have abandoned the original advocacy set out in the
Petitions - at least to the extent they attached to the Amendment a new proposed
agreement and other language from various interconnection agreements to be
adopted with "instant and retroactive" effectiveness
Order No. 29477.On April 16, 2004, the Commission issued its Order
acknowledging the Pagers' Amendment and extending the time for Qwest's
consolidated response to the two petitions and the recent Amendment."9
Motion for Expeditious Substantive Relief.An April 19, 2004 , PageData filed a
Motion for Expeditious Substantive Relief' in the consolidated dockets.PageData
requested the Commission to order Qwest to provision certain facilities.
Qwest's Response to Motion for Expeditious Substantive Relief.On May 3
2004, Qwest filed its response to PageData s Motion for Expeditious Substantive
7 Amendment, pp. 13-14.
8 Amendment, ~~ 11 , 17.
9 Order 29477, issued April 2, 2004, p. 2.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 4
Relief. 10 Qwest set forth a history of the dispute and attached relevant correspondence
and other documents to its response. Qwest hereby incorporates that response and its
attachments by reference.
Negotiations of the Parties. On May 7, 2004, the parties held their first negotiating
session. Since then the parties have held several productive sessions, and have made
significant progress toward a new interconnection agreement that would resolve the
issues raised in the Petitions and the Amendment. Qwest is hopeful that as negotiations
proceed, in the manner Congress intended under the Act, the issues between the parties
can be resolved or at least substantially narrowed, before the Commission is called upon
to decide them.
Qwest Provision of Facilities. After negotiations began on May 7, and the parties
began actually working through the issues, Qwest provided most of the facilities that
PageData sought in its Motion for Expeditious Substantive Relief. Qwest believes
PageData s motion is now moot.
RESPONSE TO ARBITRATION PETITIONS AND AMENDMENT
The Commission ordered Qwest to respond separately to the negotiation!
arbitration issues raised by the Petitions, and the pick-and-choose issues stated in the
Petitions.
As Qwest explains below in its Motion to Dismiss, the Pagers are required to
negotiate any changes to the existing interconnection agreement, whether they seek
entirely new agreements or modification of their existing agreements. Their attempts to
pick-and-choose portions of agreements are ineffective because they are currently bound
10 Qwest Corporation s Response to PageData s Motion for Expeditious Substantive Relief, filed
May 3, 2004.
11 Wayne Hart of the Commission s Staff has assisted the parties in these negotiations.
Qwest is grateful for Mr. Hart's participation, and believes this has been an important
factor in moving the parties toward resolution of the issues.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 5
by agreements to which they previously chose to opt in. Accordingly, the Commission
should not entertain the Petitions, but should let the negotiation process go forward.
Qwest notes also that until the parties sat down at the negotiating table well after
the Pagers had filed their Petitions for Arbitration, the areas of dispute were not at all
clear. This was demonstrated by (1) the Pagers ' change of advocacy and strategy in the
Amendment to Petition, (2) the Pagers ' inclusion of new descriptions of issues and
proposed language in the Amendment. Qwest refers the Commission to correspondence
attached to Qwest's recent response to PageData s Motion for Expeditious Substantive
Relief. A" review of that correspondence shows nearly all of the issues raised in the
Petitions were raised for the first time in the Petitions themselves. Moreover, many of the
issues raised in the Petitions appear to Qwest to have now been resolved in negotiations
or to have become irrelevant to the current negotiation template on which the parties are
now focused. F or these reasons, and because the Pagers' attempt to invoke the
Commission s jurisdiction was premature Qwest is simply not able at this time to
identify issues from the original Petitions that remain both unresolved and pertinent to the
current negotiations draft agreement much less formulate a response on those issues.
SEPARATE RESPONSE REGARDING 252m ISSUES
Order No. 29463 provided that Qwest should respond separately to the Pagers
requests for adoption of terms and conditions under 47 D.C. 9 252(i). The situation
here is even more confused. Qwest refers the Commission to correspondence between the
parties, attached to Qwest's Response to Motion for Expeditious Substantive Relief
which shows that, even before they filed the Petitions, the Pagers were unclear or
uncertain as to what interconnection agreement - or terms and conditions from multiple
approved interconnection agreements - they sought to adopt.
The Petitions and Amendment have only further added to this muddle. For
example, in their Amendment, the Pagers seem to have jettisoned their adoption attempts
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 6
described in the Petitions, proposing instead the adoption of an entirely new agreement
Exhibit F to the Amendment.
In none of these articulations of what they seek to pick and choose do the Pagers
seek the adoption of another carrier s interconnection agreement that has been previously
approved by the Commission. Exhibit F to the Amendment appears to be an amalgam of
terms and conditions the Pagers deem favorable; they are from a number of other
interconnection agreements.
Likewise, the Pagers seem to be of the mistaken view that they can adopt terms
that they modify to their own needs as they see fit, or that they can adopt a provision as a
starting point and seek further modification of it through the negotiation! arbitration
process. They state:
(t)hen the disputes listed in the Matrices of Unresolved Issues (Exhibits B of the
original Petitions) would remain under 252(i) and need to be arbitrated by the
Commission with the exception of items numbered 1 , 3 , 4, 13 , and 23
from WaveSent's Matrix and items numbered 1 , 2, 4, 5 , 14, 22, 23, and 24 from
PageData s Matrix. These items would remain under 252(b) negotiations, if
necessary.
This "pick and change" methodology is simply different than what the law contemplates.
A party adopting an agreement is bound by the terms of that agreement - it cannot pick a
phrase here, another there, and then seek modification of the whole to provide an
advantageous interconnection agreement.
Qwest also notes that the Pagers claim they would adopt provisions that, on their
adoption, are instant and retroactive.13 There is no legal authority for a retroactive
adoption. By its nature, 252(i) operates prospectively.
Accordingly, Qwest is uncertain as to the extent the Pagers are legitimately
attempting to invoke Section 252(i), and is not able to formulate a separate response on
12 Amendment ~ 12.
13 Amendment, ~~ 11 , 17.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 7
these issues. As with Qwest's response above regarding the 252(b) arbitration issues
Qwest believes that the issues are currently irrelevant because of the intervening progress
of negotiations.
Below, in Qwest's motion to dismiss Qwest argues that the pick-and-choose
provisions of Section 252(i) are not applicable to the present situation because the Pagers
may not modify their existing agreements by adopting inconsistent terms and conditions.
MOTION TO DISMISS
Qwest Corporation moves to the Commission to dismiss the Petitions for
Arbitration filed by Joseph McNeal d/b/a! PageData and WaveSent, LLC.
Qwest's Motion to Dismiss the Petitions for Arbitration is based on the following:
The Pagers Must Follow Contractual Procedures to Modify their Existing
Agreements or to Negotiate New Interconnection Agreements. The Pagers
current Agreements provide specific time periods and procedures for modification
or renegotiation which the Pagers have ignored. Because Pagers have not
followed their contracts, the Commission should dismiss their Petitions.
Petitions for Arbitration May Not be Filed Before the 135th Day after a
Request for Negotiations. Because the Pagers have not complied with the Act'
strict time requirements, the Commission should dismiss the Petitions for
Arbitration.
3. Response to Pa2ers' Alle2ations of Bad Faith There is no law to support
elimination of the statutory time requirements based on a claim of bad faith;
nevertheless, the Pagers' claims of bad faith are not well taken, and Qwest
responds thereto.
ARGUMENT
1. The Pa2ers Must Follow Contractual Procedures to Modify their Existin2
A2reements or to N e20tiate New Interconnection A2reements
Whether Pagers seek to negotiate new interconnection agreements, or to amend
their existing interconnection agreements to incorporate provisions from other carriers
agreements with Qwest, they must follow the procedures in their existing contracts.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 8
Both Pagers adopted the Type 1 and Type 2 Paging Interconnection Agreement
between Qwest and Arch Paging - "the Arch Agreement,,14 - and both Pagers are
currently bound by the terms and conditions of those adopted Agreements. 15 Pagers
current Agreements provide specific time periods and procedures for modification or
renegotiation which the Pagers have ignored. Section 11.4.2 of the Agreements provides:
11.4.Voluntary Termination. The Agreement may be terminated
upon 160 days ' advance written notice at any time after August
, 2001. The Parties agree that any such notification of
termination shall be deemed a formal request under Sections 251
and 252 of the Act for negotiation of an interconnection
agreement. During the termination notice period, the Parties
shall negotiate in good faith to reach a revised agreement. If no
such agreement is reached, the Agreement will terminate on the
161 st day after notice, unless either party has requested arbitration
pursuant to Section 252(b)(1) of the Act, in which case the
Agreement will continue in force and effect until a successor
agreement has been approved by he Commission.
These time periods coincide with those established under Section 252 of the Act.
The contractual terms of the Pagers' existing Agreements have expired , and the
contracts have gone into "evergreen" status. Accordingly, under the language of Section
11.4.2 above, either party is now entitled to send a termination notice and thus request
negotiation of a new interconnection agreement. Until a party provides the notice
14 Type 1 and Type 2 Paging Interconnection Agreement between U S WEST Communications
Inc., and Arch Paging, Inc./ Mobile Communications Corporation of America, filed with the
IPUC on July 13 , 2000 (hereinafter as "Arch Agreement"). See In the Matter of the Joint
Application of Qwest Corporation FKA U WEST Communications, Inc. Arch Paging, Inc. and
Mobile Communications Corporation of America for Approval of a Type and Type
Interconnection Agreement Pursuant to 47 USe. 252(e), Case No. USW-00-20. The
Commission approved the Arch Agreement on September 1 2000. Id.Order No. 28499.
15 The Commission approved PageData s and WaveSent's adoptions of the Arch Agreement on
February 25 2003.2003. See In the Matter of the Joint Application ofQwest Corporation and
Joseph B. McNeal dba PageDatafor Approval of a Paging Connection Agreement Pursuant to
47 USe. 252(i), Case No. QWE-03-, Order No. 29198; In the Matter of the Joint
Application of Qwest Corporation and WaveSent, LLC for Approval of a Paging Connection
Agreement Pursuant to 47 USC. 252(i), Case No. QWE-03-, Order No. 29198.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 9
contemplated in Section 11.4.2, however, the contract remains in effect. The notice starts
a 160-day clock, at the end of which the Agreement terminates. Prior to that time
however, both parties remain bound by the existing interconnection Agreement. Qwest is
willing to treat the Pagers' requests for negotiations as the termination notices required
by Section 11.4.2 of the Agreement, but until the 160-day clock expires, the parties
remain bound by the Agreements as written.
The Pagers are bound by the existing contract provisions, whether they seek to
negotiate new agreements, amendments to the existing agreements, or whether they
purport to incorporate new provisions into the existing agreements pursuant to Section
252(i). 16 In fact, they are not entitled under Section 252(i) to adopt provisions that would
modify their existing agreements. The FCC established these principles clearly in its
May 4, 2004 reconsideration decision in Core Communications v. SBC Communications
Inc.17 a copy of which is attached to this Response/Motion to Dismiss. In that case
complainant Z-Tel Communications had opted into interconnection agreements with
Pacific Bell Telephone Company. The agreements did not provide shared transport for
intraLA T A toll calls. Z- Tel, like the Pagers here, sought to modify its existing
interconnection agreement by amending the language to provide shared transport - a duty
which all agreed was required by the FCC's rules.
16 See, e.g., In re Petition of Supra Telecommunications for Generic Proceedings to Arbitrate
Terms and Conditions of Interconnection with BellSouth Florida Public Service Commission
1990 Fla. PUC LEXIS 632, Order Granting Motion to Dismiss, March 31 , 1998:
As for Supra s request for an arbitration proceeding between Supra and BellSouth, we find
nothing in the Act authorizing a state commission to conduct an arbitration on matters
covered by an agreement that has been approved pursuant to Section 252( e). The Act does
not authorize a state commission to alter terms within an approved negotiated agreement or
to nullify an approved negotiated agreement.
17 CoreComm Communications, Inc., and Z-Tel Communications, Inc., SBC Communications
Inc., Southwestern Bell Telephone Company, Pacific Bell Telephone Company, Nevada Bell
Telephone Company, The Southern New England Telephone Company, Illinois Bell Telephone
Company, Indiana Bell Telephone Company, Michigan Bell Telephone Company, The Ohio Bell
Telephone Company, and Wisconsin Bell, Inc.FCC 04-106, Order on Reconsideration, released
May 4 2004.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 10
The FCC ruled that Z-Tel could not allege that Pacific Bell had violated the Act
or that the agreement itself violated the Act, because parties negotiating for
interconnection under Section 252 are free to choose terms and conditions that are
difference from terms required by the Act or the FCC's rules. 18 Likewise, Z- Tel count
not require Pacific Bell to amend the agreements, nor could Z-Tel attempt to modify the
contractual language by invoking Section 252(i). The FCC stated:
(T)he Commission has never held that a requesting carrier may
successfully charge an ILEC with violating its section 251 (c) obligations
when the requesting carrier has, pursuant to section 252(i), opted into an
interconnection agreement that excludes the very section 251 (c)
obligations at issue.
The FCC further explained:
Indeed, to so hold under these specific circumstances would undermine
the point of these interconnection agreements, which Congress established
as the mechanism to implement the duties arising section 251 (c). In the
present case, Z- T el opted into a pre-existing Pacific interconnection
agreement without first negotiating or arbitrating an amendment to the
agreement regarding shared transport. Z- T el is bound by the Pacific
Agreement, and may not now require Pacific to amend its terms. See
Liability Order 18 FCC Rcd at 7581-, ~ 30 (stressing that any request
by Z-Tel to change the Pacific Agreement's terms would have to comply
with the agreement's modification or change of law provisions).
Like Z- Tel, the Pagers voluntarily opted into the Arch Agreements. Just as
Z- T el could not require Pacific to amend the agreements after opting in, the Pagers
may not now require Qwest to modify the existing agreements.
Because Pagers are still bound by the existing contracts, the Commission should
dismiss their Petitions.
47 U.C 9 252(a) and 47 U.C 9252(e)
19
~ .
, ~ 10.
20 ~ . n. 24.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P.
2. Because Pa2ers Have Not Followed the Strict Time Periods Set Out in the Act"
The Commission Should Dismiss the Petitions for Arbitration
Section 252(b)(1) of the Act states:
During the period from the 135th to the 160th day (inclusive) after the date
on which an incumbent local exchange carrier receives a request for
negotiation under this section, the carrier or any other party to the
negotiation may petition a State commission to arbitrate any open issues.
This section of the Act clearly and unambiguously requIres a
telecommunications carrier to wait 135 days after the date of a request for
negotiation to file a petition for arbitration with a state commission.21 According
to the Pagers ' own pleadings PageData requested negotiations on March 16
2004;22 WaveSent's request for negotiations was made on March 18, 2004.
Accordingly, the windows for arbitration under Section 252 of the Act open on
July 29, 2004 for PageData and July 31 , 2004 for WaveSent.
Other state commissions have found the 135-day period for opening the
arbitration window is mandatory or jurisdictional; i., a party cannot seek
arbitration before the window opens. For example, the West Virginia Public
Service Commission stated:
The Commission concludes that Sprint's petition for arbitration should be
dismissed on the grounds that it was not timely filed under the provisions
of T A96. Section 252(b) of that statute deals with interconnection
agreements arrived at through compulsory arbitration and provides, in
relevant part:
During the period from the 135th to the 160th day (inclusive) after the
date on which an incumbent local exchange carrier receives a request
47 U.C. ~ 252(b)(l).
22 PageData Petition ~ 7, see also Exhibit A, PageData s Petition.
23 WaveSent Petition ~ 7
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 12
for negotiation under this section, the carrier or any other party to the
negotiation may petition a State commission to arbitrate any open issue.
47 us.c. 9 252(b)(1). The Commission believes that this provision can
only be read to require petitions to be filed within the 135-160 day period
following the request for interconnection negotiations, despite the fact that
the phrase "may petition" is used. A proper reading of the language in this
section is that requesting carriers may file a petition for Commission
arbitration of an interconnection agreement--they are not required to do so.
However, if they wish to request such arbitration, they must file their
petition requesting same during the 25-day period specified in 47 Us. C. 9
252(b)(1). This point is made clear by the legislative history of 47 Us.
9 252(b)(1). Congress wrote that: "Requests to the State to intervene must
be made during the 25 day period that begins 135 days after the local
exchange carrier received the negotiation request." H. Conf. Rep. No. 104-
458, 104th Cong., 2d Sess. 124, reprinted in 1996 U.S. CODE CONGo &
AD. NEWS 135?4
3. Response to Pa2ers' Alle2ations of Bad Faith
The Pagers attempt to circumvent the strict requirements of Section
252(b)(1) by arguing that PageData is not required to comply with the time
requirements because Qwest has negotiated in bad faith. 25 There is no authority
for such a position; in fact, it is more likely that Congress imposed the 135-day
negotiation requirement, and the requirement that both carriers negotiate in good
faith, to avoid exactly the situation the Commission faces here: a carrier who
seeks to use the Act's processes to its own ends and until recently, without
coming to the negotiating table
Qwest does not believe that the parties can - through their behavior or
otherwise - modify the jurisdictional time periods set forth in Section 252(b )(1) of
24 In re Sprint LP Petitionfor Arbitration with Bell Atlantic CASE NO. 98-1493-, West
Virginia Public Service Commission, 1999 Va. PUC LEXIS 6444, January 29, 1999.
25 See P. 4, ~ 11 of PageD at a s Petition for Arbitration dated March 23 , 2004.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 13
the Act. However, Qwest will briefly address Pagers' baseless claims that Qwest
has negotiated in bad faith.
As the Commission is well aware the law concernIng pagIng
interconnection is disastrously unclear and self-contradictory. Likewise, the
Commission is familiar with the Pagers in this case. They are among the most - if
not the most - litigious in the industry. As of the day this motion is written
PageData is pursuing its claims against Qwest before this Commission, at the
Idaho Supreme Court and in Federal District Court in at least six actions.
As demonstrated in the documents attached to Qwest's Response to
PageData s Motion for Expeditious Substantive Relief Qwest notes that until
after the Petitions for Arbitration had been filed there had been no negotiations at
all between the parties. Qwest has been encouraged by recent negotiations and is
hopeful that they will continue to be productive. Before that, however, Qwest
faced claims of "instantaneously effective retroactive amendments" which the
Pagers claim they can do without Qwest's agreement , take-it-or-Ieave-it demands;
threats of further RICO lawsuits, accusations that Qwest's management are
criminals, demands, and so forth. The Pagers also have a duty to engage in
negotiations in good faith.
Because the Petitions for Arbitration were both filed before the 135th day
of the time period established by Section 252(b)( 1), the Commission should
decline to exercise jurisdiction over the Petitions. Accordingly, the Commission
should dismiss the Petitions as a matter of law.
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 14
CONCLUSION
Based on the foregoing, Qwest respectfully requests that the Commission dismiss
the Petitions for Arbitration and allow the parties to process with the negotiation process
envisioned by Congress in the Telecommunications Act of 1996.The parties are
currently making progress in negotiations. Once the parties reach the negotiation period
contemplated by the existing interconnection agreements and Section 252 of the Act, any
of the parties may seek the Commission s arbitration of unresolved issues. Until then
Qwest is hopeful that negotiations will continue to be fruitful, and is grateful for the
Commission s assistance in that regard.
DATED this 18th day of June, 2004.
Respectfully Submitted
Adam Sherr
Qwest Communications, Inc.
1600 7th Avenue - Room 3206
Seattle, W A 98191
and
ft--
William J. Batt
Batt & Fisher, LLP
U S Bank Plaza, 5th Floor
101 South Capital Blvd.
Boise, Idaho 83702
[phone]
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION , P. 15
CERTIFICA TE OF SERVICE
I HEREBY CERTIFY that on this 18th day of June, 2004, I served the foregoing
upon all parties of record in this proceeding as indicated below.
Jean Jewell ) Certified Mail
Idaho Public Utilities Commission
472 W. Washington Street ) First Class Mail
Boise, ID 83702-5983
!/4Rand Delivery
[phone] ) Facsimile
Joseph McNeal, d/b/a PageData ) Certified Mail
O. Box 15509
Boise, ID 83715 ()cd First Class Mail
[phone] ) Hand Delivery
) Facsimile
JJ-
William J. Batt
QWEST'S RESPONSE AND MOTION TO DISMISS PETITIONS FOR ARBITRATION, P. 16
Federal Communications Commission FCC 04-106
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
CoreComm Communications, Inc., and
Tel Communications, Inc.
Complainants
SBC Communications Inc.
Southwestern Bell Telephone Company,
Pacific Bell Telephone Company,
Nevada Bell Telephone Company,
The Southern New England Telephone
Company,
Illinois Bell Telephone Company,
Indiana Bell Telephone Company,
Michigan Bell Telephone Company,
The Ohio Bell Telephone Company, and
Wisconsin Bell, Inc.
Defendants.
File No. EB-01-MD-017
ORDER ON RECONSIDERATION
Adopted: April 28, 2004
By the Commission:
INTRODUCTION
Released: May 4, 2004
1. In this Order, we deny the Petition for Reconsideration' filed by Z- Tel
Communications, Inc. ("Z- Tel") pursuant to section 40S of the Communications Act of 1934, as
amended ("Act"2 Z-Tel seeks reconsideration of the Commission Liability Order insofar as
, Petition for Reconsideration, File No. EB-OI-MD-017 (filed May 19, 2003) ("Petition
47 D.C. ~ 405.
Federal Communications Commission FCC 04-106
it denies Z-Tel's claim, made in a section 208 formal complaint, that defendant Pacific Bell
Telephone Company ("Pacific ) violated sections 201(b), 251(c)(1) and (c)(3) of the Act, and
Commission rules 51.309 and 51.313.4 For the following reasons, we conclude that Z-Tel's
Petition lacks merit.
II.BACKGROUND
2. Z- Tel is a competitive local exchange carrier ("CLEC"), and Pacific is an
incumbent local exchange carrier ("ILEC"5 Pursuant to section 252(i) of the Act 6 Z-Tel opted
into an existing section 252 interconnection agreement between Pacific and another CLEC (the
Pacific Agreement"
).
The Pacific Agreement granted Z- Tel access to the shared transport
unbundled network element ("UNE"), but Pacific refused to allow Z- Tel to use the shared
transport UNE to transport Z-Tel's customers' intraLATA toll calls. Z-Tel sought to amend the
Pacific Agreement by asking Pacific to execute a "Memorandum of Understanding" that would
have allowed Z-Tel to use the shared transport UNE for intraLATA toll. Pacific refused Z-Tel'
request. 7
3. In its Complaint filed in this proceeding, Z- Tel alleged that Pacific s refusal to
allow Z- Tel to use the shared transport UNE for intraLA T A toll, and its refusal to execute the
Memorandum of Understanding, violated inter alia sections 201(b), 251(c)(1), and 251(c)(3) of
(Continued from previous page)
CoreComm Communications, Inc. and Z-Tel Communications, Inc. v. SBC Communications Inc. et al.
Memorandum Opinion and Order, 18 FCC Rcd 7568 (2003), petition for review pending release of the instant
order, sub nom. SBC Communications Inc. v. FCC No. 03-1147 (D.C. Cir. 2003) Liability Order
47 V.C. ~~ 20l(b), 25l(c)(l) and (c)(3); 47 C.R. ~~ 51.309(a), 51.309(b), 51.313(b). Z-Tel does not seek
reconsideration of the Commission s denial of its section 202(a) claims. The Commission granted Z-Tel's claim
that defendants Illinois Bell Telephone Company, Indiana Bell Telephone Company, Michigan Bell Telephone
Company, and Wisconsin Bell Telephone, Inc. (collectively, "Ameritech") violated paragraph 56 of the
SBC/Ameritech Merger Order Conditions. Liability Order 18 FCC Rcd at 7576- 78 , ~~ 20-25 (citing Applications
of Ameritech Corp., Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control of
Corporations Holding Commission Licenses and Lines Pursuant to Sections 214 and 31 0 (d) of the
Communications Act and Parts , 24, 25, 63 and 101 of the Commission s Rules Memorandum
Opinion and Order, 14 FCC Rcd 14712, 15023-24 (1999), (subsequent history omitted) SBC/Ameritech Merger
Order Conditions
).
Specifically, the Liability Order noted that Z- Tel purchased the shared transport UNE from
Ameritech, that Z-Tel requested pennission to use the UNE for intraLATA toll, and that Ameritech refused Z-Tel'
request. Ameritech's refusal violated the SBC/Ameritech Merger Order Conditions because those conditions
require Ameritech to "offer" shared transport for intraLATA toll. Liability Order at 18 FCC Rcd at 7576-
, ~~
20-21. The Commission has issued a forfeiture order against Ameritech for violation of the Merger Order
Conditions. See SBC Communications, Inc., Apparent Liability for Forfeiture Forfeiture Order, 17 FCC Rcd
19923 (2002), appeal pending.
Liability Order 18 FCC Rcd at 7571 , ~ 8.
47 V.C. ~ 252(i).
Liability Order 18 FCC Rcd at 7579-, ~ 29.
Federal Communications Commission FCC 04-106
the Act and Commission rules 51.309 and 51.313.8 The Complaint did not include a copy of the
Pacific Agreement. Nor did the Complaint discuss or direct the Commission s attention to any of
the language found in the Pacific Agreement,9
4. Pacific asserted in its Answer that it was not obligated by the Pacific Agreement
to provide Z-Tel shared transport for intraLATA toll or to execute the Memorandum of
Understanding.1o Pacific also stated that
, "
in conference calls with Commission staff... counsel
for (Z- TelJ specifically disavowed any claim that (Pacific) had violated their interconnection
agreement()... ."11 Pacific asserted as an affirmative defense that Z- Tel failed to state a claim
and had waived any claim because Z- Tel "specifically disavowed any claim that (Pacific J ha( s)
violated (the Pacific Agreement)" and had voluntarily entered into an agreement "that do( es J not
make available the intraLATA interexchange transmission (Z-Tel) seek(s)."12 Pacific also stated
The reason (Z-Tel) attempt(s) to base (itsJ claims on the Act and the Commission s rules and
orders rather than the governing agreements...is simple: (Z-TelJ ha(sJ opted into agreements that
do not make available the intraLA T A interexchange transmission capability (Z- Tel) seek( s).. .. "13
5. Z-Tel's Reply to the Answer did not dispute Pacific s allegations about the
requirements of the Pacific Agreement or about Z-Tel's "disavowal" of any claim of breach. Z-
Tel subsequently informed the Commission that two "key legal issues" to be decided by the
Commission were "whether (Z-Tel) ha(sJ waived any claim that (Pacific sJ conduct is
inconsistent with the Act, and the Commission s rules and orders
, ...
because (Z-Tel) ...
voluntarily... adopted existing, approved interconnection agreements that do not make available
the intraLATA interexchange transmission capability (Z-Tel) seek(sJ..." and "whether (Z-
Tel)...failed to state a claim upon which relief can be granted given that (Z-TelJ ... ha(s)
disavowed any claim that (Pacific) ha(sJ violated the terms of (the Pacific Agreement)... ."14
6. In the Liability Order after granting Z- Tel's complaint against Ameritech for
violating the SBC/Ameritech Merger Order Conditions the Commission denied Z-Tel's claims
against Pacific. The Commission found that Z- Tel had effectively admitted that the Pacific
Agreement does not require Pacific to provide use of the shared transport UNE for intraLA T A
Liability Order 18 FCC Rcd at 7569, ,-r 2.
Liability Order 18 FCC Rcd at 7580 ,-r 29 n.67.
10 Liability Order 18 FCC Rcd at 7572 ,-r 11, 7579-,-r 29.
11 Defendants' Answer , File No. EB-Ol-MD-017 (filed Oct. 10 2001) ("Answer ), Ex. B (Defendants' Legal
Analysis) at 11.
12 Liability Order 18 FCC Rcd at 7580, ,-r 29 n.67; Answer at 4-
13 Answer Ex. B (Defendants' Legal Analysis) at 14.
14 Liability Order 18 FCC Rcd at 7580, ,-r 29 n.67; Revised Joint Statement, File No. EB-Ol-MD-017 (filed Nov. 23
2001) at Statement of Key Legal Issues, 11-, ,-r,-r 6-
Federal Communications Commission FCC 04-106
toll. 15 The Commission reasoned that, although Commission rules "'plainly require unbundling
of shared transport for use with intraLA T A toll traffic, "'16 the obligations created by section 251
and Commission implementing rules are effectuated through the section 252 processes of
negotiation, arbitration, or opt-in. 17 Therefore, because Z- Tel had voluntarily opted into an
agreement that did not provide use of the shared transport UNE for intraLA T A toll, Z- Tel had
waived its claims pursuant to section 251 (c )(3) and Commission rules.
7. The Commission also denied Z-Tel's claim that Pacific s refusal to adopt Z-
Tel's "Memorandum of Understanding" violated section 251(c)(1). The Commission reasoned
that Z- Tel could not voluntarily opt into the Pacific Agreement, and then invoke section
251(c)(1) to require Pacific to amend the agreement, unless the Pacific Agreement obligated
Pacific so to do. Yet Z-Tel had not asserted that Pacific s refusal to adopt the Memorandum of
Understanding violated the Pacific Agreement's amendment or change of law provisions, and
indeed, had disavowed any claim that Pacific had breached the Pacific Agreement. Accordingly,
the Commission found that Z- Tel had not met its burden of proving that Pacific was obligated to
adopt Z-Tel's Memorandum of Understanding.
8. Finally, the Commission denied Z-Tel's section 201(b) claims because Z-Tel
had advanced no reason, other than Pacific s alleged violation of its obligations under section
251(c), why Pacific s conduct was "unjust and unreasonable" within the meaning of section
201(b). Therefore, because Z-Tel's section 251(c) claims failed, its section 201(b) claims also
failed.
III.DISCUSSION
The Liability Order is Consistent with Commission Precedent.
9. Z-Tel argues that, in denying Z-Tel's claims against Pacific , the Commission
abandon( ed)" prior Commission precedent establishing that the terms of any interconnection
agreement between a CLEC and an ILEC are irrelevant to the issue of whether the CLEC may
prevail on a claim that the ILEC has violated section 251.21 Z- Tel argues further that the
Commission s failure to follow this alleged precedent violated principles of administrative law.
15 Liability Order 18 FCC Rcd at 7579-81 ,-r 29.
16 Liability Order 18 FCC Rcd at 758l ,-r 30 (citing SBC Communications, Inc., Apparent Liabilityfor Forfeiture
Forfeiture Order, 17 FCC Rcd 19923 19932 ,-r 18 (2002)).
17 Liability Order 18 FCC Rcd at 7581 , ~ 30.
18 Liability Order 18 FCC Rcd at 7579-, ~~ 29-30.
19 Liability Order 18 FCC Rcd at 7581-, ~~ 30-32.
20 Liability Order 18 FCC Rcd at 7582, ~ 33.
21 Petition at 3. Accord Petition at 6-12.
Federal Communications Commission FCC 04-106
According to Z- Tel, where the Commission departs from its prior precedent, it is required to
provide "a reasoned explanation" for its change of mind, 22 and also to give the parties notice of
the change and an opportunity to provide evidence bearing on the new standard.
10. We find, however, that the Liability Order is fully consistent with Commission
precedent. Specifically, the Commission has never held that a requesting carrier may
successfully charge an ILEC with violating its section 251(c) obligations when the requesting
carrier has, pursuant to section 252(i), opted into an interconnection agreement that excludes the
very section 251 ( c) obligations at issue.24 As discussed below
, the Liability Order is not
inconsistent with any of the Commission precedent cited by Z- Tel in its Petition, provides a
reasoned explanation for the Commission s finding,25 and thus fully complies with the
requirements of administrative law.
i. The Liability Order is Consistent with Commission Rulemakings.
11. Z-Tel argues that the Commission s denial ofZ-Tel's claim against Pacific is
inconsistent with the Commission s statement, in the Local Competition Report and Order 26 that
a party may file a section 208 complaint alleging violations of section 251 or Commission
implementing rules "even if the (defendant carrier) is in compliance with an agreement approved
by the state commission.27 Z-Tel misconstrues the Commission s statement. The cited
language cannot reasonably be read to suggest that section 251 is violated when a carrier
voluntarily enters into an agreement, as Z- Tel did, that does not afford the full range of rights
22 Petition at 13.
23 Petition at 3, 12-14.
.. _.. ....
We note that Z- Tel had ample notice that it was taking a risk in failing
to allege that the Pacific Agreement provided shared transport for intraLA T A toll, because Pacific repeatedly
argued that Z-Tel's claims were precluded by the terms of the Pacific Agreement. For example, Pacific alleged
that Z-Tel had waived its claims because Z-Tel had "specifically disavowed any claim that (PacificJ ha(sJ violated
(the Pacific Agreement)." Liability Order 18 FCC Rcd at 7580, ,-r 29 n.67. Nevertheless, far from contesting
Pacific s allegations, Z- Tel affirmatively adopted them. See discussion at,-r 5 supra (discussing Z- Tel's "key legal
issues ). Moreover, as discussed below, Z- Tel would not have prevailed even if it had asserted that Pacific
breached the Pacific Agreement, because there was no such breach.
25 Liability Order 18 FCC Rcd at 758l-,-r,-r 30-32.
26 Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, First Report and
Order, 11 FCC Rcd 15499 (1996) (subsequent history omitted) Local Competition Report and Order
27 Petition at 6 (citing Local Competition Report and Order 11 FCC Rcd at 15565, ,-r 127).
Federal Communications Commission FCC 04-106
available under section 251 , and later demands to change its terms. Such a construction would
be fundamentally inconsistent with the statutory scheme, which permits carriers to enter into
binding agreements "without regard to the standards set forth in subsections (b) and (c) of section
251."28 The Commission s discussion in the Local Competition Report and Order simply does
not address the situation where, as here, the complainant voluntarily opted into an
interconnection agreement pursuant to section 252(i). As we explained in the Liability Order
Tel may not rely upon the general section 251 duties to circumvent the more specific terms of an
agreement that it has voluntarily chosen to adopt.
The Liability Order is Consistent with Commission Adjudications.
12. Z-Tel also argues that the Liability Order is inconsistent with several
Commission orders resolving section 208 formal complaints. Again, Z- Tel is incorrect. The
cases upon which Z-Tel relies have no bearing on the instant matter.
13. First, Z-Tel cites Net2000 Communications,29 in which the complainant CLEC
alleged that the defendant ILECs had violated sections 201(b) and 251(c)(3) of the Act, as well as
Commission rules requiring that, upon request, ILECs convert tariffed special access circuits into
enhanced extended 100ps.30 Net2000 does not stand for the proposition that an ILEC may be
found to have violated section 251 ( c) even though the parties' interconnection agreement
excludes the very section 251 ( c) obligations at issue. The Commission found it unnecessary to
inquire into the terms of the special access tariff or the parties' interconnection agreement
because the Commission denied complainant's claims on other grounds. Specifically, the
Commission found that the complainant's factual allegations were unsubstantiated.
14. Z-Tel argues that the fact that Net2000's claims were not dismissed on
jurisdictional grounds makes the case inconsistent with the Liability Order: If the Commission
lacked the appropriate authority to address section 251 claims..., and if a violation of section 251
could not amount to a section 201 (b) violation. . ., then the Commission presumably would have
dismissed Net2000's claims on jurisdictional grounds - which is exactly what the Commission
did with regard to Z-Tel's claims against Pacific.,,32 With this argument, Z-Tel fundamentally
misconstrues the Liability Order.
47 V.C. 9 252(a)(l).
29 Net2000 Communications, Inc. v. Verizon-Washington, D., Inc.Memorandum Opinion and Order, 17 FCC
Rcd 1150 (2002).
30 See 47 C.R. 9951.305 - .321.
31 The Commission found that the circuits at issue did not meet the criteria for conversion prescribed by
Commission rules. Net2000 Communications, Inc.17 FCC Rcd at 1157, ~ 23, 1160, ~ 33.
32 Petition at 9.
Federal Communications Commission FCC 04-106
15. First, the Liability Order does not stand for the proposition that the Commission
lack(sJ the appropriate authority to address section 251 claims." In the Liability Order the
Commission did address Z-Tel's section 251 claims. The Commission asserted jurisdiction over
Tel's section 251(c) claims against Pacific, and then denied those claims on the merits.33 The
Commission did not, as Z- Tel seems to believe, deny Z- Tel's claims on jurisdictional grounds.
N either does the Liability Order stand for the proposition that "a violation of Section 251 could
not amount to a Section 201 (b) violation." No such statement can be found in the Liability
Order. The Commission denied Z-Tel's section 201(b) claims because Z-Tel advanced no
reason why Pacific s conduct was "unjust and unreasonable" other than that Pacific had allegedly
violated section 251 (c), which the Commission found it had not. Because its section 251 (c)
claims failed, Z-Tel's section 201(b) claims also failed. Nothing in this reasoning, however
supports Z-Tel's cited assertion. Thus, the conflict that Z-Tel finds between the Liability Order
and Net2000 comes entirely from misconstruing the Commission s decision in the Liability
Order.
16. Z-Tel also cites TSR Wireless 34 in which the Commission found that the
defendant LECs had violated Commission rule 51. 703(b )35 by charging the complainants
commercial mobile radio service ("CMRS") providers, for facilities used to deliver LEC-
originated traffic. Z-Tel argues that TSR Wireless establishes that the terms of the Pacific
Agreement were irrelevant to an analysis ofZ-Tel's claims against Pacific.36 As with Net2000
Z- Tel again focuses on the jurisdictional issue that it has misunderstood. Z- Tel argues that in
TSR Wireless the Commission again unequivocally stated that carriers could plead violations of
its local competition implementing rules as part of a section 208 complaint arising under section
251. "37 Nothing in the Commission s statement of jurisdiction in TSR Wireless conflicts with the
Liability Order.
17. Nothing in the substantive portion of the TSR Wireless decision conflicts with
the Liability Order either. We recognize that, in TSR Wireless the Commission found the
defendants bound by rule 51. 703(b) even though the obligation created by that rule had not been
incorporated into an interconnection agreement. The TSR Wireless defendants were bound by
rule 51.703(b) for reasons not applicable to Pacific s obligations at issue here. First, the
Commission s authority to issue rule 51. 703(b), as applied to CMRS providers, arises under
33 See Liability Order 18 FCC Rcd at 7572-, ~~ 12-13.
34 TSR Wireless, LLC v. Us. West Communications, Inc.15 FCC Rcd 11166 (2000), petition for review denied sub
nom. Qwest Corporation v. FCC 252 F.3d 462 (D.C. Cir. 2001).
47 D.C. ~ 51.703(b) ("A LEC may not assess charges on any other telecommunications carrier for
telecommunications traffic that originates on the LEC's network"
36 Petition at 9-10.
37 Petition at 9.
Federal Communications Commission FCC 04-106
section 332 of the Act.38 Accordingly, rule 51.703(b) may apply, in circumstances such as those
present in TSR Wireless regardless of the existence or terms of a section 252 interconnection
agreement. Further, in adopting rule 51.703(b), the Commission stated that "(aJs of the effective
date of (the Local Competition Report and Order), a LEC must cease charging a CMRS provider
. .. for terminating LEC-originated traffic. . . . "39 Thus
, as the Commission stressed in TSR
Wireless rule 51. 703(b) "clearly calls for LECs immediately to cease charging CMRS providers
for terminating LEC-originated traffic; the (rule J does not require a section 252 agreement before
imposing such an obligation on the LEC."4O The Commission has imposed no such immediate
obligation with respect to shared transport. Indeed, the Commission stressed in TSR Wireless
that
, "
to the extent that other Commission rules promulgated under the Local Competition
(Report and) Order were not made ' effective immediately,' we would expect that requesting
carriers would utilize the interconnection agreement process of sections 251 and 252 to obtain
services under section 251."41 Thus TSR Wireless is not relevant to Z-Tel's claims against
Pacific, and does not stand for the proposition that a CLEC may successfully charge an ILEC
with violating section 251(c) even though the parties' interconnection agreement excludes the
very section 251 (c) obligations at issue.
18. Z-Tel also relies upon the Commission s statement in Cellexis42 that
Defendants ' statutory interconnection obligations , whatever they may be, exist independently of
the (interconnection) Agreement's terms."'43 Z-Tel reads the Commission s statement out of
context. The Cellexis case involved entirely different facts and statutory provisions than the
instant matter. The complainant in that proceeding was a reseller of CMRS services who alleged
that the defendant CMRS providers had violated sections 201(b), 202(a), 251(a), and
332(c)(1)(B) of the Act by refusing to continue to interconnect their cellular networks with
complainants after the parties' interconnection agreement had expired. The interconnection
obligations at issue in Cellexis arose under sections 251(a) and 332 of the Act, not under section
251(c), as in this case. Neither the general interconnection obligation of section 251(a) nor the
interconnection obligation arising under section 332 is implemented through the negotiation and
47 D.C. * 332. See Iowa Utilities Brd .v. FCC 120 F.3d 753 800 n.2l (8th Cir. 1997) (subsequent history
omitted); Qwest Corp. v. FCC 252 F.3d 462 465-67 (D.C. Cir. 2001) (confinning that section 332(c)(l)(B) gives
the Commission authority to require that LECs interconnect with CMRS providers).
39 TSR Wireless 15 FCC Rcd at 11167, ~ 3.
40 TSR Wireless 15 FCC Rcd at 11183, ~ 29 (emphasis added).
41 TSR Wireless 15 FCC Rcd at 11182, ~ 29 n.97. Similarly, the Liability Order emphasized that "the obligations
created by section 251 and our rules are effectuated through the process established in section 252 - that is, by
reaching agreement through negotiation, arbitration, or opt-in.Liability Order 18 FCC Rcd at 7581 , ~ 30.
42 Cellexis Int 'I, Inc. v. Bell Atlantic NYNEX Mobile Systems, Inc., et al.Memorandum Opinion and Order, 16
FCC Rcd 22887 (2001) Cellexis
43 Petition at 10 (citing Cellexis 16 FCC Rcd at 22891 , ~ 9, but omitting the word "Defendants
Federal Communications Commission FCC 04-106
arbitration scheme of section 252.44 Thus, the significance of the terms of any agreement in
Cellexis has no bearing on the significance of the terms of the agreement in this case, and nothing
in the Liability Order is inconsistent with Cellexis.
19. Finally, Z- Tel argues that
, "
In the context of pole attachment agreements entered
into pursuant to section 224 of the Act, the Commission routinely has concluded that the
existence of such agreements does not constitute a waiver of a carrier s ability to file a formal
complaint under the Commission s pole attachment rules."45 Z-Tel's analogy is unavailing.
Section 252(a)(1) provides that an incumbent LEC "may negotiate and enter into a binding
agreement. .. without regard to the standards set forth in subsections (b) and (c) of section
251."46 In contrast, nothing in section 224 provides that parties may negotiate without regard to
the requirements of the Act. Finally, the Commission s pole attachment rules specifically
contemplate that the Commission will rule on the reasonableness of the rates, terms, and
conditions contained in pole attachment agreements before the Commission.
The Commission Correctly Concluded that Z-Tel Waived Its Section 251(c)
Claims.
20. Z- Tel argues that the Liability Order incorrectly concludes that "carriers, such as
Tel
, '
implicitly' waive their rights under section 251 of the Act and the Commission s rules by
merely signing an interconnection agreement - regardless of the language of the interconnection
agreement. "48 The
Liability Order draws no such conclusion. Rather, the Commission in the
Liability Order found that Z-Tel waived its claims because Z-Tel effectively admitted that the
Pacific Agreement did not obligate Pacific either to provide shared transport for intraLA T A toll
44 Section 25l(c) obligates incumbent LECs "to negotiate in good faith in accordance with section 252 the
particular tenus and conditions of agreements to fulfill the duties described in paragraphs (1) through (5) of
subsection (b) and this subsection (i.subsection (c))." 47 D.c. ~ 25l(c)(l). It does not require such
negotiation with respect to section 251(a). Similarly, section 252(a)(1), 47 D.C. ~ 252(a)(l), pennits ILECs to
negotiate agreements "without regard to the standards set forth in subsections (b) and (c) of section 251 " but does
not mention subsection 25l(a). Section 332(c)(l)(B) requires intercotU1ection when the Commission fmds such
action necessary or desirable in the public interest. See 47 D.C. ~ 332(c)(l)(B) (providing that, upon reasonable
request of a CMRS provider, the Commission shall order intercotU1ection pursuant to section 201.) There is, again
no mention of the section 251/252 negotiation process.
45 Petition at 10.
47 D.c. ~ 252(a)(l).
47
See Commission rule 1.1410 ("If the Commission detennines that the rate, tenn, or condition complained of is not
just and reasonable, it may prescribe a just and reasonable rate, tenn, or condition and. .. (s )ubstitute in the pole
attachment agreement the just and reasonable rate, tenn, or condition established by the Commission.) 47 C.R. ~
1.1410. See also Southern Co. Servs. Inc. v. FCC 313 F.3d 574 (D.c. Cir. 2002) (concluding that the Commission
has authority to review the reasonableness of the tenus of a pole attachment agreement). Accord Pub. Service Co. of
Colorado v. FCc, 328 F.3d 675 677-678 (D.C. Cir. 2003).
48 Petition at 3.
Federal Communications Commission FCC 04-106
or to execute a Memorandum of Understanding to do SO.
21. Z- Tel argues that it made no admissions regarding the terms of the Pacific
Agreement, but "only denied any need (under the Act, the Commission s rules, or the (Pacific
Agreement)) to plead a section 208 complaint under the interconnection agreement itself."5O Z-
Tel ignores the record in this proceeding. For example, as stated above, Z- Tel informed the
Commission that the Pacific Agreement "do ( es) not make available the (use of the shared
transport UNEJ capability (Z- Tel) seeks " and that Z- Tel "disavowed any claim that (Pacific)
ha(s) violated the terms of (the Pacific Agreement)."5l Thus, we stand by our earlier conclusion
that Z- Tel admitted that the agreement Z- Tel chose to adopt did not require Pacific to provide
shared transport for intraLA T A toll traffic, and that Z- Tel accordingly waived its right to demand
such terms. Z- Tel opted into the Pacific Agreement without first negotiating or arbitrating an
amendment to its terms regarding shared transport, and may not complain now.
The Pacific Agreement Excludes Shared Transport for IntraLA T A Toll
Unless Z-Tel Requests Such Use in Accordance with the Terms of the
Agreement, and Z-Tel Has Not Done So.
22. Z-Tel argues that the Commission should have reviewed the Pacific Agreement
to determine whether it in fact obligated Pacific to provide shared transport for intraLA T A toll or
to execute the Memorandum of Understanding. 52 As discussed above, Z-Tel's statements and
omissions in this proceeding meant that the Commission was under no such obligation. In any
event, however, any such review would have been unavailing. The Pacific Agreement provides
use of the shared transport UNE for intraLA T A toll calls only if Z- Tel complies with the Pacific
Agreement's "Bona Fide Request" process or requests "Customized Routing, Option C." Z- Tel
has not demonstrated that it did either.
49 Z- Tel argues that the Commission in Cellexis confirmed that a carrier does not waive its statutory right merely
by signing an interconnection agreement." Petition at 10 (citing Cellexis 16 FCC Rcd at 22891 , ~ 9). What the
Commission said, however, was that the interconnection agreement at issue in that case, which had expired
, "
does
not alter whatever right to interconnection Cellexis may have under the Act." Cellexis 16 FCC Rcd at 22891 , ~ 9.
The Commission s statement is not inconsistent with the Liability Order because, as discussed, the duty ofCMRS
providers to interconnect can be imposed pursuant to section 332 independently of an interconnection agreement.
50 Petition at 16.
51 Z-Tel argues that its "disavowal" of any claim that Pacific breached the Pacific Agreement see Liability Order
18 FCC Rcd at 7580, ~ 29 n., merely meant that Z-Tel denied that it was obligated so to allege. Petition at 16.
We disagree. As Z- Tel notes
, "
disavow" means, among other things
, "'
to disclaim knowledge of... .'" Petition at
16 (citing Webster s II New College Dictionary 323 (2001)). If Pacific were in breach of the Pacific Agreement's
terms governing shared transport, Z-Tel would have had "knowledge of' that breach. Hence , when Z-Tel
disavowed" any claim that Pacific had breached the Pacific Agreement, it effectively admitted that there was no
breach. In any event, the Commission s conclusion, that Z-Tel effectively admitted that the Pacific Agreement had
not been breached, was not based solely upon Z- Tel's "disavowal " but upon the totality of Z- Tel's statements and
omissions during the proceeding. See Liability Order 18 FCC Rcd at 7580, ~ 29 n.67.
52 Petition at 4-, 17-20.
Federal Communications Commission FCC 04-106
23.The Pacific Agreement provides at Attachment 6, section 2:
General: Unbundled Network Elements and Combinations: Access to (UNEs) shall be
specified herein and not presumed. The Network Elements offered under this Agreement
shall be clearly specified in this Agreement or the attachments hereto. In no event will it
be presumed that access to a (UNE) is offered unless so specified. Pacific will make
available any other form of access requested by (Z- Tel) that is required by the Act and the
regulations thereunder. Requests for Network Elements not specified in this Attachment
shall be processed according to the process described in Section 22 (Bona Fide Request)
. ..
of this Agreement.
Thus, section 2 provides initially that Z- Tel may not have access to shared transport unless the
Pacific Agreement expressly so states. Yet section 2 further provides that Z- Tel may obtain such
access if it complies with the "Bona Fide Request" provisions of the Agreement: Pacific "will
make available any other form of access" if that access is "required by... ( Commission)
regulations." In short, Pacific was obligated to provide access to shared transport only to the
extent provided in the Pacific Agreement unless Z- Tel complied with the "Bona Fide Request"
process. The only section of the Pacific Agreement expressly granting access to the shared
transport UNE provides that the UNE may be used for intraLA T A toll only if Z- Tel exercises
Option C."54 "Option C" is found in an earlier section of the Pacific Agreement. That section
is headed "Option C: Customized Routing-Complex for (Z- Tel) Using Routes Designated by (Z-
Tel)." This section provides that, ifZ-Tel exercises "Option C", Pacific "shall route (Z-Tel'
intraLA T A traffic over Pacific s Shared Transport facilities... ."55
24. Z- Tel argues that the Pacific Agreement "expressly provides that Z- Tel
may.. . request use of the shared transport UNE for intraLA T A toll service " and that "Z- Tel made
such a request through its Memorandum of Understanding. "56 Consistent with our analysis
above, however, the language upon which Z- Tel relies provides shared transport for intraLA T A
toll only ifZ-Tel requests "Option C", or makes a request that complies with the "Bona Fide
Request" process.57 Yet Z-Tel has not shown that its Memorandum of Understanding complied
53 Letter dated December 7, 2001 from Christopher M. Heimann, counsel to Pacific, to Magalie R. Salas
Secretary, FCC, File No. EB-O l-MD-O 17 ("Heimann Letter ) Ex. 1 (Pacific Agreement) at Attachment 6, ~ 2.
54 Heimann Letter Ex. 1 (Pacific Agreement) at Attachment 6, ~ 7.4.1 (providing that the shared transport UNE
maybe used for intraLATA toll "if requested by (Z-Tel) in connection with LSNE option 'c' under Section 6.
above.
55 Heimann Letter Ex. 1 (Pacific Agreement) at Attachment 6, ~ 6.
56 Petition at 5. Accord Petition at 17-20.
57 With regard to Option C, Z- Tel relies upon two sections of the Pacific Agreement providing shared transport for
intraLATA toll only ifZ-Tel exercises Option C. See Petition at 19 (citing Pacific Agreement, Attachment 6
, ~
, which, as discussed above at paragraphs 25-, provides shared transport for intraLAT A toll only if Z-Tel
exercises Option C). See also Petition at 19, n.45 (citing Pacific Agreement, Attachment 6, ~ 7.4., which
provides
, "'
Pacific shall route (Z-Tel)'s intraLATA traffic over Pacific s Shared Transport facilities if requested by
(continued... .
Federal Communications Commission FCC 04-106
with the Bona Fide Request process, or that it constituted a request to exercise Option C.58 Thus
as the Liability Order correctly concluded, 59 Pacific, did not violate section 251 (c )(1) by failing to
negotiate in good faith.
25. Z-Tel's additional arguments regarding construction of the Pacific Agreement
also fail. Z- Tel asserts that the agreement "permits either party to file a complaint at the FCC..."60 Yet the Pacific Agreement does not state that any such complaint will succeed. Z- Tel argues
that the Pacific Agreement "is expressly designed to encompass the UNEs required by the
Act...."61 The language cited by Z- Tel, however, does not state that Pacific is offering all UNE
access available under the Act and Commission rules. The section is entitled "Introduction " and
merely explains that the purpose of Attachment 6 is to enumerate the specific UNEs provided.
Indeed, Z- Tel omits the final sentence of this section: "The specific terms and conditions that
apply to the (UNEs) and Combinations are described below."62 Thus, the terms pertaining to
UNEs are "described below" - in the sections of the Pacific Agreement that follow.
(Continued from previous page)
(Z-Tel) in connection with LSNE option under section above.(emphasis added). Finally, with regard
the Bona Fide Request process, Z- Tel quotes a single sentence from Attachment 6, section 2. Petition at 18, n.42.
As discussed above, however, when read in its entirety, this section requires compliance with the Bona Fide
Request process.
58 Z- Tel did not place the Memorandum of Understanding in the record, and it does not allege that the Memorandum
was a "Bona Fide Request" or the exercise of Option C. On the contrary, Z- Tel admits that the Memorandum was an
amend(mentJ" to the Pacific Agreement. See Formal Complaint, File No. EB-Ol-MD-017 (filed Aug. 28 , 2001)
Complaint") at 8, ~ 18. Further, Z-Tel used the Memorandum of Understanding as a proposed amendment to a
number of interconnection agreements, not just the Pacific Agreement. Id. Thus, the Memorandum of Understanding
was not tailored specifically to comply with the requirements of the Pacific Agreement. See also Complaint Ex. 7
(Letter dated Jan. 19 2001 from Michael Hazzard, counsel to Z-Tel, to Adam McKinney, counsel to Pacific)
(describing the Memorandum of Understanding as "based on the MOU drafted by SBC and executed by Z-Tel in
Texas... "); Petition at 5 (same). Z- Tel argues that Pacific was obligated to "suggest that Z- Tel modify or otherwise
reformulate its request." Petition at 5. Z-Tel made no such claim in the liability phase of this proceeding, and
therefore may make no such claim now. In any event, Z-Tel has advanced no reason why section 25l(c)(l) imposes
an obligation upon Pacific to explain to Z-Tel why Z-Tel's Memorandum did not comply with the Pacific
Agreement.
59 Liability Order 18 FCC Rcd at 7579-, ~~ 29-32.
60 Petition at 17-18 (citing Pacific Agreement at Attachment 3 , 92.1).
61 Petition at 18 (citing Pacific Agreement at Attachment 6, ~ 1.1)
62 Heimann Letter Ex. 1 (Pacific Agreement) at Attachment 6, 9 1.
63 Because we affirm our denial ofZ-Tel's section 25l(c) claims, we also affirm our denial ofZ-Tel's section
20l(b) claims. Z-Tel's Petition provides no reason , independent of its claim that Pacific violated section 25l(c),
why Pacific violated section 20l(b). See Liability Order 18 FCC Rcd at 7582, ~ 33.
Federal Communications Commission FCC 04-106
IV.ORDERING CLAUSE
26. Accordingly, IT IS ORDERED, pursuant to sections 201 , 208, 251 , and 405 of
the Communications Act of 1934, as amended, 47 U.C. ~~ 201 , 208 , 251 , and 405 , and
sections 51.309 and 51.313 of the Commission s rules, 47 C.R. 9951.309 and 51.313, that the
instant petition for reconsideration IS DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary