20060928Motion to dismiss Part I.pdf

RECEIVED
Mary S. Hobson
. 6Attorney & Counselor ZOO& SEP 21 PH 4.
999 Main, Suite 1103 j-!r U:'1 IC
Boise ID 83702 ESU O~XNiISSION
208-385-8666 OT
September 27 2006
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, ill 83702-5983
RE:Docket No. QWE-O6-
Dear Ms. Jewell:
Enclosed for filing with this Commission are an original and seven (7) copies of QWEST
CORPORATION'S MOTION TO DISMISS in the above referenced matter.
If you have any questions, please contact me. Thank you for your cooperation in this matter.
Very truly yours
~~~~
Enclosurescc: Service List
RECEIVED
200G SEP 21 PH 4: 56
Mary S. Hobson (ISB. No. 2142)
999 Main, Suite 1103
Boise, ID 83702
Tel: [phone]
marv .hobson(2i2qwest. com
IDAHO I)UdLiC
UTILITIES COMMiSSIO;~
Adam L. Sherr
Corporate Counsel, Qwest
1600 7th Avenue, Room 3206
Seattle, W A 98191
Tel: [phone]
adam. sherr(2i2qwest. com
Attorneys for Qwest Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
AT&T COMMUNICATIONS OF THE
MOUNTAIN STATES, INC.,
Complainant,Case No. QWE-O6-
QWEST CORPORATION'
MOTION TO DISMISS
QWEST CORPORATION
Respondent.
Qwest Corporation ("Qwest") files this Motion to Dismiss the Complaint of AT&T
Communications of the Mountain States, Inc. ("AT&T"). In this Complaintl AT&T is raising
Complaint AT&T Commc ns of the Mountain States, Inc.v. Qwest Corp.Case No. QWE-O6-
(hereinafter
, "
Complaint"
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-O6-17
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matters clearly barred by the statute of limitations of the Federal Telecommunications Act
Federal Act"), as well as by fundamental principles of collateral estoppel and res judicata.
Pursuant to Idaho Civ. Proc. R. 12(b)(6), Qwest submits this Motion to Dismiss and respectfully
requests that the Idaho Public Utilities Commission ("Commission ) promptly reject AT&T's
Complaint, thereby sparing the Commission itself and the parties from expending further time
and expense associated with this matter.
Summary of Argument
As recently determined by the Oregon Commission when it addressed materially the
same Complaint that is before the Idaho Commission here, AT&T's claim is barred by the
federal two-year statute oflimitations. The Oregon Commission found that AT&T's allegations
in fact are premised upon the Telecommunications Act of 1996 and are "masquerading" as state
law claims.
AT &T has an obvious reason to disguise its alleged federal claim in state law clothes:
here, as in Oregon, Section 415 of the Federal Act clearly would bar the claim if accurately pled.
Through this Motion, Qwest requests that the Commission dismiss AT&T's Complaint because
the doctrine of collateral estoppel bars AT&T from attempting to re-litigate the rulings of the
Oregon Commission that: (1) the federal two-year statute of limitations applies to these claims;
and, (2) AT&T knew of the facts underlying its claim as far back as March 2002. Moreover
even if the Commission decides not to apply collateral estoppel and considers the issues afresh
Oregon Public Utility Commission, Order No. 06-465 , Order Denying Petition for Reconsideration AT&T
Commc ns of the Northwest, Inc.v. Qwest Corp.Docket No. UM-1232, at 3 (August 16, 2006) (quoting MFS Int
Inc. v. Int ! Te!ecom Ltd.50 F. Supp. 2d 517, 520 (E.D. Va. 1999)) ("OPUC Reconsideration Order
),
aff'Order
No. 06-230, Order Granting Motion to Dismiss AT&T Commc ns of the Northwest, Inc.v. Qwest Corp.Docket
No. UM-1232 (May 11 , 2006)("OPUC Complaint Order ). Copies of these two orders are provided here as Exhibits
A and B.
QWEST CORPORATION'S MOTION TO DISMISS
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the governing federal statute of limitations still results in dismissal because it denies the
Commission jurisdiction to hear this Complaint.
This Motion first will describe the proceedings before the Commission and other state
commissions and then turn to the specific findings of the Oregon Commission, and the law
supporting dismissal of this complaint.Qwest respectfully requests that the Commission
promptly dismiss this Complaint, thereby avoiding wasted time and resources for itself and the
parties arising from AT&T's untimely filing.
II.Background
AT&T's Complaint relates to events that ended over four years ago. Specifically, AT&T
references an interconnection agreement between Qwest and Eschelon Telecom ("Eschelon
and another between Qwest and McLeodUSA Telecommunications Services, Inc. ("McLeod"
Those agreements both terminated in 2002 and have not been in effect since, so by definition
AT&T's alleged harm, if any, only would relate to prior periods.
The two interconnection agreements were well known to AT&T in 2002. That year
AT&T played an active leading role in a proceeding before the Minnesota Public Utilities
Commission in which both agreements were at issue. 3 Indeed, on February 27, 2002, AT&T
raised the subject in a complaint letter filed with utility commissions across the 14-state Qwest
Based on a complaint filed in February 2002, the Minnesota Commission published public notice of its
decision to proceed with the unfiled agreements case on March 12, 2002. See Notice and Order for Hearing, In re
Com pl. of the Minn. Dep t of Commerce Against Qwest Corp. Regarding Unfiled Agreements Docket No. P-421/C-
02-197 (Minn. Public Utils. Comm n 2002). The Eschelon agreement was referenced in that initial complaint and in
the public notice; the McLeod agreement was referenced in an amendment to the complaint filed on May 2, 2002.
AT&T was an active party in the Minnesota proceedings both before and after the March 12 public notice and
therefore had actual knowledge of the circumstances underlying these two agreements. AT&T participated by
propounding discovery, filing pleadings, presenting evidence, cross-examining Qwest witnesses, and seeking
monetary relief ITom the Minnesota Commission.
QWEST CORPORATION'S MOTION TO DISMISS
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region.4 In that letter, AT&T complained about alleged "secret" interconnection agreements that
Qwest purportedly failed to file in compliance with 47 U.C. ~~ 251 and 252 of the Federal
Telecommunications Act (the "Act"). This was the beginning of AT&T-led litigation on the
unfiled agreements" issue before multiple state commissions and at the FCC.
Here in Idaho Qwest made a compliance filing of six negotiated agreements with this
Commission on August 21 , 2002, including its agreements with McLeodUSA. 5 Qwest submitted
an additional amendment to its interconnection agreement with McLeodUSA on September 19
2002. The Commission determined that a formal hearing in the matter was not required but
provided notice of the filings and an opportunity to intervene within twenty-one days of the
service date of the order.
AT&T did not seek to intervene and did not file any comments concerning Qwest'
submission of the six interconnection agreements or the September 19, 2002 amendment. But
that does not mean that AT&T has ignored the issue. As the Commission knows, in 2002 AT&T
made the "unfiled agreements" issue one of its central grounds for urging the FCC to deny Qwest
Section 271 authority, including such authority in Idaho.? AT&T's FCC comments raised
similar arguments to what AT&T had made to state commissions: that Qwest should not be
granted 271 authority based on the unfiled agreement issue, including the McLeod and Eschelon
As an example, a copy of AT&T's letter to the Iowa Utilities Board. This filing is attached as Exhibit C.
See In re Application of Qwest Corp., and McLeodUSA Telecommc 'ns Servs., Inc. for Approval of An
Amendment to An Interconnection Agreementfor the State of Idaho Pursuant to 47 USe. 252(e), at 1, Case No.
QWE-02-, Order No. 29116 (Idaho Public Utils. Comm n Sept. 19 2002).
!d.at 2-
See Comments of AT&T Corp.In re Qwest Commc ns Int l Inc., Consolo Application for Auth. to Provide
In-Region, InterLATA Servs. in Colo., Idaho, Iowa, Neb. and ND.WC Docket No. 02-148 (July 3 2002).
QWEST CORPORATION'S MOTION TO DISMISS
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agreements.8 The FCC rejected these arguments, but not without first considering them.
Meanwhile, although AT&T chose not to comment before this Commission on Qwest'
interconnection agreement filings, another party did, making AT&T's arguments. Pagedata
submitted comments relying on an affidavit of an AT&T witness, Kenneth Wilson, which AT&T
previously had filed with the FCC in connection with Qwest's contemporaneous application for
section 271 authority.AT&T's FCC affidavit alleged that "(tJhe agreements at issue with
McLeod, Covad, and Eschelon are not all of the unfiled interconnection agreements that Qwest
had with McLeod, Covad, and Eschelon including oral, expired, and cancelled agreements.
AT&T subsequently raised the "unfiled agreements" issue directly in a complaint it filed
before this Commission. On August 6, 2004, AT&T filed a complaint against Qwest alleging
that Qwest overcharged AT&T for use of conduit facilities in Idaho under its interconnection
agreementY AT&T asserted that its injuries resulted from "a pattern of the deceptive and anti-
competitive practices that Qwest had engaged in across the multi-state service areas, including,
specifically, Idaho.AT&T pointed to actions related to the unfiled interconnection
agreements before the FCC and in numerous states, including one decision dating back to at least
June 2002 in Iowa where AT&T was the plaintiffY However, AT&T did not pursue its breach
See e.
g.,
Order Establishing Time for Responses In re: US WE T Commc ', Inc., nlk/a Qwest Corp.
Docket Nos. INU-00-, SPU-OO-ll (May 17, 2002).
See In re Application by Qwest Communications International Inc for Authorization to Provide In-Region
InterLATA Services in the States of Colorado, Idaho, Montana, Nebraska, North Dakota, Utah, Washington and
Wyoming, 17 FCC Rcd 26 303, at 26 570 ~~ 466- 491 (2002).
In re Application of Qwest Corp., and McLeodUSA Telecommc 'ns Servs., Inc. for Approval of An
Amendment to An Interconnection Agreementfor the State of Idaho Pursuant to 47 USe. 252(e), Comments by
Pagedata, at 2, Case No. QWE- T -02-17 (Idaho Public Utils. Comm n Oct. 25, 2002).
II Complaint
AT&T Corp. v. Qwest Corp.Case No. ATT-04-1 (Idaho Public Utils. Comm , filed Aug. 6
2004), attached as Exhibit D.
12
Id. at ~ 22.
13 See id. at~ 22 n. 1.
QWEST CORPORATION'S MOTION TO DISMISS
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of contract claim in this complaint even though that claim related to the same interconnection
agreements. On July 12, 2005, AT&T and Qwest filed a Stipulation and Joint Motion to Dismiss
the Complaint with Prejudice, and the Commission summarily accepted the settlement and
granted the Motion to Dismiss.
As noted, the Eschelon and McLeod agreements were both terminated in 2002, so they
are ancient history. But Qwest provides this background because, notwithstanding AT&T's
artful pleading, it underscores both that: (1) AT&T's claims here arise under the Federal Act, and
(2) AT&T knew of the unfiled agreements matter long ago and did not pursue its claims on a
timely basis.
After a lengthy hiatus, AT&T recently has attempted to resurrect its stale claims
purportedly arising from the McLeod and Eschelon agreements.These efforts began in
November 2005 and January 2006, when AT&T filed complaints with the Washington Utilities
and Transportation Commission and Oregon Commission asserting substantively identical
claims to those presented here. In each case, as here, AT&T attempted to portray its damages
claims as violations of state law rather than of the Federal Telecommunications Act, undoubtedly
to avoid the shorter federal limitations period.
However, the Oregon Commission dismissed the AT&T complaint on May 11 , 2006/6
concluding that AT&T's purported state contract claims in fact rested on alleged violations of the
Federal Act. The Oregon Commission firmly stated that "(t)he alleged violations are 'actions
14 See AT&T Corp. v. Qwest Corp.Case No. ATT-04-, Order No. 29832 (Idaho Public Utils. Comm
July 22, 2005).
See 47 u.S.C. g 415.
16 See OPUC Complaint Order.
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based on (federal law) masquerading as state law claims.Accordingly, the Oregon
Commission held that "(t)hese thinly veiled claims of violations of federal law fall under the
federal Communications Act statute of limitations, 47 u.S.C. ~ 415, of two years from
accrual.,,18 The Oregon Commission also found that AT&T was aware ofthe two agreements at
least as early as the spring of 2002, and that therefore the time for seeking damages based on any
violations arising from those agreements had long passed.AT &T unsuccessfully sought
reconsideration of that ruling. On August 16 , 2006, the Oregon Commission reaffirmed its
decision that AT&T's complaint was time-barred. 19
After the Oregon Commission ruled against it, AT&T filed new complaints with the state
courts in both Oregon and Washington, asserting the same claims yet again. The Oregon state
court is currently considering Qwest's motion to dismiss based on this same statute oflimitations
issue, as well as collateral estoppel arising from the decision of the Oregon Commission. Similar
motions are pending in Washington.
Then, within days after losing its bid for reconsideration by the Oregon Commission
AT &T filed similar complaints before other state utility commissions and state courts, including
this case.20 In effect, AT&T is shotgunning complaints at as many courts and commissions as
possible, hoping for a different answer than the one it received in Oregon. This Commission
See OPUC Reconsideration Order.
OPUC Complaint Order at 6.
OPUC Reconsideration Order.20 All of the state court cases have been, or soon will be, removed to federal court. See, e., AT&T
Commc ns of the Midwest, Inc. v. Qwest Corp.Case No. CLl03091 (Iowa Dist. Ct., Polk County, filed Aug. 31
2006); AT&T Commc ns of the Midwest, Inc. v. Qwest Corp.Case No. (Minn. Dist. Ct., Fourth Dist.
Hennepin County, filed Sept. 1 2006); AT&T Commc ns of the Midwest, Inc. v. Qwest Corp.Case No.
(Neb. Dist. Ct., Lancaster County, filed Sept. 1 , 2006); AT&T Commc ns of the Mountain States, Inc. v. Qwest
Corp.Docket No. 060913848 (Utah Dist. Ct.filed Aug. 22, 2006); AT&T Commc ns of the Mountain States, Inc.
Qwest Corp.Civil Action No. 168-538 (Wyo. Dist. Ct.filed Aug. 28, 2006).
QWEST CORPORATION'S MOTION TO DISMISS
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should not indulge AT &T' s search. F or the reasons discussed below, the Commission should
promptly dismiss this Complaint, filed long after the expiration of the applicable federal two year
statute of limitations. Qwest requests that the Commission take administrative notice of the
previous proceedings held regarding these Qwest agreements to the extent necessary to conclude
that federal issues form the basis of AT&T's allegations, and that a motion to dismiss may be
granted now, notwithstanding AT&T's artful attempt to try and suggest that its claim arises
under state law.
The Oregon Commission decision is more than just persuasive authority. The Oregon
Commission decision directly bars the AT&T complaint on collateral estoppel grounds. AT&T
already fully litigated the question of whether the statute of limitations in Section 415 of the
Federal Act bars its damages claims. The Oregon Commission correctly rejected AT&T'
position. As a matter oflaw, AT&T is therefore barred from re-litigating that question here in
Idaho, or in the multiple other fora from which it seeks a different answer. The Commission
should apply the ruling of the Oregon Commission on this narrow but dispositive issue.
By acting upon Qwest's motion to dismiss this case on one or more of these grounds, the
Commission will spare Qwest, the Commission, and other parties. unnecessary time and expense
associated with this improper Complaint. These matters are discussed further below.
III.Argument
Legal Standards for Motions to Dismiss
Idaho Civ. Proc. R. 12(b)(6) provides dismissal for "failure to state a claim upon which
relief can be granted." Under Idaho law, a court will dismiss pursuant to Rule 12(b)(6) only
QWEST CORPORATION'S MOTION TO DISMISS
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when it appears beyond doubt that the plaintiff can prove no set of facts in support of (theJ
claim which would entitle (plaintiff) to relief.21 The movant admits the well-pleaded facts in
the complaint, and all inferences are construed in the non-movant's favor.22 On a motion to
dismiss, the court may properly consider those facts appearing in the complaint, supplemented
by those facts of which the court may properly take judicial notice.
AT&T's Complaint Is Barred By The Two Year Federal Statute Of
Limitations.
Section 415 of the Federal Act Provides the Applicable Statute of Limitations for
AT&T's Claims.
Although AT&T attempts to frame its breach of contract claim under state law, the
allegations themselves demonstrate that the claims arise under federal law and thus are governed
by the Federal Act's statute of limitations in section 415. In its opening allegations, AT&T
acknowledges that "(p Jursuant to the federal Telecommunications Act of 1996 " Qwest was
required to enter into interconnection agreements with other telecommunications carriers that
request access to the incumbent carrier s network, facilities and services.24 The complaint then
asserts that "Qwest did not file these secret Agreements with the PUC as required by law, and
because they were not filed and remained undisclosed, AT&T did not know about them and
therefore could not demand the same discounted rates in a timely manner, as it was entitled to
dO.
21
Wackerli v. Martindate 353 P.2d 782, 787 (Idaho 1960).
22 Walenta v. Mark Means Co.394 P.2d 329 331 (Idaho 1964).
23 See Wackerli 353 P.2d at 787; Roberts v. Hollandsworth 616 P.2d 1058, 1060-61 (Idaho 1980) (taking
judicial notice of a Ninth Circuit action and dismissing state court action on ground of another pending action).
24 Complaint, at ~ 1 (citing 47 US.C. ~~ 251-52).25 Id.at~3.
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This Commission s jurisdiction to hear actions to enforce the terms of interconnection
agreements derives, not from state law, but from the Federal Act.26 AT&T acknowledges as
much, relying on Idaho Code ~ 62-615(1) for the Commission s jurisdiction.27 Section 62-615
provides that "(tJhe Commission shall have full power and authority to implement the federal
telecommunications act of 1996. . .." This jurisdictional structure is consistent with Congress
intent regarding the limits of authority delegated to state commissions.(WJith the 1996
Telecommunications Act, Congress has offered the states, not federal funds, but a role as what
the carriers have called a 'deputized' federal regulator.28 The Federal Act limits the scope of a
state commission s authority to regulate local telecommunication competition.29 Thus, without
delegated authority, the Commission lacks jurisdiction to act.
AT&T's breach of contract claim represents the quintessential type of claim relating to
interconnection agreements that courts have refused to allow to proceed on state law grounds.
AT&T's claim is dependent on and intertwined with the Federal Act, and thus the Commission
must look to section 415 of the Federal Act to determine whether it has jurisdiction to hear this
action.Section 415 provides an express two-year statute of limitations within which the
26
See Pac. Bell v. Pac-West Telecomm, Inc.325 F.3d 1114, 1126 (9th Cir. 2003) ("It is clear ITom the
structure of the Act, however, that the authority granted to state regulatory commissions is confined to the role
described in g 252 -- that of arbitrating, approving, and enforcing interconnection agreements.
);
Southwestern Bell
Tel. Co. v. Connect Commc ns Corp.225 F.3d 942, 946 (8th Cir. 2000) ("(T)he state commission s power to
enforce a federally-mandated interconnection agreement arises ITom g 252, and thus a state commission s decision
enforcing the agreement is a 'determination' under that section.
).
See also Petition of SBC Tex. For Post-
Interconnection Dispute Resolution with Tex-Link Commc ns., Inc., under the FTA Relating to Intercarrier Comp.
Ruling on Motion to Dismiss, 2005 WL 2834183 , at 2 (Tex. P.u.C. Oct. 26 2005) ("Enforcement ofICAs does not
rely on state law. Rather, the authority to enforce ICAs comes from federal law.) (hereinafter SBC Tex.
27 See Complaint at'i18.
28 MCI Telecomms. Corp. v. Ill. Bell Tel. Co.222 F.3d 323, 343-44 (7th Cir. 2000); Connect Commc
Corp.225 F.3d 942, 946 (8th Cir. 2002) (The new regime for regulating competition in this industry is federal in
nature, and while Congress has chosen to retain a significant role for the state commissions, the scope of that role is
measured by federal, not state law.
29 Pac. Bell 325 F.3d at 1126-27 (discussing AT&T v. Iowa Utils.Bd.525 u.S. 366, 378 & n. 6 385 & n. 10
(1999)).
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Commission may exercise such authority. In pertinent part, 47 U.C. ~ 415 provides:
(a) All actions at law by carriers for recovery of their lawful charges, or any part thereof
shall be begun, within two years from the time the cause of action accrues and not after.
(b) All complaints against carriers for the recovery of damages not based on overcharges
shall be filed with the Commission within two years from the time the cause of action
accrues and not after subject to subsection (d) of this section.
(c) For recovery of overcharges action at law shall be begun or complaint filed with the
Commission against carriers within two years from the time the cause of action accrues
and not after subject to subsection (d) of this section, except that if claim for the
overcharge has been presented in writing to the carrier within the two-year period of
limitation said period shall be extended to include two years from the time notice in
writing is given by the carrier to the claimant of disallowance of the claim, or any part or
parts thereof, specified in the notice.
(Emphasis added.
Section 415 applies to proceedings in federal court, the FCC, or before a state
commission.3o This broad scope is consistent with Congress' desire to assure national uniformity
in the Federal Act's application.31 To permit varying periods of limitation from state to state
would contravene Congress s intent and discriminate against carriers that happen to be sued in
states with more generous statutes oflimitation.
Recognizing the breadth of Section 415, courts in the Ninth Circuit have applied Section
415 in actions involving telecommunications carriers, irrespective of whether the claims were
state or federal. In Pavlak the Ninth Circuit applied the two-year limitation to a plaintiffs civil
rights claims against a carrier.33 In
Cole v. Kelley,34 plaintiffs brought an action against a
number of defendants, including Pacific Telephone, asserting constitutional and federal statutory
30 See, e., Pavlak v. Church 727 F.2d 1425, 1426-27 (9th Cir. 1984) (holding that 47 u.S.C. ~ 415 applies
to claims filed in district court as well as to complaints filed with the FCC); SBC Tex.at 7-9 (fIDding that the two-
year limitation applies to claims that a state commission is authorized to hear).
See Swarthout v. Mich. Bell Tel. Co.504 F.2d 748 748 (6th Cir. 1974).
See A.J. Phillips Co.v. Grand Trunk W. Ry. Co.236 U.S. 662 667 (1915).
See Pavlak 727 F.2d at 1427-28.34 438 F.Supp. 129 (c.D. Cal. 1977).
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violations in addition to a number of state law claims. As to Pacific Telephone, the Cole court
held that the limitations period provided by Section 415(b), which at the time was one year
barred all of plaintiffs' claims , including the state claims: "The statute applies to civil actions
brought against a federally regulated communications utility in federal court, as well as those
filed with the regulatory agency.Following this precedent, the Oregon Public Utility
Commission has found that Section 415 bars the very same AT&T claims that are presented
here. The Oregon Commission decision is discussed in more detail in Section C below for its
relevance to collateral estoppel.
But the Commission also should be guided by other precedent on this point.For
example, the Texas Public Utility Commission has found that the Federal Act granted that
Commission its authority to interpret and enforce interconnection agreements, and therefore the
Commission had to look to Section 415 as a limitation on its jurisdiction: "Given that the
authority to interpret/enforce ICAs (interconnection agreements) and to award any damages
comes from the FCAlFTA 36 the FCA's two-year limitations must apply to a claim for damages
in an FTA arbitration.Thus, without that authority, the Commission lacks jurisdiction to
interpret or enforce interconnection agreements.
Similarly, the court in MFS International, Inc., v. International Telecom Ltd.38 found that
the fact that the complainant attempted to allege state law claims did not override the sweeping
language of Section 415(b), and thus those claims were precluded. While noting that the
complainant's breach of contract and conversion claims appeared on the surface not to implicate
Id. at 145 (citing Ward v. Northern Ohio Tele. Co.251 F.Supp. 606 (N.D. Oh. 1966)).
Federal Communications Act/Federal Telecommunications Act.
SBC Tex.at 9.38 50 F. Supp. 2d 517 520 (E.D.Va. 1999).
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the Federal Act, the court adhered to long-standing precedent and the plain language of the
Federal Act to find "that such putative state law claims are in fact governed by the federal statute
of limitations set out in ~ 415(b).Although the MFS International court dealt with a
federally-filed tariff, rather than an interconnection agreement, the difference is immaterial. The
Ninth Circuit has held that "interconnection agreements have the binding force of law.4o Thus
notwithstanding AT&T's attempt to cloak its claims under state law, it nevertheless remains
evident that the Commission must look to Section 415 to determine whether it has jurisdiction to
hear AT&T's Amended Complaint.
The need to apply Section 415 is made more compelling in this case given the nature and
purpose of interconnection agreements, and the likelihood that if this case is not dismissed, the
Commission would have to turn to federal law in resolving AT&T's breach of contract claim.
Interconnection agreements are not ordinary contracts.41 The very existence of interconnection
agreements was created by virtue of the Federal Act.42 Interconnection agreements set forth the
terms and conditions. . . to fulfill the duties" mandated by 47 U.c. ~~ 251(b) and 252(c),
and many of the provisions of interconnection agreements "represent nothing more than an
attempt to comply with the requirements of the 1996 Act.,,44 Agreements are "cabined by the
Id.
40 Pac. Bel/325 F.3d at 1127; Verizon Md, Inc. v. RCN Telecom Servs., Inc.232 F.Supp.2d 539, 552 n. 5 (D.
Md. 2002) (noting that an interconnection agreement "is functionally no different from a federal tariff.
);
see also
Goldwasser v. Ameritech Corp.222 F.3d 390, 402 (7th Cir. 2000).
41 RCN Telcom Servs., Inc.232 F. Supp.2d at 552 n. 5 ("(A)n interconnection agreement is part and parcel of
the federal regulatory scheme and bears no resemblance to an ordinary, run-of-the-mill private contract"
);
SBC Tex.
at 4 ("An interconnection agreement is not an ordinary private contract"
);
E.Spire Commc ', Inc. v. NM Pub.
Regulation Comm '392 F.3d 1204, 1207 (lOth Cir. 2004) (noting that interconnection agreements are
instrument( s) arising within the context of ongoing federal and state regulation
OPUC Complaint Order at 4.
47 US.C. g 251(c)(l).
44 AT&T Commc ns of the S. States, Inc. v. Bel/South Telecom., Inc.229 F.3d 457 465 (4th Cir. 2000).
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obvious recognition that the parties to the agreement had to agree within the parameters fixed by
the federal standards set out in 47 U.C. ~~ 251 and 252.45 Given this context, the Ninth
Circuit has held that "interconnection agreements have the binding force oflaw.
Furthermore, in evaluating AT&T's complaint, the Commission necessarily would have
to apply the rules and policies created by the FCC to implement the interconnection provisions of
the Federal Act.The interconnection agreements specify that "(tJhis agreement shall be
governed by and construed in accordance with the (FederalJ Act and the FCC's rules and
regulations, except insofar as state law may control any aspect of this Agreement. . . .
Moreover, AT&T's breach of contract claim is premised on the allegation that Qwest breached
its obligations under the interconnection agreements.48 Yet, this language is informed by and
essentially mirrors the express requirements of the Federal Act. Section 251(c) obligates a local
exchange carrier to provide interconnection "on rates, terms, and conditions that are just
reasonable, and nondiscriminatory, in accordance with the terms and conditions of the agreement
and the requirements of this section and section 252 of this title.Similarly, AT&T's breach of
contract claim asserts that Qwest did not "'act in good faith and consistently with the intent of
the 1996 Act.
To evaluate AT&T's claim then , the Commission would need to apply federal law
establishing the scope of Qwest's duty as defined by Congress and the FCC. The mere fact that
Bel/South Telecom., Inc. v. MCImetro Access Transmission Servs., Inc.317 F.3d 1270, 1281 (11th Cir.
2003).
Pac. Bel/325 F.3d at 1127.
See Complaint at Exh. 1 921 ("Governing Law
48 See, e., id. at ~~ 4, 16, 20-22 (alleging that Qwest breached duties under the Federal Act and
interconnection agreement).
49 Id.at~~4 16.
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ILECs charge different companies different rates for the same services is not a facial violation of
the Federal Act.Under Section 252(i), ILECs are required, albeit only in appropriate
circumstances and subject to the rules of the FCC, to make interconnection services available to
other carriers on request on the same terms and conditions as are contained in such individually
negotiated interconnection agreements. The FCC, not state commissions, establishes the
policies and rules addressing how section 252(i) is to be applied, 52 and also whether a contract
qualifies as an interconnection agreement that must be filed in the first place.
Thus, the Commission unavoidably would have to address issues of federal law arising
under the Federal Act in adjudicating AT&T's breach of contract claim. For example, the
Federal Act requires that a carrier must be willing and able to accept all legitimately related
terms in an existing agreement.54 Notwithstanding AT&T's unsubstantiated allegations that it
would have "availed itself of the discounts in the Eschelon and McLeodUSA Agreements 55 the
Complaint fails to allege that AT&T could or would have chosen to comply with the related
terms and conditions. Similarly, FCC rules exempt incumbents that can prove that providing a
50 "If the 1996 Act is read to allow no price distinctions between companies that impose very different
interconnection costs on LECs, competition for all competitors, including small companies, could be impaired.
Thus, we find that price differences, such as volume and term discounts, when based upon legitimate variations in
costs are permissible under the 1996 Act, if justified.In re Implementation of the Local Competition Provisions in
the Telecommunications Act of 1996 1996 WL 452885, at *251 11 F.C.R. 15 499, 15928 (FCC Aug. 8, 1996).
47 u.S.C. 9252(i).52 The FCC has established detailed policies and rules governing the scope of Section 251 (i), including when
another carrier may request access to the terms of another party's interconnection agreement, and when they may
not. See, e., Review of the Section 251 Obligations of Local Exch. Carriers Second Report and Order, 19 FCC
Rcd 13494 and n. 6 (2004), affd sub nom. New Edge Network, Inc. v. FCC 2006 WL 2473472 (9th Cir., Aug. 29
2006).
53 See Memorandum Opinion and Order Petition for Declaratory Ruling on the Scope of the Duty to File and
Obtain Prior Approval of Negotiated Contractual Arrangements Under Section 252(a), WC-02 89, 17 FCC Rcd
19337 (2002); see also Complaint, Exh. 1 921.
54 Iowa Utils. Bd.525 u.S. at 398.55 Complaint at ~ 17.
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Page 15 of 26
particular interconnection agreement to a requesting carner IS either (1) more costly than
providing it to the original carrier, or (2) technically infeasible. 56 If one of these federally
described exemptions applied, AT&T's breach of contract claim would fail based on application
of federal law.
In sum, notwithstanding its artful attempt to frame its complaint under state law, AT&T
is seeking damages arising from federal law matters. Any other conclusion would upset the
Federal Act's structure of consistent nation-wide regulation in the area of interconnection. 57 It
follows that the federal statute of limitations in section 415 of the Federal Act applies to this
Complaint.
AT&T's Claim Accrued Much More than Two Years Before it Filed this
Complaint.
Under Section 415 a claim accrues when the aggrieved party in the exercise of reasonable
diligence should have discovered the injury.58 Once the time to bring suit under the Federal Act
has lapsed, the Commission no longer has jurisdiction to hear the action. The United States
Supreme Court has made clear that the "and not after" language found in Section 415 means that
the lapse oftime not only bars the remedy but destroys the liability.59 A cause of action cannot
be revived after the limitations period passes.
As the Oregon Commission has already determined, AT&T's claims accrued more than
47 C.R. ~ 51.809.
57 See Verizon Md., Inc. v. Global Naps, Inc.377 F.3d 355, 363-65 (4th Cir. 2004) (fIDding substantial
questions of federal law because the agreement was federally mandated, the key disputed provisions incorporated
federal law, and the contractual duty was imposed by federal1aw); Connect Commc ns Corp.225 F.3d at 947-
(fIDding "substantial federal-law questions underlying the dispute in this case" and that the "Commission s argument
now that this case is simply a matter of state contract law does not ring true
58 Pavlak 727 F.2d at 1426-27; MFS Int', Inc.50 F. Supp.2d at 524.
59 A.J. Phillips Co.236 u.S. at 667.
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two years before it filed this complaint.6o AT&T's claims accrued when it discovered , or by
exercise of reasonable diligence should have discovered, its right to apply for relief. In this case
AT&T filed letters with state commissions in the Qwest region requesting an investigation into
the agreements at issue here on February 27, 2002.In describing this letter, the Iowa
Commission stated that "AT&T alleged that Qwest had entered into a series of secret agreements
granting preferential treatment to some CLECs. AT&T noted a similar complaint before the
Minnesota Public Utilities Commission where agreements had not been filed with the state
commission as required by 47 U.C 99251 and 252.62 Thus, AT&T was not only on actual
notice of the facts underlying its claims as of that time, it was seeking state commission
investigations with regard to those facts.
Moreover, this is not a situation in which AT&T was a mere passive spectator in the
complaint proceedings brought by various state commissions.AT&T and its affiliated
companies pursued a strategy of intervention and active participation in the "unfiled agreement"
dockets opened in Arizona, Colorado, Iowa, Minnesota, New Mexico, and Washington. At the
least, AT&T knew-or should have been aware with the exercise of minimal diligence-of the
operative allegations at least as early as March 12, 2002, the date on which the Minnesota
Commission published public notice of its decision to proceed with the unfiled agreements
case.
It follows that AT&T's cause of action here accrued well over four years ago, and that its
OPUC Complaint Order at 7-
See Exhibit C.62 Written Consultation and Evaluation Qwest Commc ns Int'l, Inc.WC Docket No. 02-148 (Iowa Utilities
Commission, July 3 2002), at 72.
63
See Notice and Order for Hearing, In re Complaint of the Minn. Dep t of Commerce Against Qwest Corp.
Regarding Unjiled Agreements, Docket No. P-421/C-02-197 (Minn. Public Utils. Comm , Mar. 12 2002), attached
as Exhibit E to this motion.
QWEST CORPORATION'S MOTION TO DISMISS
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action is barred by Section 415 of the Federal Act.
AT&T is Attempting to Relitigate An Issue that it Already Has Litigated
and Lost.
The Elements of Collateral Estoppel
As discussed in the Introduction to this Motion, after losing the decision before the
Oregon Commission, AT&T has now decided to file the same basic claim in multiple states, thus
raising in multiple places the fundamental legal question of whether its complaint is time-barred
by Section 415 in multiple places. This type of litigation strategy is exactly what the doctrine of
collateral estoppel is intended to prevent.
It is well-established that the Full Faith and Credit Clause compels Idaho courts and
agencies to give preclusive effect to the decisions and findings of administrative tribunals and
courts of other states.64 If ever collateral estoppel should be applied by a state commission, this
is the case: it involves the identical agreements as in Oregon, the same legal issue of whether the
Federal Act applies notwithstanding the attempt to plead state law, and the same triggering event
for the running of the statute of limitations. Indeed, the failure to apply collateral estoppel here
would reward AT&T for filing multiple cases in an attempt to forum-shop for an answer that it
likes.
Collateral estoppel serves the purpose of protecting litigants from the burden of re-
litigating an identical issue with the same party or his privy, of promoting judicial economy by
preventing needless litigation, of preventing inconsistent decisions and of encouraging reliance
64 Idaho St. Bar v. Everard 124 P.3d 985, 990 (Idaho 2005) (giving preclusive effect to findings made in
Washington); J&J Contractors/D.T. Davis Const., AJ V v. State by Idaho Transp. Bd.797 P.2d 1383, 1385 (Idaho
1990) ("The doctrine of claim preclusion, or res judicata, applies to the effect of administrative decisions.
QWEST CORPORATION'S MOTION TO DISMISS
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on adjudications.65 The full faith and credit clause renders the doctrines of res judicata and
collateral estoppel compulsory as between the states and precludes AT&T's action.
To bar re-litigation of an issue determined in a prior proceeding, a party seeking
dismissal based on issue preclusion must establish that: (1) the party against whom the earlier
decision was asserted had a full and fair opportunity to litigate the issue decided in the earlier
case; (2) the issue decided in the prior litigation was identical to the issue presented in the
present action; (3) the issue sought to be precluded was actually decided in the prior litigation;
(4) there was a final judgment on the merits in the prior litigation; and (5) the party against
whom the issue is asserted was a party or in privity with a party to the litigation.
Applied here, AT&T is estopped from relitigating both the federal basis of its claim, and
the discovery date for its claim under the applicable statute oflimitations in the Federal Act.
The Oregon Commission Has Ruled (Twice) on the Central Issues of
AT&T's Claim
AT&T Is Estopped from Relitigating the Issue of Whether Its Claims
Fall under Federal Law.
The Oregon Commission found that "(AT&T's) claims squarely fall under federal law
and the kinds of harms contemplated by the federal telecommunications framework, so the
breach of contract claims may not be made separately from the violations of federallaw.68 The
issue decided by the Oregon Commission is identical to the jurisdictional issue in this case-
whether AT&T's attempt to plead state law claims is just an artful attempt to bring otherwise
65 Anderson v. City ofPocatello 731 P.2d 171 , 183 (1986) (citations omitted).
66 Everard 124 P.3d at 990; Baker v. Gen. Motors Corp.522 u.S. 222, (1998) ("For claim and issue
preclusion (res judicata) purposes, in other words, the judgment of the rendering State gains nationwide force.
(citation omitted).
67 Rodriguez v. Dep t ofCorr.29 P.3d 401 , 404 (Idaho 2001) (fIDding full and fair opportunity as to whether
limitations period was tolled).
OPUC Complaint Order at 6.
QWEST CORPORATION'S MOTION TO DISMISS
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time-barred federal law allegations.
The Oregon Commission decision is directly on point here. In Oregon, AT&T filed an
amended complaint alleging, among other claims, a state law breach of contract claim. Qwest
opposed the amended complaint primarily on the ground that the two-year statute of limitations
under 47 U.C. ~ 415 barred the entire action, including the breach of contract claim. AT&T
responded to Qwest's motion, stating that it was not asserting any independent violations under
federal law and were merely pursuing state law claims.
In what is now a final order, the Oregon Commission granted Qwest's motion to dismiss.
The Oregon Commission agreed with Qwest that 47 U.C. ~ 415 , the statute of limitations
under the Federal Act, applied to AT&T's breach of contract claims. The Commission refused
to give any credence to AT&T's obvious attempts to circumvent federal law. The Oregon
Commission s decision is squarely on point and collaterally estops AT&T from trying to assert a
breach of contract claim here:
The interconnection agreements are required under the Telecommunications Act, 47 USC
~ 252, and the provisions cited by AT&T directly implicate federal law. Even
Complainants (AT&T) state
, "
regardless of whether the Commission fmds that AT&T
have brought, or could bring, an independent action for violation of Section 252(i), the
Amended Complaint states a cause of action for breach of contract that incorporates
Qwest's obligations under Section 252(i)." Complainants' Response , 10. These thinly
veiled claims of violations of federal law fall under the federal Communications Act
statute oflimitations, 47 USC ~ 415 , of two years from accrua1.7o
Specifically, the Oregon Commission found that AT&T's claims were based on the allegation
that "Qwest violated section 252(i), thereby depriving (the company) of the opportunity to opt
into more favorable contracts. These claims squarely fall under federal law and the kinds of
harms contemplated by the federal telecommunications framework so the breach of contract
See id. at 3.
OPUC Complaint Order at 6.
QWEST CORPORATION'S MOTION TO DISMISS
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claims may not be made separately from the violations of federal law.71 The Commission
consequently found that the statute oflimitations in section 415 of the Federal Act governed all
of AT&T's claims.
Here collateral estoppel principles reqUIre this Commission to apply the Oregon
Commission s holding that AT&T's breach of contract allegations depend on federal law.
First AT&T had an opportunity to assert this claim and fully and fairly adjudicate it
before the Oregon Commission. The Oregon Commission considered documentary evidence
submitted as exhibits with the pleadings, and then dismissed AT&T's claim based on a well-
reasoned order. 73 Indeed, AT&T then filed a petition seeking reconsideration of the decision.
The Oregon Commission denied AT&T's petition , finding that the "violations are predicated on
rights conferred by 47 USC ~ 252(i), which requires filing of interconnection agreements with
state commissions." The Oregon Commission added that the alleged violations were actions
based on federal law "'masquerading as state law claims.
Second there is no material difference between the breach of contract claim raised in this
action and the breach of contract claim adjudicated by the Oregon Commission. Both actions
involve the same interconnection agreements, and AT&T's claim necessarily depends on federal
law and, in particular, Qwest's obligations under 47 U.C. ~~ 251 and 252. Consequently, the
Oregon Commission s decision precludes AT&T from relitigating that its claims are nothing
more than poorly disguised violations of federal law.
Id. (emphasis added).
72 See e.Complaint at ~ 17 ("If AT&T had known about Qwest's secret agreements with Eschelon and
McLeodUSA in a timely manner, AT&T would have availed itself of the discounts in the Eschelon and McLeod
Agreements.
See OPUC Reconsideration Order.
74 Id. at 3 (discussing the Complaint Order and quotingMFS Int'l 50 F. Supp. 2d at 520).
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Page 21 of 26
Presumably mindful of the Oregon Commission s decision, this time AT&T artfully does
not assert a direct violation of section 252(i) in its present Complaint.Nevertheless, the
allegations in the complaint make clear that AT&T's injuries, if any, arise from AT&T's
complaint that it did not enjoy the benefit of the terms of the Eschelon and McLeod
interconnection agreements, rights that arise, if at all pursuant to section 252(i) and other
provisions of federal law. Qwest's alleged deprivation of those rights was exactly the issue that
was before the Oregon Commission. Thus, the issue in both actions is identical.
Third AT&T raised and "actually litigated" the issue before the Oregon Commission
and it was essential to a final decision on the merits. The central dispute was whether AT&T
stated a claim under federal or state law. AT &T argued that an independent state law violation
arose from its not receiving the same terms as were included in the McLeod and Eschelon
interconnection agreements. The Oregon Commission disagreed and decided (correctly) that
AT&T only was presenting federal law claims "masquerading" as state law claims.
Fourth the Oregon Commission s decision is a final, valid judgment on the merits.
Fifth AT&T brought both the action in Oregon and the present action against Qwest.
These can be no dispute that the parties are the same.
In sum, giving preclusive effect to the Oregon Commission decisions furthers the purpose
of the doctrine of issue preclusion.It protects this Commission and respondents from the
vexation of relitigating identical issues with identical parties '" and preventing "unnecessary
litigation" and "thereby furthering the interest of judicial economy and efficiency.75 AT&T
already litigated and lost the same set of operative facts before the Oregon Commission. AT&T
should not now be allowed to file in another forum and get another bite at the apple.
75 Everard 124 P.3d at 990.
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Page 22 of 26
AT&T Is Estopped from Relitigating the Discovery Date For Its Claim
The Commission also should find that AT&T may not reargue the discovery date
litigated before the Oregon Commission. The Oregon Commission determined that Section
415's two-year limitation began to run in March 2002 when the Minnesota Commission opened
a docket on the unfiled agreements issue to which AT&T was an active party. The Oregon
Commission also noted that "AT&T had raised the issue in Section 271 proceedings before the
FCC and the states and filed its first complaint in Iowa in February 2002.76 Based on these
facts, the Oregon Commission determined that AT&T "had 'reason to know of the harm' that
provided the basis of their claims beginning in March 2002" and therefore its claims were
barred. 77
AT&T is precluded from mounting another challenge to the discovery date under Section
415. The Commission would be dealing with the same question-when AT&T knew or should
have known in the exercise of reasonable care of its injury to trigger the running of the
applicable statute of limitations period. Determination of the applicable discovery date would be
a necessary and essential question to any claim arising from the same injury. The facts and legal
issue underlying AT&T's claim in this case are indistinguishable from those at issue in the
Oregon Commission adjudication. AT&T had the opportunity to litigate the discovery date
before the Oregon Commission, and this determination was a necessary element to the
Commission s conclusion that AT&T's action was barred by section 415. This Commission
should enforce the same conclusion under principles of collateral estoppel.
Id. at 7.
77 Id.
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Page 23 of 26
III. Conclusion
For all the above reasons, Qwest requests an order of this Commission dismissing
AT&T's Complaint with prejudice.
DATED this 27th day of September, 2006.
Respectfully submitted
fl~~
Mary S. Hobson (ISB. No. 2142)
999 Main, Suite 1103
Boise, ID 83702
Tel: [phone]
marv.hobson~qwest.com
Adam L. Sherr
Corporate Counsel, Qwest
1600 7th Avenue, Room 3206
Seattle, W A 98191
Tel: [phone]
adam. sherr(2i2qwest. com
Attorneys for Qwest Corporation
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Page 24 of 26
CERTIFICATE OF SERVICE
I do hereby certify that a true and correct copy of the foregoing QWEST CORPORATION'
MOTION TO DISMISS was served on the 27th day of September, 2006 on the following
individuals:
Jean D. Jewell
Idaho Public Utilities Commission
472 West Washington Street
o. Box 83720
Boise, ID 83702
Telephone [phone]
Facsimile: [phone]
i i ewell~puc. state.id.
Molly O'Leary
Richardson & O'Leary
515 North 2ih Street
O. Box 7218
Boise, Idaho 83707
moll v(2i2ri chardsonandolearv. com
Theodore A. Livingston
Dennis G. Friedman
Mayer, Brown, Rowe & Maw LLP
71 South Wacker Drive
Chicago, IL 60606-4637
dfriedman(2i2mayerbrown. com
Dan Foley
General Attorney & Assistant General Counsel
AT&T West
O. Box 11010
Reno, Nevada 89520
df6929 (2i2att. com
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Hand Delivery-1L U. S. Mail
Overnight Delivery
Facsimile-.X Email
Hand Delivery-1L U. S. Mail
Overnight Delivery
Facsimile-1L Email
Hand Delivery-X U. S. Mail
Overnight Delivery
Facsimile
Email
Mary S. Hobson
Attorney for Qwest Corporation
QWEST CORPORATION'S MOTION TO DISMISS
Case No. QWE-06-17
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Page 26 of 26
ORDER NO. 06-465
ENTERED 08/16/06
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UM 1232
AT&T COMMUNICATIONS OF THE
PACIFIC NORTHWEST, INC., and TCG
OREGON, TIME WARNER TELECOM
OF OREGON, LLC, and INTEGRA
TELECOM OF OREGON, INe.
ORDER
Complainants
QWEST CORPORATION
Defendant.
DISPOSITION: PETITION FOR RECONSIDERATION DENIED
On July 10, 2006, AT&T Communications of the Pacific Northwest, Inc.
(AT&T), and TCG Oregon (Complainants) filed a petition for reconsideration, arguing
that the six year statute of limitations under state law governing contracts should apply to
violations of the interconnection agreements between the parties by Qwest Corporation
(Qwest). On July 25, 2006, Qwest filed its response, arguing that because the
Telecommunications Act gives the Commission the authority to enforce the
interconnection agreements, its statute of limitations should apply. The petition isdenied.
Applicable Law
An application for reconsideration may be made within 60 days of the
service of an order. See ORS 756.561. The Commission may grant an application for
reconsideration if there is new evidence which had been previously unavailable, a change
in law or policy since the original order was issued, an error of law or fact which was
essential to the decision, or other "good cause." OAR 860-014-0095(3).
Parties' Arguments
AT&T argues that the Commission erred when it "reformulate( dJ AT&T'
breach of contract claims" and
Qwest Motion to Dismiss
Exhibit A
ORDER NO. 06-465
disregard(ed) (i) the actual allegations set forth in the
amended complaint, (ii) the nature of the interconnection
agreement regime under the federal Telecommunications
Act of 1996 ("1996 Act"), and (iii) the body of case law
holding that matters concerning the construction or
interpretation of interconnection agreements entered into
pursuant to Section 252 of the 1996 Act present issues of
state contract law.
Petition, 4-5. Because this Commission applied federal law to the claims, it held that the
two year statute of limitations set forth in 47 USC ~ 415 applied to the claims, not the six
year statute of limitations applicable under state contract law, as set forth in ORS 12.080.
See Order No. 06-230.
AT&T asserts that the Commission should not have analogized AT&T's
claims to those in Marcus v. AT&T Corp.138 F3d 46, 54 (2nd Cir 1998), and MFS
International, Inc., v. International Telecom Ltd., 50 F Supp 2d 517,520 (ED Va 1999),
because those involved violations of federal tariffs, which have the force of law. On the
other hand, AT&T argues, its complaint claimed a breach of contract, which should be
governed by state law. To its petition for reconsideration, AT&T attached a recent.
decision by the Washington State Utilities and Transportation Commission, which agreed
that a breach of contract claim should be subject to the statute of limitations UIider state
contract law, six years. See AT&T v. Qwest, Docket UT -051682; Order 04, 2006 Wash.
UTC Lexis 266 (June 7, 2006).
As further support, AT&T cites a recent United States Supreme Court case
for the proposition that breach of contract claims should be subject to state contract law.
See Empire HealthChoice Assur., Inc. v. McVeigh, 547 US _126 S Ct 2121 (2006). In
that case, a health insurance company sought repayment of funds from the estate of a
claimant, arguing that the decedent was "in breach of the reimbursement provision of the
Plan.See slip op at 7 (126 S Ct at 2129). The Court held that Congress had preempted
state law for certain aspects of the health insurance contract, which was negotiated by the
federal government on behalf of its employees pursuant to federal law. However, the
reimbursement provision at issue in Empire HealthChoice was not preempted and did not
implicate an identifiable conflict between federal policy and the operation of state law.
See slip op at 12 (126 S Ct at 2132). The Court also held that "Empire s contract-derived
claim for reimbursement is not a 'creature() of federal law,'" and that "the reimbursement
right in question * * * is not a prescription of federal law." Slip op at 15 (126 S Ct at
1234). Finally, the Court concluded, "This case * * * involves no right created by federal
statute. * * * While the (Master Contract) provides for reimbursement, (the federal
statute s) text itself contains no provision addressing the reimbursement or subrogation
rights of carriers." Slip op at 16 (126 S Ct at 2135).
In opposition, Qwest argues that because the Commission gets its
authority to review and enforce interconnection agreements from the
Telecommunications Act, the statute of limitations found therein must apply to any
ORDER NO; 06-465
disputes related to the agreements. See Pacific Bell v. Pac West Telecomm, Inc., 325 F3d
1114, 1126 (9th Cir 2003); Petition of SBC Tex,Ruling on Motion to Dismiss, 2005 WL
2834183, at 2 (Tex PUC, Oct 26,2005). Similar to arguments made in the initial
proceeding, Qwest cited a Ninth Circuit case from 1984 in which the court held that the
two year statute of limitations should apply to a civil rights claim involving a
telecommunications carrier. See Pavlak v. Church 727 F2d 1425, 1426-27 (9th Cir .
1984). . Qwest also challenges AT&T's interpretation of Empire HealthChoice ;;lfguing
(1) that the Supreme Court was not deciding how the contract language should be
interpreted, but whether a contract-derived claim should be subject to federal law, and (2)
that the statutory framework in Empire HealthChoice was more narrowly circumscribed
than the Telecommunications Act of 1996.
Conclusions
It is not easy to detennine when state law applies and when federal law
applies to interconnection agreements. As the Seventh Circuit observed, in attempting to
sort through the apparently overlapping state and federal jurisdiction:
This allocation of authority has a potential to cause
problems. Federal jurisdiction under ~ 252(e)(6) is
exclusive when it exists. Thus every time a.carrier
complains about a state agency s action concerning an
agreement, it must start in federal court (to fmd out whether
there has been a violation of federal law) and then may
move to state court if the first suit yields the answer 'no.
This system may not have much to recommend it, but, as
the Supreme Court observed in Iowa Utilities Board the
1996 Act has its share of glitches, and if this is another,
then the legislature can provide a repair.
Illinois Bell Tel. Co. v. WorldCom Tech., Inc., 1999 S. App. LEXIS 20828, *25-26; 16
Comm. Reg. (P & F) 232 (1999) (amending original order at 179 F3d 566 (7th Cir 1999)),
cert den 535 US 1107 (2002). The parties have not cited, and we could not find, a court
which has definitively decided which statute of limitations should apply to violations of
an interconnection agreement.
We are not persuaded that the violations alleged by AT&T are strictly
breaches ofa privately negotiated contract. The violations are predicated on rights
conferred by 47 use ~ 252(i), which requires filing of interconnection agreements with
state commissions. The alleged violations are "'actions based on (federal law)
masquerading as state law claims.'" . Order No. 06-230, 6 (quoting MFS International
Inc., 50 F Supp 2d at 520). Interconnection agreements are entered into pursuant to
federal law, and have the force of federal law. See Pacific Bell, 325 F3d at 1127 (the
Telecommunications Act mandates that "inter-connection agreements have the binding
force of law.
ORDER NO. 06-465
AT&T's citation to Empire HealthChoice is not to the contrary. In that
case, the underlying provision, the reimbursement provision, was not derived :ITom
federal law, so resolution of any conflicts regarding that provision was properly placed in
state court. In this case, AT&T is asserting a violation of Section 36 of the
interconnection agreement between AT&T and Qwest, which states that Qwest will offer
Network Elements to CLEC on an unbundled basis in accordance with the terms of the
contract, Oregon law, and "the requirements of Section 251 and Section 252 of the
Federal Act." By not filing interconnection agreements with the Coinmission, Qwestprevented AT&T :ITom opting into those agreements, in violation of Section 252(i).
Based on this analysis, we find that there was no error in our conclusions
oflaw in applying the statute oflimitations :ITom the Telecommunications Act to AT&T'
claim against Qwest for a violation of Section 252(i), nor is there good cause to
reconsider our earlier order.
ORDER
IT IS ORDERED that the Petition for Rehearing and Reconsideration of
Order No. 06-230 is denied.
Made, entered, and effective AUG 1 6 2006
John Sava e
nmmiSSioner
y Bamn
Commissioner
A party may appeal this order by filing a petition for review with the Court of Appeals in
compliance with ORS 183.480-183.484.
ORDER NO. 06-230
ENTERED 05/11/06
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UM 1232
AT&T COMMUNICATIONS OF THE
PACIFIC NORTHWEST, INC., and TCG
OREGON, TIME WARNER TELECOM
OF OREGON, LLC, and INTEGRA
TELECOM OF OREGON 1NC.,
Complainants,
QWEST CORPORATION
Defendant.
ORDER
DISPOSITION: MOTION TO DISMISS GRANTED
This case is the second part of our review of Qwest Corporation s (Qwest)
failure to file certain interconnection agreements with the Commission, in violation of state
and federal law. In reviewing this motion, we first discuss our investigation and resolution of
docket UM 1168, then address the issues raised in this docket.
Staff Investigation and Resolution ofUM 1168
On September 7, 2004, the Commission adopted Staff s recommendation to
formally open docket UM 1168 to investigate allegations that Qwest had failed to file certain
interconnection agreements for Commission approval. In its recommendation, Staff reported
that the allegations rust arose in Minnesota in 2002. See September 7, 2004 Public Meeting
Regular Agenda, Item 3, Staff Memorandum ("Staff Report"). In response, Qwest petitioned
. the Federal Communications Commission (FCC) for a declaratory ruling that the contracts
did not need to be filed with state commissions because they were not interconnection
agreements under the statute; the FCC ruled against Qwest's interpretation of the law. See
id. Subsequently, several other states initiated investigations against Qwest, including
Oregon, which began an informal investigation in March 2002. See id. at 4-5. Staff
speculated that, in the unfiled agreements, Qwest gave preferential treatment to some
competitive local exchange carriers (CLECs) in exchange for thoseCLECs declining to
oppose the Qwest/ US West merger and Qwest's Section 271 application at the FCC. See id.
Qwest Motion to Dismiss
Exhibit B
ORDER NO. 06-230
at 3-4. According to the Staff report, the issue of unfiled contracts was raised by AT&T in
the Section 271 process before the FCC:
AT&T argued that Qwest's secret agreements with competitors
were evidence of Qwest discriminatory practices, and that such
practices were not consistent with the requirement that Qwest
irreversibly open its local service markets to competition.
AT&T pointed to provisions in some agreements where the
CLEC agreed not to oppose Qwest's Section 271 application in
exchange for more favorable treatment.
See id.
In the course of the informal investigation, Staff obtained advice from the
Attorney General that ORS 759.990 did not allow the Commission to award refunds to
CLECs harmed by Qwest's failure to file contracts. A meeting was held on September 30,
2004, between Qwest, Staff, and CLECs, many of whom became intervenors, to discuss the
impact of the investigation.
A prehearing conference was held October 26, 2004, and a schedule was set to
allow for submission of an issues list and testimony. Time Warner Telecom of Oregon LLC,
Covad Communications Company, Integra Telecom of Oregon, Inc., Rio Communications,
Inc., and Universal Telecom, Inc., intervened in the proceeding. The schedule was
suspended while Qwest and Staff worked out a stipulation, which was submitted on February
2005. The intervenors neither supported nor opposed the stipulation, and the stipulation
between Qwest and Staff was ultimately adopted. See Order No. 05-783.
In that order, the Commission found that Qwest violated Oregon
Administrative Rille (OAR) 860-016-0020(3) in failing to file 29 agreements, including three
closely related pairs of agreements. Staff determined that failure to file 13 of the agreements
constituted major violations, because there was discriminatory treatment of CLECs as a
resillt. Sixteen of the violations were considered minor, because there was no discriminatory
treatment. Consequently, the parties agreed to a penalty of $50,000 for 13 agreements, and
$25,000 for 16 other agreements, resulting in a fmal settlement of $1,050,000, which was
subsequently paid pursuant to a judgment entered by Marion County Circuit Court.
The stipulation and order did not compensate for any harm that may have
been done to CLECs. The Commission stated:
This settlement does not preclude the CLECs from pursuing
other litigation. The Attorney General advised Staff that, under
the applicable penalty provision;.ORS 759.990, the
Commission does not have the authority to award reparations
for injuries suffered by CLECs due to Qwest's failure to file
ORDER NO. 06-230
the agreements. See Staff/3. Intervenors did not provide any
testimony regarding the impact of Qwest's failure to file
certain contracts or QPposing the settlement.
Order No. 05-783 at 3.
Complaint
Procedural History
On January 13,2006, AT&T Communications of the Pacific Northwest, Inc.,
et al. (Complainants) filed a complaint against Qwest Corporation (Qwest). Complainants
assert economic injury arising from Qwest Corporation s failure to provide
nondiscriminatory access to terms and provisions in interconnection agreements that Qwest
unlawfully did not file with the Commission. Specifically, Complainants premise their
request for relief on four bases: (1) violation of federal law, 47 USC ~ 251, 252;
(2) unjust discrimination in rates, ORS 759.260; (3) undue preferences and prejudices,
ORS 759.275; and (4) breach of contract. See Amended Complaint, 7-10.
On February 2, 2006, Qwest filed a motion to dismiss on four grounds:
(1) the Commission does not have jurisdiction to award the relief requested by Complainants;
(2) the complaint is barred by the federal statute of limitations; (3) federal law does not
provide any cause of action for which Complainants may sue; and (4) the filed rate doctrine
prohibits the Commission from awarding damages.
On February 17, 2006, Complainants filed a response to Qwest's motion.! In
its response, Complainants clarify that they are not seeking reparations based on Qwest'
violation of federal law, per se, but only to the extent that federal provisions have been
incorporated into their contracts. See Complainants' Response , 10. Based on this
clarification, we conclude that no independent violations under federal law are asserted as
grounds for relief in this docket.
Legal Standard
In reviewing Qwest's motion to dismiss, "we assume the truth of all
allegations, as well as any inferences that may be drawn, and view them in the light most
favorable to the nonmoving party. Our review of a motion to dismiss based on the expiration
of the statute of limitations, ORCP 21A(9), is limited to what appears on the face of the
1 Qwest also filed a Reply to Complainants' Response to Motion to Dismiss (Feb 24 , 2006); Complainants filed
a Supplemental Authority and Request to Supplement Record (Feb 28, 2006); and Qwest med a Response to
Complainants' Notice of Supplemental Authority (Mar 3, 2006). OAR 860-013-0050(3)(d) provides for a
response to a motion, but no rule provides for a third, fourth, or even a fifth round of briefing, nor did the parties
provide a reason why the extra filings should be taken into account. The additional filings are not considered inthis ruling.
ORDER NO. 06-230
pleading.Dauven v. St. Vincent Hospital and Medical Center 130 Or App 584, 586 (1994)
(Citations omitted). "To survive a motion to dismiss on limitations grounds, a complaint does
not have to show that the action is timely; it suffices if the complaint does not reveal on its
face that the action is not timely.Munsey v. Plumbers ' Local #51, 85 Or App 396, 399
(1987) (citing ORCP 21A(9)). With these standards in mind, we address the motion to
dismiss by each remaining claim: violation of state law and breach of contract.
ORS 759.260 and ORS 759.275
First, Qwest argues that the Commission does not have the jurisdiction to
award private refunds for violations of ORS 759.260 and ORS 759.275. See Qwest Motion
to Dismiss, 3. Further, Qwest asserts that any injury to Complainants is speculative at best,
and cannot be quantified, in contrast to previous Commission orders awarding damages to
private parties. See id. at 6-7. Qwest also argues that the federal statute of limitations bars
Complainants' state claims. See id. at 12-13.
Complainants respond that this complaint is not governed by the specific
statutes in chapter 759, but the more general complaint statutes in chapter 756. See
Complainants' Response, 6. In particular, Complainants argue that ORS 756.500(2)
contemplates that the Commission may grant an order of reparation to a party to a complaint
proceeding. See id. Complainants also cite several cases in which the Commission has
awarded refun4s. See id. at 7-9 (citing In re Metro One IC 1, Order No. 00-623 (OPUC
Oct 6, 2000), and Pacific Northwest Bell v. Katz, 116 Or App 302 (1992), rev den 316 Or
528 (1993)).
ORS759.990 sets forth the Commission s jurisdiction to set pemilties for
certain actions by a telecommunications carrier. The statute sets out the penalties for both
ORS 759.260 and 759.275, a fine of not less than one hundred dollars. See ORS 759.990(1),
(2). To impose the fine, the Commission must make proper findings in an order; then, the
Attorney General takes the order to Marion County Circuit Court to obtain a judgment
against the offending carrier. See generally ORS 756.160(4). Where the Oregon legislature
establishes a statutory right that did not exist at common law, it also establishes the exclusive
remedy. See Gilbertson v. McLean et aI, 216 Or 629,635-36 (1959). This doctrine was
confmned by the Court of Appeals, which held that a common law remedy may remain if its
purpose is to provide relief for a different sort of hann than that contemplated by the
statutory remedy. See Carsner v. Freightliner Corporation, 69 Or App 666 673-rev den
298 Or 334 "(1984).
This case more closely resembles Gilbertson than Carsner. In this case, the
legislature established a statutory right that did not exist at common law, andalso set forth
the remedy to any violations of that right. Specifically, the law that put into place the unjust
discrimination statutes, see Or L 1987, ch 447, ~~ 46, 49, also purposely stated the remedies
for violations of those statutes, see id. at ~ 52. For this reason, the Commission does not
have the jurisdiction to award the relief that Complainants seek for Qwest's alleged
ORDER NO. 06-230
violations of ORS 759.260 and 759.275? Complainants' claims for damages based on
violations of ORS 759.260 and 759.275 are dismissed.
Breach of Contract
Complainants contend that Qwest violated the tenns of existing
interconnection agreements by not offering them similar tenns and conditions contained in
the unfiled contracts. Complainants set forth similar provisions in four contracts to show
how Qwest breached the contract. For example, Sections 36 of the AT &T/Qwest
Agreement, ARB 3, and the Integra/Qwest Agreement, ARB 216, provide:
ILEC will offer Network Elements to CLEC on an unbundled
basis on rates, terms and conditions that are just, reasonable
and non-discriminatory in accordance with the terms and
conditions of this Agreement, the Oregon Statutes and
Regulations and the requirements of Section 251 and
Section 252 ofthe Federal Act.
Qwest argues that, to the extent violations of federal law give rise to
Complainants' breach of contract claims , the federal statute of limitations of two years
applies under 47 USC ~ 415. See Qwest Motion to Dismiss, 2 n 2. In support of its
argument, Qwest cites Pavlak v. Church, 727 F2d 1425 (9th Cir 1984), in which the court
held that a civil rights claim that had no statute of limitations could import the nearest
applicable limit, in that case, the statute of limitations for violations of the
Telecommunications Act. Because the Commission is regulating telecommunications on
behalf of Congress under federal law, Qwest maintains that the federal statute of limitations
should apply. See Qwest Motion to Dismiss, 9-10. Qwest asserts that the statute of
limitations began running when the Complainants found out about the unfiled contracts in
Minnesota in March 2002. See id. at 11.
Complainants respond that they are asserting a breach of contract, and that the
interconnection agreements between them and Qwest integrated provisions of state and
federal law requiring the filing of contracts and opportunity to opt in to those contracts. See
Complainants' Response, 11. They argue that the applicable statute of limitations is found in
Oregon law and provides a six-year limitation on actions "upon a contract" or "upon a
liability created by statute.See ORS 12.080(1), (2). Even if the federal statute of limitations
. is found to apply, Complainants argue that the time of discovery was the date on which the
protective order in the unfiled contracts docket was issued, October 25, 2004. See
Complainants' Response, 11-12.. Further, Complainants state that any statute of limitations
should be tolled for the duration of the unfiled contracts case, in which they were pursuing
their rights through that case; See id. at 12.
2 Because private claims for refunds are not permitted under the statutory framework, there is no need to decide
at this time whether the Commission may award refunds under ORS 756.500.
ORDER NO. 06-230
First, although Complainants attempt to posit their claims as breach of
contract claims, the violations they assert are actually of federal law. The interconnection
agreements are required under the Telecommunications Act, 47 USC ~ 252, and the
provisions cited by Complainants directly implicate federal law. Even Complainants state,
. "
regardless of whether the Commission fmds that Complainants have brought, or could
bring, an independent action for violation of Section 252(i), the Amended Complaint states a
cause of action for breach of contract that incorporates Qwest's obligations under Section
252(i)." Complainants' Response, 10. These thinly veiled claims of violations of federal law
fall under the federal Communications Act statute of limitations, 47 USC ~ 415, of two years
from accrual.
Support for this characterization of Complainants ' breach of contract claims
can be found in federal case law, which has more often dealt with the question of whether
state law breach of contract claims should be heard in federal court because they were really
claims under federal law. In Marcus v. AT&T, 138 F3d 46,54 (2ndCir 1998), a federal court
stated that an adjudicator must carefully examine a telecommunications claim under state law
to detennine whether it "actually arose under federal law " or arose under state law, although
the question in that case was whether the case should be remov€?-d to federal court. See id.
55. In that case, a breach of warranty claim that arose under a tariff required by the Federal
Communications Act was considered a matter of federal law, and not strictly within the
bounds of state law. See id. at 55-56. Similarly, in MFS International, Inc. v. International
Telecom Ltd., 50 F Supp 2d 517,520 (ED Va 1999), the court stated that "state law claims
themselves will be preempted if, on close scrutiny, they are revealed to be actions based on
the MFS tariff masquerading as state law claims." In that case, the court found that the
breach of contract claims were actually actions under the federally filed tariff, which arise
under the federal telecommunications act, and are therefore subject to the federal statute of
limitations. See id. at 521. Where the action "is necessarily based on (federal law) rather
than on any contract," the federal statute of limitations under section 415(a) applied. See id.
at 524.
The Telecommunications Act does not preempt all claims related to violations
of its provisions. In fact, the Act provides a savings clause: "Nothing in this Act contained
shall in any way abridge or alter the remedies now existing at common law or by statute, but
the provisions of this Actare in addition to such remedies." 47 USC ~ 414. This statute has
been held to pennit state law actions barring fraudulent and deceptive advertisement and
billing practices and to preserve state laws protecting privacy. See Higgins v. AT&T, 697F
Supp 220,222-23 (ED Va 1988). In the present case, Complainants' allege Qwest violated
section 252(i), thereby depriving them of the opportunity to opt into more favorable
contracts. These claims squarely fall under federal law and the kinds of harms contemplated
by the federal telecommunications framework, so the breach of contract claims may not be
made separatelr from the violations of federal law and are not otherwise preserved by47 USC ~ 414.
3 Under the analysis found in
Marcus, it is unclear whether Complainants may even have a separate claim for
breach of contract for the alleged violations of federal law. Qwest makes no such argument, and there is no
ORDER NO. 06-230
For these reasons, we conclude the Act's statute of limitations applies to
Complainants' breach of contract claims. That provision states: "All complaints against
carriers for the recovery of damages not based on overcharges shall be filed with the
Commission within two years from the time the cause of action accrues, and not after.
47 USC ~ 415(b). The remaining question is when that two-year limitation began.
Complainants argue that the clock should begin running from the time the Complainants had
access to the unfiled contracts in Oregon, when the protective order was issued in UM 1168
on October 25, 2004. Qwest argues that the time begins to run at the time of the unfiled
contracts dispute in Minnesota, in March 2002.
The general rule is that a cause of action accrues when a plaintiff knows or
has reason to know of the harm or injury that is the basis of the cause of action.See MFS
International, Inc., 50 F Supp 2d at 524. Qwest notes, and Complainants do not dispute, that
Minnesota began its investigation in March 2002. See Qwest Motion to Dismiss, 11. AT&T
and Time Warner were parties to the Minnesota case in 2002, and AT&T and Integra were
named defendants in a similar case before the Washington Utilities and Transportation
Commission in 2003. "Based on the Minnesota complaint, Oregon and many of the Qwest
states soon started investigations of Qwest's secret contracts. Oregon staff began an informal
investigation in March 2002.See Staff Report, 2. In fact, AT&T initially raised the issue in
Section 271 proceedings before the FCC and the states and filed its fIrst complaint in Iowa in
February 2002. See id. at 4-5. Based on Complainants' awareness ofunfiled contracts in
other states, they had "reason to know of the harm" that provided the basis of their claims
beginning in March 2002.
Complainants assert that if the clock begins to run in March 2002, then the
time should be tolled while they were pursuing their rights through the Staff investigation in
UM 1168. While Complainants participated in that case, they did not preserve their rights to
pursue a private cause of action. Equitable tolling will only be allowed in extraordinary
circumstances: "Meant to 'ensure that the plaintiff is not, by dint of circumstances beyond
his control, deprived of a reasonable time in which to file suit,' equitable tolling is
unwarranted where a litigant has 'failed to exercise due diligence in preserving his legal
rights.'" See Communs Vending Corp of Ariz., Inc, v. FCC, 365 F3d 1064, 1075 (DC Cir
2004) (citations omitted) (federal court reviewing Federal Communications Commission
interpretation of 47 USC ~ 415). That court specifically rejected the plaintiffs' industry trade
association filing of a petition for a declaratory ruling as evidence that plaintiffs had
exercised due diligence in preserving their rights. See id. at 1076.
That situation is analogous to this one, in which Time Warner Telecom of
Oregon, LLC, and Integra Telecom of Oregon, Inc., were intervenors in UM 1168, the Staff
investigation into Qwest's failure to file interconnection agreements for Commission
approval under Section 252(a)(1) of the Telecommunications Act. In response to a
suggestion by Staff, the schedule in that case was suspended pending a stipulation, but there
need to decide whether Complainants make the separate claim, because in this instance, it is barred by thefederal statute of limitations.
ORDER NO. 06-230
was no intervenor response requesting further proceedings. See UM 1168, Ruling (Dec 9
2004). A testimony schedule was later set, but no intervenor submitted testimony. See
UM 1168, Ruling (Mar 23, 2005). Given the lack of intervenor activity in that case, and the
Complainant's failure to file a placehol~er complaint at that time, it cannot be fairly said that
Complainants diligently pursued their claims so that the statute of limitations should be
tolled. Therefore, the breach of contract claims, which are based on federal law, are barred
by the statute oflimitations under 47 USC ~ 415.
Because the Commission does not have jurisdiction over the claims raised by
Complainants, either because the requested relief is not available or the claim is time barred
the motion to dismiss the complaint in its entirety is granted.
ORDER
IT IS ORDERED that the motion to dismiss the complaint is granted.
Made, entered, and effective MAY 1 1 2006
~C?-
Commissioner
A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A.
request for rehearing or reconsideration must be filed with the Commission within 60 days of
the date of service of this order. The request must comply with the requirements in OAR 860-
014-0095. A copy of any such request must also be served on each party to the proceeding as
provided by OAR 860-013-0070(2). A party may appeal this order by filing a petition for
review with the Court of Appeals in compliance with ORS 183.480-183.484.
Q U)~fCeP~/(I
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AT&T
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Gary B. Witt
Senior Attorney
February 27, 2001
Room 1575
1875 Lawrence Street
Denver. CO 80202
303298-6163
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Judi K. Cooper
Executive Secretary
Iowa Utilities Board
350 Maple A venue
Des Moines, IA 50319
Dear Ms. Cooper:
AT&T is extremely concerned with recent revelations that Qwest may have entered
into a series of secret agreements granting preferential treatment to some CLECs in
Minnesota.! In this regard, AT&T would like to take this opportunity to request that
the Iowa Utilities Board initiate an investigation into Qwest's business practices in
Iowa to detennine whether the same or a similar practice is occurring here.
Following a six month investigation into potential anticompetitive beh~vior by Qwest
the Minnesota Department of Commerce on February 14, 2002, fileda complaint
against Qwest alleging it has entered into a series of secret agreements with various
CLECs to provide preferential treatment for those CLECs with respect to
interconnection, access to network elements, resale, number portability, dialing parity,
access to rights-of way, reciprocal compensation, and collocation.2 These agreements
have been characterized as being amendments to existing interconnection agreements.
As the Board is well aware, Qwest is under a legal obligation to submit agreements of
this nature to the state commission for approval, to make all such agreements public,
and to provide the same services to other CLECs on a non-discriminatory basis.3 The
Minnesota Department of Commerce asserts in its complaint that Qwest did not obtain
the required commission approval for these agreements, that Qwest has not made the
agreements public as required, and that Qwest is not providing the same terms and
conditions to otper CLECs on a non-discriminatory basis.
I See attached newspaper articles (Attachment A). .
1/1 the Matter of the Complaint of the Minnesota Department of Commerce against Qwest
Corporation, before the Minnesota Public Utilities Commission, Docket No. P-421IDI-Ol-814. filed
February 14,2002. See Complaint, at paras. 17-25 (Attachment B).
3 See 47 U.C. ~252(a)-(i). See also 47 U.C. ~251(c).
Qwest Motion to Dismiss
Exhibit C
Iowa Utilities Board
Page 2
The Minnesota Department of Commerce is seeking civil penalties of between $50
million and $200 million.
Qwest may be entering into these agreements to silence opposition to its ~271
application there.
If the existence of these secret Minnesota agreements is established, it will demonstrate
a pattern of behavior on Qwest s part, in that Qwest will have been shown to have
entered a series of such agreements, and these agreements are therefore not merely an
isolated instance. In addition, because of the multi-state operations of Qwest and the
various CLECs involved, it appears likely at this point that the practice potentially
crosses state boundaries.
AT&T urges the Board to take a close look at the attached Minnesota complaint, and toinitiate a comprehensive investigation of Qwest's business practices , in order to expose
any secret agreements which may have been executed ina similar fashion to those
alleged to have occurred in Minnesota.
. .
.. cAT&T believes that the practices alleged in the Minnesota complaint may not be
limited solely to Minnesota, and that they are serious enough to merit, at a: minimum
. furtherinvestigation into' Qwest s business practices in Iowa. Indeed, these
allegations-which have resulted from a long and careful examination of Qwest'
business practices by an independent regulatory body-show clearly that there is goodcause to believe that similar agreements exist here, and must be examined more
closely.
. '. "
Very truly yours,
6((.l 'j 71 (()ilt'
Gary YVitt
Attachments (2)
cc: . OCA - Alice Hyde
Page 1 of 2
Attachment A
Subject: FW; Big news In MN
State regulators say Qwest made secret 'agreements with competitorsSteve Alexander
Star Tribune
Published Feb 15, 2002
State regulators Thursday accused Owest CommunIcations of breaking state and federal laws by restricting
competition in the local telephone market. They sought eMl penalties against Owest that could range from $50
million to $200 million.
In a filing with the Minnesota Public Utilities Commission (PUC), the Minnesota Department of Commerce
accused Owest of restricting competition by secretly making agreements with some Companies that worked to the
disadvantage of others. OWest is the largest phone company In Minnesota, controlUng 2 million of the 2.7 milliontelephone lines In the state.
If true, such secret agreements would violate state and federal laws that require awest to be reasonable and non-
cfiscrfmlnatory In agreements with other focal phone competitors. Firmg the agreements with the PUC Is supposed
:0 ensure that fairness.
rhe agreemenls In question cover the way competitors pay Owest, connect to Qwesfs network. resell Owest
elephone lines to customers and enable customers to keep their old telephone numbers when they switch localmone companies.
;)west officIals denied any wrongdoing. Chuck Ward, Qwest's vice president for polIcy and law in Denver, said;)west has negotIated more than 150 agreements with competitors in Minnesota, and -our belief. Is that tk~ ''t~rcomectlon agreements have been filed with the PUC in Minnesota.-
, ".. ,~".- . . : , ".!
lowever, after an investigation of more than six months. the ~erce Department said it:had'ieamed that."the' . ,
; .! .)!,
seret agreements either change or acid to the approved agreements- and that they have not been ~ubmltted to
. . . ~ - "' .' .
1e PUG for approval.
ony Mendoza, Commerce Department deputy commissioner for telecommunications, sald that -Owest playedIVOrites with some competitors in the market, leaving others out In the cold. -
west -entered into legal contracts with these (competing) companies to provide certain Interconnection-type
arvices that are better than what was available to other carriers . Mendoza said.
:!C8USe of confidentiality rules govemlng Owest trade secrets, Mendoza said he could not reveal the names ofe companies with which Owest Is alleged to have made secret agreements, or the taRnS of those agreements.
. said the Commerce Department is asking the PUC to make that Infonnation public and to
holds hearing oni! aBegatJons within 30 days.
. he PUC rrlds that violations occurred, it could fine Qwest based on the number of offenses and the time period
ring which they happened, Mendoza said. The maximum amount the PUC could fine Owest Is $56.2 milDon to02.5 rmlUon. If Owest were fined by the PUG, it would be the first time any penalties have been assessed under
'999 state law that prohibits anticompetitive conduct by Owest.
der state law, only Owest would be flnanclaRy Dable for not disclosing the agreements because it is the onlyitpany that Is required to disclose them to the PUC, Mendoza said. Companies that made the agreemenls with
lest would not face any penalties, he said.
in interview, Mendoza questioned whether Owest was trying to use sweetheart agreements with some local
aphone competitors to silence its critics at state regulatory hearings.
9 noticed conspicuous behavior. Some of the competitors that had been critics of Owest were no longer
,wing up to talk about Owest service quality" at PUG hearings, Mendoza saId.
rd said that If competing telephone companies don t have any complaints about Owest, "then I think we
19 a good job.
...; "
Page 2 ~f2
The aUegation about silencing critics also comes at a time when Owest Is trying to win PUG approval to enter the .
long-distance telephone market in Minnesota. Owest has been barred by law from offering long-distance in the 14-
state region where it offers local telephone service. But It can petition those IncflVidual states and the FederalCommunications Commission to let it offer 10ng-cflStance if it can show that it has competition for local service ammeets some other conditions.
Ward said Owest is not as far along in its efforts to enter the long-distance business in Minnesota as It Is In other
states, largely because regulatory review here has been slower.
But AT&T. a Owest competitor in the local busIness telephone market. drew a connection between the Commerm
Department allegations and Owesfs bid to enter the long-distance market In
Its 14-state local-service te"'tory.
"We've had the sense. based on our conversations with other competitors, that Owest may be entering into
agreements with other carriers that contain terms that prefer one carrier over another, . said Mary Tribby, Denver.
based chief regulatory counsel for A T&1"'s western region that includes Minnesota. 'We re also concerned thatcompanies entering Into these agreements are being silenced in regulatory proceedings as part of theagreements. .
B/II Myers, a Owest spokesman In Denver, said AT&T "has an Interest in frustrating our efforts to get Into the long-
distance business. .
In an unrelated development, Owest's commercial paper rating was cut one level by Standard & Poor's, which
cited debt of $25 bllnon at the phone company. S&P cut lis short-term rating to 8A38 from A2,while dropping theIong-tenn credit rating to "BBB,. two levels above junk, from "BBB+." S&P has a negative ouUook.:
"The dOwngrade is based on Qwesfs more limited fInancfaJ flexibility and near-tennliquldlty concerns," S&Panalyst GIJ'Q ZSppin saId In a prepared statement. The loss of access to the commercfal-paper market was also afactor, he said.
. '
Siooinbiig N~Ws contributed to this report.
, , .
- Slev.e. Al~1tllnder Is.", s/extlslllrlfJbune.com
. .. '
Subject:FW: Article from deseretnews.com
rhe following story appeared on deseretnews. com on February 19, 2002.
----------------
leadline: Minnesota accuses Qwest of secret deals
:ubhead: Communications firm could face $200 million fine
.uthor: Associated Press
T. PAOL, Hinn. -- The Minnesota Department of Commerce has accused Qwest
ommunications International Inc. of violating state and federal law by entering
3to secret agreements wi th competi tors.
E the state Public Utilities Commission finds that Qwest broke the law, the~ver-based company could face civil penalties of up to $202.5 million!pending on the nwnber of claims.
,est vice president Chuck Ward said the company is reviewing the complaint.
'0 assert there's secret things going on I don't think 1s productive,. WardLid.
Commerce Department investigation found that Qwest entered into numerous
cret agreements with rival local phone companies that violate Qwest'
ligations under the law. The agreements include issues of interconnection,
cess to network elements, resale, number portability, access to rights-of-way
d compensation.
est, as the local exchange carrier in Minnesota, is required by federal law to
ovide other carriers reasonable access to its network.
~y interconnection agreements between QWest and the other carriers have
wiously been approved by state regulators. But the alleged secret agreements
either change or add to those were not submitted for state approval.
!st has provided details of the agreements to commerce officials, but the
apany has designated each agreement as a W trade secret,. which prevents publicilclosure.
~st's behavior is blatantly anticompetitive,. commerce commissioner Jim:nstein said. w Qwest has entered into these secret agreements repeatedly and.ry are in force today. There is zero benefit to Minnesota telephone customers
!J1 Qwest is in the business of limiting competition.
. Ward said the company has made 150 interconnection agreements with
pet1tors in Minnesota.
merce officials also have asked the Public Utilities Commission to require
t to make the terms and conditions of the agreements publicly available to
er local competitors.
st controls about 2 million of the 2.7 million telephone lines innesata.
company likewise controls about 90 percent of the lines in Utah. and whenLegislature reconvenes next week it may take up a bill aimed at keeping3t from shutting out competition in the Utah local-service market.
10, yet to be discussed by the House Public Utilities and Technology Standing
:ommittee, would impose stronger fines on Qwest for anticompetitive behavior.. A:hird violation would start a process that could lead to a separation of the
:ompany'S retail and wholesale operations.
roponents, including AT&T and the bill's sponsor, House Majority Leader Kevin~rn, R-Layton, say ~995 state and 1996 federal telecommunication measures haveailed to provide a framework for local-service ,competition.
---------
:Jpyright 2002, Deseret News Publishing Co.
Page 1 of 1
Subject: FW: Qwest secret deals
Qwest accused of secret deals
By The Assodated Press
The Assodated Press
Saturday, February 16, 2002 - The Minnesota Department of Commerce has accused Qwest
Communications International Inc. of violating state and federal law by entering
Into secretagreements with competitors.
The agency filed a complaint Thursday with the Minnesota Public Utilities Commission.
If the PUC finds Qwest broke the law, the Denver-based company could face dvil penalties ofbetween $56.2 mimon and $202.5 million, based on the number of claims.
Chuck Ward, vice president of policy and law for Qwest, .said the company Is reviewing thecomplaint and will file an answer soon. "To assert there s secret things going on r don t think isproductive,. Ward said.
&.
Department of Commerce investigation determined Qwest entered Into numerous secret
Jgreements with rival local phone companies that VIolate Qwest's oblIgations under the law. TheIgreements include Issues of Interconnection, access to network elements
, resale; numberIOrtablllty, access to rights-oF-way and compensation.
!west, as the incumbent local exchange carrier in Minnesota, Is required by federal law tei provide
ther carriers with the ability to connect to Its network based on agreements that are reasonablend non-dlscrfmlnatory.
any Interconnection agreements between Qwest and the other carriers have previously been
'proved by the PUC. But the secret agreements either change or add to those and werenIbmltted to the PUC for approval.
"lest has provided details of the agreements to commerce
officials, but the company hasislgnated each agreement as "trade secret," which prevents public disclosure.
west's behavior is blatantly anti-competitive,. said Commerce Commissioner Jim Bernstein.west has entered Into these secret agreements repeatedly and they are In force today. There Is
"0 benefit to Minnesota telephone customers when Qwest is In
the business of limitingT1petftlon." Qwest's Ward said the company has made 150 Interconnection agreements withnpetitors In Minnesota.
T1merce officials also have asked the PUC to require Qwest to make the terms and conditions ofagreements publicly available to other local competitors.
est controls about 2 million of the 2.7 million telephone fines in Minnesota.
ontenb Copyright 2002 The Denver Post or other copyright holders. An rights reserved. This material may not be'shed, bl'CHldi::ast, rewritten or redistributed I'vr any COmmercia' purpose.Term.. of use Prlvacv nallCX
THE DENVER POST / NATION
Sunday, February 17, 2002 '
~.. .
.. 7A
-...
Qwest deals with
. ,
rivals scrutinized' '
. '
By Krfs Hudson
Denver Post 8usinns Writ8r
The MInnesota Department of
Commerce has' ac:cused Qwest of
breakiDg state and federal law by
cuWng secret deals with some ~
its competitors ~ the detriment of
others. .
. In a complaint filed with. thestates PubUc UUUUes Commis-
sion, the state CODUllel'Ce. depart-
ment alleges Qwest acted In an an-
tk:ompetitive II1IUIDeI' by einchfDg
the deals without gaining the
PUC's approval. Federal law re-
quires Baby Bells such u Qwest to
provide all competitors equal ac-
cess to its phone lines OD public
terms.
The complaint demands that
Qwest make the secret deals public:ami allow any competitor to take
advantage of their terms. It also
seeks 'c1vU penalties of $50 million.
to. $200 mUllon, The Asso~ated
Press reported.
. .
The deals, ealled inten:oaneclimi
agreements, set the prices and
terms for the two companies to
connect their communications net-
works and band off calla. All are
required to be approved by thePUC so Qwest's competitors CaD
ensure others aren t getting favor-
able terms.
By entering into the secret
agreements, Qwest is providingdiscriminatory treatmeDt ill favor
of the (competitors) that are party
to those agreements and to the det-
riment of (competitors) that are
not," the complaint reads.
. Qwest is looking into. the com-
plaint
. "
re just In the process of
looking at wbat they've ffied, " said
Steve Davis, Qwest's senior .viCe
president of policy and law.. "
bave filed Ii1eraIIy hundreds of 111-
.. .
tercODJIec:tion agreements across .
: .
the region since 1996. We re look- .
" ~ .
iq at tile ODeS they tbiDk we should ". ; :have filed and figuring out . if...;::.there s merit to what they Aid.-I'
Aud Utbey need to be filed, we'Il::~~file them. " .
:::;
Colorado utiUties officials ad
::;::
COIISUDIer advocates 00 FridaJ
cUned to CODJmeIIt on the MiImeso-:
ta complaint before leamiDg moreabout fl
Qwest'sDavfSl.ldthecomplaiJ1t~ .
should haye DO el1ect 011. Qwest's-=
push to gm federal and. state
proval to seIllong-distaDc:e serric:e=':in tlie former US West's 14-state::;
territory. Qwest's ardIrival, AT&!t_i
Corp., wasn't so sure.We have been suspicious for ;:::
quite some time that Qwest be :"~O:been entering iDto. I.eethe~
deals with emIers that prefer ODe .
earrier over 1IIOther, It IIid Mary ~
Tribby, ATleT's chief rep!!ltary
;-,
c:ounsel. "'1'hafs a violation of their .,
obligations to treat all earriers
equaDf.Tribby said ATleT Jntends to.
. urge atilities ....mml-'4ml In eaeh
of the 13 other US West states to ;i:-
loqt Into the MiImesota. IlIeg... ..
':':
tkms. "I doI1't thiDt It's Isolated to i' Minnesota, It she said.
. .
'lbeTeiam Ad of 1998 man-:, .:
dates that Baby Bells must prove;::.
they allow competitors easy 8Dd.
efficient access to their phone lines ..
' .
so the cOmpetitors can deliver HI'- ::i ~vices over them. 0nI:e a Baby Bell
proves it allows c:ompet1t1cm, state
and federal regulators may grant
. .
it permissiOn to sell Icmg-ilistaDce :~iin given state.
~ ~.
Qwest caDDot sell long distance ...in any of the 14 US West states,:~'
but it Is nearfDg the end of its ~-
~~ j
lug and review process to do~. -'
":". "
U~/lU/Ul W~V ll:~J tA~ ~U~Zll~~~~
:.:
sr.: ~r.E'1-BOO-S6 '1ea
(BuTTel1es N~)
. P~9c 1 at 1 tRMAM11CH)
Wed February 20, 200:Appears On Page 4B
Circulation: 311,77::3
MH NI::W.sKUU,1t ...... VU.L::i.LJI. ~ UU702/20/0209:55:38 AMEST
~~~.:
Rocky Mountain NewsDenv~t',
. .
4T& 1. wants State PUt to scrUtinize
Qwest deals for possible wrongdoing.
Allegations of secret, '. no msoa ' to believe dJat this u;
KeD ReiI, direCtor of the Caleta-Jimited to.Minnesota. Companies. do Office of Consumer
Counsel. c
Improper agreements
. suSpected to haveente:red into utility watchdog, said Tue$day thatin Minnesota ur call . s~ deaJs likely opente ~ other he also isn't aware of improper
. ,
states as welL"
. .
deals by Owest. But ~e said weBy_SeaItll
. :
State-~andwa~ l'wewouldn't~"'S1nCedecajJ5N. saurWn'l8r aid 1l1esd.3y tMt.the, don't haVe' ofChosea.eree=enturen
tll1.zbJic.
..
.. anye9ideneeofslichdeaJs. Steve Davis, Qwest's senior
AT&T saiditpJansID a.sJcrega- . Tn"lJbyaidQwesti$~by
viee president of P.oUC)' anci'12\\;lators in Colorado to investigate the
Telecoaimunic:atioos Act of said .Thesday that Qwac has en-whether Qwcst Com.m.unic:atioDS 1996 to treat aD earners in. a
MII- teRd into hundreds of mtcrcon-lntematioaallnc. has made agree. discrinzmarory fashion. She said nectiOl1 agreementa across the reo
ments with local phone whoJesal.. sh~ U worried the aDegect' deals &ion and tbat it is commoa for suchers that megaDy ratrict compe~ DJight .'silence .partaen agreemeneso or It leaSt pardons.tion. '
. : from JWdcipatiq in replatary to be CODtidentiaJ.The issue came up last \\reek ~s
Qwest"s ef- '"There aren t any allegations
when M'mnesota regalatpri ac:.. !art to re-enter IODr-distance in its that the deals are inept, just they~ecI Qwcst 0( lktate WI!SUml'egicm. .
Sbowd have been pub6cJy med.suchaercements with who.Iesalers .TenY Bate, IIJ)Olcesmaa or the DaYil said.: UWe ft looJcini at that
that connect to Qwars Qetwork CoIarado PubJic UtiUties CommiS-
If som~ should be Sled. weto rese111cc:iJ pbone service.. lion, said Tuelday the Stlte basnl liJe. .' - The ,only question here isWe iae coiq to talJc td
~-
UDaWentd similar' evidei&ce and whetherYie aced to file 1Iome por.
ton in all of QW'est"Utates'mclucl-' hasn't yet been coD~ed by.: tiohoftbosu.greemqts."iaa: Colorado to thesn to AT&:'t
- .
Davis aid he also CODIiders it
loOk-jato almDar an~~-r-
-"
H~ 011 Qwest"s
,::~~~.
that AT&T Is so COn~
~'AT.&:1"rdzief~~:. inca :1OZU-cfi&taace. in CoIOQ .dMf !;\11th
. ...~.~..
L:: oiDtAL-- ......... ":I_
~ ""'--:"".. '. . ~ ....::.:;.~ )' ..' .
tory-co~ m U1:n~ 'I'1"e-U8v'e. .....e~C'n....~ .._.
. -'
, "llJIIUsa !!.'o......,
02/20/02 WED 10:56 (TX/RX NO 82651
i ..1 ." . 0
A T& T TO ASK QWEST STATES TO JNVESTIGA TE DEALS WITH CLECs
23:00:57,20 February 2002
AT&T said it planned to ask Colo. PUG and regulators in other Qwest states to investigate whether Qwest
had made illegal secret agreements with selected CLECs that provided favored carriers with rates and
terms not available to other competitors. Colo. is Qwest's hq state. AT&T was reacting to complaint
against Qwest filed with Minn. PUG last week ~ Telecom Div. of Minn. Depl of Commerce on behalf ofstates retail teJecom ratepayers. Minn. COD1plaint alleged Owest made secret amendments tointerconnection contracts with selected CLECs to mute their opposlUon to Qwest long distance entry andother Qwest regulatory initiatives. It charged that Qwest and "
partner" CLECs might be concealingfavorable terms so other CLECs couldn't opt into them. Minn. complaint didn't name specific CLECs or
deals. Qwest has denied Minn. charges.
AT&T said it had "no reason to believe that this is limited" to Minn., and Qwest might seek to make secretdeals with selected CLECs throughout its 14-state region to "sIlence those partnei's froR! participating In
regulatory hearings" on its Sec. 271 petitions. Colo. PUG hasn't received petition from AT&T, buts~kesman said ag~ hadn't seen any evidence of secret Qwest dealmaking to unlawfullY InfluenCeCLEC opponents Of its regulatory InitiatIVes. Similarly:, Colo. Office of Consumer Counsel, stats's utilitywatchdog agency, isn't aware of any improper deals between awest and CLECs. but spokesman
saidagency might not know of such dealings becal,(se details wouldn't be public. Consumer
advocacyagencies in some other Qwest states were eitfier unaware of Minn. complaint against Owest or didnknow enough about situation to ~l
, .. '
Qwest said It had entered Into hundreds of interconnection agreements with CLECs across its region
andIt was common for proprietary InfcnnatiQn in s~me portions of Interconnection contracts to be
keptconfidential. It also denied allegations that Its interconnection deals WIth CLECs in Colo. or other &fates ofIts ~Jon were Blegal. Only question, Qweslsald, Is whether some contract terms should have been filedpublicly. Spokesman said hIS company was looking into that question and if something should
be filedpublicly, it would do so. - Herb Kirchhoff "
CDvIaNewsEDGE
9oPYright (c) 2002 Warren Publishing, Inc.
Received by News Edge Insight 0212012002 23:00:57
. ...... .. ..
Attachment
PUBLIC DOCUMENT - Trade Secret Data Has Been Excised
FOR THE MINNESOTA PUBLIC UTILITffiS COMMISSION
SUITE 350
121 SEVENTH PLACE EAST
ST. PAUL, MINNESOTA 55101-2147
Greg Scott
Edward Garvey
ManhaU Johnson
LeRoy Koppendrayer
Phyllis A. Reba
Chair
Commissioner
Commissioner
Commissioner
Commissioner
In the Matter of the Complaint of the
Minnesota Department of Commerce
. ~gainst Qwest Corporation
Docket No. P-421/DI-01-814
VERIFIED COMPLAINT
Expedited Proceeding Requested
Temporary Relief Requested
The Minnesota Department of Commerce ("Department") brings this Verified Complaint
before the Minnesota Public Utilities Commission (the "Commission ) against Qwest
C9rporation ("Qwest"), seeking relief for Qwest's violation of its obligations under state and
federal law. Qwest's unlawful conduct has hindered and continues to hinder competition in the
local exchange markets in Minnesota. In support of this Complaint, the Department alleges:
PARTIES
Under Minn. Stat ~ 216A.07,the Department is charged with investigating and
enforcing Chapter 237 and Commission orders made pursuant to that chapter. The Department'
local address in Minnesota is Golden Rule Building, 85 East 7th Place, Suite 500, St Paul, MN
55155.
The Department is represented in this proceeding by its attorneys:
Mike Hatch
Attorney General
State of Minnesota
Steven H. Alpert
Assistant Attorney General
525 Park Street, #200
St. Paul, Minnesota 55103-2106
[phone] (telephone)
[phone] (TIT)
Respondent Qwest is a Delaware corporation with its principal place of business
in Denver, Colorado, with offices in Minnesota at 2QO South Fifth Street, Minneapolis,
Minnesota. Qwest provides switched local exchange service in a number of Minnesota
exchanges, and is regulated by the Commission. under Minn. Stat. ch. 237 as a "telephone
company." Minn. Stat. ~ 237., subd. 2. As a major provider oflocal exchange service in
Minnesota, Qwest controls approximately two million out of the approximately two million
seven hundred thousand telephone lines in Minnesota.
The Department believes that Qwest is represented in Minnesota by its attorney:
Jason Topp
Qwest Corporation
Law Department
200 South 5th Street, Room 395
Minneapolis, MN 55402
[phone] (telephone)
[phone] (facsimile)
JURISDICTION
The Deparbnent's investigation into certain agreements entered into by Qwest
and described more particularly below, establishes that Qwest's behavior violates federal and
state law.
The Commission has jurisdiction over this Complaint pursuant to 47 U.
~~ 252(e) (authority of state commissions to enforce interconnection agreements), 251(c)(2)
(duty of incumbent carriers to interconnect with CLECs); Minn. Stat. ~~ 2~7.mn(Commission
investigations); and, 237.462 (competitive enforcement).
OVERVIEW
Qwest's Legal Obligations
Qwest is the successor in interest to U S WEST Communications, Inc. (""U S
WEST") At all times relevant to this . complaint, either U S WEST or its successor Qwest
operated as an incumbent local exchange carner in Minnesota.
The Department is informed and believes and on this basis alleges that, upon its
merger with U S WEST, Qwest assumed the obligations and the benefits of every agreement
described in this complaint to which U S WEST was a party. For purposes of this complaint
both Qwest and U S WEST are referred to as Qwest.
As an incumbent local exchange carrier, Qwest has a number of legal duties set
forth in 47 U.C. ~ 251(c). Among those duties are:
The duty to negotiate in good faith the particular terms and conditions of
agreements for interconnection, access to network elements, resale, number
portability, dialing parity, aCcess to rights-of-way, reciprocal compen~tion,
and collocation. 47 U.C. ~ 252(c)(1).
The duty to provide interconnection with Qwest's network on rates terms
and conditions that are just, reasonable and non-discriminatory. 47 U.
. ~
2S1(c)(2)(D).
The duty to provide nondiscriminatory access to network elements on an
unbundled basis on rates, terms and conditions that are just, reasonable and
nondiscriminatory. 47 V.C. ~ 251(c)(3).
10.Pursuant to 47 V.C. ~ 252(a), Qwest may negotiate the terms of any agreement
to provide interconnection, access to network elements, resale, number portability, dialing parity,
access to rights-of-way, reciprocal compensation, and collocation with the CLEC requesting
such items or services. The agreement entered into by Qwest "shall be submitted to the State
commission under subsection (e) of this section." 47 V.C. ~ 252(a)(I).
11.Qwest and numerous CLECs are parties to Interconnection Agreements ("ICAs"
which have been approved at various times by this Commission pursuant to 47 U.C. ~ 252(e).
12.Qwest is required to make available any interconnection, service, or network
element provided under an agreement approved by this Commission pursuant to 47 U.
~ 252(e) to which Qwest is a party to any other requesting telecommunications carrier upon the
same terms and conditions as those provided in the agreement. 47 U.C. ~ 252(i). This
requirement is also known as the "most favored nation" or "pick and choose" rule.
13.In the Local Competition First Report and Order the FCC explained the
importance of the filing requirement in 47 U.C. ~ 252(a)(I) and its relation with 47 D.
~ 252(i):
As a matter of policy, moreover, we believe that requiring filing of all
interconnection agreements best promotes Congress s stated goals of
opening up local markets to competition, and permitting interconnection on
just, reasonable, and nondiscriminatory terms. State commissions should
have the opportunity to review all agreements, including those that were
negotiated before the new law was enacted, to ensure that such agreements
do not discriminate against third parties, and are not contrary to the public
interest. In particular, preexisting agreements may include provisions that
violate or are inconsistent with the pro-competitive goals of the 1996 Act
and states may elect to reject such agreements under section 252(e)(2)(A).
Requiring all contracts to be filed also limits an incumbent LEC's ability to
discriminate among carners, for at least two reasons. First, requiring public
filing of agreements enables carriers to have information about rates, terms,
and conditions that an incumbent LEC makes available to others. Second,
any interconnection, service or network element provided under an
agreement approved by the state commission under section 252 must be
made available to any other requesting telecommunications carner upon the
same tenns and conditions, in accordance with section 252(i). In addition,
we believe that having the opportunity to review existing agreements may
provide state commissions and potential competitors with a starting point for
detennining what is "technically feasible" for interconnection.
Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC
Docket No. 96-98, First Report and Order, para. 167 (1996) (emphasis in original).
The Secret Agreements
14.The Department is conducting an investigation into potential anti-competitive
conduct by Qwest, in part to determine whether Qwest has engaged in a practice of entering into
secret agreements with some CLECs that violate Qwest's obligations under 47 U.C. ~251(c)
andlor 47 U.C. ~ 252(a)(I).
15.On June 20 2001 the Department sent an infonnation request to Qwest asking it
to produce every agreement with a CLEC not filed with the Commission entered into by Qwest
over the last five years. After discussions with Qwest, the scope of Qwest's production was
narrowed to agreements entered into on or after January 1 , 2000.
16.The facts set forth below have been determined by the Department based on the
agreements and information provided by Qwest in Docket P421/DI-OI-814.
17.The Department's investigation revealed that Qwest has entered into numerous
secret agreements with CLECs to provide interconnection, access to network elements, resale
number portability, dialing parity, access to rights-of-way, reciprocal compensation and/or
collocation to the CLEC (the "Secret Agreements"). The Secret Agreements are discussed in
more detail below and attached as exhibits to this complaint.
18.The Secret Agreements either modify or augment the termS and conditions set
forth in the ICAs between Qwest and the CLECs that are party to them.
19.47 V.C. ~ 242(a)(l) requires that these Secret Agreements be submitted for
Commission approval pursuant to 47 V.C. ~ 252(e).
20.Qwest has not submitted the Secret Agreements for Commission approval
pursuant to 47 U.C. ~ 252(e).
21.In addition to failing to submit the Secret Agreements to this Commission for
approval, Qwest included confidentiality provisions in the agreements that, in many cases
precluded access to the Secret Agreements by other CLECs, the Department, or this Commission
to the Secret Agreements.
22.The Department is informed and believes and on this basis alleges that the terms
of these Secret Agreements described below do not appear in any ICAs approved by the
Commission under 47 D.c. ~ 252(e), to which Qwestis a party.
23.As a result, the terms of these Secret Agreements described below remain
unknown to the CLECs that are not party to these agreements and are not available for adoption
by other CLECs pursuant to 47 U.s.C. ~ 252(i).
24.By entering into the Secret Agreements, Qwest is providing discriminatory
treatment in favor of the CLECs that are party to these agreements and to the detriment of
CLECs that are nol
25.Because these Secret Agreements either modify or create entirely new terms and
conditions of interconnection, access to network elements, resale, nwnber portability ~ dialing
pari~, access to rights-of-way, reciprocal compensation and/or collocation, Qwest's failure to
make these terms generally available to all CLECs violates 47 U.C. ~ 251(c).
26.As set forth in greater detail below, the ongoing and repeated behavior of Qwest
in entering into these secret agreements was, and is, anti-competitive.and in violation offedeIa1
and state law.
SPECIFIC FACfUAL ALLEGATIONS
(TRADE SECRET MATERIAL BEGINS
27.
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. 30.
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no.Ill.
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251.
TRADE SECRET DATA ENDS)
REQUEST FOR EXPEDITED PROCEEDINGS
252.Qwest's continuing failure to comply with its obligations under state and federal
law warrants expedited proceedings, temporary relief and penalties available pursuant to Minn.
Stat ~ 237.462, which authorizes the Conunission to conduct expedited proceedings, impose
temporary relief and impose penalties to remedy violations of interconnection agreements and
incumbent local exchange carrier obligations under Section 251 of the Act and Minnesota law.
253. Pursuant to Minn. Stat. ~ 237.462 subd. 6, the Department requests that the
Commission conduct an expedited proceeding to resolve this Complaint.
254.QW'est's conduct has inhibited andJor limited CLRCs in their ability to eom~ete
effectively in Minnesota markets, including the ability to compete in the Minnesota local
exchange markets.
255.As a result of Qwest's conduct, Minnesota's end user customers have been denied
the benefits of potentially increased competition.
256.Qwest's conduct, as described above, is hannful to the public interest and the
public is being denied the benefits of competition, including lower prices and diversity of
telecommunications services, contrary to public policy favoring competition. Expedited
resolution of this matter will advance the development of competition and, therefore, advance the
public interest.
257.Carriers have been hindered in their ability to compete in the local exchange
market in Minnesota as a result of Qwest's unlawful behavior.
258.Through such behavior, Qwest benefits by the retention of its dominance over the
local exchange markets in Minnesota.
259. Accordingly, the Department requests that the Commission resolve this
Complaint as soon as possible, and in no event, no more than 60 days from today.
REQUEST FOR TEMPORARY RELIEF
260. Minn. Stat. ~ 237.462, subd. 7 provides for temporary relief pending dispute
resolution.
261.Based on the facts as pleaded, the Department is likely to succeed on the merits.
State and federal law requires Qwest to submit agreements setting forth terms and conditions of
interconnection to this Commission for review and approval andlor to refrain from offering tenns
and conditions of interconnection in a discriminatory manner.
262.An order for temporary relief is necessary to protect the public s interest in fair
and reasonable competition. Despite clear legal obligations to provide non-discriminatory
service, and to do so expeditiously, Qwest has refused to comply with the law. Unless the
Commission orders Qwest imIIiediately to submit to the Conunission for approval those portions
of the Secret Agreements that relate to terms and conditions of interconnection, Qwest will
continue to provide access to its network and services in a discriminatory and unlawful manner.
263.Without immediate relief, Qwest's secretive tactics will achieve Qwest's goal of
limiting competition to itself and, to a lesser degree, some of its wholesale customers of choice.
Thus . the Act's and this Commission s goal of bringing local exchange competition to the
consumers of Minnesota will be further hindered.
264.The Department's proposal to make all terms and conditions of interconnection
available to all CLECs in a non-discriminatory manner is technically feasible. Qwest has
provided the Department with no evidence to the contrary.
265. Accordingly, under Minn. Stat. ~ 237.462, subd. 7, the Department hereby
requests that the Commission order Qwest immediately to make any and all of the specified
terms or conditions of interconnection or service public, and imIIiediately available to any other
CLEC who wishes to adopt said provision(s).
REQUEST FOR PENALTIES
266.Through its conduct as described above, Qwest has willfully refused to comply
with its obligations under state and federal law.
267.By its delay in submitting these agreements to this Commission for approval and
its refusal to provide non-discriminatory access to services, Qwest has willfully hindered
competition in Minnesota.
268.According to Qwest's website, Qwest Communications International, Inc., Qwest
Corporation s parent, reported annual revenues of over $20 billion and assets of over $74 billion
for the year 2001. With these revenues and assets, Qwest Corporation and its parent have the
financial ability to pay any penalty this Commission may impose in this proceeding. The
Department asks the Commission to impose the maximum penalty for each violation under the
statute.
RELIEF REQUESTED
Wherefore, the Deparbnent requests that the Commission:
269.Pursuant to Minn. Stat. ~ 237.462, order an expedited hearing to be held before
this Commission.
270.Grant the Department temporary relief by making the relevant portions of the
contracts public and directing Qwest to immediately provide all requesting carriers the
opportunity to pick and choose any of the terms and conditions contained therein.
271.Pursuant to MinD. Stat. ~ 237.462, make a finding that for each of the contracts
described in the Complaint, that Qwest acted in violation of state and/or federailaw;
272. Declare that each of Qwest's violations of law were in bad faith and anti-
competitive;
273. Pursuant to Minn. Stat. ~ 237.462, subel. 2, impose penalties on Qwest in the
. amount of $10 000 per day for each of Qwest's prior failure, and for each day of its continuing
failure to comply with the requirements of state or federa1law.
274. Grant such other and further relief as the Commission may deem just and
reasonable.
Dated: February
-'
2002 Respectfully submitted,
MIKE HATCH
Attorney General
. State of Minnesota
STEVEN H. ALPERT
Assistant Attorney General
Attorney Registration No. 1351
525 Park Street, #200
St. Paul, Minnesota 55103-2106
[phone] (Voice)
[phone] (1TY)
ATIORNEYS FOR MINNESOTA
DEPARTMENT OF COMMERCE.
AG: S47640
Mary V. York, Esq. (ISB No. 5020)
HOLLAND & HART LLP
Suite 1400, U. S. Bank Plaza
101 South Capitol Boulevard
Post Office Box 2527
Boise, Idaho 83701
Telephone: [phone]
Facsimile: [phone]
myork~hollandhart.com
T. Scott Thompson, Esq.
Brian M. Josef, Esq.
Rita Tewari, Esq.
Cole, Raywid & Braverman, LLP
1919 Pennsylvania Ave., N.
Second Floor
Washington, D.C. 20006
Telephone: [phone]
Meredith R. Harris, Esq.
AT&T Corp.
One AT&T Way
Bedminstet, New Jersey 07921
[phone]
Attorneys for AT&T Corp. and AT&T
Communications of the Mountain States, Inc.
Robert M. Pomeroy, Esq. (CSB No. 7640)
HOLLAND & HART LLP
8390 E. Crescent Parkway
Suite 400
Greenwood Village, CO 80111-2800
Telephone: [phone]
Facsimile: [phone]
bpomeroy~ho llandhart. com
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
AT&T CORP., a New York Corporation;
AT&T COMMUNICATIONS OF THE
MOUNTAIN STATES, INC., a Colorado
Corporation
Complainants
vs.
QWEST CORPORATION, a Colorado
Corporation
Respondent.
Case No. ATT-O4-
COMPLAINT
AT&T COMPLAINT-
Qwest Motion to Dismiss
Exhibit D
AT&T Corp., and AT&T Communications of the Mountain States, Inc. (collectively
AT&T"), by and through its attorneys, Holland & Hart, hereby complains against Qwest
Corporation ("Qwest"), as follows:
PARTIES
1. Claimant AT&T Corp. is a public utility that provides telecommunications services in the
State ofIdaho and other states by and through its affiliate AT&T Communications of the
Mountain States, Inc. The Idaho Public Utilities Commission ("Commission ) has granted
AT&T certification to provide long distance and local exchange telecommunication service in
Idaho. AT&T's principal place of business is One AT&T Way, Bedminster, New Jersey 07921.
2. Respondent Qwest is a public utility and a certified provider of long distance and local
exchange telecommunications services in the State ofIdaho and other states. Qwest's principal
place of business is 1801 California Street, Denver, Colorado 80202,
JURISDICTION AND VENUE
3. Jurisdiction over this dispute is properly held by the Commission pursuant to Idaho Code
~~ 61-315 61-501 61-502 61-503 61-514, and 61-641 et. seq. The State ofIdaho has certified
to the Federal Communications Commission ("FCC") that it regulates the rates, terms and
conditions for pole attachments, which includes conduits. See Public Notice States That Have
Certified That They Regulate Pole Attachments 7 FCC Red. 1498 (1992), attached hereto as
Exhibit 1.
AT&T COMPLAINT - 2
4. Qwest is a certified long distance and local exchange carrier that owns or controls conduit
in the State of Idaho and elsewhere. Such conduits are used for purposes of wire
communications.
5. AT&T owns communications facilities that occupy Qwest's conduit.
6. Qwest and AT&T are direct competitors in local and long distance telecommunications
service.
7. AT&T has the right of access to Qwest conduit on just, reasonable and
non-discriminatory rates, tenns and conditions. See 47 U.C. ~224; Idaho Code ~~ 61-301
61-315.
8. AT&T occupies Qwest-owned conduit in Idaho pursuant to "General License Agreement
for Conduit Occupancy Between The Mountain States Telephone and Telegraph Company and
The American Telephone and Telegraph Company for the State of Idaho, dated May 28, 1988"
Conduit License Agreement") and Licenses executed pursuant thereto. See Conduit License
Agreement attached hereto as Exhibit 2; Licenses attached hereto as Exhibit 3.
9. AT&T also occupies Qwest-owned conduit pursuant to an "Agreement for Tennsand
Conditions for Interconnection, Unbundled Network Elements, Ancillary Services, and Resale of
Telecommunication Services Between Qwest Corporation and AT&T Communications of the
Mountain States, Inc. in the State of Idaho
" ("
Interconnection Agreement" or "Agreement"
dated May 4, 2004 and approved by the Commission on June 22, 2004. See Interconnection
Agreement attached hereto as Exhibit 4. See also In the Matter of the Joint Application of Qwest
Corporation and AT&T Communications of the Mountain States, Inc. for Approval of an
AT&T COMPLAINT - 3
Interconnection Agreement Pursuant to 47 us.e. 252(e), Case No. QWE-04-9, Order No.
29530 (June 22, 2004). Prior to the adoption of this Agreement, the parties had operated under
an alternative Interconnection Agreement adopted September 15, 1998. See Agreement for
Local and Wireline Network Interconnection and Service Resale ("1998 Interconnection
Agreement"), attached hereto as Exhibit 5. See also In the Matter of AT&T Communications
the Mountain States, Inc. Petitionfor Arbitration Pursuant to Section 252(b) of the
Telecommunications Act of 1996 of the Rates, Terms and Conditions of Interconnection with US
West Case No. USW-96-15, ATT-96-, Order No 27738 (Sept. 15, 1998).
GENERAL ALLEGATIONS
10. AT&T currently occupies approximately 138 607 feet of Qwest's conduit in the State of
Idaho. See Qwest Conduit Licenses, attached hereto as Exhibit 3; Qwest Conduit Invoices
attached hereto as Exhibit 6.
11. The Conduit License Agreement does not establish rates. Rather, the individual Licenses
issued pursuant to the Agreement set forth the rates. See Qwest Conduit Licenses (Exh. 3).
12. Similarly, the 1998 Interconnection Agreement between the parties does not set forth a
specific rate for conduit rental. Instead, the Agreement requires Qwest to provide AT&T "equal
and non-discriminatory access to poles, ducts, conduit and ROWand any other pathways on
terms and con~tions equal to that provided by (Qwest) to itself or to any other Person.
Interconnection Agreement at ~ 47.4.5 (Exh. 5).
13. Q~est makes its conduit rental rate publicly available in its Statement of Generally
Available Tenns and Conditions ("SGAT") on file at the Idaho Public Utilities Commission. See
Idaho SGAT~ 10., attached hereto as Exhibit 7. See also In the Matter of Determining
AT&T COMPLAINT - 4
Prices for Unbundled Network Elements (CINE) in Qwest Corporation s Statement of Generally
Available Terms (SGAT), Case No. QWE-01-, Order No. 29408 (Jan. 2, 2004).
14. Qwest's published SGA T conduit rate set forth below is "just, reasonable and
nondiscriminatory" and consistent with 47 U.C. ~ 224 and Idaho Code ~ 61-301. ld.
15. The current Interconnection Agreement between the parties states that Qwest's conduit
rental fees "are in accordance with Section 224 of the Act and FCC orders, rules and regulations
promulgated thereunder, as well as the rates established by the Commission. . .." The
Agreement sets forth the conduit occupancy rate by attaching a copy of Qwest's January 2004
SGA T as an Exhibit to the Agreement. See Interconnection Agreement at 10.8.3 and Exhibit A
(Exh. 4 attached hereto).
16. However, Qwest currently charges AT&T rates ranging from $2.75 to $3.25 per foot per
year to occupy its conduit in Idaho. See Conduit Invoices attached hereto as Exhibit 6.
17. Qwest's publicly available SGA T identifies Qwest's conduit rental rate as $0.31. See
Idaho SGA T Spreadsheet ~ 10.12 (Exh. 7). Upon information and belief, this is a just and
reasonable rate for conduit occupancy. Although this is the publicly filed rate and approximates
levels that AT&T believes would be generated under the FCC's conduit formula, Qwest
continues to charge AT&T the higher $2.75 to $3.25 per foot rates.
18. Beginning in February, 2000 and continuing through December, 2003, AT&T attempted
to re-negotiate Qwest's conduit rental rates to be consistent with the rates that would be
. produced under the FCC's formula and/or the rates at which Qwest offers conduit to other
telecommunications companies. AT&T's attempts have not been successful.
AT&T COMPLAINT - 5
REQUEST FOR RELIEF
19. This Commission is charged with ensuring that the rates, terms and conditions of
attachment are just and reasonable. See Idaho Code ~ 61-514; see also Idaho Code ~ 61-502. In
addition, the Commission holds broad authority to supervise and regulate every public utility
within the State. See Idaho Code ~ 61-501. Upon a finding that a public utility has charged
unjust and discriminatory rates, the Commission is empowered to adjust the rates and award
reparations, with interest, to the affected party from the date of the collection of the unlawful
amount. See Idaho Code ~~ 61-502 61-503,61-641.
20. The conduit occupancy rates that Qwest charges AT&T are eight to 10 times higher than
the rates in Qwest's SGAT on file with the Commission. The rates that Qwest charges AT&T
therefore, are not just, reasonable, and non-discriminatory, in violation of Idaho Code ~ ~ 61-502
and 61-514.
21. Qwest competes directly with AT&T in providing local exchange and long distance
telecommunications service in the state of Idaho. Qwest has granted itself an undue preference
and has subjected AT&T to undue and unreasonable prejudice and competitive disadvantage by
forcing AT&T to pay condUit occupancy rates well above the SGA T rate on file with the
Commission, in violation ofIdaho Code ~~ 61-301 and 61-315. See also Idaho Code ~~ 61-502
and 61-514.
22. Furthermore, Qwest's practice of offering its facilities to other telecommunications
carriers at the SGAT rate, while charging AT&T conduit rates in excess of the SGAT rate is
discriminatory and prohibited by law. See Idaho Code ~ 61-315. See also Idaho Code ~~
AT&T COMPLAINT - 6
61-301 61-502. It is also part ora pattern of the deceptive and anti-competitive practices that
Qwest has engaged in across its multi-state service areas, I including, specifically, Idaho.
23. Finally, Qwest's authority to provide long-distance telecommunications service in Idaho
is conditioned on Qwest affording competitors non-discriminatory access to Qwest's network
including non-discriminatory access to its "poles, ducts, conduits and rights-of-way." 47 D.
~ 271 (c )(2)(B)(iii). By refusing to provide AT&T with conduit at the publicly available SGA
rates, Qwest is not providing non-discriminatory access to its "poles, ducts, conduits and rights-
of-way," in violation of federal law. See, e.
g.,
47 D.C. ~~ 224 and 271(c).
See, e., In re Qwest Corp Apparent Liability for Forfeiture Notice of Apparent Liability for Forfeiture, FCC
04-57, File No. EB-03-IH-O263 (Mar. 12 2004) (imposing $9 million forfeiture and finding that "Qwest's cavalier
attitude toward the Act's filing requirements shows a disregard for Congress s goals of opening local markets to
competition and permitting interconnection on just, reasonable, and nondiscriminatory terms ); Letter from Hillary
S. DeNigro, Deputy Chief, Investigations and Hearings Division, Enforcement Bureau to Melissa Newman, Vice
President-Federal Regulatory, Qwest Communications International, Inc. re: Section 271 Compliance Review
Program for Arizona (dated Mar. 26, 2004) (establishing Section 271 compliance monitoring program for Qwest and
reserving Commission s authority to investigate and monitor other subjects not expressly noted in prior orders or
correspondence); Letter from William Davenport, Deputy Chief, Investigations and Hearings Division, Enforcement
Bureau to Melissa Newman, Vice President-Federal Regulatory, Qwest Communications International, Inc. re:
Section 271 Compliance Review Program for Minnesota (dated July 23, 2003) (same); Letter from William
Davenport, Deputy Chief, Investigations and Hearings Division, Enforcement Bureau to Melissa Newman, Vice
President-Federal Regulatory, Qwest Communications International, Inc. re: Section 271 Compliance Review
Prograin for New Mexico, Oregon and South Dakota (dated June 4, 2003) (same). See also State Telecom
Activities, Communications Daily (Apr. 23, 2004) (announcing Arizona Corporation Commission s assessment of
nearly $21 million in penalties on Qwest for its "willful and intentional" violations of state and federal laws for
failing to file interconnection agreements); In the Matter of the Investigation into Unfiled Agreements Executed
Qwest Corporation, Docket No. 02I-572T, Colo. PUC (Feb. 27, 2004) (Colorado PUC staff recommending a
hearing regarding willful and intentional violations of state and federal law by Qwest); Order Assessing Penalties
Docket No. P-4211C-O2-197, Minn. PUC, (Feb. 28, 2003) (Minnesota agency ordering Qwest to pay $26million
fine and engage in steps toward compliance), Order after Reconsideration on Own Motion Minn. Docket No. P-
4211C-O2-197 (Apr. 30 2003) and Order Adopting ALl's Report and Establishing Comment Period Regarding
Remedies Minnesota Docket No. P-4211C-02-197, at 5 (Nov. 1 2002), Qwest Corporation v. Minnesota Public
Utilities Commission, et at., Complaintfor Declaratory Judgment and Injzinctive Relief to Prevent Enforcement of
Public Utilities Commission Orders Civ. File No. 03-3476, D. Minn. (filed June 19,2003) (Qwest complaint
challenging PUC's authority to impose penalty); AT&T Corp. v. Qwest Corp., Order Making Tentative Findings,
Giving Notice for Purposes of Civil Penalties, and Granting Opportunity to Request Hearing, Iowa Utils. Bd.
Docket No. FCU-02-2 (June 18 2002) (finding that Qwest's failure to file interconnection agreements at issue
violated Section 252 of the Act).
AT &T COMPLAINT - 7
WHEREFORE, in accordance with the Commission s broad authority to regulate public
utilities and protect the public interest, as well as its aqthority over conduit under state and
federal law, AT&T respectfully request this Commission to enter an Order:
a. declaring unlawfulQwest's Idaho conduit rates of $2.75 to $3.25 per foot innerduct per
year, and terminate the $2.75 to $3.25 rates;
b. ordering Qwest to charge AT&T an annual conduit rental rate equal to the SGA T rate of
$0.31 per foot of duct;
c. ordering Qwest to refund to AT&T all amounts paid in excess of rates charged to other
telecommunications carriers dating back to September 15, 1998, when Qwest committed
to providing AT&T with non-discriminatory rates;
d. awarding attorneys fees to AT&T dating back to February 2000, when AT&T notified
Qwest of the discrepancy between the rates that Qwest is currently charging AT&T and
the rates Qwest charges other telecommunications carriers, to the extent authorized under
applicable law;
e. granting AT&T such other relief the Commission deems just, reasonable and proper.
Respectfully submitted, this 6th day of Au
Mary V k, Esq. SB No. 5020)HOLL & HART LLP
Suite 1400, U. S. Bank Plaza
101 South Capitol Boulevard
Post Office Box 2527
Boise, Idaho 83701
AT&T COMPLAINT - 8
Robert M. Pomeroy, Esq. (CSB No. 7640)
HOLLAND & HART LLP
8390 E. Crescent ParkwaySuite 400
Greenwood Village, CO 80111-2800
T. Scott Thompson, Esq.
Brian M. Josef
Rita Tewari, Esq.
Cole, Raywid & Braverman, LLP
1919 Pennsylvania Ave., N.
Second Floor
Washington, D.C. 20006
Telephone: [phone]
Meredith R. Harris, Esq.
AT&T Corp.
One AT&T Way
Bedminster New Jersey 07921
[phone]
Attorneys for AT&T Corp. and AT&T
Communications ofthe Mountain States, Inc.
AT&T COMPLAINT - 9
CERTIFICATE OF SERVICE
1. I hereby certify that on this 6th day of August 2004, I caused to be served a true and
correct copy of the foregoing by the method indicated below, and addressed to the following:
Donald L. Howell II, Director
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83720-0074
Facsimile: [phone]
Jim Schmit
Vice President
Q West Corporation
999 Main Street
Boise, Idaho 83702
S. Mail
Hand Delivered
Overnight Mail
Telecopy (Fax)
S. Mail
=x= Hand Delivered
Overnight Mail
Telecopy (Fax)
Mary Hobson, Esq.
Stoel Rives
101 S. Capitol Blvd.
Suite 1900
Boise, Idaho 83702
Facsimile: [phone]
u.S. Mail
Hand Delivered
Overnight Mail
Telecopy (Fax)
3264343
AT&T COMPLAINT -
"-"------'---'---'-------"""'-'--"
:.1
EXHIBIT
. .!
STATES mAT HAVE CERTIFIED THAT THEY REGULATE POLE ATTACijMENTS
DA 92-201
Before the
Federal COmmunications Commission
Washbi.gton, DC 20554
PUBLIC NOTICE
Released: February 21, 1992
This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI
v. FCC. 515 F 2d 385 (D.C. Citc 1974).
STATES THAT HAVE CERTIFIED THAT THEY REGULATE POLE ATTACHMENTS
Pursuant to Section 1. 14 14(b) of the Commissions Rules on cable pole attachments, the following states. have certified that they regulaterates, tenns, and conditions for pole attachments, and, in so regulating, have the authority to consider and do consider the interests of
subscribers of cable television services, as well as the inten:sts of the consumers of utility services. Moreover, these states have certified thatthCy have issued and made effective rules and regulations implementing their regulatoIy authority over pole attachments, including a specific
methodology for such regulation which bas been made publicly available in the state.
Certification by a state preempts the FCC from accepting pole attachment complaints under Subpart 1 of Part I of the Rules.
Alaska
CaIifonrla
Connecticut
Delaware
District of Columbia
Idaho
illinois
Kentucky
Louisiana
Maine
Mass acbusetts
Michigan
New Jersey
New York
Ohio
Oregon
Utah
Vemiont
Washington
* "
state" by Section 1.1402(g) of the Rules, means any state, teIritOry, or possession of the United States, the District of Columbia, or any
political subdivision, agency. or instrumentality thereof.
This Public Notice BUpersedes1hePublic Notice. of December 30. 1987. DA No. 87-1862.
FEDERAL COMMUNICATIONS COMMISSION
Exhibit I
Case # ATT-04-
AT&T Complaint, Page I of I
httn://www. fCc.20v/eb/mdrdlnacerthtm t 8/512004
---------- - ----'---'--"-
EXHIBIT
. .
:cIJ to /lJf) 7Z-~ 6260
Agreement No. I-OOIC.
04/87- Issue 1
Itf.
GENERAL UCENSE AGREEMENT
FOR
CONDurr OCCUPANCY
THE MOUNTAIN STATES TELEPHONE AND TELEGRAPH CO~ ANY
AND
. THE AMERICAN TELEPHONE AND TELEGRAPH. COMPANY
for the State of Idaho
Dated
May ~. 1988
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page I ofl6NOTICEThe 'nformation conta'ned here1n should not
be d1 sclosed to unauthorIzed persons. It's meant for use
only by authorized representatives of the part'es hereto.
TABLE OF CONTENTS
PREAMBLE
Article'1.- DEFINITIONS
Article 2 - SCOPE OF AGREEMENT
, Articre 3 - 'FEES AND CHARGES
Article' 4 - TERM.OF AGREEMENT AND LICENSHS
) .
Article 5 -, TERMINATION ,OF AGREEMENT
Article 6 - SPECIFICATIONS,
Article 7 ~ LE~L RE~IRE~ENTS
Article ,8 - ISSUANCE OF LICENSES
Article 9 - PRELICENSE sURVEY AND ~KE-READY, HORK
Article 10- CONSTRUCTION. MAINTENANCE AND REMOVAL OF COMMUNICATIONFACILITIES , 7
Article 11- INSPECTION OF LICENSEE'S OOMMUNICA1ION FACILITIES
Article 12- UNAUTHORIZED UTILIZATION. OR OCCUPANCY
Article 13- LIABILITY AND DAMAGES
Article 14-' INSURANCE
Article 15- COMPLIANCE HITH LAWS
Arti c 1 e 16- CONFIDENTIALITY
Article .17- AUTHORIZATION NOT EXCLUSIVE
, Arti c 1 e 18 -":' ASSIGNME NT Of RIGHTS
Article '19 - FAILURE 'TO ENfORCE
Article J~ NOTICES AND DEMANDS
Article 21
, -
MISCELLANEOUS
Article 22 - ENTIRE AGREEMENT
Appendix 1 - Administrative Forms
9 , '
- ,
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 2 of 16
:~~
. Page 1 of 1.3 Page$
. .- j
PREAMBLE
lHIS AGREEMENT. executed this :28th day of May . 1988,
between THE f:t()lJNTA.IN STATES TELEPHONE AND TELEGRAPH COMPANY. a corporation.organized and existing. under the laws of the State 9f COlorado; having itsprlncipal. office in the . City and . County of Denver (hereinafter called
Licensor ). and THE AMERICAN TELEPHONE AND TELEGRAPH COMPANY. a corporation.
organized and existing under the laws of the State of New Yorls.. having.its
principal off'ce in .th~ city of New York (her'einafter called "Licensee
).
WITNESSETH:
WHEREAS. Licensor proposes . to provi de access to its condl\t system. in. . certain ar~as of Idaho; and
. WHEREAS. Licensee desires to place and maintain underground ~ommunicationsfacil ities within the area described . above and desir.es to place such
communi catt ons faci 11 fi ~s i n the conduit system o~ Li censor; and
WHEREAS. Licensor is willing to. permit. under. certa"n condi-tions .on a
nonexclusive license basts. the placement ofsai.d communications faci"t1es onor within Licensor ' facilities where . reasonably ava1.1able in . the ar.ea
descri bed above and where such use will not interfere wi th L i censqr I S servi ce
requirements or .the use of its facilities by others;
NOH THEREFORE. in . consideration of the mutual ,ovenants. terms and
conditions.herein contained. the parties do hereby mutually covenant and agreeas follows:
Exhibit 2
Case # ATT~T-O4-AT&T Complaint, Page 3 of 16
~:J
Page 2 of 13 Pages
- i
Article 1
DEFINITIONS
,As used in th t s Agreement:
A) Conduit Occupancy
OccIJ.pancy of a conduit system by any item of Li censee ' s communi ca ti ons, facil ities.
B) ,Conduit Syste~
Any combination of ducts. manholes. handhole..s. and vaults joined, to form
an integrated whole. which is, o~ned solely or 1n part by the Licensor.
, C) Duct
, A single enclosed raceway for wire conductors. cables or innerducts.
D) u.nerduct
One of the single 'enclosed raceways located within a duct. the interior
diameter of whi ch raceway shall , in 'no event be less than one inch.
E) Joint User
A party which may occupy a duct either solely or partially owned by the
Licensor. in return' for granting the Licensor equivalent rights of
occupancy of duct which it owns. either solely or partially.
F) Licensee s Commumcations Facilitl:es
All hc11tties. including but not limited to cables. equipment and
associated 'hardware. owned and utilized: by the licensee which occupy aconduit system.
G) Make-Ready Work
All wor~. including but not limited to rearrangement or transfer of
existing facilities or other changes required to accomodate the Licenseecommunications facilities in a conduit system.
H) Manhole
A subsurface, enclosure which personnel may enter and use for the purposeof installing. 'operating and maintaining cOmmunications facilities.
I ) Prelicense Sur:vey.
All wor~ required. including field inspection and administrative'
processing. to determine the' ma~e-ready wor~ nece~sary to accomodateLicensees communicat'ons facilities' in licensor s conduit system.
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 4 of 16
Page 3 of 13 Pages
Article 2
SCOPE OF AGREEMENT
A) Subject to the provTsions of this Agreement, Licensor agr~es to issue. to
Li censee for any awful commun i cati ons purpose, . none xc 1 us i ve, revocablelicensees) authoriz.ing
. .
the placement of Licensee'communications
facilities in those portions of licensor s conduit system within the State
. of Idaho, whi ch . Licensee elects to' use.
B) . Nothing contained in this Agreement sha1l be construed to compel Ucens9r. . to construct, extend , or place any duct or other facility for use by the11 censee.
. -..-C1.Jothing contained in this Agreement. sha'll be construed. as lim~ta.tion,restriction, or .prohibition against licensor with. respect to any agreement
or. arrangement which licensor. has heretofore entered into, with others. not '
. ..
parties. to this Agreement regarding the conduit systems covered .by thisAgreement. The rights of 11 censee sha1l at all .times be subject to any.such exi sti ng agreement or 'arrangement. '
. Article' 3
FEES AND CHARGES
A) licensee shall pay all applicable fees and charges specified in the11 cense(s) granted hereunder wi thi n forty-fi ve (45) days after recei pt ofthe bill. Failure to pay all fees and charges on the sp.ecif1ed . paymentdate, shall constitute a default of this Agreement,' unless the partieshereto agree . that unusual circumstances prevented receipt,of payment byli censor. In event that such unusual ci rcumstances occurred', the parti
heTeto: shall mutu!llly. agree on a new payment date. In addition,. all feesnot paid on the specified payment date shall result in 'late 'paymentcharge.~f one and one-half (1+1/2) percent per month of the unpaid balance
or the hlghest lawful rate, whichever .is less, to Licensor.
B) .Fees and charges for. each condon system occupancy shall be computed on ani ndi vi d~al case bas i s.
C) Li censor reserves. the right to revise .the fees and charges speci fied inany or all licensees) grante.here(Jnd~r by providing. written notice tocensees1xtY"(60) days prior to the end of any term of such 1icense(s).
. .
Article 4
TERM OF AGREEMENT AND LICENSEeS)
A) This Agreement shall continue 'during such time licensor is providingcondJ.l1t .sy~tem occupancy under anyone or more Hcenses pursuant to thisAgreement". In the. event that a 1,. licenses granted hereunder expi reor areterminated. then this Agreement may be term.inated by either party with
thirty (30) days prior written notice to the other party.
B) Any licensees) issued hereunder shall continue in effect for an initialterm of five (5) years from "the date such license(s) is issued unles~
otherwi se speci fi ed 'n such li tense.
Exhibit 2
Case # ATT-O4-AT&T Complaint, Page 5 of 16
8-'
-';'"
Page 4 of 13 Pages
C) May 1,1 cense ,1 ssued 'hereunder shall be extended for successIVe terms.. 'five (5) years unless .otherwise specified in such license and 'unlesseither party provides written notice sixty (60) days prior to theexpiration date of such term of its election to terminate such license.
D) Termination of thi s Agreeme,nt or any licenseC-s) issued hereunder shall notaffeCt Licensee's liabilities,and obligations incurred hereunder prior-to
the effective date of such termination.
Article 5
TERMJNATION OF AGREEMENT AND LICENSEes)
, A) 'Licensor shall have the right ,to termi'nate this entire Agreement or alicense issued hereunder with thirtY-HID days prior written notice to,Licensee whenever Licensee is in .default' of any term of this Agreement.Default shalT include. but: not be limited to, the following conditions:
(1) If Lt.censee knowingly uses its communications facilities or ma:1ntatnssame, 'in violation of any law or in. aid of any unlawful act. orundertaking; or
C2) If U censee occupi es any porti on of a conduit system owned byLicensor without having first been is$ued a license, therefore; or
(3) If any autf\orization which may ,be required of the Licensee' by any,governmental or pr1vate authority for the construction, operations,and maintenance ' of ,the Licensee'conmunications fac111ties withinl1censors conduit system is permanently denied or revoked; or
(4) 'If the insurance carrier shall at any time notify Ucensor" 'Licensee that the policy or policies of insurance, required under, Arti c 1 e 14 hereof , w11-1 be cance 11 ed or changed and i f in the 'solereasonable judgment' of Licensor ' the requirements of Article 14 ,willno longer be ,satisfied' by policies with other insurance cal:"riers,this Agreement shall' terminate upon the effective 'date of suchcance 11 a ti on or change.
(5) 'Nonpayment as described, in Article 3 heretn~
B) .Licensor wil1 promptly notify the Licenset! in writing of any condition(s)of ,def!f,ult 'by U censee i ncl udi ng those set forth in A) above.. Licenseeshal1 take illl1lE!diate ,corrective action to eliminate any such 'condttion(s)and shall confirm in writing to licensor within thirty' (30) days followingreceipt of such' wrHten notice that the cited condttions(s) ,has ceased .or,. been corrected. If Licensee fans to discontinue or correct suchcondj tions(s) and fans to give the required confi nnation , li censor mayinunedlately 'terminate any or all licensees) granted hereunder and thisAgreement. Licensee shall ' then ' have shty C60) days to remove . ftsfacilities from licensor's conduit system.
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 6 of 16
Page 5 of 13 Pages
__n '. u
- 1
C) In the event of early termination by licensee or default of this Agreement
or any licensees) issued hereunder, ,the,licensee shall be liable to pay to,
licensor a termination l1abllity amount whether or not licensee has phcedits communication facHiti"es in licensor s facilities.Such early
termination charges shall be ' in. accordance with' the following. schedule:
Years RemalninQ in licensees.)Percent of Total Fees and ,Charc:Jes,
Rema ini ng i n li cen~e( s)
16+
11-15 ,
1001
751
5O"L
251-
O"Ln_'-_, .--
D) If,this Agreement or any "licen~e(s) granted hereunder is terminated for
reasons other than default, or, early termination, then licensee shall
remove its, communications facilities 'from Ucensor s conduit system within
, twelve months (12) ,from the " date of termination; provided, howe.ver, that
licensee, shall be liable for arid pay all fees and charges provided for in
this' Agreement to li censor unttJ liceresee s communication facilities are
physi~a11y removed
E) If licensee does not remove its cOmmunications facilities' from licensor
conduit system within ,the applicable tlme periods specified in ' this,
Agreement, licensor shall have the option to; (0 remove such 'f~c111.tiesat the expense of licensee and wi thout any 1.1 abt11ty on the part of
Licensor to liceris ee therefore; or (10 assess a ,charge not to exceed
forty. percent (4crL) of the fees and charges specified in the licensees) so
terminated. Such charge is i,n addition .to the fees and charges specified
in the terminated licensees) and shall be calculated on a dal1y basis for
each day that Licensee -communicat~on facilities remain in licensor
conduit system.
Article 6
SPECIFICATIONS
A) Licen see communications facilities shall be placed and maintained in
accordance with ' the requirementS and specifications of current applicable
Mountain Bell Practices and the current editions of the National
Electrtcal COde (NECL and the National '~lectrlcal Safety Code (NESC) andthe rules and regulations of the Occupational Safety and ' Health Act
(OSHA), all of which are incorporated by reference in this Agreement,. andany governing authority having jurhdiction over the subject matter.
Where a difference in, specifications exists, the more stringent shallapp l-y .
B) If any part of Licensee s 'co.mmunications facilities i,not' placed ,and
maintained in accordance with A) preceding, and licensee has . not correctedthe violation within thirty (30) days from rece ipt of written notice
thereof from licensor, Lfcensor may at its option correct said condition.
licensor will attempt to notify Ucensee in writing ,prior to performing
such work. whenever practicable. However , wh~n such conditions pose an
invnediate threat to the safety of the l1 censor s employee~ or the public,
interfere with the performance of the licensor ' service obligations, or
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 7 of 16
Page 6 of 13 Page~
(Article 6 conUnued) ,
pose an: immediate thre~t to the, physical, integrity of the Licensor
facilities. the licensor may perform such work and take such action that
it deems nece$sary without first giving written notice to the Licensee by
giving telephone notice'to licensee. As soon as practicable thereafter.
li cenSor will advise' licensee i n writ' ng of the work performed and the
actic:m taken , and wn endeavor to arrange for reaccommendation of
license s facUities so affected. The licensee ,shall"' responsible .for
payi ng the U censor for all reasonable costs i ncurred by the U censor for
all work; action. and, reaccommendation performed by U'censor under , this
, subsection.
Article 7 '
LEGAL REQUIR.EMENTS
licensor shall be responsible for' obtaining from ' appropriate ' public ind.private authority any required authorization to construct,' operate and,
maintain its conduit facUlties on public and private property. licenseeshall be responsible for obtaining from the appropriate public and, privateauthority any required authorization -to place. operate and 'maintain
' ,
its
communications 'facilities on 'publ ic and pr1vate property, before it occupies
conduit system located on such public and private property.
Article 8
ISSUANCE OF IJCENSES
Before Licensee may occupy' any portion of a conduit system. Licens~e must makewri tten appli cation for ~nd have recei ved wri tten 1 i cense from the
Licensor. Such appHcationCs) and licensees) shall be In the form, attached
hereto as Appendix 1. Forms A-l through A-5. Such licensees) shall state thetime nee~ed to accompli sh any make-ready work necessary to accommodate
licensee fac'lities. license applications shall be subm1tted to the
licensor at the address set forth in Artlcl~ 20 herein.Article 9
PRELICENSE SURVEY AND MAKE-READY WORK
A. When an app'llcatlon for conduit system occupancy is submitted, by the'li censee. a pre 1t cense, survey by the U censor wi 11 be required to
determine the avaH-ability of ,the conduit system to actomodate' Ucensee
communications fad li ti es. A representative of the l1 censee' may accompany
the licensor representative on the field inspection
' p
ortion of ' such
prel icense surMey.
B. The - L1 censor reta1 ns the ri ght. i n its sol e judgment. to determi ne the
aval1abl1ity of space in conduit system. In the event the licensor
determines that rearrangement of the existing facilities' in the conduit
system 1'5 required, before Ucensee communications facilities 'can be
accomodated, the make-ready charges that, will 'apply for such rearrangement
workw111 be specified as nonrecurring charges on the associated ltcense.
Such charges will be due and payable 1n accordance with Article 3 herein.
C. In performing all make-ready work. to accomodate Licensee.s communications
fac'lities. L'censor 'w'll endeavor to 'nclude such work in its normal workload schedule.
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 8 of 16
.--
Page 7 of 13 Pages
, ,
Article 10 '
CONSTRUCTION. MAINTENANCE AND REMOVAL OF COMMUNICATIONS FACILITIES
A) 'Licensee shall,' at" 'tts 'own expense, con$truct and ,maintain its
communications fac.i1ities 1'n c ondu1t 'systems covered by thh Agreement a-nd
all license(s) i ~sued hereunder in a safe condition and 'in a manner
acceptable to Lic:ensor, $0 as not to physically conflict or electrically
interfere with the facilities, attached thereon or placed therein by the
Licensor" joint users. or other au~horized licensees. Licensee ,shall
place its commun cation facilities in accorda,nce with licensor s, 'work.
diagram, In:corporated herein by reference, whi ch wn be provided to
Licensee upon execution of the l1cense~s) ,hereunder.
B) The U-censee must obtain prior written aothorlzation, from the Licensor,
approv1ng of the
, ,
work. and the party' performing 'such work., before the
Licensee shall install. remOve. or provide maintenance of its
communications facUlties in any of Licensor'conduit systems'' If
licensor does not .provi-de such writtten notification to Lice!1see within
s~ven (7) days. authorization' shall be granted. licensor shall not
withhold such authorization withqut goo~ cause.
C) :licensee shall nottty LicensQr of any r~mova1(s) or modification(s)
Licensee s c~unications ' fa:~llities from any of Licensor conduit
systems. Removal notlf'cation shall' be in the form provided in Appendix1. Form A...6. If Licenses desi res to modify its facilities that , are
located in Licensor s conduit system. Licensee shaJ 1 first notify licensor
of such. intent. .such notification shall be in the forms provided in,
Appendix 1, Forms A-4, A-5 and A-6. Licensor .reserves the right to refuse'
such request if the modifications would . create any problems to Licen-sor-
facl1iti es.
D) For each li cense , ssued hereunder, Li censor shall des i gnate the parti cu1 ar
duct(s) or' innerduc-t(s) to be occupied., the location and manner in which
licensee s cOlllllunication s 'facilities will enter and exit Licensor
condui t system and, the specific location for any associated equipment
whi ch i s per~i tted by Li censor to ,occupy the condu' t ~ystem. .such
speci:fications will be 'provided by Licensor to' Licensee on Licensor work.
diagram' incorporated 'herein by reference.
Licensee shall be responsib1e for obtaJ ning any necessary, authorization
from 'appropriate authorities to open manholes and conduct work. operations
therei'n. Licensee s employees, agents or contractors will be permitted to '
enter or work. in Licensor s manholes only when an authodzed employee or
agent-of- Licensor is present or if prior authorization waiving this
. requ-i rement : granted by ,the Li censor. If li censor s emp 1 oyee' or agent
observes any unsafe practices ' or hazardous cond,t'ons occurr'ng as a
result of the work. be'ng pe~formed' by Ltcensee employees or agents.
Ucensor sha,l1 colJtact Ucensee s author'zed representath~ for resoluti.on
of 'the problem. Ucensee agrees to pay Ucensor' for hav'ng Ucensor
employee or agent present when licensee s work. is being done 'n and around
U censor s conduit system. .such charges shall be the U censor s fully,
loaded labor rates then in effect.
" -
. E)
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 9 of 16
. .
Page 8 of 13 Pages
F) In the event of any service Qutage affecting both -Lic~nsor~s and
Ucensee fac\1;ties. both 'partin shal1'mutually agree on.. reasonablereston 1 plans.
- '
- With Licensor'prior concurrencei licensee, without charge -and, where
- avatlab-le. may temporarl1y use sp~re duct ot: innerduct for emergenc:y
maintenance purpo!)es., Such l1censee emergency fac\1 i ties !)hall be 'removed
, within ninety (90) days after - the date 'licensee replaces its existing
fadllt1es in one duct with the placement of'substitute 'facl1Uies in
, another duct un 1es s .Li censee app 11 es for and li censor grants a 11 cense, for
such conduit system occupancy. In cases where -an emergency 'exists .that
effects both parties, and where only, (;me spare i nnerduct ,or duct is'
present. Ucensor has l!Iiintenance prtor1-ty.
, If'licensee fa Us to remove "ts, fadlities within the specified . period.
Licensor' shall' have the right .to remove such fact 1 'ties' at - Licensee
expense and wi thout any 11.abi 1i ty on the part- of the Li censor for damage
to such facilities or without ~ny liability for any interruption. of
Licensee s services. or may. at its option, take over said facilities at. a
price to be negotiated between the 'parties. Shout d li censor under -, the
provisions of this Article or any .other 'applicable Articl. 'of this
Agreement remove Li~ensee s facilities from the conduit systems, covered by
thls Agreement. licensor will deliver '1;0 ,Uce-nsee the facilities so
removed upon payment by li censee of the cost, of removal ~ 'storage ' and
delivery. and all other amounts due Licensor. NQthing "n this ,Article
shaH operate 'to prevent Licensor from pursutng. at its option. any other
remedies under this Agreement or at law or in equity.
1) Licensee shall advise ltcensor in writing as to the date on which the
removal of its communications fad1ities from each, portion of' conduit
system has been' camp eted. Such noti fi ca ti on s ha 11 be 1 n the form
prov 1 ded i n Append i xl. Form A-
Article 11
' .
INSPECTION OF LICENSEE'S COMMUNICATIONS FACll..ITIES
A) licensor reserves the dght to make periodic inspectlons of any, 'part of
licensee s communications facil1t1es occupying Licensot's conduit system.
B) The frequency' and eXtent 'of su ch inspection by U censor wi 11 depend upon
li censee ' s performance hereunder.
, C) li censQr w11 1 gl~e Li ce nsee advance written noti ce of such i nspections.
except ln thos, instances where. 'in the sole judgment of Licensor. safety
cons1derations justify the need .for such, an inspection without the , delay
of wait-ing until written notice has been forwarded to licensee., A
representative'of the Licensee may accompany the, Licensor 's representativeon such field inspections.
0) ,The making 'of periodic inspections or the failure to 'do so, shall not
operate to impose upon licenso~ any liabtl1ty of 'anyk.ind whatsoever nor
relieve Ucensee of any responsibility. obligations or lability assumed
under th i s Ag reement. .
- '
Exhibit 2
Case # ATT-04-
AT&T Complaint, Page 10 of 16
Page 9 of 13. Pages
. Article 12
UNAUTHORIZED UTILIZATION OR OCCUPANCY
A)
..
If any of Licensee . c~mmunications facilities shall be found occupying
conduit systems 'for wh1ch 'no license 15 outstanding.. Licensor, without
prejudice to its other rights or remedies under this. Agreement. may impose
a charge of ten .dollars ($10~OO) per duct foot and five .hundred dollar
($500.00) for each itempf unauthorized equipment within a manhole, and
requi re li censee . to submi t in writi n9. withi n 15. days . after receipt of
wr-itten notification froln 'Licensor .the unauthorized utilization. or
occupancy, a. conduit system occupancy license application. If. such
appl i catton' 15 not received by the u.censor within the specified time
period, ~icensee may be required at 'Licensor s . option to remove its
unauthorized occupancy.or cease its unauthorized util ization within sixty --
~._.
(60) days .of 'the fro a 1 ~ate of submitting 'the required applicatio~, or
Licensor may at Lice nsor option' remove Licensee unauthorized
fac11 iti es wi thout 11 abi 1 i ty. and the exp~nse 'of such removal shall be
borne by Licensee.
B) No act or f~ilure to act by.- licensor with regard to said unlicensed use.shall be deemed as. a ratifica,tion . Qf the unlicensed use; and if any
Hcense shoulq be subsequently issued, said license shall not. operate
retroacthi.e1y.or constitute a waiver by.L.icensor of any of its rights .
privileges ' under this Agreement or. otherwise; provided'however, that
Licensee shall. be subject to ' all . 1 tabil Hies, obligations ' and.
responsibilities of this' Agreement in regards to said unauthorized use.
from i ts i ncepti on.
Article 13
LIABILITY AND DAMAGES
A) Licensor shall exerche precaution to avoid damaging the commun.ications
facn iti es of. .the Ucensee and. shall make an immediate report to the
' U censee of the occurrence of any such damage caused by i ts employees,
agents or contractors. . Licensor agrees .to reimburse the Licensee for all
reasonable direct costs .incurred by. the licensee for the physical repair
of such faciHties damaged .by the. neg1igence of Licensor. Licensor shall
not. "however, be 1 i ab 1 e to. Licensee for any nterruption of Licenseeservice' or .tor interference with the operation of Licensee
COl1llluni.c"ations facilities, or. for any spe cial, indirect, or consequential
damages aristng in any manner, including licensor s negligence, out of the
use of conduit systems or Licensor actions or omissions in regards
thereto and Licensee shall indemnify and save harmless Licensor' from and
against any and a.1l claims. demands, or causes of ac.tion by Licensee
. customers, and costs and attorney fees resulting frO!ll damaging the
. communications fac;ltties.
. B) Licensee shall exercise precautron to avoid damaging the facilities' of'
Li censor and of .other occupants of the conduit system at any time. and
shall make ci.n imrne d'ate report to the owner of facll tt'es so damaged and
licensee' assumes all respons'bility for any and all d'rect loss from such
damage cause~ by Licensee I s employees, agents or contractors. li censee .
shall have no responsibility for any 'ndirect, special, or consequenUal
damages. This paragraph B shall survive the terminat'on of this Agreement
and any " cense ., ssued hereunder.
Bxhibit 2
Case # ATT-O4-
AT&T Complaint, Page 11 of 16
Page 10 of 13 Pages
C) li censee shall i ndemn I fy, protect and save harmhs s the U censor from any,
and all damages arad costs; including attorney s fees. incurred by the
licensor arising as a result of Licensee s breach , of Article) 'hereof.
D) licensee shall i ndemoi fy, protect and save harml ess the It tensor and jot nt
user 'from and against any and all :chtms, demands, causes of. actions' andcosts. it:\cludtng attorney s fees,for damages to property and' injury 'or'
death to persons~ including but' not ,limited , to 'payments under .any
WOrkmen s Compen5a,tton law pi'" under any pl!1n for employee disabtlltyand
death' beneft ts, wht ch ,may arise out of or be caused by the placement,
maintenance, presence, use or removal of Licensee's facillt1es, or by any
act or omission of the Licensee s employees, agents, or contractors.
E) licensee shall promptly advise ~the Licensor of 'all claims relating to
damage of property,. or Injury or death of persons, arising -Qr' alleged" 'to
have atisen in any manner, directly or indirectly, by ,the placement,
maintenan~e, repair, replacement,' presence, _use or. remOval of
. .
the
Licensee's facUities , Copies of all accident reports ,and statements . made ,
to licensee s t nsurer by 'the ' Licensee or others sha 11 be furn i shed
promp.tly to the L1 censor. .
F) In the event that Licensor issues a license to Licensee for cQ~autt system-
occupancy,and licensee is unable to. use licensor-'s du~t or innerduct due
to previous damage to such duc,t or i nnerduct, U censor shall incur 'the
cost to repair such facilities. However, in no event , shall ' Ucensor- be
liable, to licensee for any lost t~me or any other indirect damages or
, charge s I ncurred by Li censeeas a resul t of such damage~ fac,t1es. '
Article 14
INSURAN CE
A) ,Licensee shall obtain and maintain insurance, including. endorsements
insuring the , indemnification provisions of this Agreement., issue~ by an
i osurance carri er 'mutually satisfactory to Licensor and .u censee to
protect, the Licensor from and, again~t all c1aims~ demand~, caus~s ofacUons, judgments, costs, incJuding attorney fees, expenses andliabilities of 'insurable klnd and nature wh1ch may arise'or.result,
directly or indirectly from or by reason of such loss,' injury or damage .
c~vered in this Agreement including Article 13 preced in~.
B) The amounts of such insurance:'
1) agai nst 1 iabi1 i ty due tQ damage to property shall .be not less tha,n
$500,000 as to anyone occurrence and $1,000,000 ~ggregate. and;
2) against llabiH.ty due to inJury or death of persons shall be not less
than $500,000 as to any one: person and $1,000.000' as to. any :oneoccurrence.
- .
C). Ucense shall submit to licensor certificates by each company. 'nsuring
Li censee to' the effect that ' t has insured Licensee for all 'abi 1 i t' es
Licensee covered by thh AgreeDlent and that it wi 11 not cancel or change
any such pol i cy of 'nsurance i ss~ed to, U censee, except 'after thirty (30)
days written not'ce to Licensor. Such c,ertificates shall be in a form
mutually satisfactory to licensor and Lit:ensee.
twitbstanding the foregoing, Licensee may self-insure for any insurancecoverage required hereunder.
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 12 of 16
8--
Page 11 of 13 Pages
D) All insurance . required in accordance with B) .and C) preceding. must beeffective .before U censor. will authori ze .occupancy of a condui t. system andsha 11 remain i n force until such U censee ' s fac" i ti es have been removedfrom all such conduit systems. In the..event that. the Licensee shall. fanto maintain the required insurance.coverage~ Licensor may pay any premium
thereon falling. due , and the Licensee shall forthwith reimburse the. Licensor for any such premium paid.
. . Article 15
COMPLIANCE WITH LAWS
Both parties hereunCJer shaH .comp1y with all . applicable provisions . of.workmen . compensation laws, unemploymenf. compensation .laws, the .-f.:edera~.Social Security Law, the . Fair Labor Standards Act and all other applicablefederal, state and local. laws and. regulations.
Article 16
CONFIDENTIALITY
Both Licensor and L1censee agree to treat. thi s Agreement and any .other relatedinformation whether 1n tangible form or obtained. from the use of Licensor. sconduit system. as proprietary, and said information . shall not be rep.roduced,published, or disclosed to any third .party. without the prior wri tten. consentof. the other party. All copies of Information provided to . either party shallbe returned to disclosing party upon request or termi nation . of- thisAgreement. Each party shall take all necessary precautions, including. butnot l1mited to,lnformlng its employees of ttie proprietary nature of anyinformation provided by the disclosi ng party and . the need to gua-rd the secrecyof such nformation. and l1mi t access to such information to employees ofrecipient party who have a need for such lnformat~on to perform its
ob11 gatlons hereunder.
Article 17
AUTHORIZATION NOT. EXCLUSIVE
Nothing. herein contained shall be construed .. a grant of any e1Cc1usiveauthorization, right- or privilege to Ucensee. Licensor shall have the right
to grant, renew and extend rights and privileges to others. not parties to thIsAgreement, by contract or otherwise, to use any conduit system ~overed by thisAgreement. .
. Article 18
ASSIGNMENT OF RIGHTS
A) L1censee shall not assign, tran ster, or 'sub1;censi(this Agreement .or anylicense or any authorization gr~nted under this Agreement and thi sAgreement shall not inure to the benefit of. Li censee I s successors orassigns, without the prior written consent of Licensor. .LJcensor maywitho1d such consent .in its sole dlscretlon. Licensee shall pay $100
adm'nlstratlv~ processing fee to Licensor prior to consent beln~ g~anted.
. !
B) In the event such consent or consents ar~' granted by Licensor . then theprovhions of thts Agreement shall apply to and bind the successors and
assigns of the Licensee.
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 13 of 16
8_-
Page 12. of 13 Pages
Article 19
F AlLURE TO ENFORCE
Failure of Licensor to enforce or insist upon compliance with any of the terms
or conditions of this Agreement~or to give notice or declare this Agreement or
any authorization granted hereunder terminated shall not constitute a generalwaiver or rellnquishmentof any term or condition of this Agreement, but the
same shall be and remai n .a t a 11 times i n fuH force and effect. Any wa 1v~rmust b~ in writing, and signe~ by both parties.
Article 20
NOTICES AND DEMANDS
A 11 demands a~d requests gi v~nby ,o~ party- to the other party shall be ' inwri ti ng ,and shall be deem~d to be duly, given. on the date de livered i n person.by te1ex. cablegram " United States ,man or deposited. postage prepa:id. in the
' United States mail, addressed as follows:
To L' censee:
The' Ameri'can Te 1ephone and Telegraph Company
Attention: ChucK Meier
: (Addressf 5925 West La.s Positas, Blvd... Room 1026
(City. state. Zip Code) Pleasanton" CaHfornia. 94566
To U censor.
The Mountain States Telephone and . Te 1 egraph Company
Attention: Ri cK A. Rosl1 10
(Address) 5820 Stoneridge Mall Road. Suite 100
(City. State. Zip ,Cpde) Pleasanton. California. 94566
or to such a~dress as the , parties hereto, may from time to time specify inwriting.
Article 21
MISCELLANEOUS
A) In any action. brought pur~uapt to the terms of this Agreement. theprevail i ng party 'i n such action shall 'be enti tl ed to re!:over from the
other party any and all reasonabl e attorneys I fees incurred by such party
i n connecttonwi th such action. '
B) This Agreement shall be construed in accordance with the laws of the State
where tne lic~nsed conduit system is located.
C) Any modification of any terms a~d conditions of this Agreement. shall be
set forth in wri ting and signed by the parties hereto.
- I
Exhibit 2
Case # ATT-O4-AT&T Complaint, Page 14 of 16
Page 13 of 13 Pages
. .
Article 22
ENTIRE AGREEMENT
A) This Agreement, together with a 11 Appendi ces a~tached hereto, execut
during the term of this Agreement, shall constitute the enti're Agre'ement
betwe~n .the parties with respect to. ~he subject matter hereof.
$)
Thi s Agr~ement. supersede$ a 11 previous agreements, ~he~her wri tten . ororal, between .u censor and Lt censee for attachment and mai ntenance' of
LIcensee'communications facil1ties in conduit 'systems within the
geographi cal area covered by this Agreement except as expressed 'herei n.All currently effective Jicenses heretofore granted pursuant to .such
previous agreements shall be subject tQ the terms and conditions of thi'Agreement.
C) Both parties. hereto represent. they hav~ read this Agreement, unders~and .. it, agree to' be bound by all . terms and conditions state~J- herein and
acKnowledge a receipt' of a , signed, true and ~xact copy of thi~ Agreement.
IN WITNESS WHEREOF, the parties hereto 'have caused th i Agreement to be
executed , by the i r du 1 y .authori zed off' cers as of'the day arid year f.i rs t
wri tten above.
Licensee:L i censor:
The Mountain Stat~s Telephone
ancJ Telegraph Company
The American Telephone and
Telegraph Company
Signed:
~~~
Name:' ChUCK Meier Name :
Title: District Manager Title: Executive' Director
Date Signed: l.f/(.o( JUN 22 \988 Date Signe:~tworK fstiKr~B
APPROVED
~~ 79 'F9.~.
- 'Attorney.
Signed:. .
Title: Req'onal Account Manager - Hest
. Date Signed: 54.;'49
/ /
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page IS of 16
It".A~l
ADMiNIsTRAiTvE FORMS .
THIS Appendix 1 h an integral part .'9f the ,l1cense Agreement No. I-OO1C
dated May 28. 1988 and contain.s the administrative forms governing theuse of. L kensor I s con~u1t system by. L1 censee I S cOlllDUni cations facn Hi es.
. .,
INDEX' OF ADMINISTRATIVE FORMS
Appl ication for Co~dui t ~ccupan'y .llcenses
Conduit System Occupaocy License and .associated fees/charges
Coridui t System Oi agram
Cable, t~ Occupy 'CQnduit
Equ.pmerit Hous i ngs to be Pl aced 1 n 'Manho1 es
Notification of Surrender ,or Modificat1on
of Conduit Occupancy U cens'e by L1 censee .
Exhibit 2
Case # ATT-O4-
AT&T Complaint, Page 16 of 16