20041006Comments.pdf

CE!VED
r~'.-J,Mary S. Hobson (ISB #2142)
Stoel Rives LLP
101 South Capitol Boulevard - Suite 1900
Boise, ill 83702
Telephone: [phone]
Facsimile: [phone]
msho b son~stoe 1. com
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Adam L. Sherr (WSBA #25291)
Qwest
1600 7th Avenue - Room 3206
Seattle, W A 98191
Telephone: [phone]
Facsimile: [phone]
adam.sherr~qwest.com
Attorneys for Qwest Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF QWEST
CORPORATION AND MCIMETRO
ACCESS TRANSMISSION SERVICES
LLC'S MASTER SERVICES
AGREEMENT FILING
Case No. QWE-O4-
COMMENTS OF QWEST CORPORATION
Qwest Corporation ("Qwest") hereby responds to Order No. 29596, which requests
comments on MCI's July 30 2004 Application for Approval of the Qwest-MCI QPPTM Master
Services Agreement (the "Commercial Agreement"), dated July 16, 2004. Qwest urges the
Commission to enter an order declining to consider the Commercial Agreement for approval.
BACKGROUND AND INTRODUCTION
On July 16, 2004, Qwest and MCI entered into a commercial agreement1 under
which Qwest agreed to provide Qwest Platform PlusTM services to MC!. Qwest Platform Plus
The Commercial Agreement consists of the Qwest Master Services Agreement, Service Exhibit 1 - Qwest
Platform PlusTM Service, Attachment A to Service Exhibit 1 (Performance Targets for Qwest QPPTM
Service ) and the Rate Sheet.
COMMENTS OF QWEST CORPORATION - Page 1
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services are offered under Section 271 of the Federal Telecommunications Act and consist
primarily of the local switching and shared transport network elements in combination with
certain other services.2 As a result of the D.
C. Circuit's decision in United States Telecom
Association v. FCC
("
UST A If'
),
Qwest is no longer required to provide these network elements
under Sections 251 or 252 of the Act.3 The Commercial Agreement expressly provides that it
does not amend or alter the terms and conditions of existing interconnection agreements between
Qwest and MCI.4 Most importantly, and as explained below, because the Commercial
Agreement does not create any terms or conditions for services that Qwest must provide under
Sections 251 (b) and (c), it is not an interconnection agreement or an amendment to the existing
interconnection agreement between Qwest and MCI.
Also on July 16, 2004, Qwest and MCI entered into a separate agreement that is
an amendment to their interconnection agreement in Idaho entitled "Amendment to
Interconnection Agreement for Elimination of UNE- P and Implementation of Batch Hot Cut
Process and Discounts" (the "ICA Amendment"
).
The ICA Amendment generally provides for
the deployment of a batch hot cut process and contains certain other terms and conditions that
may fall within the scope of Sections 251 of the Act. On July 28 2004 Qwest filed an
application with the Commission requesting that it approve the ICA Amendment pursuant to
Section 252 of the Act. The ICA Amendment was approved in Order No. 29580 entered
September 3 2004.
Section 26 of the Commercial Agreement expressly states that "This Agreement is offered by Qwest in
accordance with Section 271 of the Act."
United States Telephone Ass 'v. FCC 359 F.3d 554 (D.C. Cir. 2004). See Part II B below.
Qwest Master Services Agreement, Section 33.
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On July 30 2004, MCI filed the Commercial AgreementS and the ICA
Amendment with the Commission and requested that the Commission review and approve both
agreements.6 Qwest is offering the terms and conditions contained in the Commercial
Agreement to any carrier assuming the same obligations as MCI.7 Notwithstanding the public
nature of the Commercial Agreement and the offer to make it available to all other carriers
Qwest points out that the Commercial Agreement does not fall within the Section 252 filing
obligation. and that, as a result, the jurisdiction to review, approve or reject the Commercial
Agreement resides with the FCC and not with this Commission. Accordingly, for the reasons
that follow, Qwest believes the Commission must enter an order declining to consider the
Commercial Agreement for approval.
II.ARGUMENT
The Authority of the Commission to Review and Approve Agreements Under the
Federal Act is Governed by Federal Law.
Whether the Commission has the power to review and approve the Commercial
Agreement is a question of federal law governed by the provisions of the 1996 Federal
Telecommunications Act and the controlling federal authorities construing the Act. There are
two primary controlling authorities. The first is the decision of the United States Court of
Appeals for the District of Columbia in USTA II. The second is the October 2002 FCC decision
Declaratory Order ) in a declaratory ruling docket brought by Qwest that defines "the scope of
In Order No. 29596, the Commission stated that Qwest and MCI Uointly) filed the Commercial Agreement
for review and approval. Order No. 29596, at 1. Qwest notes that it did not file the Commercial
Agreement for approval.
The Commercial Agreement is a 14-state agreement. The Commercial Agreement filed by MCI with the
Commission does not include the complete Rate Sheet. It includes only the portion of the Rate Sheet
pertaining to Idaho.
The Commercial Agreement is posted on Qwest's website. See
http://www.qwest.com/wholesale/ clecs/ commercialagreements.html
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the mandatory filing requirement set forth in section 252(a)(1)."g Read together, these
authorities definitively establish that the Commercial Agreement is not subject to either Section
251 or 252 and is therefore not subject to review and approval by the Commission. MCI cites no
authority and offers no analysis supporting its request for approval of the Commercial
Agreement. Its "application" is nothing more than a cover letter attaching the ICA Amendment
and Commercial Agreement and seeking review and approval by the Commission.
The Commercial Agreement Relates to Network Elements That Are No Longer
Required to Be Unbundled Pursuant to Section 251 or 252 of the Act.
Under Section 251(d)(2) of the Federal Telecommunications Act, before an
incumbent local exchange carrier such as Qwest can be required to unbundle network elements
the FCC must first lawfully determine, at a minimum, that "access to such network elements as
are proprietary in nature is necessary and that "the failure to provide access to such network
elements would impair the ability of the telecommunications carrier seeking access to provide
the services that it seeks to offer."9 Absent such a lawful determination, there is no obligation to
unbundle under Section 251 of the Act.
A simple reading of Section 251 makes this clear. Section 251(b)(3) states that
ILECs must make network elements available to CLECs, subject to the "necessary" and "impair
standards of Section 251(d)(2). Section 251(c)(3) authorizes unbundling only "in accordance
with.. .the requirements of this section (251),"10 - that is, only if the FCC determines that the
impairment" test of Section 251 (d)(2) is satisfied. As the Supreme Court and D.C. Circuit have
Memorandum Opinion and Order, In the Matter ofQwest Communications International, Inc. Petition for
Declaratory Ruling on the Scope of the Duty to File and Obtain Prior Approval of Negotiated Contractual
Arrangements under Section 252(a)(l), WC Docket No. 02-, 17 FCC Rcd 19337, 2002 FCC Lexis 4929
(October 4, 2002) ~ 1.
47 V.C. ~ 251(d)(2).
47 V.C. ~ 251(c)(3).
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held, the Section 251(d)(2) requirements reflect Congress s decision to place a real upper bound
on the level of unbundling regulators may order.
Congress explicitly assigned the task of applying the Section 251 (d)(2)
impairment test and "determining what network elements should be made available for purposes
of subsection (251)(c)(3)" to the FCC.12 The Supreme Court confirmed that as a precondition to
unbundling, Section 251 (d)(2) "requires the (Federal Communications) Commission to
determine on a rational basis which network elements must be made available, taking into
account the objectives of the Act and giving some substance to the 'necessary' and 'impair
requirements. "13
In USTA IL the D.C. Circuit vacated the FCC's impairment determination for
mass market switching.14 In doing so, the Court also expressly stated that "we doubt that the
record supports a national impairment finding for mass market switches." Consequently, Qwest
is no longer obligated to provide unbundled access to mass market switching under Section 251
of the Act. As the Oregon Commission recently noted:
We do not. . agree with the assertion that Verizon must continue
providing the UNEs at issue until there is a finding that CLECs are'
not impaired without access to those elements. Section 252(
(sic) requires an affirmative finding of impairment before an
incumbent telecommunications carrier can be required to provide a
See AT&T Corp. v. Iowa Utilities Board 525 V.S. 366 390 (1998) ("We cannot avoid the conclusion that
if Congress had wanted to give blanket access to incumbents ' networks on a basis as unrestricted as the
scheme the (FCC) has come up with, it would not have included ~ 251( d)(2) in the statute at all.
);
USTA
FCc, 290 F.3d 415 418 427-28 (quoting Iowa Utilities Board'findings regarding congressional intent
and Section 251 (d)(2) requirements, and holding that unbundling rules must be limited given their costs in
terms of discouraging investment and innovation).
47 V.C. ~ 251(d)(2).
Iowa Utilities Board 525 V.S. at 391-92.
USTA IL 359 F.3d at 571.
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UNE. Absent a legally sufficient finding of impairment by the
FCC or this Commission, there is no obligation to unbundle.
Furthermore, the FCC determined in its Triennial Review Order that shared
transport is not required to be unbundled under Section 251 of the Act where unbundled
switching is not required to be unbundled.
10.As discussed in Part C below, the entire premise of the duty to file an agreement
with a state commission under Section 252 is based on the fact that the service or element
provided is required by Section 251 (b) or ( c). 17 Thus, when, as with switching and shared
transport, a service is no longer required by Section 251 , there is no Section 252 obligation to file
a privately-negotiated agreement with a state commission nor is there a Section 252 power in the
state commission to review and approve the agreement.
c.,In the Declaratory Order, the FCC Ruled that Agreements Like the Commercial
Agreement Need Not Be Filed.
11.The 2002 Declaratory Order sets out explicit standards governing the
circumstances under which agreements between an ILEC and CLEC must be filed with state
commissions. The basic standard is that an ILEC must, pursuant to Section 252(a)(1), file any
agreement that "creates an ongoing obligation pertaining to resale, number portability, dialing
In the Matter ofVerizon Northwest Inc. Petition for Arbitration of an Amendment to Interconnection
Agreements with Competitive Local Exchange Carriers and Commercial Mobile Radio Service Providers
in Oregon Pursuant to Section 252 of the Communications Act of 1934 as Amended, and the Triennial
Review Order ARB 531, (OregonPUC June 30, 2004).
In the Matter of Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers
CC Docket 01-338 (FCC rel. August 21 2003) ("TRO") ~ 534.
47 U.C. ~ 252(a)(1) ("Upon receiving a request for interconnection, services, or network elements
pursuant to section 251 an incumbent local exchange carrier may negotiate and enter into a binding
agreement. . .. The agreement shall be submitted to the State commission under subsection (e) of this
section.) (emphasis added).
The opening phrase of Section 252 is instructive on this point. It states that "( u )pon receiving as request for
interconnection, services, or network elements pursuant to section 251 . . .." 47 U.C. ~ 252(a)(1)
(emphasis added). Thus, the obligations of Section 252 come into being only if a Section 251 service or
element is the subject of the agreement.
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parity, access to rights-of-way, reciprocal compensation, interconnection, unbundled network
elements, or collocation."19 The FCC characterized these requirements as properly balancing the
right of CLECs "to obtain interconnection terms pursuant to section 252(i)" with the equally
important policy of "removing unnecessary regulatory impediments to commercial relations
between incumbent and competitive LECs."2O
12.With regard to the issue in this case, the FCC could not have been more clear that
there is no requirement to file all agreements:
We.. . disagree with the parties that advocate the filing of all
agreements between an incumbent LEC and a requesting
carrier. ... Instead, we find that only those agreements that contain
an ongoing obligation relating to section 251 (b) or (c) must be
filed under section 252(a)(1).
13.It is undisputed that USTA II eliminated the requirement that switching and shared
transport be provided as UNEs under Section 251(b) or (c). Thus, the Declaratory Order stands
for the clear proposition that neither Qwest nor MCI has an obligation to file the Commercial
Agreement and the Commission has no authority to review and approve it.
Contracts for Non-Section 251 Network Elements Are Not Subject to State
Jurisdiction.
14.As shown above, only agreements pertaining to the provision of services required
under Section 251 (b) and (c) of the Telecommunications Act constitute "interconnection
agreements" that must be filed under Section 252. The Commercial Agreement does not pertain
to an "unbundled network element" under Section 251 (c) or any other facility or service that
must be provided under Sections 251 (b) or ( c), and thus is not within the Section 252 filing
requirement. In addition, the FCC has jurisdiction over contracts for non-251 network elements
Declaratory Order ~ 8 (italics in original).
Id.
Id.footnote 26 (italics in original).
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that preempts the state commissions from exercising jurisdiction or regulatory review over such
contracts. As explained in more detail below, the FCC, and not the states, have jurisdiction over
these elements for the following reasons: (1) certain network elements are required under federal
law to be provided by RBOCs such as Qwest under Section 271 (c)(2)(B) of the 1996 Act; (2)
network elements remain subject to federal jurisdiction even after they have been removed from
the list of Section 251 (c )(3) elements; and (3) contracts between carriers for network elements
that do not meet the "necessary" and "impair" tests also fall within express federal filing
jurisdiction.
15.First, in the case of Qwest (and other RBOCs), there is an independent investiture
of federal jurisdiction under the 1996 Act. Many of the elements which have been removed from
the list of network elements must still be provided pursuant to Section 271 (c)(2)(B) of the 1996
Act.22 The offering of the switching element, for example, pursuant to Section 271 (c)(2)(B)(vi)
is subject to federal jurisdiction.23 The filing and review (if any) of contracts entered into
pursuant to Section 271 (c)(2)(B) of the 1996 Act is a federal matter which has not been
delegated to the states.
16.Second, network elements made available under the Telecommunications Act are
subject to the jurisdiction of the FCC, subject to specific exceptions.2s The FCC's jurisdiction is
not diminished whenever a network element is removed from the FCC's list of unbundled
TRO 18 FCC Rcd. at 173 83-, ~ 652.
The FCC, in the TRO, confIrn1ed this jurisdiction, noting that it would enforce compliance with Section
271 offerings (id. at 17385-, ~ 655) and that it would apply Sections 201 and 202 of the Act to such
offerings (id. at 17389, ~ 663).
State jurisdiction over Section 271 issues is considerably more limited than is the case with Section 251
and is advisory only. See 47 V.C. ~ 271(d)(2)(B).
TRO 18 FCC Rcd. at 17100-, ~ ~ 194-95; USTA IL 359 F.3d at 594.
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elements.26 What this jurisdictional structure means is that a valid federal policy (in this case, the
policy favoring market agreements for network elements that have not met the "necessary" and
impair" test) is presumptively preemptive of inconsistent state regulations because the federal
nature of the service under the Telecommunications Act automatically brings them into the zone
of federal jurisdiction.27 State filing and review requirements are not permissible because they
are inconsistent with this preemptive federal policy.
17.Third, contracts between carriers for network elements that do not meet the
necessary" and "impair" test also fall within express federal filing jurisdiction. That is, the FCC
has the authority to require that all such contracts be filed with the agency and to enforce the
Communications Act's Section 202(a) non-discrimination requirements with regard to them. As
a matter of rule, the FCC has exempted non-dominant carriers from the federal filing obligations
applicable to such contracts. No such exemption exists for contracts between ILECs (which are
subject to dominant carrier regulation) and CLECs. Furthermore, unlike access services, the
Commission has not directed the ILECs to provide these network elements as tariffed offerings.
These contracts, therefore, must be filed with the FCC, but are not subject to prior FCC approval.
Concomitantly, states have no authority to duplicate this federal filing requirement (beyond
reviewing such contracts for informational purposes only).
18.Section 211(a) of the Communications Act requires that:
Every carrier subj ect to this (Act) shall file with the Commission
copies of all contracts, agreements, or arrangements with other
carriers, or with common carriers not subject to the provisions of
AT&T Corporation v. Iowa Utilities Board 525 U.S. 366, 385 (1999): "Congress has broadly extended its
law into the field of intrastate telecommunications, but in a few specific areas (ratemaking, interconnection
agreements, etc.) has left the policy implications of that extension to be determined by state
COmmISSIOns. . .
In other words, the contrary presumption for services assigned to the intrastate jurisdiction by Section 2(b)
of the Act does not apply because federal jurisdiction over the regulatory treatment of the element has been
established.
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this chapter, in relation to any traffic affected by the provisions of
this chapter to which it may be a party.
19.This statutory language provides an affirmative grant of power to carriers to order
their affairs with other carriers by way of contract unless the FCC's rules (or other provisions of
the Communications Act) provide otherwise, even when the same business relationship with an
end-user customer would need to be dealt with in a tariff.28 It stands for the legal proposition that
Qwest may enter into commercial negotiations with CLECs for the sale of network elements not
subject to Sections 251(b) or (c), and may enter into binding agreements with those CLECs for
the sale of those network elements (even though untariffed sales to end-user customers would
generally not be lawful). Pursuant to Section 211 , Qwest has filed the Qwest/MCI Commercial
Agreement with the FCC, thereby complying with that Section and perfecting the FCC'
jurisdiction over the Commercial Agreement.
20.The general prohibition against "unreasonable discrimination" applies to such
contracts.29 Carriers may, of course, purchase services from the tariffs of another carrier or
choose to tariff their inter-carrier offerings - Section 211(a) provides carriers a choice in those
instances where the FCC has not acted to actually require either a contract (network elements) or
a tariff (exchange access). In point of fact, the current structure whereby interexchange carriers
purchase access to local exchange carrier facilities and services pursuant to tariff is of relatively
Bell Telephone of Pennsylvania v. FCC 503 F.2d 1250, 1277 (3d Cir. 1974). See also In the Matter of
Policy and Rules Concerning the Interstate, Interexchange Marketplace, Implementation of Section 254(g)
of the Communications Act of 1934 as amended Notice of Proposed Rulemaking, 11 FCC Rcd. 7141
719097 (1996); In the Matter of the Applications of American Mobile Satellite Corporation Order and
Authorization, 7 FCC Rcd. 942, 945 15 (1992); In the Matter of Policy and Rules Concerning Rates for
Competitive Carrier Services and Facilities Authorizations Therefor Notice of Proposed Rulemaking, 84
FCC 2d 445 481 95 (1981).
MCI Telecommunications Corp. v. FCC 842 F.2d 1296 (D.C. Cir. 1988).
COMMENTS OF QWEST CORPORATION - Page
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recent origin 3O and the access tariff regime replaced a system governed largely by inter-carrier
contracts and partnerships.
21.These statutory federal filing requirements are important because they show a
federal regulatory regime (already in place) that deals with the precise issue (filing of contracts
for interconnection services not covered by Sections 251 (b) or ( c)) that conflicts directly with
any state filing requirements applicable to those same agreements. State filing requirements
thus, would conflict irreconcilably with the federal jurisdiction over the network elements
covered by the agreements.
III.CONCLUSION
22.For the reasons set forth herein, Qwest respectfully opposes MCI's request that
the Commission review and approve the Commercial Agreement. Qwest urges the Commission
to enter an order declining to consider the Commercial Agreement for approval on jurisdictional
grounds.
Respectfully submitted this 6th day of October, 2004.
Qwest Corporation
f1I1/P~ ~ l.-
Mary S. U'obson
Stoel Rives LLP
Adam L. Sherr
Qwest
Attorneys for Qwest Corporation
See In the Matter of MTS and WA TS Market Structure Second Supplemental Notice of Inquiry and
Proposed Rulemaking, 77 FCC 2d 224, 226-31 ~ ~ 12-35 (1980).
See In the Matter of MTS and WATS Market Structure Third Report and Order, 93 FCC 2d 241 , 246 ~ 11
254 ~ 39, 256-60 ~ ~ 42-55 (1983).
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CERTIFICATE OF SERVICE
I hereby certify that on this 6th day of October, 2004, I served the foregoing
COMMENTS OF QWEST CORPORATION upon all parties of record in this matter as
follows:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, ill 83720-0074
ij ewell~puc. state.id. us
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Thomas F. Dixon
MCI
707 17th Street - Suite 4200
Denver, CO 80202
Telephone: [phone]
Facsimile: [phone]
thomas.dixon~mci.com
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
:d!A a:vi~
Brandi L. Gearhart, PLS
Legal Secretary to Mary S. Hobson
Stoel Rives LLP
COMMENTS OF QWEST CORPORATION - Page 12
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