20070327Response to questions.pdf

Mary S. Hobson
Attorney & Counselor 7Pi)-
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March 27 2007
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, ill 83702-5983
RE:Docket No. QWE-06-
Dear Ms. Jewell:
Enclosed for filing with this Commission are an original and seven (7) copies of QWEST
CORPORATION'S RESPONSE TO COMMISSIONS QUESTIONS IN ORDER NO.
30241 in the above referenced matter.
If you have any questions, please contact me. Thank you for your cooperation in this matter.
Very truly yours
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Enclosurescc: Service List
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Mary S. Hobson (ISB. No. 2142)
999 Main, Suite 1103
Boise, ID 83702
Tel: [phone]
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Douglas R, M. Nazarian
Hogan & Hartson
111 South Calvert Street
Baltimore, MD 21202
Tel: [phone]
drmnazariano;v,hhlaw. com
Attorneys for Qwest Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
AT&T COMMUNICATIONS OF THE
MOUNTAIN STATES, INC.
Complainant,Case No. QWE-06-
QWEST CORPORATION
QWEST CORPORATION'
RESPONSE TO COMMISSION'
QUESTIONS IN ORDER NO. 30247
Respondent.
INTRODUCTION
Qwest Corporation ("Qwest") files this Response pursuant to the Commission s February
2007 Order directing AT&T and Qwest to file briefs addressing two questions concerning the
applicable limitations period and the discovery date on which AT&T's claims began to run.
Despite their nominal state law labels, the gravamen of AT&T's claims is federal -
federal because the Commission s authority to regulate interconnection relationships among
carriers arises under federal law, and federal because the obligations supposedly begetting
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
AT&T's rights arise under federal law. Accordingly, the Commission should apply 47 u.S,
~ 415's two-year limitations to AT&T's claims and dismiss them; any other result would violate
not only the structure of the Act but also the federalism concerns for state sovereignty embodied
in the Tenth Amendment. AT&T's claims are barred because they accrued no later than mid-
2002, as both the record and the decisions of other tribunals establish beyond any dispute. For
these reasons, and those set forth in Qwest's prior filings, Qwest respectfully requests that
Commission dismiss AT&T's Complaint.
ARGUMENT
Courts and utility commissions across the Qwest region have ruled - most recently, the
United States District Court for the District of Nebraska - that AT&T's substantively identical
claims are federal in nature and subject to dismissal pursuant to section 415's two-year
limitations period. See, e.Memorandum Opinion AT&T Commc 'ns of the Midwest v. Qwest
Corp.Case No. 8:06CV625 (D. Neb. Feb. 27 2007) ("Nebraska Dismissal"), attached as Ex. 1.
Additionally, as the Idaho Supreme Court recognized in McNeal v. Idaho Pub. Uti!. Comm '
132 P.3d 442 (Idaho 2006), the Commission s authority to hear claims based on breaches of
interconnection agreements arises not under state law, but federal. The Telecommunications Act
(the "Federal Act") authorizes state commissions to hear telecommunications cases involving
disputes arising under interconnection agreements pursuant to federal law and limits that
authority to effectuate nationwide objectives. To permit varying periods oflimitation from state
to state based on state limitations periods would contravene Congress s intent and discriminate
against carriers that happen to be sued in states with more generous statutes of limitation. See
J. Phillips Co., v. Grand Trunk WRy. Co.236 U.S. 662, 667 (1915). For these reasons, and
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
as discussed below, the Commission s responsibilities under the Federal Act do not permit
application of a state law limitations period to these claims. Instead, the Commission should
recognize the quintessentially federal gravamen of AT&T's claims, apply section 415's two-year
limitations period, and dismiss them,
The Gravamen of AT&T's Breach of an Interconnection Agreement Is
Indisputably Federal in Nature and Therefore Governed by Section 415
AT&T'S OWN RESPONSE MAKES CLEAR THAT THE
GRAVAMEN OF ITS CLAIM IS FEDERAL IN NATURE.
By AT&T's own reckoning, it is clear that the gravamen of its claims in this Commission
is federal in nature. Hayden v. Lake Fire Protection Dist. v. Alcorn 111 P .3d 73 (Idaho 2005).
AT&T's Complaint relates to events that ended over four years ago. It involves matters and
allegations that AT&T has actively pursued, in various courts and regulatory agencies, since
early 2002. AT&T does not dispute that it is attempting to enforce Section 252(i) through its
interconnection agreement. AT&T concedes that the interconnection agreement at issue arose as
a result of a federal mandate imposed by the Federal Act. Nor can AT&T dispute that its rights
to opt into the terms of Qwest' s agreements with other carriers, whatever they may be, arise
under federal law, as did any obligation Qwest had to file those agreements for approval by the
Commission in the first place.
Courts and commissions across the region have agreed with these fundamental
principles, 1 most recently (and significantly) the United States District Court for the District of
See Order Granting Motion to Dismiss, AT&T Comm cns ofthe Midwest, Inc, v.Qwest
Corp., Docket No. FCU-061-51 (Iowa Utils. Bd. Dec. 4 2006) (IUB Dismissal Order), rehearing
denied Docket No. FCU-061-51 (Iowa Utils. Bd. Jan. 12 2007) (ruB Rehearing Order); Order
No. 06-230 AT&T Commc ns of the Pac. Nw., Inc., v. Qwest Corp.UM 1232 (Or. P.C. May
2006) (OPUC Dismissal Order), reconsideration denied Order No. 06-465 (Or. P.C. Aug,
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
Nebraska, which granted Qwest's motion to dismiss these same claims. After this Commission
issued its February 16 order requesting further briefing, the United States District Court in
Nebraska on February 27 rejected AT&T's argument that it could avoid application ofthe
federal statute of limitations by pleading nominal state law claims: "The Court finds that
AT&T's claims are barred by the two-year statute oflimitations contained in 47 U.C. ~ 415
and will grant Qwest's motion to dismiss." Nebraska Dismissal, at 7. The court held that
AT &T may not avoid the two-year statute oflimitations contained in ~ 415 simply by
characterizing its claims as state law claims,Id. at 6. The Nebraska federal district court
agreed with Qwest that "(n)otwithstanding AT&T's characterization of its claims. . . . (a)ny duty
on the part of Qwest to file its interconnection agreements with the NPSC (Nebraska Public
Service Commission) and to make the terms available to other CLECs arose under ~~ 252(e) and
(i).Id. As such, the court concluded that "(t)he claims in this case necessarily require the Court
to determine whether Qwest complied with the Telecommunications Act " and that "the ultimate
issue in this case is an interpretation of federal law.Id. Thus, just as the Oregon Commission
had decided before it, the Nebraska federal district court dismissed AT&T's complaint in its
entirety based on the application of Section 415. There, as here, the state law labels did not
matter: the actual substance of AT&T's claims there and here is federal and compels the
application ofthe Federal Act's two-year limitations period.
2006) (OPUC Reconsideration Order); Memorandum and Order Addressing Motion to
Remand AT&T Commc 'ns of the Mountain States, Inc. v. Qwest Corp.Case No. 2:06CVOO0783
, at 9-10 (D. Utah Feb. 13 2007); Order Denying Motion to Remand AT&T Commc 'ns. of
the Mountain States, Inc. v. Qwest Corp.Case No. 06-CV-232-D (D. Wyo. Dec. 12 2006)
(Wyoming Remand Order).
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
AT&T presented the Nebraska federal district court with all of the same substantive
arguments that it has made here, including AT&T's attempt to construe this case as one of mere
contract interpretation and its misinterpretation of Pacific Bell v. Pac- West Telecomm, Inc.325
3d 1114, 1128 (9th Cir. 2003), and other similar cases. See AT&T Response, at 4-5. But in
granting Qwest's motion, the Nebraska federal district court looked to federal first, appreciating
that AT&T's claims did not require it to interpret an interconnection agreement to dispose of the
case. The essential right that AT&T claimed had been breached was the right to "opt in" under
other interconnection agreements as provided by federal law. As the Nebraska federal district
court implicitly recognized, trying to frame that claim as a contractual obligation or a common law
claim is immaterial; where the statute creating that duty is federal, the claims are federal and the
federal limitations period governs.
This position has been recognized in another similar case by the United States District
Court for the District of Wyoming. The Wyoming federal district court, ruling on AT&T'
motion for remand to the state court, rej ected AT&T's argument that federal jurisdiction does not
apply because AT&T had pled its claims only under state law. See Wyoming Remand Order at
, The Wyoming federal district court agreed with Qwest that federal question jurisdiction exists
because "(AT &TJ's Complaint clearly asserts violations of (QwestJ's obligations under the
Telecommunications Act." See id. at 8. The Wyoming federal district court held that
(a)lthough Plaintiff characterizes its claims as state law claims and insists that it is merely
seeking to enforce the terms of its agreement with Qwest " the underlying predicate acts "all
arise out of purported violations of Qwest's obligations under the Act." Id. at 8-
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
The Iowa Utilities Board ("IUB") also recently examined similar claims by AT&T
cloaked in state law, against the backdrop of the 2002 proceedings, and dismissed the complaint.
In dismissing AT&T's claim there , the IUB reached two important conclusions: (1) that "this
action clearly arise(s) out of the same transaction that was at issue in Docket No. FCU-02-2 (the
2002 ruB enforcement docket opened as a result of AT&T's letter to the IUB): Qwest's failure
to file with the Board certain interconnection agreements as required by law " and (2) that butfor
that transaction, Complainants have no claimfor breach of contract, no claimfor violation of
Board rules, and no claim for common law fraud.IUB Dismissal Order at 18 (emphasis
added). The Iowa Board subsequently denied AT&T's Petition for Rehearing on January 12
2007, dismissing AT&T's claims - including a similarly-styled breach of contract claim under
Iowa law. See IUB Rehearing Order.
In the course of reaffirming its prior Dismissal Order, the Iowa Board specifically
characterized AT&T's claims as having "state law elements but. . . ultimately (being) based on
federal law (Qwest's obligation to file interconnection agreements with the Board pursuant to 47
C. 9252(e)).See id. at 4. The reasoning of these decisions supports a finding that the
gravamen of AT&T's complaint is federal in nature.
The federal nature of AT&T's complaint is made even more abundantly clear considering
the interconnection provisions on which AT&T relies; they all are round-about ways of trying to
enforce federal obligations and to circumvent the limitations period found under the Federal Act
rather than central, substantive provisions ofthe agreement.2 AT&T's reliance on section B of
Of course, AT&T's reliance on Section 2.1 does not state a breach of contract claim as a
matter of law. Section 2.1 requires Qwest to make available those terms and conditions
approved by the Commission under Section 252 of the Act." Section 2.1 (emphasis added).
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
the "Scope of Agreement " which provides that the parties "shall act in good faith and
consistently with the intent of the Act" in carrying out their obligations under the Agreement
cannot end-run the investigations that AT&T initiated years ago and the requirements imposed
by federal law. The only basis suggested by AT&T for Qwest's alleged lack of good faith is its
failure to file the Eschelon and McLeod agreements. See AT&T Response, at 11-12. But AT&T
admits that there was uncertainty regarding the provisions identified in Section 2.1 and that "the
rule was being challenged in court at the time.Id. at 9. And given the uncertainty with the law
surrounding the filing requirement, Qwest sought formal guidance from the FCC regarding
which agreements needed to be filed. See Memorandum Opinion and Order In re Declaratory
Ruling on the Scope of the Duty to Fi!e and Obtain Prior Approval of Negotiated Contractual
Arrangements Under Section 252(a), WC 02-, 17 FCC Red 19337 (FCC 2002); see also Gen.
Elec. Co. v. Porter 208 F.2d 805 , 816-17 (9th Cir. 1954) (finding "(t)he requisite good faith was
met when there were substantial unsettled issues oflaw
);
Brinderson-Newberg v. Pacific
Erectors 971 F.2d 272, 283 (9th Cir. 1992) (holding that where genuine issue exists regarding
contract terms and liability, insurer s refusal to pay claim did not constitute breach of implied
covenant of good faith and fair dealing). However AT&T couches them, the gravamen of
AT&T's complaint arises entirely from rights and obligations created and defined by federal law.
Yet, AT&T has averred that the agreements upon which it seeks recovery were "secret" and kept
hidden from AT&T by Qwest's failure to file them and have them approved in accordance with
Section 252. Thus, by AT&T's own reckoning, there can be no breach of Section 2,, as a
matter of law, when the very agreements were never approved by the Commission under Section
252. Qwest respectfully requests the Commission dismiss any claim based on this provision if
the Commission determines to proceed under a state law statute of limitations.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
B. THE NATURE OF THE CLAIMS AND THE NATURE OF THE
COMMISSION'S JURISDICTION REQUIRES APPLICATION OF
SECTION 415
The cases cited for the proposition that "state law governs the question of interpretation
and enforcement of interconnection agreements see Order No. 30247 at 4 and AT&T Response
at 4-3 leave open the question ofthe applicable limitations period. These cases recognized a
specific role for state law in borrowing principles of contract interpretation, but also the primacy
of federal law; indeed, the Ninth Circuit specifically admonished state commissions to be aware
of their "weighty responsibilities of contract interpretation under ~ 252.See e.g., Pac. Bell 325
3d at 1128 (9th Cir. 2003).4 In the first instance, a state commission "has an obligation to
interpret the Agreement within the bounds of existing federal law.See, e.g., Southwestern Bell
Tel. Co. v. Brooks Fiber Commc ns of Okla. Inc.235 F.3d 493, 499 (10th Cir. 2000).
AT&T cites and discusses Illinois Bell Tel. Co. v. Worldcom Techs. Inc.179 F.3d 566
573- 7 4 (7th Cir. 1999), for the proposition that the interpretation and enforcement of an
interconnection agreement "present( s) only a question of state law" to which only a state forum
may supply the remedy. See AT&T Response, at 4. It does so notwithstanding that it is bad law.
The Supreme Court has rejected such a narrow reading of a federal court's jurisdiction under the
Federal Act and under federal law to review actions involving enforcement of interconnection
agreements, Although the Supreme Court withdrew certiorari as improvidently granted, it heard
the "same questions, arising in the same factual context" in Verizon Maryland, Inc. v. Public
Service. Commission of Maryland 535 U.S. 635 643-44 (2002). See Mathias v. Worldcom
Techs.535 U,S, 682 , 683-84 (2002) (withdrawing certiorari). Contrary to AT&T's arguments
the Supreme Court emphatically came to the opposite conclusion. While the Supreme Court
found that 47 U.C. ~ 252(e)(6) did not strip federal courts of their general federal jurisdiction
under 28 U.C. ~ 1331 , the Supreme Court stated that the Federal Act expressly precluded state
law review. The Supreme Court noted that "where otherwise applicable (state) jurisdiction was
meant to be excluded, it was excluded expressly.Verizon Md., Inc.535 U.S. at 644.
Notably, Pacific Bell never held that federal law does not apply. The Ninth Circuit
merely pointed out that that at least one court had noted that courts borrow state law contract
principles when interpreting and enforcing interconnection agreements. Pac. Bell 325 F .3d at
1128.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO, 30247
In this regard, AT&T misapprehends the interplay the Federal Act intends for federal and
state law in this context when it argues that "the agreement alone - not the 1996 Act - (J governs
the parties' relationship" and that "parties to an interconnection agreement have no independent
rights under the 1996 Act vis-a-vis each other.See AT&T Response, at 6.5 First, AT&T's
argument does not square with the terms of the Federal Act. The Federal Act permits some
flexible negotiation, but is limited in that parties may negotiate only "without regard to the
standards set forth in subsections (b) and (c) of section 251." Compare 47 U.C. 252(a)(1) with
AT&T Response, at 6 ("Among other things, parties are free to negotiate terms of
interconnection agreements 'without regard to the rest of the 1996 Act"(citing 47 U.
252(a)(1)) (emphasis added); see also AT&T Response, at 8 (while citing to Section 251
claiming that "( t )he 1996 Act did not require these terms (at issue in the complaint) to be
included, for it allows interconnection agreement to be reach and approved 'without regard to
other provisions of the Act (emphasis added). Because the other sections found in Title
remain in force, approval of an interconnection agreement does not and cannot remove the
parties from further regulation under that Chapter. For example, even an interconnection
agreement that is voluntarily negotiated between an ILEC and a CLEC must still be submitted to
the relevant state commission(s) for approval, and the relevant state commission(s) can reject the
5 AT&T's argument is curious in the first place given that the Agreement recites that it "
a combination of agreed terms and terms imposed by arbitration under Section 252 of the
Communications Act of 1934, as modified by the Telecommunications Act of 1996, the rules
and regulations ofthe Federal Communications Commission" and the orders, rules, and
regulations of the Idaho Public Utilities Commission; and as such does not necessari!y represent
the position of either Party on any given issue.AT&T Amended Complaint, Ex. 1 (Recitals)
(emphasis added). Parties to contracts formed under state law cannot compel arbitration to force
a meeting of the minds that otherwise is not present, and the agreement itself dispels any claim
that this interconnection agreement was "freely negotiated.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
agreement based on factors set out in 47 U.C. g 252(e) - a feature that distinguishes
interconnection agreements from purely private contracts. See 47 U.C. ~ 252(e). Thus, the
courts counsel that a state agency may not appropriately look to an interconnection agreement to
attempt to ascertain whether state or federal law should apply to a claim without first
ascertaining applicable federal law. See, e.g., Pac. Bell 325 F.3d at 1128; Brooks Fiber
Commc ns of Okla. Inc.235 F.3d at 499. Otherwise, under AT&T's specious theory, parties to
an interconnection agreement could completely write out a state commission s jurisdiction
pursuant to Section 252 to interpret and enforce interconnection agreements by "negotiating
such a provision "without regard to" the Federal Act.
AT&T's reliance on Law Offices of Curtis V Trinka LLP v. Bell Atlantic Corp.305 F.
, 104 (2d Cir. 2002), to claim that "a carrier with an approved interconnection agreement may
not sue for a stand-alone violation of the 1996 Act " does not support its theory and is
undermined by AT&T's own conduct.See AT&T Response, at 7. Trinka involved alleged
violations of Sections 251 (b) and ( c), even though the parties had negotiated the terms of their
interconnection relationship in their agreement, and did not address the question whether a claim
under an interconnection agreement was federal in nature. Here, AT&T's claims flow not from
Qwest's compliance with negotiated terms , but from AT&T's rights (or not) to opt into
AT&T has not hesitated trying to pursue "stand-alone violation(s) ofthe 1996 Act
notwithstanding the existence of an interconnection agreement, in other venues. For example
AT&T's complaints in Oregon included alleged violations of federal law , specifically Sections
251 ( e) and 252(i), as well as breach of contract claims predicated on the same violations. See
Exh. 2. Given AT&T's insistence that it may only seek recovery based on the terms of its
interconnection agreement, it is puzzling that AT&T has also asserted these federal law
violations and is continuing to pursue them. That said, the Second Circuit was careful to note in
Trinka the unique circumstances and "emphasize( d) that our analysis is limited to section 251
the Telecommunications Act and does not address other provisions of that Act." Id.at n. 10.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
agreements with other carriers that Qwest failed to file and make available under Section 252(i).
Parties are not permitted to negotiate "without regard to" these provisions. Under Section 252(i),
CLECs may opt into approved interconnection agreements only ifthey meet certain conditions.
These rights are wholly created by the Federal Act and are not available under state contract law
principles.
In sum, as the Nebraska federal court held in dismissing these same claims, AT&T'
claims arise from duties created by the Federal Act and the FCC rules. Moreover, those
provisions speak directly to the rights and obligations of the parties here, making AT&T's claims
subject to 47 U.c. ~ 415, For these reasons, even ifthe Commission is directed to borrow state
law principles to interpret provisions ofthe agreement, it must apply Section 415 to AT&T's
claim in the first instance pursuant to its exercise of federal authority.
APPLICATION OF STATE LAW - SPECIFICALLY A STATE
LIMITATIONS PERIOD - WOULD VIOLATE THE TENTH
AMENDMENT
The primacy of federal law, and specifically Section 415, is made even more compelling
because of the potential Tenth Amendment issues that arise when state commissions hear state
law breach of contract claims using a state limitations period under the guise of federal authority.
State commissions exercise the authority granted by their respective legislatures. Many
state commissions, including this Commission, lack the authority under state law to hear breach
of contract claims.7 Federal courts recognize, however, that state commissions have the
McNeal 132 P.3d 442 (stating that generally, the construction and enforcement of contract
rights lies with the courts and not the Commission); see also Ethyl Corp. v. Gulf States Uti!s.,
Inc.836 So.2d 172, 176 (La.Ct.App.2002) (stating that Louisiana PUC has no jurisdiction under
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO, 30247
authority to interpret and enforce interconnection agreements under federal law and direct state
commissions to borrow state law contract interpretive principles in carrying out those federal
responsibilities. To that end, the Federal Act contemplates a nationwide scheme where state
commissions are the first to hear disputes involving interconnection agreements with appeal
available to federal district court. "While the state utility commissions were given a role in
carrying out the Act, Congress 'unquestionably' took 'regulation oflocal telecommunications
competition away from the State' on all 'matters addressed by the 1996 Act;' it required that the
participation of the state commissions in the new federal regime be guided by federal-agency
regulations.Indiana Bell Tel. Co. v. Indiana Uti!. Reg. Comm '359 F.3d 493 494 (7th Cir.
state law over tort actions or contract disputes involving a utility); Wi!shire Constr. Co. v. Union
Elec. Co.463 S.W.2d 903 905 (Mo.1971) (While the "Commission does have exclusive
jurisdiction of all utility rates
" "
when a controversy arises over the construction of a contract or
of a rate schedule upon which a contract is based, and a claim of an overcharge is made, only the
courts can require an accounting or render a judgment for the overcharge.
);
accord State ex rei.
GS Techs. Operating Co. v. Pub. Servo Comm 'n, 116 S. W3d 680, 696 (Mo.Ct.App.2003)
(determining that controversies over contracts are enforceable by courts, not the commission
because courts can enforce contract and enter judgment); Southwestern Pub. Servo CO. V. Artesia
Alfalfa Growers ' Ass '353 P.2d 62, 68-69 (N .M. 1960) (noting that New Mexico law allows
PUC to hear question of whether a public utility could enter into a contract but prohibits a PUC
constructing or interpreting the contract or determining rights and liabilities arising out of the
contract); accord Summit Props., Inc. v. Pub. Servo Co. ofNM 118 P.3d 716, 722 (N.M. App.
Ct. 2005) (same); T. W Phillips Gas and Oi! Co. v. Peoples Natural Gas Co.492 A.2d 776, 779
(Pa. Cmwlth Ct. 1985) (stating that PUC does not have jurisdiction over private contractual
disputes or the authority to award damages in negligence or contract actions); Hi-Country
Estates Homeowners Ass V. Bagley Co.901 P.2d 1017, 1023 (Utah 1995) (citing Kearns-
Tribune Corp. v. Public Servo Comm '682 P.2d 858, 860 (Utah 1984)) ("Although the PSC has
power to construe contracts affecting matters within its jurisdiction such as rate-making, ordinary
contracts unrelated to such matters are outside of the purview ofPSC jurisdiction.
);
Green
Mountain Power Corp. V. Sprint Commn 'cns 779 A.2d 687 690 (Yt. 2001) (stating that
( 0 )rdinarily, public service boards and commissions do not have the authority to rule on claims
for damages alleged to have been caused by negligence or breach of contractual obligations
Benwood-McMechen Water CO. V. City of Wheeling, 4 S.E.2d 300, 303 (W. Va. 1939) (finding
that the power to pass on the validity of a private contract or enforce its provisions is entrusted
exclusively to the courts).
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
2004) (citing AT T Corp. v. Iowa Uti!s. Bd.525 U.S. 366 378 n. 6 (1999)); see also
Wisconsin Bell, Inc. v. Bie 340 F.3d 441 , 444 (7th Cir. 2003) (noting that the Federal Act
explicitly excluded the state courts from getting involved"
);
Verizon North Inc. v. Strand 367
3d 577, 584 (6thCir. 2004) (discussing the Federal Act's structure of review and approval by
state commissions with FCC oversight andfederal review). Yet, the Commission s Order No.
30247, and AT&T's reading ofthose cases and the Federal Act, takes that analysis a step further
and implicitly assumes that the Federal Act has authorized state commissions, notwithstanding
sovereign state legislative decisions to the contrary, to hear state law breach of contract claims.
Congress cannot bestow on a state commission authority under state law that it does not
already have under state law - that would put Congress in a position of attempting to regulate an
essential state function - the states' prerogative to delegate authority to state agencies - in
violation ofthe Tenth Amendment.Coyle v. Smith 221 U.S. 559 565 (1911) (finding that
Congress exceeded its authority in legislating the location of Oklahoma s state because the
power to locate its own seat of government is a "peculiarly state power(J"). But there is
dispute that Congress may grant authority to hear claims that derive from federal law. MCI
While Courts have upheld the Federal Act against challenges on sovereign immunity
grounds because states voluntarily authorized state commissions to "regulat( e) on behalf of
Congress" and waived their sovereign immunity in return MCI Telecommn 'cns Corp. v. Ill. Bell
Tel. Co.222 F.3d 323 , 343 (7th Cir. 2000) (emphasis added), the voluntariness ofthat waiver is
only limited to suit in court, however. No court has gone so far as to find that a state
authorization allowing state commissions to exercise federal authority pursuant to the Federal
Act also constitutes authorization for Congress to take over a state s legislative functions with
respect to state agencies and enlarge their authority under state law. New York v. United States
505 U.S. 144, 112 (1992) (holding that state legislatures are not subject to federal direction).
AT&T's position asks this Court to simply gloss over these tensions and disregard an appropriate
construction ofthe Federal Act, one that is consistent with the findings in Nebraska, Iowa, Utah
and Wyoming, in favor of a reading that raises grave constitutional questions.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
Telecommn 'cns Corp, 222 F.3d at 343 (noting that "state commissions have conducted
arbitrations for interconnection agreements, have approved and enforced those agreements, and
have acted on an SGAT under a federal grant of power, Their authority to act was derived from
provisions of the Act and not from their own sovereign authority
Although state law may provide the relevant principles of contract interpretation for the
Commission to apply in interpreting interconnection agreements, it does not follow that the
Commission may disregard Section 415 of the Act and attempt to proceed under a state statute of
limitations for contract actions in exercising its federal authority,9 In the first instance, the
Commission s power derives from the Act, not state law and not all Commissions have the
authority under their respective authorizing statutes to hear breach of contract claims, These
See e., Masoner v. First Community Ins. Co.81 F.Supp.2d 1052 , 1055-56 (D. Idaho
2000) (holding that federal law applies to disputes arising under "standard" insurance policy
issued pursuant to National Insurance Act of 1968 and noting any differences between the policy
and Act to be "of little consequence" because Congress intended to establish policies national in
scope) (citing Spence v. Omaha Indemnity Insurance Company, 996 F.2d 793 , 795 (5th Cir.1993)
(holding that breach of contract claim brought by insureds against WYO company was governed
by procedural requirements of ~ 4072) and Froehlich v. Catawba Insurance Company,
Supp.2d 597, (W.Ya.1998) (holding that ~ 4072 vests federal courts with exclusive original
jurisdiction over claims arising out of policy issued by WYO company pursuant to the National
Flood Insurance Act)).
In this regard, Section 415 is more closely analogous to the statutory scheme embodied in
the Federal Tort Claims Act ("FTCA"). While the FTCA looks to state law for the applicable
substantive tort law
, "
Congress has specifically provided a federal limitations period in 28 u.S.
~~ 2675(a) and 2401(b), and the interpretation ofthat limitation is a matter of federal law.
Bai!ey v. United States 642 F.2d 344, n.l (9th Cir. 1981) (adding that "Appellants are mistaken
in arguing that state law governs the jurisdictional question in this case ). Similarly here
Congress enacted a clear limitations period in Section 415 ofthe Act, and its two-year limitation
period controls the Commission s jurisdiction and the timing of Complainants' action.
Complainants erroneously conflate application of state law contract principles with application
of jurisdictional limits, yet provide no legal authority. Given the similarities, it is appropriate for
the Commission to follow the Ninth Circuit in Bai!ey and find that AT&T is "mistaken in
arguing that state law governs the jurisdictional question in this case.Id.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
competing interests can be reconciled if, as the Nebraska federal court held, the Commission
holds that AT&T's claim arises under federal law, subject to the limitations period defined in
Section 415. Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bui!ding Constr. Trades Counci!
485 U.S. 568, 575 (1988) ("where an otherwise acceptable construction of a statute would raise
serious constitutional problems, the Court will construe the statute to avoid such problems unless
such construction is plainly contrary to the intent of Congress.
Second, Congress enacted a jurisdictional limit on the Commission s authority, and this
limitation period controls the Commission s jurisdiction and the timing of AT&T's action. Sw.
Bell Tel. Co. v. Connect Commc ns Corp.225 F.3d 942 947 (8th Cir. 2000) ("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 ). A state commission exercising federal power under the
guise of state law would conflict with the federal control that Congress envisioned under the
Federal ActIO while also allowing state commissions to usurp state power under the guise of
exercising federal law. In contrast, a state commission can readily borrow state law contract
principles consistently with the Rules Enabling Act I 1 and without running afoul of the Tenth
Amendment. Thus, where federal law grants commissions authority over interconnection
10
See 47 U.C. 99 252(e)(5) & (e)(6) (respectively providing for FCC preemption of state
commission inaction and federal court review of state commission determinations involving
interconnection agreements).11 The Rules Enabling Act states: "The laws of the several states except where the
Constitution or treaties of the United States or Acts of Congress otherwise require or provide
shall be regarded as rules of decision in civil actions in the courts ofthe United States, in cases
where they apply. The Rules of Decision Act, 28 U.C. ~ 1652, enacted as part ofthe Judiciary
Act of 1789 (emphasis added),
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
disputes, it also contemplates that those disputes are federal in nature subject to the federal
limitations period.
D. SECTION 415 APPLIES TO AT&T'S CLAIMS
For all the reasons previously raised by Qwest and those discussed above, AT&T's claim
is governed by Section 415. There is no legal basis to apply any other limitation period
including the fall-back provision provided by 28 U.C. ~ 1658 or any proposed state-law
limitations period. Indeed, the FCC has rejected AT&T's argument that the general four-year
federal statute oflimitations in 28 U.C. ~ 1658 or any state limitation period should apply
instead ofthe specific two-year period found under Section 415 of the Federal Act. See
Memorandum and Opinion Order In re Am. Cellular Corp.2007 WL 268574, at ~ 13 (F.c.C.
Jan. 31 2007) (finding Section 1658(a) to be a "'fallback' provision " and "(bJecause claims (like
Dobson s) for recovery of damages from carriers are specifically governed by the limitations
period set forth in section 415(b) of the Act, the default statute of limitations set forth in 28
9 1658(a), and cases applying it, are inapposite ). And perhaps presaging this decision
the Ninth Circuit has applied Section 415 to claims arising under the Federal Act. See Davel
Commn 'ens v. Qwest Corp.451 F.3d 1037 (9th Cir. 2005) (upholding dismissal based on the
two-year statute oflimitations of 47 u.S.C. ~ 415(b)). Thus, AT&T's argument concerning the
applicability of Section 1658 simply highlights the numerous deficiencies in its arguments and
its reliance on the WUTC decision.
The FCC rejected the very same cases that AT&T has proffered here and that the WUTC
accepted. Compare AT&T Response at nn. 4-5 with In re Am. Cellular Corp.2007 WL 268574
at n , 51 (citing Reply Supplement at 7-8 (citing spire Communications, Inc. v. Baca 269 F.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
Supp. 2d 1310 (D.M. 2003); VerizonMaryland, Inc. v. RCNTelecom Services, Inc.232 F.
Supp. 2d 539 (N,D. Md. 2002); Bell-Atlantic-Pennsylvania v. Pennsylvania Public Uti!ities
Commission 107 F. Supp. 2d 653 (E.D. Pa. 2000)). The FCC found these cases distinguishable
because they did not "involve(J claims brought against carriers for the recovery of damages
re Am. Cellular Corp.2007 WL 268574, at n. 53 , for which the Federal Act provided Section
415's two-year limitations period, but dealt instead with appeals seeking injunctive relief against
state commission orders under 47 U.C. ~ 252(e)(6). To reach its conclusion that Section 1658
trumped Section 415 - even though none of the cases addressed Section 415 - the Washington
Commission stretched to find that Congress repealed section 415 by implication and ignored
well-accepted principles of statutory construction and interpretation, without addressing any of
Qwest's arguments in this regard.
The FCC thus disposed of the same facial argument that AT&T attempts to make here
and clearly answers the Commission s question concerning the applicable limitations period:
We reject Dobson s suggestion that state statutes oflimitation apply to Dobson s Complaint
because Dobson s Complaint does not (and could not here) assert state law claims.Id. at n. 54
(emphasis added). In doing so, the FCC rejected "a variety of lengthy state limitations periods
and refused "to regard Counts 1 and 2 as arising under state contract law.Id. Not only did the
FCC reject any other applicable limitations period, it also refused to allow the petitioner to
attempt to repackage clearly federal claims under state law. In arriving at its decision then, the
WUTC again disregarded Ninth Circuit precedent and its "weighty responsibilities" under the
Federal Act. Thus, there can be little doubt that the Commission is faced with only one properly
applicable limitations period - Section 415 of the Federal Act.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
AT&T Had Access to the Agreements as early as March 13, 2002 and Therefore
Knew or Should Have Known of the Basis for Any Causes of Action.
Any potential argument concerning AT&T's awareness of the circumstances providing
the basis for its claims has been put to rest, not only by the facts, but also by the decisions of at
least three state commissions that have refused to accept AT&T's revisionist history. AT&T was
aware of its potential claims as early as February 2002 , and by no later than mid-2002. Under
Section 415's two-year limitations period (or even the four year limitations period), AT&T'
claims are barred.
AT&T'S ACCRUAL DATE CONFLICTS WITH THE FACTS
AT &T does not dispute that it had knowledge of the Qwest interconnection agreements at
issue in this case more than four years before it filed this complaint. In its response, AT&T does
not deny that it was aware of and actively involved in the Minnesota complaint proceedings
against Qwest for unfiled interconnection agreements with Eschelon and McLeodUSA initiated
in February 2002. AT &T claims instead that "many details of the oral agreement were kept
confidential in the Minnesota proceeding, subject to a confidentiality agreement, and thus were
not known to the AT&T entity in Idaho and could not have been used for a case in Idaho.
AT&T Resp. at 14-15. AT&T asks the Commission to believe that AT&T could not have any
knowledge until September 20, 2002
, "
when the Administrative Law Judge in the Minnesota
case rejected Qwest's denials and found that the oral agreement with McLeod did in fact exist
that AT&T could have proceeded with claims regarding that contract in other states." Id. at 15.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
Of course, AT&T concedes that it knew of the agreements no later than June 2002.12 But
in any case, the paper trail of AT&T's knowledge and usage ofthis "agreement" dates back well
before September:
On June 12 2002, AT&T (and others) were served with the public versions of the
affidavits ofW. Clay Deanhardt, Blake Fisher and Lori Deutmeyer that were filed
in the Minnesota proceeding to determine whether Qwest's application for long
distance authority was in the public interest. These affidavits served as the key
evidence" of the alleged QwestlMcLeod oral agreement in the Minnesota cases
and elsewhere. 13 As the cover e-mail indicates, counsel for AT&T was served
along with the other parties.
On June 14, 2002, the Minnesota Department of Commerce served its Second
Amended Complaint in the Minnesota unfiled agreements proceeding.Is That
complaint specifically alleged the existence of the QwestlMcLeod oral discount
agreement.16 As the cover e-mail indicates, counsel for AT&T was served along
WIt t e ot er partIes.
On July 3 2002 , AT&T filed comments with the Federal Communications
Commission in opposition to Qwest's application for long distance authority in
12 See AT&T Response, at 14. In addition to admitting that AT&T was aware of the
proceedings and the existence of the agreement, there is no merit to any purported attempts by
AT&T to distance itself from its "affiliates." AT&T's representatives in this action were
themselves also on the service lists in other earlier state proceedings involving Qwest. For
example, Mary B. Tribby of AT&T Communications of the Mountain States is listed as a party
representative before the FCC in opposition to Qwest's application for long distance authority in
several states, including Idaho. See Exh. 3.
Exh.
14
See id. (noting service to AT&T counsellsfriesen~att.com, shoffstetter~att.com
weigler~att.com, and jbrowne~lga.att.com).
A copy of this complaint is attached as Exh. 5 to this Response.
Id. at'il'il239-247.
See id. (noting service to AT&T counsel gwitt~att.com and Janet Browne).
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
several states. IS These comments cite to and attach the Second Amended
Complaint from the Minnesota unfiled agreements proceeding.
AT&T's knowledge and affirmative use of these allegations during the summer of 2002 renders
disingenuous, ifnot actively misleading, any suggestion that AT&T sat in the dark until later that
year, when the Minnesota ALJ enlightened it.
AT&T's knowledge of these allegations in 2002 began the limitations period and
required AT&T to raise its allegations then. Once AT&T had notice
, "
it (bore) the responsibility
of making diligent inquiries to uncover the remaining facts needed to support the claim.Spring
Commc ns Co. v. FCC 76 F.3d 1221 , 1230 (D.C. Cir. 1996); Davel Commc ns v. Qwest Corp.
460 F.3d 1075 (9th Cir. 2006) (finding that Sprint was on inquiry notice, triggering the running
of the statute of limitations under Section 415 , when "it had knowledge suggesting the rates
might be improper ). Knowledge is knowledge, and for these purposes neither requires nor
awaits actual adjudication. See Commc ns Vending Corp v. FCC 365 F.3d 1064 1073-74 (D.
Cir. 2004) (rejecting theory that cause of action did not accrue until an agency ruled on the
lawfulness of an issue or uncertain law became settled).
B. AT&T'S PROPOSED ACCRUAL DATES HAVE BEEN REJECTED BY
THREE STATE COMMISSIONS
In addition to lacking a factual or legal basis for its proposed accrual date, AT&T'
arguments have been denied by the Oregon, Iowa, and Washington Commissions. Thus, every
state commission to address the issue has found that AT&T's claims accrued no later than July
Exh.
See id. at 18 n.15.
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
2002. Given that AT&T filed its complaint in August 2006, the two-year limitations period (and
even the four-year limitations period) clearly bars AT&T's claims here.
First, the Oregon Commission dismissed AT&T's complaint on May 11 , 2006, noting
that AT&T's affiliated company had been a party to the commission docket in Minnesota, and
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.OPUC Dismissal Order, at 7. The Commission
determined that AT&T's active participation and encouragement evinced AT&T's awareness of
the "secret" agreements and the alleged harm that provided the basis of its present claims. Based
on these facts, the Oregon Commission determined that AT&T "had 'reason to know of the
harm' that provided the basis oftheir claims beginning in March 2002" and therefore their
claims for seeking damages based on any violations arising from those interconnection
agreements had long passed. Id. AT&T unsuccessfully sought reconsideration of that ruling,
and on August 16 2006, the Oregon Commission reaffirmed its decision that AT&T's complaint
was time-barred. OPUC Reconsideration Order, at 3.
Second, the Iowa Utilities Board also examined similar claims by AT&T, cloaked in state
law, against the backdrop of a 2002 proceeding and dismissed the complaint. In February 2002
AT&T filed a letter with the Iowa Board complaining that Qwest had not filed certain
interconnection agreements with AT&T's competitors and alleging a violation of Section 252 of
the Federal Act. In response, the Board conducted an investigation, agreed with AT&T that
violations existed, and invited further proceedings. AT&T failed to pursue that invitation.
Attempting to file more than four years later, the Board found - correctly - that AT&T's new
Board-level complaint should be dismissed.In dismissing, the Iowa Board reached two
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
important conclusions: (1) that "this action clearly arise( s) out of the same transaction that was
at issue in Docket No. FCU-02-2: Qwest's failure to file with the Board certain interconnection
agreements as required by law " and (2) that but for "that transaction, Complainants have no
claim for breach of contract, no claim for violation of Board rules, and no claim for common law
fraud.See Iowa Dismissal Order, at 18.Docket No, FCU-02-02 was the earlier 2002
proceeding that the Iowa Board held in response to AT&T's request.The Iowa Board
subsequently denied AT&T's Petition for Rehearing on January 12 , 2007, dismissing AT&T'
claims - including a similar claim under Iowa law to the claim AT&T seeks to pursue in this
Commission. See ruB Rehearing Order. The Iowa Board decision reinforces the conclusion that
AT&T was active in the proceedings as early as February 2002 and therefore is now barred from
pursuing its claims.
Finally, in addition to the Oregon Commission and Iowa Board decisions, the
Washington Utilities and Transportation Commission (in which AT&T has placed so much
stock) rejected AT&T's argument that it lacked knowledge of these claims in 2002. To the
contrary, the WUTC affirmed an interlocutory order finding that AT&T's claims began to run on
July 15, 2002. By that date, the Commission determined that "AT&T knew that the Minnesota
agreements existed (including Minnesota counterparts of the relevant Washington agreements)
and knew that there were similar agreements in Washington (as they had been filed in the 271
docket).WUTC Order, at,-r 38. Thus, with regard to the discovery date, every court or agency
has now unanimously rej ected AT&T's argument as a matter of law , and AT&T has provided no
reason to reconsider these determinations anew in Idaho.
CONCLUSION
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
For the foregoing reasons, the Commission should grant Qwest's motion to dismiss and
dismiss AT&T's claims with prejudice based on the application of Section 415.
DATED this 27th day of March, 2007.
Respectfully submitted
Mary S. obson (ISB. No. 2142)
999 M n- Suite 1103
Boise, ID 83702
Douglas R. M. Nazarian
Hogan & Hartson
111 South Calvert Street
Baltimore, MD 21202
Attorneys for Qwest Corporation
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
CERTIFICATE OF SERVICE
I do hereby certify that a true and correct copy of the foregoing QWEST CORPORATION'
RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247 was served on the
2ih day of March, 2007 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. us
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Molly O'Leary
Richardson & O'Leary
515 North 2ih Street
O. Box 7218
Boise, Idaho 83707
moll y~richardsonando eary. com
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
--X
Theodore A. Livingston
Dennis G. Friedman
Mayer, Brown, Rowe & Maw LLP
71 South Wacker Drive
Chicago, IL 60606-4637
dfri edman~ma yerbro wn. com
---X-
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Dan Foley
General Attorney & Assistant General Counsel
AT&T West
O. Box 11010
Reno, Nevada
df6929~att.com
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
~~I;t
L---.
Attorney for Qwest Corporation
QWEST CORPORATION'S RESPONSE TO COMMISSION'S QUESTIONS IN ORDER NO. 30247
EXHIB IT
Case: 8:06-cv-00625-LES- TOT Document #: 29 Date Filed: 02/27/2007 Page 1 of 7
IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
AT&T COMMUNICATIONS OF THE
MIDWEST and TCG OMAHA, INC.,
Defendant.
8:06CV625Plaintiffs,
QWEST CORPORATION,MEMORANDUM OPINION
This matter is before the Court on Qwest Corporation
motion to dismiss (Filing No. 12).Having reviewed the motion
the parties ' submissions, 1 and the applicable law, the Court
finds that defendant's motion should be granted.
STANDARD OF REVIEW
In considering a motion to dismiss a complaint under
Rule 12 (b) (6), the Court must assume all the facts alleged in the
complaint are true and must liberally construe the complaint in
the light most favorable to the plaintiff.Young v. City of St.
Charles, 244 F.3d 623, 627 (8th Cir. 2001); Schmedding v. Tnemec
Co., 187 F.3d 862, 864 (8th Cir. 1999).A Rule 12(b) (6) motion
to dismiss a complaint should not be granted unless it appears
beyond a doubt that the plaintiff can prove no set of facts which
would entitle him to relief.Young, 244 F.3d at 627.Thus, as a
practical matter, a dismissal under Rule 12 (b) (6) should be
granted only in the unusual case in which a plaintiff includes
1 The Court will grant AT&T's motions for leave to file
supplemental authority (Filing Nos. 23 and 24). Qwest's motion
for leave to file supplemental authority (Filing No. 25) will be
denied as moot.
Case: 8:06-cv-00625-LES- TDT Document #: 29 Date Filed: 02/27/2007 Page 2 of 7
allegations that show on the face of the complaint that there is
some insuperable bar to relief.Schmedding, 187 F.3d at 864.
BACKGROUND
Telecommunications Act of 1996
The Telecommunications Act of 1996 ("the
Telecommunications Act") encourages competition among
telecommunication providers by inter alia obligating
telecommunications companies to interconnect with one another.
Sections 251 and 252 of the Telecommunications Act require
incumbent local exchange carriers ("ILECs ) to lease their
networks to requesting competi ti ve local exchange carriers
CLECs
) .
47 U.C. ~~ 251 (c), 252 (b) .Under the
Telecommunications Act, ILECs must submit any interconnection
agreements they form with CLECs to the relevant state public
utili ties commission for approval.Id. at ~~ 252 (a), (e) The
Telecommunications Act requires ILECs to make the terms of any
approved interconnection agreements to which they are parties
available to requesting non-party CLECs upon "the same terms and
conditions, in addition to rates, as those provided in the
agreement. "See 47 U.C. ~ 252(i); 47 C.R. ~ 51.809(a).
2 Local exchange carriers ("LECs ) are defined as "any
person that is engaged in the provision of telephone exchange
service or exchange access.4 7 U. S. C. ~ 153 (24). Incumbent
local exchange carriers ("ILECS") refer to any LEC, with respect
to an area, that provided telephone exchange service on February
8, 1996, and was deemed to be a member of the exchange carrier
association on that date pursuant to 47 C.R. 69.601 (b), or its
successor or assignee. 47 U.C. ~ 251 (1).
Case: 8:06-cv-00625-LES- TDT Document #: 29 Date Filed: 02/27/2007 Page 3 of 7
II.Factual Background
Pursuant to the Telecommunications Act, plaintiffs,
AT&T Communications of the Midwest ("AT&T") and TCG Omaha, Inc.
TCG"(collectively, "AT&T"), entered into interconnection
agreements with Qwest Corporation ("Qwest"The complaint
alleges Qwest agreed to act in accordance with the
Telecommunications Act and make products and services available
to AT&T on nondiscriminatory rates, terms and conditions.The
complaint further alleges that Qwest breached its agreements with
AT&T when Qwest entered into secret interconnection agreements
wi th Eschelon Telecom ("Eschelon ) and McLeodUSA
Telecommunications Services, Inc.McLeodUSA") from 2000 until
2002 and failed to file these interconnection agreements with the
Nebraska Public Service Commision ("NPSC") as required by the
Telecommunications Act (Complaint ~~ 2, 3).AT&T alleges that
its interconnection agreement with Qwest obligated Qwest to
notify AT&T of these interconnection agreements.The complaint
alleges that Eschelon and McLeodUSA received up to a ten percent
discount on Qwest's products and services, which AT&T was
enti tled to receive under the terms of its interconnection
agreement with Qwest.
AT&T alleges that Qwest is liable under theories of:
(1) breach of contract;(2) fraud; and (3) Nebraska anti trust
provisions.Qwest argues that AT&T's claims should be dismissed
because they are barred by:(1) the two-year statute of
limitations established by 5 415 of the Telecommunications Act;
-3-
Case: 8:06-cv-00625-LES- TDT Document #: 29 Date Filed: 02/27/2007 Page 4 of 7
and (2) the principles of collateral estoppel based on a decision
of the Oregon Public Utility commission.
III.Related Decisions
The subj ect of this controversy has been litigated and
argued in other forums.On February 14, 2002, a complaint was
filed with the Minnesota Public Service Commission ("MPSC"
) ,
accusing Qwest of failing to file certain interconnection
agreements as required by the Telecommunications Act.The MPSC
opened an investigation on March 12, 2002, and AT&T participated
in this proceeding.On September 20, 2002, an Administrative Law
Judge in Minnesota found that Qwest had violated the
Telecommunications Act by failing to file certain interconnection
agreements with the MPSC and recommended that the MPSC take
action against Qwest.Findings of Fact, Conclusions,
Recommendation and Memorandum, In re Complaint of the Minnesota
Department of Commerce Against Qwest Corporation Regarding
Unfiled Agreements, 2002 WL 32129264 , ~~ 341 , 344.
The Oregon Public Utility Commission ("OPUC"
determined on May 11, 2006, that 47 U.C. ~ 415 (b) proscribed a
two-year statute of limitations for AT&T's breach of contract
claim against Qwest based on Qwest's failure to file various
interconnection agreements with the OPUC.In so deciding, the
OPUC determined AT&T's claims were essentially federal in
character.See Oregon Public Utility Commission, Order No. 06-
230, Order Granting Motion to Dismiss, AT&T Communications of the
Northwest, Inc., et al. v. Qwest Corporation, Docket No. UM-1232
Case: 8:06-cv-00625-LES- TDT Document #: 29 Date Filed: 02/27/2007 Page 5 of 7
(May 11, 2006), aff'd on reconsideration, Order No. 06-465, Order
Denying Petition for Reconsideration (August 16, 2006).
In contrast, the Washington State Utilities and
Transportation Commission ("WSUTC") recently reaffirmed its
decision that AT&T's breach of contract claims against Qwest for
failure to file various interconnection agreements with the WUTC
were based on state law and, therefore, the state law statute of
limitations for breach of contract was the applicable statute of
limi tations for these claims.See Washington State Utilities and
Transportation Commission, Order No. 04 , Interlocutory Order
Reversing Initial Order, Denying Motion for Summary Determination
or Dismissal, AT&T Communications of the Pacific Northwest, Inc.
v. Qwest Corporation, Docket No. UT-051682 (June 7, 2006); aff'
Order No. 06, Order Affirming Interlocutory Order; Allowing
Amendment of Complaint; Denying Motion for Summary Determination
(Dec. 21 , 2006).
DISCUSSION
Qwest argues that AT&T's claims are federal claims
masquerading as state law claims and are, therefore, barred by
the two-year statute of limitations set forth in 47 U.C. ~ 415.
AT&T disagrees, arguing its claims are based on Nebraska law and
Nebraska s four-year state statute of limitations should apply.
Notwithstanding AT&T's characterization of its claims, the
relationship between ILECs and CLECs is heavily regulated by the
Telecommunications Act.Any duty on the part of Qwest to file
its interconnection agreements with the NPSC and to make the
Case: 8:06-cv-00625-LES- TDT Document #: 29 Date Filed: 02/27/2007 Page 6 of 7
terms available to other CLECs arose under SS 252 (e) and (i).
The claims in this case necessarily require the Court to
determine whether Qwest complied with the Telecommunications Act.
In other words, the ultimate issue in this case is an
interpretation of federal law.Section 415 (b) states:All
complaints against carriers for the recovery of damages not based
on overcharges shall be filed with the Commission wi thin two
years from the time the cause of action accrues.
C. S 415(b).AT&T seeks damages for Qwest's alleged failure
to comply with the requirements of the Telecommunications Act
pursuant to AT&T's and Qwest's interconnection agreements, and
AT&T may not avoid the two-year statute of limitations contained
in S 415 simply by characterizing its claims as state law claims.
While the accrual date for AT&T's claims is a factual
determination, the Court finds AT&T's claims clearly accrued more
than two years prior to the filing of its complaint on September
, 2006.AT&T concedes in its opposition brief that, "at the
earliest it was not until September 20, 2002 , when the ALJ in the
Minnesota proceeding rej ected Qwest' s sworn testimony and found
that there was in fact a secret oral agreement with McLeod, that
AT&T could have had any confidence in proceeding on a claim that
there was a secret oral agreement and that, assuming such
agreement applied or had a counterpart in Nebraska, it might have
a cause of action here (Filing No. 19 at 30-31).At this time,
AT&T was on notice that it may have claims against Qwest in other
states, including Nebraska.
Case: 8:06-cv-00625-LES- TDT Document #: 29 Date Filed: 02/27/2007 Page 7 of 7
The Court finds that AT&T's claims are barred by the
two-year statute of limitations contained in 47 U.C. 5 415 and
will grant Qwest's motion to dismiss.For this reason, the Court
need not address Qwest's collateral estoppel argument.
separate order will be entered in accordance with this memorandum
opinion.
DATED this 27th day of February, 2007.
BY THE COURT:
/ s/ Lyle E. Strom
LYLE E. STROM, Senior Judge
United States District Court
EXHIBIT 2
BEFORE THE
PUBLIC UTILITY COMMISSION OF OREGON
UM 1232
AT&T CO~CATIDNS OF THE
PACIFIC NORTHWEST, INC., AND
TCG OREGON; TIME WARNER
TELECOM OF OREGON, LLC; AND
INTEGRA TELECOM OF OREGON
INC.AMENDED COMPLAINT
Complainants
QWEST CORPORATION
Res ondent.
Pursuant to ORS 756.500 and OAR 860-013-0015 , AT&T Communications of the
Pacific Northwest, Inc" and TCG Oregon (collectively "AT&T"), Time Warner Telecom
Oregon, LLC ("TWTC"), and Integra Telecom of Oregon, Inc. ("Integra ) bring the following
Amended Complaint against Qwest Corporation ("Qwest"). h1 support of their Amended
Complaint, AT&T, TWTC, and Integra allege as follows:
PARTIES
Complainant AT&T. AT&T provides switched and non-switched local exchange
and long distance services in Oregon as a competitive telecommunications service provider
pursuant to a certificate of authority issued by the Commission. AT&T's contact information for
purposes of this Amended Complaint is:
PAGE 1 - AMENDED COMPLAINT
UM 1232
PDX 1371987v1 19977-356
Sarah K. Wallace
Davis Wright Tremaine LLP
1300 SW Fifth Avenue, Suite 2300
Portland, OR 97201-5630Phone: [phone]Fax: [phone]
Email: sarahwallace(Q),dwt.com
Letty S. D. Friesen
AT&T
1875 Lawrence Street, Suite 1575
Denver, CO 80202
Phone: [phone]
Fax: [phone]
Email: Isfriesen(Q),attcom
Complainant TWTC. TWTC provides switched and non-switched local exchange
and long distance services in Oregon as a competitive telecommunications service provider
pursuant to a certificate of authority issued by the Commission. TWTC's contact information for
purposes of this Amended Complaint is:
Sarah K. Wallace
Davis Wright Tremaine LLP
1300 SW Fifth Avenue, Suite 2300
Portland, OR 97201-5630Phone: [phone]Fax: [phone]
Email: sarahwallace~dwt.com
Brian Thomas
Time Warner Telecom
223 Taylor Avenue North
Seattle, WA 98109
Phone: [phone]Fax: [phone]
Email: Brian, Thomas~twtelecom.com
Complainant Integra. Integra provides switched and non-switched local exchange
and long distance services in Oregon as a competitive telecommunications service provider
pursuant to a certificate of authority issued by the Commission. Integra s contact information for
purposes of this Amended Complaint is:
Sarah K. Wallace
Davis Wright Tremaine LLP
1300 SW Fifth Avenue, Suite 2300
Portland, OR 97201-5630Phone: [phone]Fax: [phone]
Email: sarahwallace~dwt.com
Karen Johnson
Integra Telecom of Oregon, Inc.
1201 NE Lloyd Blvd, Suite 500
Portland, OR 97232
Phone: [phone]Fax: [phone]
Email: karen. i ohnsonuuintegratelecom.com
Respondent.Qwest is an incumbent local exchange company ("ILEC"), as
defined in 47 U.C. ~ 251(h) and provides local exchange and other telecommunications
PAGE 2 - AMENDED COMPLAINT
UM 1232
pox 1371987v1 19977-356
services throughout the State of Oregon. On infonnation and belief, Qwest's contact infonnation
for purposes ofthis Amended Complaint is:
Alex M. Duarte
Qwest Corporation
421 SW Oak Street, Suite 810
Portland, OR 97204Phone: [phone]Fax: [phone]
Email: a1ex.duarte~qwest.com
JURISDICTION
Commission Jurisdiction. The Commission has jurisdiction over this Amended
Complaint and Respondent Qwest pursuant to ORS 756,500, ORS 759.260, ORS 759.275
47 u.S,C. g 252(a), 47 u.S.C. g 252(e)(1), and 47 u.S.C. ~ 252(i).
FACTS
Eschelon Agreements. Beginning in or about February 2000, Qwest entered into a
series of interconnection agreements with Eschelon Telecom ("Eschelon
).
Those agreements
established rates, tenDS and conditions for telecommunications services and facilities that Qwest
provided, or agreed to provide, to Eschelon, including rates, tenDs, and conditions that were not
contained in any agreement with any other similarly situated company ("Eschelon Agreements
Qwest did not file these agreements with the Commission. The Eschelon Agreements were not
publicly available, and Qwest did not provide AT&T, TWTC or Integra with a copy ofthese
agreements or otherwise notify AT&T, TWTC or Integra of the existence or contents of these
agreements.
McLeodUSA Agreements. Beginning in or about April 2000, Qwest entered into
a series of interconnection agreements with McLeodUSA Telecommunications Services, Inc.
McLeodUSA"). Those agreements established rates, tenDS and conditions for
PAGE 3 - AMENDED COMPLAINT
UM 1232
PDX 1371987vl19977-356
telecommunications services and facilities that Qwest provided, or agreed to provide, to
McLeodUSA, including rates, tenDs, and conditions that were not contained in any agreement
with any other similarly situated company ("McLeodUSA Agreements ). Qwest did not file
these agreements with tPe Commission. The McLeodUSA Agreements were not publicly
available, and Qwest did not provide AT&T, TWTC or Integra with a copy ofthese agreements
or otherwise notify AT&T, TWTC or Integra of the existence or contents of these agreements.
Same or Comparable Services. AT&T, TWTC or Integra each obtained
telecommunications facilities and services from Qwest that were the same as, or comparable to
the telecommunications facilities and services that Qwest provided, or agreed to provide, to
Eschelon under the Eschelon Agreements during the time frame in which those agreements were
in effect. AT&T, TWTC and Integra each obtained telecommunications facilities and services
from Qwest that were the same as, or comparable to, the telecommunications facilities and
services that Qwest provided, or agreed to provide, to McLeodUSA under the McLeodUSA
Agreements during the time frame in which those agreements were in effect.
Adoption. AT&T, TWTC and Integra each would have adopted, or otherwise
would have agreed to, the rates and reasonably related and legitimate tenDS and conditions in the
Eschelon and/or McLeodUSA Agreements if AT&T, TWTC and Integra had known of the
existence of those agreements or the rates and reasonably related and legitimate tenDS and
conditions contained in those agreements and if Qwest had made those agreements or rates and
reasonably related and legitimate tenDS and conditions available to AT&T, TWTC and Integra.
10.Damages, The amounts that AT&T, TWTC and Integra each paid Qwest for
telecommunications facilities and services during the time period in which the Eschelon and
McLeodUSA Agreements were in effect were significantly higher than the amounts that
PAGE 4 - AMENDED COMPLAINT
UM 1232
PDX 1371987vl19977-356
Eschelon and McLeodUSA paid or agreed to pay, Qwest for the same or comparable
telecommunications facilities and services. Qwest concealed the existence of the Eschelon and
McLeodUSA Agreements and the rates and reasonably related and legitimate terms and
conditions in those agreements and did not make available to AT&T, TWTC, or Integra the rates
and reasonably related and legitimate terms and conditions contained in those agreements,
Qwest, therefore, overcharged AT&T, TWTC and Integra the difference between the amounts
that AT&T, TWTC and Integra each paid to Qwest and the amounts that AT&T, TWTC and
Integra each would have paid had AT&T, TWTC and Integra adopted or otherwise accepted the
rates and reasonably related and legitimate terms and conditions in the Eschelon and/or
McLeodUSA Agreements,
11.Interconnection Agreements. AT&T, TCG Oregon, TWTC, and Integra each
separately entered into interconnection agreements with Qwest.
AT&T and Qwest. The Commission approved the original interconnection
agreement between AT&T and US West Communications, Inc. (Qwest's predecessor in interest)
on September 5, 1997 in docket ARB 3 ("AT&T/Qwest Agreement"), The AT&T/Qwest
Agreement was in effect when Qwest entered into the Eschelon and McLeodUSA Agreements.
Section 36 of the AT&T/Qwest Agreement provides:
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 of the Federal Act.
TCG Oregon and Qwest. The Commission approved the original
interconnection agreement between TCG Oregon and US West Communications, Inc, (Qwest's
predecessor in interest) on May 19, 1997 in docket ARB 2 ("TCG/Qwest Agreement"). The
PAGE 5 - AMENDED COMPLMNT
UM 1232
PDX 1371987vl19977-356
TCG/Qwest Agreement was in effect when Qwest entered into the Eschelon and McLeodUSA
Agreements. Section XVI of the TCG/Qwest Agreement provides: "The Parties agree that the
provisions of Section 252(i) of the Act shall apply, including state and federal interpretive
regulations in effect from time to time.
TWTC and Qwest. On May 8 1997, the Commission approved the
interconnection agreement between GST Telecom of Oregon, Inc. (TWTC's predecessor in
interest) and U S West Communications, mc, (Qwest's predecessor in interest) ("First
TWTC/Qwest Agreement"). The First TWTC/Qwest Agreement was in effect when Qwest
entered into the Eschelon and McLeodUSA Agreements, although the parties were negotiating a
new interconnection agreement during that time. Section AA ofthe First TWTC/Qwest
Agreement provides:
Most Favored Nation Terms and Treatment: The parties agree
that the provision of Section 252(i) of the Act shall apply,
including state and federal interpretive regulations in effect from
time to time,
The Commission approved a new interconnection agreement between TWTC and Qwest
on August 8 , 2000, in docket ARB 235 ("Second TWTC/Qwest Agreement"). Although this
agreement was being negotiated during the time that Qwest entered into the Eschelon and
McLeodUSA Agreements, TWTC did not know of the existence of those agreements and was
not given the opportunity to opt into any provisions in those agreements. Section (A)3.36 of the
Second TWTC/Qwest Agreement provides:
Availability of Other Agreements. With regard to the availability
of other agreements, the Parties agree that the provisions of Section
252(i) of the Act shall apply, including Commission, FCC and
court interpretive regulations and decisions in effect from time to
time.
PAGE 6 - AMENDED COMPLAINT
UM 1232
pox 1371987v1 19977-356
Integra and Qwest. On May 12, 2000, Integra opted in to the
interconnection agreement between AT&T and U S West Communications, Inc. (Qwest'
predecessor in interest) ("Integra/Qwest Agreement"
).
See OPUC Docket No. ARB 219. This
agreement was in effect at the time Qwest entered into the Eschelon and McLeodUSA
Agreements. Section 36 of the Integra/Qwest Agreement provides:
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 of the Federal Act.
CLAIMS FOR RELIEF
Violation of Federal Law
12.AT&T, TWTC, and Integra reallege and incorporate by reference the allegations
in paragraphs 1-11 above as if fully set forth herein.
13.47 US.C. 9 251(b) and (c) requires Qwest to provide access to, and
interconnection with, its network to AT&T, TWTC, Integra, and other competing
telecommunications service providers "on rates, terms, and conditions that are just, reasonable
and nondiscriminatory.
14.47 US.C, 9 251(e) provides "Any interconnection agreement adopted by
negotiation or arbitration shall be submitted for approval to the State commission " and
subsection 252(i) provides
A local exchange carrier shall make available any interconnection
service, or network element provided under an agreement approved
under this section to which it is a party to any other requesting
telecommunications carrier upon the same terms and conditions as
those provided in the agreement.
PAGE 7 - AMENDED COMPLAINT
UM 1232
pox 1371987vl 19977-356
15.By providing facilities and services to Eschelon and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
to AT&T, TWTC, Integra, and other similarly situated competing telecommunications service
providers, Qwest violated 47 D.C. ~~ 251 and 252.
Violation of ORS 759.260 (Unjust discrimination in rates)
16.AT&T, TWTC, and Integra reallege and incorporate by reference the allegations
in paragraphs 1-16 above as if fully set forth herein,
17.ORS 759.260 provides in relevant part:
(NJo telecommunications utility. . . shall, directly or indirectly, by
any device, charge, demand, collect or receive from any person a
greater or less compensation for any service rendered or to be
rendered by it than:
(a)That prescribed in the public schedules or tariffs
then in force or established; or
(b)It charges, demands, collects or receives ttom any
other person for a like and contemporaneous service
under substantially similar circumstances.
18.By providing facilities and services to Eschelon and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
to AT&T, TWTC, Integra, and other similarly situated competing telecommunications service
providers, Qwest demanded, collected, or received greater compensation ttom AT&T, TWTC
and Integra than Qwest demanded, collected, or received ttom Eschelon and McLeodUSA for a
like and contemporaneous service under substantially similar circumstances in violation of ORS
759.260.
PAGE 8 - AMENDED COMPLAINT
UM 1232
PDX 1371987vl19977-356
Violation of ORS 759.275 (Undue preferences and prejudices)
19.AT&T, TWTC, and Integra reallege and incorporate by reference the allegations
in paragraphs 1-19 above as if fully set forth herein.
20.ORS 759.275 provides in relevant part:
No telecommunications utility shall make or give undue or unreasonable
preference or advantage to any particular person or locality, or subject any
particular person or locality to any undue or unreasonable prejudice or
disadvantage in any respect.
21.By providing facilities and services to Esche1on and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
to AT&T, TWTC, Integra, and other similarly situated competing telecommunications service
providers, Qwest granted an undue preference to Eschelon and McLeodUSA and subjected
AT&T, TWTC, and Integra to undue prejudice or disadvantage in violation ofORS 759.275.
Breach of Contract
22.AT &T, TWTC, and Integra reallege and incorporate by reference the allegations
in paragraphs 1-22 above as if fully set forth herein.
23.By providing facilities and services to Eschelon and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
to AT&T, Qwest breached section 36 of the AT&T/Qwest Agreement.
24.By providing facilities and services to Eschelon and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
to TCG Oregon, Qwest breached section XVI of the TCG/Qwest Agreement.
25.By providing facilities and services to Eschelon and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
PAGE 9 - AMENDED COMPLAINT
UM 1232
PDX 1371987v119977-356
to TWTC, Qwest breached section AA of the First TWTC/Qwest Agreement and section (A)3.
of the Second TWTC/Qwest Agreement.
26.By providing facilities and services to Eschelon and McLeodUSA at rates or
discounts off of rates that were lower than the rates and/or discounts that Qwest made available
to mtegra, Qwest breached section 36 ofthe mtegra/Qwest Agreement.
PRAYER FOR RELIEF
WHEREFORE, AT&T, TWTC, and mtegra pray for the following relief:
An order from the Commission requiring Qwest to provide refunds or damages to
AT&T, TWTC. and Integra based on overcharges for the intrastate telecommunications services
and facilities they each obtained from Qwest. specifically the difference between the amounts
that AT&T, TWTC, and Integra each paid to Qwest and the amounts that AT&T, TWTC, and
Integra each would have paid had Qwest charged AT&T, TWTC, and Integra the rates and
applied the discounts in the Eschelon and/or McLeodUSA Agreements while those agreements
were in effect, plus interest; and
Such other or further relief as the Commission finds fair, just, reasonable, and
sufficient.
DATED this 13th day of January, 2006.
DAVIS WRIGHT TREMAINE LLP
Attorneys for AT&T Communications
of the Pacific Northwest, me., and
TCG Oregon, Time Warner Telecom
of Oregon, LLC, and Integra Telecom of
Oregon, Inc.
AT&T COMMUNICATIONS OF THE
PACIFIC NORTHWEST, INe. AND TCG
OREGON
By:BY,~L~~
D. Friesenh K. Wallace, OSB No. 00292
Gregory J. Kopta, WSB No. 20519
PAGE 10 - AMENDED COMPLAINT
UM 1232
PDX 1371987vlI9977-356
EXHIBIT
Qwest Colorado, Idaho, Iowa, Nebraska, and North Dakota 271 AT&T Comments-July 3,2002
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
Qwest Communications International Inc.
Consolidated Application for Authority to
Provide In-Region, InterLA T A Services in
Colorado, Idaho, Iowa, Nebraska and North
Dakota
WC Docket No. 02-148
COMMENTS OF AT&T CORP.
David W. Carpenter
SIDLEY AUSTIN BROWN & WOOD
Bank One Plaza
10 South Dearborn Street
Chicago, illinois 60603
[phone]
Mark E, Haddad
Ronald L Steiner
SIDLEY AUSTIN BROWN & WOOD, LLP.
555 West Fifth Street
Los Angeles, California 90013
[phone]
David L Lawson
Mark Sclmeider
R. Merinda Wilson
James p, Young
Richard E, Young
Christopher T. Shenk
SIDLEY AUSTIN BROWN & WOOD, LLP.
1501 K St., N.
Washington, D,C, 20005
[phone]
Mark C. Rosenblum
Lawrence J, Lafaro
Richard A. Rocchini
AT&T CORP,
295 North Maple Avenue
Basking Ridge, NJ 07920
[phone]
Mary B. Tribby
AT&T Communications of the Mountain
States, Inc.
1875 Lawrence Street, Room 1575
Denver, Colorado 80202
[phone]
Attorneysfor AT&T Corp.
July 3, 2002
Qwest Colorado, Idaho, Iowa, Nebraska, and North Dakota 271 AT&TComments-July3,2002
TABLE OF CONTENTS
FCC ORDERS CITED ........., ....,... ,........".,..........,..,
,....., ..,..,.....,..", .....,.. ,.. ,..,..,.. ,..... .."..... ....... ...
.iv
INTRODUCTION AND SUMMARY ....................................,.........,...,.."",.......,..........,...............
QWEST'S PERV ASIVE AND ONGOING SECRET DEALS
DISCRIMINATION REQUIRES THAT THE COMMISSION REJECT THESE
APPLICATIONS., ............. .............................................. ......................,....,.. .................. ..
The Secret Deals Discrimination Is Undisputed..,..............,.................................. 18
The Secret Deals Foreclose Any Finding That Qwest Has Met Its
Checklist Or Public Interest Burdens, ............
..,.......... '....... ,............... ................ ..
II,QWEST DOES NOT PROVIDE NONDISCRIMINATORY ACCESS TO ITS
OPERATIONS SUPPORT SYSTEMS,. "....., ."",.........,.......,.. .".., ...,..... ,..., ...,...... .... ....... 28
III,
IV.
Qwest Has Neither Established, Nor Adhered To, an Adequate Change
Management Process. ........,..,...
,........ .......... ........
.................... .....,....,..,...... ..',..,." 301. Qwest Has Not Shown That It Has Adhered To an Adequate
Change Management Process Over Time, ........,.......................................
Qwest Has Not Provided an Adequate Test Environment To
CLECs .... .............
.......... ...... ......... ....... ......,.".. ..,..,.........,.................... .... ..
Qwest's Interfaces Fail To Provide Nondiscriminatory Access............................ 39
The Performance Data Upon Which Qwest Relies Are Inaccurate......,................46
QWEST'S RECURRING AND NON-RECURRING RATES DO NOT
SATISFY CHECKLIST ITEM TWO. ........
................. .................. ....................,........... ..
.49
Qwest's Iowa, Nebraska and North Dakota UNE Rates Do Not Satisfy
The Commission s Benchmarking Analysis, Using Colorado As The
Benchmark State,.,..",..,........................................................................,...,............ 51
Qwest's Idaho, Iowa, North Dakota And Nebraska UNE Rates Can Not
Be Found TELRIC-Compliant On Their Own Merits.....................................,..... 54
Qwest's Has Failed To Satisfy Its Burden Of Proving That Its Colorado
UNE Rates Are TELRIC-Compliant. ............ ,............ ....... ,.. ..............,... .......... .....
1. Qwest's Colorado NRCs Are Overstated By Clear TELRIC Errors.........2. Qwest's Colorado UNE Loops Rates Are Overstated By Clear
TELRIC Errors. ............."..................................,.."..,.. ,......,...................,..
Qwest's Colorado Switching Rates Are Overstated By Clear
TELRIC Errors. ....,......................,..,..,..............,........,..,........................,... 64
Qwest's UNE Rates Create A Discriminatory "Price Squeeze" In
Violation Of Checklist Item 2, ...............
............ .......... ..... ..... ..........................,..,.
QWEST DOES NOT PROVIDE REASONABLE AND
NONDISCRIMINATORY ACCESS TO INTERCONNECTION, UNBUNDLED
NETWORK. ELEMENTS, AND RESALE.......~...,..................................,...."",............... 71
Qwest Colorado, Idaho, Iowa, Nebraska, and North Dakota 271 AT&T Comments -July 3,2002
Qwest Denies CLECs Nondiscriminatory Interconnection..................................,
1. Qwest's "Entrance Facility" Charge Denies CLECs Reasonable
Access To CLEC-Selected Points Of Interconnection ("POI"
), .....,.........
Qwest's Interconnection Arrangements Discriminate Against
CLECs And Provide CLECs With Interconnection Arrangements
Inferior To Those Qwest Provides For Its Own Connections. ..,...............
Qwest Unlawfully Requires CLECs To Place Interconnection
Traffic On Separate Trunk Groups. .................,..............................,......,..,
Qwest's Length Limitation On Interconnection Trunks Is
Unlawful. .....,..............,.............................. .....................,..,.",..,..,............. 80
Qwest Denies CLECs Nondiscriminatory Access To Unbundled Network
Elements. ...............
........
,............................................,.."...,..,.....".................",.... 811. Qwest Discriminates Against CLECs That Place UNE Orders
Requiring Construction of New Facilities, ....,........................................... 82
Qwest Denies CLECs Unbundled Access To The Network
Elements Of Qwest Affiliates...... .....,...
...., .......................... ............. ........,
Qwest's Refusal To Connect UNEs And Finished Services Is
Discriminatory. .. .................
....,...... ...........'..... ..................,.......... ,......,......
Qwest Provides Discriminatory Access To Unbundled Network
Elements By Exploiting CLEC Customer Service Calls As
Winback Opportunities,......,........... ........,..,..,............ ,....................,..........
Qwest Fails To Comply With Its Obligation To Provide Unbundled
Switching. ............ ,.....,..,... ,...."..".. ..............,...
,.." ............ ... ,..."... ............. ,..... ....,.
1. Qwest Improperly Exploits The Commission s Narrow Switching
Carve Out Exception To Avoid Full Compliance With Its
Obligation to Provide Switching As An Unbundled Network
Element.,. ..,'..
......."........,........"."...........,...., .,. ,.. ,.. ." ...". ,...... ........,...........
Qwest Improperly Discriminates Against CLECs By Denying
Them High-Quality Packet Switching Functionality. ...............................
Qwest Denies CLECs Reasonable And Non-Discriminatory Access To
Unbundled Local Transport, ,.......
,....... ,.......... ,......., ...........
................................... 99
Qwest Denies CLECs Reasonable Access To Unbundled Dark Fiber By
Impermissibly Applying The Commission s Test For Use Restrictions on
EELs. ..,......... '....,.,.... ....,.,....,
........ ..", .., .., ..,... ,.,.., ..."............. ,.................... .........
1 02
Qwest Denies CLECs Nondiscriminatory Access To The NID. ......,..................103
Qwest Fails To Make DSL Available For Resale On Reasonable And
Nondiscriminatory Tenns And Conditions. .........,..............................................104
QWEST HAS FAILED TO DEMONSTRATE THAT IT AND ITS SECTION
272 AFFILIATE WILL OPERATE IN ACCORDANCE WITH SECTION 272 IF
GRANTED INTERLA T A AUTHORITY, ................................................................,....106
Qwest And QCC Have Not Established That They "Operate
Independently" As Required By Section 272(b )(1). ..........................,..,.............108
Qwest Has Not Established Compliance With The Separate-Employees
Requirement Of Section 272(b )(3), .............................., ........... ................ ..,........1 09
Qwest Colorado, Idaho, Iowa, Nebraska. and North Dakota 271 AT&T Comments -July 3.2002
VI.
Qwest Does Not Meet The 272(b)(5) Requirement That All Transactions
With the Section 272 Affiliate Be At Arm s Length, Reduced To Writing,
And Publicly Available, ,.....................................................................................111
Qwest Has Not Demonstrated Compliance With Its Nondiscrimination
Obligations Under Section 272(c). ..,...................................................................113
QWEST'S ENTRY INTO THE INTERLATA MARKET IS NOT CONSISTENT
WITH THE PUBLIC INTEREST. ................................,.................................................117
InterLATA Authorization Is Not In The Public Interest Unless The BOC'
Local Markets Are Irreversibly Open To Competition, ...................................,..117
Qwest Has Engaged In A Pattern Of Anticompetitive Acts And Violations
Of Sections 251 , 252 and 271 Of The Act To Maintain And Expand Its
Market Power Over Local Service. .....................................................................119
1. Qwest's Violations of Section 252 (Secret Interconnection Deals). .......120
2. Qwest's Violation of Section 251 (Refusal To Test UNE-
Services).
""""""""""" """"""'" ................................................. .......... ,
122
3, Qwest's Pervasive Violations of Section 271...............................,..........123
4. Qwest's Other Anticompetitive Conduct ................................................130
Qwest Maintains Monopoly Power Over Residential Service. ...........................133
Qwest's UNE Rates Preclude UNE-Based Entry In Idaho, Iowa and North
Dakota" ,..... "..'
....,..."......"... .....,...,... .... ... ....... .""....... ... .,... ...................,.. ..........,
137
Qwest's Performance Remedy Plans Are Inadequate To Demonstrate 271
Compliance. ..................... ...............,..,.... ..., ....,.....,......... ..........,............
......., ......
142
CONCLUSION..................... .....
....,.......,..,..,..,..,................. ...... ................. ...... ............ ....,.....,. ..
147
1l1
Qwest Colorado, Idaho, Iowa, Nebraska, and North Dakota 271 AT&TComments-July3 2002
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
Qwest Communications International Inc"
Consolidated Application for Authority to
Provide In-Region, InterLATA Services in
Colorado, Idaho, Iowa, Nebraska and North
Dakota
WC Docket No, 02-148
COMMENTS OF AT&T CORP.
Pursuant to the Commission s Public Notice, AT&T Corp. ("AT&T') respectfully
submits these comments in opposition to the joint application of Qwest for authorization to
provide inwregion, interLA T A services in Colorado, Idaho, Iowa, Nebraska, and North Dakota.
INTRODUCTION AND SUMMARY
Process, not substance, is the central theme of Qwest's unprecedented 5-state section 271
application. The message behind this application is unmistakably clear: accept at face value
Qwest's claims of compliance with the federal law requirements of section 271, defer entirely to
state commission recommendations, and, whatever you do, please don t look behind the curtain.
Abdication, not independent review, is called for, Qwest contends, because the "new" Qwest is
different from all prior section 271 applicants (and from its predecessor US West) and, unlike
prior applicants, can be trusted to do the right thing for competition and consumers.
The new Qwest is different from prior applicants, but only in ways that demand more, not
less, Commission scrutiny. No prior section 271 applicant can match Qwest's long and shameful
record of blatant section 271 violations - violations that defy Qwest's express representations to
the Commission, that began the minute Qwest swallowed US West, and that continue unabated
Qwest Colorado, Idaho, Iowa, Nebraska, and North Dakota 271 AT&T Comments July 2002
the Commission can be sure that Qwest has fully opened its markets to competition and has met
its checklist burden is to allow state commissions to conduct comprehensive investigations
regarding Qwest's secret deals, to force Qwest to come clean about all of its secret deals and to
reform its discriminatory practices, and then to restart the section 271 process with full
participation by all interested parties.
The Commission cannot ignore these fundamental violations of the Act's core
market opening provisions on the grounds that Qwest has filed a petition seeking a Commission
declaration that Qwest'failure to file its secret interconnection agreements with state
commissions did not violate section 252, Assuming Qwest had a colorable claim that section
252 could be read, as Qwest argues, to allow Qwest to file only selected passages of negotiated
interconnection agreements - and the plain language of section 252 makes plain that this
contention is frivolous 14 - the declaratory order proceeding provides no lawful basis for ignoring
the mounting secret deals evidence here. Even if the Act could be read as not requiring Qwest to
file its secret, discriminatory agreements, that would not make Qwest's practice offavoring some
CLECs with rate and non-rate terms that are not available to (or even known by) other CLECs
any less discriminatory. The secret deals provide dispositive evidence that Qwest does not
provide access to network elements (and other checklist items) on nondiscriminatory terms, and
there is no possible basis for the Commission to ignore that evidence in this proceeding.
13 The fact that Qwest provided certain carriers sweetheart deals is also highly probative of whether the rates, terms
and conditions it has imposed on the disfavored carriers comply with the Act'substantive standards of Checklist
Item 2.
14 Section 252(a)(I) allows Qwest and other incumbent LECs to negotiate agreements for "interconnection, services
or network elements pursuant to section 251 " but provides that "(t)he agreement. . . shall be submitted to the State
commission under subsection (e) of this section." 47 V.C. ~ 252(a)(1). Section 252(e) provides that "(a)ny
interconnection agreement adopted by negotiation or arbitration shall be submitted for approval to the State
commission." 47 U.C. ~ 252(e)(1). See Opposition of AT&T Corp. To Petition For Declaratory RuJing Of Qwest
Communications International Inc., WC Docket No. 02-, at 6~10 (filed May 29 2002).
Qwest Colorado, Idaho, Iowa, Nebras/m, and North Dakota 271 AT&T Comments-July 3 2002
The Secret Deals Discrimination Is Undisputed.
It is now beyond dispute that Qwest has entered into blatantly discriminatory
agreements with favored CLECs and has kept those agreements secret from state regulators and
competitors by failing to file them with state commissions, as required by law. Further, it is
beyond dispute that in some cases, the favored CLECs agreed in return to acquiesce in major
Qwest regulatory initiatives, including Qwest's instant section 271 application,
As a result of a six-month investigation into potential anticompetitive conduct, the
State of Minnesota Department of Commerce filed a complaint against Qwest with the
Minnesota Public Utilities Commission on February 14, 2002.15 That complaint alleges that
Qwest entered into a series of secret, discriminatory agreements with various competitive LECs
to provide preferential treatment for those competitive LECs with respect to access to rights of
way, reciprocal compensation, and collocation.16 The Department of Commerce Complaint
included as exhibit 11 written agreements between Qwest and various CLECs that Qwest had
never filed with the Minnesota Public Utilities Commission pursuant to Section 252(a)(1). The
Minnesota Department of Commerce is seeking civil penalties in excess of $50 million against
Qwest l7 The Minnesota PUC has already held one hearing before an ALl and will conduct
further proceedings, scheduled for August 6-, on additional, newly discovered agreements
between Qwest and McLeod before issuing a decision,
IS See. e.g., Second Amended Verified Complaint, In the Matter of the Complaint of the Minnesota Department of
Commerce Against Qwest Corporation Regarding Unfiled Agreements, Minnesota Public Utilities Commission,
Docket No. P-4211C-O2-197 (Attachment 2 hereto).
16 See Second Amended Verified Complaint '\I 24 ("By entering into the Secret Agreements, Qwest is providingdiscriminatory treatment in favor of the CLECs that are party to these agreements and to the detriment of CLECs
that are not"
);
id. at '\I 26 ("(TJhe ongoing and repeated behavior of Qwest in entering into these secret agreements
was, and is, anti competitive and in violation of federal and state law
17 See Second Amended Verified Complaint '11'11275-, 282.
18 Favoring selected CLECs held little risk for Qwest, because if any carrier began to grow beyond "acceptable
boundaries, Qwest could neutralize that carrier s opposition by a pretense of cooperation, holding the carrier to its
Qwest Colorado, Idaho, Iowa, Nebraska, and North Dakota 27 AT&T Comments July 3, 2002
Significantly, the Minnesota Department of Commerce has uncovered evidence
demonstrating that five of the agreements identified in its Complaint "were the direct result of
efforts by Qwest to prevent Eschelon and McLeodUSA - two of Qwest's largest wholesale
customers - from participating in consideration of Qwest's application to provide in-region
interLATA long-distance services by the state commissions and the FCC.19 As a result of these
secret agreements to silence Eschelon and McLeodUSA, the Minnesota Department of
Commerce noted that "14 states, including Minnesota, have been reviewing Qwest's Section 271
application without the participation of two of Qwest's largest wholesale customers in most of
their workshops or adjudicative proceedings.2o While "(t)he extent of the damage that these
agreements have caused with respect to 271 proceedings across Qwest's territory is still
unknown " the Minnesota Department of Commerce recently "uncovered information that Qwest
has not provided accurate billing or access information for the UNE platform products ordered
by Eschelon from Qwest at any time from 2000 through the present.,,The Department's
investigation is continuing.22
Upon learning of the Minnesota complaint, several other state commissions in the
Qwest region commenced similar investigations of their own.The New Mexico Public
Regulatory Commission, for example, has issued over 80 subpoenas to competitive LECs
promise not to oppose Qwest's section 271 proceedings, but paying only lip service to its own promises of
favorable" treatment.
19 See Comments Of The Minnesota Department of Commerce In Opposition To Qwest's Petition For Declaratory
Ruling, WC Docket No. 02-89, at p, 18 (filed May 29, 2002). See also id. Qwest granted Eschelon various
preferences "in exchange for Eschelon agreeing not to participate in consideration of Qwest's Section 271
application before any state commission or the FCC"
);
id. at 20 ("Qwest entered into a similar arrangement with
McLeodUSA in exchange for an oral agreement to stay out of the Section 271 proceedings ; noting that
McLeodUSA confirmed this in response to a discovery request).
/d. at 22.
21 /d. at 22-23.
22 AT&T is aware, for example, that - prior to their defections ITom the workshops - Eschelon raised serious
problems with Qwest's UNE-P offering and McLeod raised issues with respect to access to poles/duct/conduits and
rights of way.
EXHIB IT 4
Nazarian, Dou~las RM.
o;="","Ii
.!deW
McNally Public
Aff.pdf (122 KB...
Powersaffred.pdf
(127 KB)
~~I
CopleyAff.pdf (89 Fisher PUBliC 6-12 WCD PublicKB) (358pm).doc... Affidavit.pdf (252 ...
'1!J
...
.w.
Deutmeyer Public
Aff.pdf (129 ...
To:
"Sue Peirce" ~Susan.Peirce~state,mn.us~ on 06/12/2002 04:53:52 PM
cc:
Subj ect :
~Morton. Posner~algx, com~. ~lsfriesen~att. com~, ~bross~bestlaw. com~.
~anita, taffrice~bowenlawgroup. com~, ~steve ,bowen~bowenlawgroup. com~.
~aanderso~covad. com~ . ~Heim , Shannon~dorseylaw , COM~.
~gregkopta~dwt. com~, ~dmframe~eschelon. com~,
~diane. peters~globalcrossing, com~. ~aisar~illerisar. com~
~dalocolbeck~millerisar. com~. ~RayC~moss-barnett. com~
~Mary . Buley~Onvoy . com~. ~Jshanso~qwest. com~
~Burl.Haar~state .mn,Us~, ~Linda. Chavez~state ,mn.us~,
~Linda. S .Jensen~state .mn. us~. ~Mary. Crowson~state .mn. US~I
~Tony. Mendoza~state, mn, us~
~shofstetter&att. com~ ~weigler~att. com~, ~pjudge~briggs. com~
~mdoberne~covad, com~ ~cla~deanhardt. com~
~cattanach.robert~dorseylaw.COM~1 "Tony Mendoza"
~Tony, Mendoza~state. mn. us~ ~scratty2~earthlink. net~,
~tlmurray~earthlink. net~, ~klclauson&eschelon. com~.
~gregory . merz&gpmlaw . com~ ~carrie. rice~HickoryTech, com~
~eryk~kientzle. com~, ~jbrowne&lga. att. com~.
~don.low~mail. sprint .com~, ~dlipschultz&mcleodusa. com~1
~bradleym~moss-barnett . com~, ~pbewick&newedgenetworks. com~
~j oy. gullikson~Onvoy. com~ ~j topp~qwest. com~ ~j fgibbs~rkmc, com~,
~rmliethen&rkmc. com~. ~Diane. Wells~state. mn. us~
~Ginny. Zeller~state, mn. us~. ~Jeanne, Cochran~state, mn. us~,
~John.Lindell~state. ron. US~~Karen.Hammel~state.mn, US~I~Lillian.Brion~state. ron. us~. ~Marc, Fournier~state ,mil. us~
~Michael.Lewis~state. ron. us~, ~Peter .Marker~state. mil. US~
~Priti, Patel~state. ron. US~I ~Ray .Smith~state ,mn.us~,
Steve . Alpert~sta te . mn. us~ ~brian. Thomas~twtelecom. com~
lesley , lehr~wcom, com~ ~eswanson~winthrop. com~
Docket P421/CI-O1-1371
Enclosed please find a public version of the affidavit of W. Clay Deanhardt on behalf of
the Minnesota Department of Commerce.
Public copies of the affidavits of Lori Deutmeyer, Todd McNally Lynn Powers. and' Ellen
Copley and Blake Fisher which are attached as exhibits to the Affidavit of Mr. Deanhardt
are also attached to this email.
Should you have any questions. please contact me at 651/296-0399.
Sue Peirce
MN Department of Commerce
(See attached file: Deutmeyer Public Aff .pdf) (See attached file: McNally Public Aff .pdf)
(See attached file: Powersaffred.pdf) (See attached file: copleyAff .pdf) (See attached
file: Fisher PUBLIC 6-12 (358pm) .doc) (See attached file: WCD Public Affidavit ,pdf)
Docket No, P-4211CI-01-1371; OAH No. 7-2500-14486-
Department of Commerce
Affidavit ofW. Clay Deanhardt
June 12 2002
Page 1
BEFORE THE MINNESOTA PUBLIC UTILITIES COMMISSION
Gregory Scott
Edward A. Garvey
Marshall Johnson
LeRoy Koppendrayer
Phyllis Reha
Chair
Commissioner
Commissioner
Commissioner
Commissioner
In the Matter of a Commission Investigation
Into Qwest's Compliance with Section 271(c)(2)(B)
Of the Telecommunications Act of 1996;
Checklist Items 1,, 13 and 14
MPUC Docket No.
4211CI-01-1371
OAHDocketNo.
2500-14486-
AFFIDAVIT OF W. CLAY DEANHARDT
My name is Clay Deanhardt. My business address is 161 Otsego Ave., San
Francisco, California, 94112. I am self-employed. I am working with the Minnesota
Department of Commerce (the "Department") to evaluate Qwest Corporation
Qwest') ability to comply with Sections 251 and 252 as well as Section 271 of the
Telecommunications Act of 1996 (the "Act"
From January 1999 through September 2000 I was Senior Counsel for Covad
Communications Company ("Covad") and responsible for Covad's legal relationship
with Qwest and its predecessor U S WEST (referred to collectively throughout my
affidavit as Qwest). As a result, I dealt with Qwest on an almost daily basis on issues
ranging from simple provisioning issues to interconnection negotiations and all
regulatory matters. I also managed various business aspects of Co va d's relationship with
Qwest. While at Covad, I led the operational and business team that determined, for the
Affidavit of Lori Deutmeyer
June 11 2002
Page 8 of 8
Lori Deutmeyer
Signed before me this 11th day of June, 2002.
Notary Public
EXHIB IT 5
Nazarian, Dou~las R.
Subject:
Alpert, Steve (Steve.Alpert~state.mn.us)
Friday. June 14, 200210:07 AM
Greg Merz; gwitt~att.com; Janet Browne; Janet Shaddix; Joy Gullikson; Lesley Lehr; Mark J.
Ayotte; Michael Hoff; PeterMarker; Sandy Hofstetter; Steve Weigler; Tom Koutsky; Ogrady,
Kevin; Klein, Allan; Tony Mendoza; Clay Deanhardt; JuliaAnderson; Michelle Rebholz;
RiddhiJani; .tlundy~qwest.com ; Jason Topp; Mitchell, Cynthia; Nazarian, Douglas RM.
Rohrbach, Peter A.; Spivack, Peter S.
Second Amended Complaint
From:
Sent:
To:
Attachments:AGO DOCS-#680958-v1-Untitled 421 Filing_Ltr Svs LsC6 02.DOC; AGO DOCS-
680158-v1-P-421 (unfiled agtsL2nd amended- com plaint. DOC
AGO DOCS-#6809 AGO DOCS-#6801
58-vI-Untltled P... 58-vI-P-421 (unf...
Second Amended Complaint and cover letter
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This e-mail message and any attachments are confidential and may be privileged, If you are
not the intended recipient, or the person responsible for delivering it to the addressee,
please notify the sender immediately by replying to this message and destroy all copies
this message and any attachments. Thank you.
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~~AGO DOCS-#68095B-vl-Untitled P-421 Filing Ltr Svs Lst 6 14 02 .DOC~~
~~AGO DOCS- #680158-vl-P-421- (unfiled agts) _2nd amended complaint .DOC~~
FOR THE MINNESOTA PUBLIC UTILITIES COMMISSION
SUITE 350
121 SEVENTH PLACE EAST
ST, PAUL, MINNESOTA 55101~2147
Greg Scott
Edward Garvey
Marshall Johnson
LeRoy Koppendrayer
Phyllis A. Reha
Chair
Commissioner
Commissioner
Commissioner
Commissioner
In the Matter of the Complaint of the
Minnesota Department of Commerce
Against Qwest Corporation Regarding
Unfi1ed Agreements
Docket No, P-4211C-02-197
SECOND AMENDED 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
Corporation ("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. g 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.
mitigate damages; and the Interconnection Agreements are hereby amended
accordingly.
236.The Department is informed and believes and on this basis alleges that there are
no provisions in any McLeodUSA ICA that set forth the waiver provisions described in
Section 3 of McLeod Agreement II.
237,The Department is informed and believes and on this basis alleges that no ICA
approved by the Commission under 47 U.C, ~ 252(e) with Qwest as a party contains the same
waiver provisions as this term of McLeod Agreement II.
238.By providing this term to McLeodUSA and to no other CLEC, Qwest
discriminated and continues to discriminate against other CLECs in violation of 47 U.
~ 251(c).
McLeod Agreement III
239.On October 26, 2000 Qwest entered into an oral agreement to provide
McLeodVSA with an 8% to 10% discount on all purchases made by McLeodVSA from Qwest
between October 2, 2000 and December 31 , 2003 ("McLeod Agreement III"
240.As set forth more specifically below, McLeod Agreement III sets the rates that
McLeodUSA pays for interconnection and access to unbundled network elements. As such
47 U.C. ~ 252(a)(1) requires Qwest to submit McLeod Agreement III to the Commission for
approval under 47 U.C, ~ 252(e),
241.To date, Qwest has not submitted McLeod Agreement III to the Commission for
approval under 47 V.C. ~ 252(e).
242.Qwest therefore violated and remains in violation of 47 U.C, ~ 252(a)(1).
243.McLeod Agreement III is an oral agreement pursuant to which Qwest agreed to
provide McLeodUSA with an 8% to 10% discount on all purchases made by McLeodUSA from
Qwest.
244.The discount applies to all products and services purchased by McLeodUSA from
Qwest, including interconnection, access, unbundled network elements , collocation, resale
services, and tariffed products and services. The discount applies for all purchases made by
McLeodUSA from Qwest inside and outside of Qwest's 14-state territory. The term of the
agreement is October 2 2000 through December 31 , 2003.
245,The effect of the discount is to reduce the rates that McLeodUSA pays for, among
other things, interconnection, access to network elements, collocation, services for resale and
reciprocal compensation by 8% to 10%.
246.No ICA approved by the Commission under 47 U.C. ~ 252(e) with Qwest as a
party contains the same terms as McLeod Agreement III.
247.By providing this rate discount to McLeodUSA and to no other CLEC, Qwest
discriminated and continues to discriminate against other CLECs in violation of 47 U.
~~ 251(b) and (c).
THE USLINK INFO TEL AGREEMENT
248,Today and at all times described below, USLink Inc. and InfoTel
Communications, LLC are and were licensed and certificated to operate as a CLEC in
Minnesota.
249.Today and at all times described below, USLink and InfoTel are and were parties
to ICAs with Qwest that were approved by the Commission under 47 U.C. ~ 252(e).
283.Grant such other and further relief as the Commission may deem just and
reasonable,
Dated: March -' 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] (TTY)
ATTORNEYS FOR MINNESOTA
DEP AR TMENT OF COMMERCE
AG: #680158-v1
104