HomeMy WebLinkAbout20040130Pagedatas Request for Summary Judgment.pdfJOSEPH MCNEAL, d/b/a P AGEDA T A
O. Box 15509
Boise, ill 83715
(208) 375-9844
Attorney Pro Se
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
JOSEPH B. MCNEAL, d/b/a PAGEDATA,
Complainant
vs.
QWEST CORPORATION
Respondent.
CASE NO. QWE- T -03-
P AGEDA T A'S REQUEST FOR SUMMARY JUDGMENT
TABLE OF CONTENTS
Page
Introduction
....................................................................................................................
Bellowing
"""""""""'" """"""""""""""""""""""""""'"...........................................
Qwest'Scheme..............................................................................................................
Reciprocal Compensation................................................................................................ 4
Single Point of Presence................................. .......... .......................................................
Unfiled Interconnection Agreements
...............................................................................
Transit Charges...........
"""""""""""""""""""""""""""""""""""""""""""'" ...........
FCC Pre-emption of Tariff..............................................................................................
Dispute Process...............................................................................................................
Call to Action..............................................................
....................................................
Formula for Charges...................................................................... ................................. 9
Disputed Spurious Billing Accounts....................................................
..........................
Wide Area Calling
........................................................................................................
Conclusion.................................................................................................................... 12
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE i
Introduction
PageData has provided enough information with this and previous submittals to
the Idaho Public Utilities Commission ("PUC") to request a summary judgment of Case
No. QWE-03-, whether or not Qwest replies to PageData s Complaint. It is
PageData s understanding that under Idaho PUC Rule 571 the Commission can make a
decision on a complaint, whether or not Qwest chooses to respond. Qwest's silence on
the matter could be an indication to the PUC that a summary judgment may be in the best
interest of Qwest and it could be a quick way for the Commission to resolve the
complaint without much fanfare. In Qwest's Limited Reply to the Complaint Qwest said
they reserved the right to defend themselves. We submit that is a misapplication of the
Commission rules because Qwest has no rights to reserve. PageData served Qwest's legal
representatives under Rule 542 and Qwest failed to reply within the designated 21 days.
We have attached as Exhibit A the recent ruling by the u.S. Court of Appeals in
the Mountain Communications, Inc., v. Federal Communications Commission case
Mountain Decision ), which is directly relevant to PageData s Complaints No. QWE-
O3-25 and USW-99-24 with the Idaho PUC.
Qwest has started to show some movement in correcting PageData s accounts.
However, a new scheme appears to be on the horizon wherein Qwest is trying to treat
each division in Qwest as its own separate company. Qwest implies that one division has
the right to disconnect services of PageD at a for lack of payment while another division of
Qwest is withholding reciprocal compensation payments from PageData, which more
1 IPUC Rules of Procedure, Rule 572 IPUC Rules of Procedure, Rule 54
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 1
than cover the amounts billed to PageData. Another Qwest division is hiding the fact that
the old disputed bills that PageData received from Qwest were predominantly filled with
charges for delivery of Qwest originated traffic, which Qwest is prohibited from
charging.
Qwest is correcting the invoices per the interconnection agreement that was
effective after signing on December 22, 2002 and approved by the Idaho PUC on
February 25 2003, but still not agreeing to remit payment for reciprocal compensation
due PageData. Qwest is expecting PageData to remit a monthly payment for facilities and
transit factor while Qwest is unjustly holding reciprocal compensation from PageData.
The reciprocal compensation due PageData for terminating Qwest originated traffic has
always offset, at a minimum, any monthly obligation that PageData has had with Qwest.
According to the FCC, reciprocal compensation is calculated using the formula of the
LEC's costs as a starting point. Qwest's reciprocal compensation obligation started when
PageData received its first facility from Qwest.
PageData requests that this reciprocal compensation issue be addressed head on
and that the code of silence at Qwest and the Idaho PUC about reciprocal compensation
owed PageData be addressed openly and forthrightly. Not doing so would needlessly
perpetuate both companies continuance of billing and legal disputes.
Bellowine
Qwest, by its attorneys, has been bellowing to the Idaho PUC and the FCC, using
its prestige as a multi-national, multi-billion dollar company, that PageData does not want
3 United States Court of Appeals for the District of Columbia Circuit Decision dated January 16, 2004, in
the case of Mountain Communications. Inc. v. Federal Communications Commission No. 02-1255
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 2
to pay Qwest one cent and has not paid Qwest since at least October 1998.4 At first
glance by the uninitiated, this is a damning statement. But once Qwest's claims are
scrutinized with the eyes of the 1996 Telecommunications Act and subsequent FCC and
federal court decisions, the uninitiated will discover that the emperor has no clothes. Here
is the rest of the story. The uninitiated will discover that PageData has paid Qwest over
$250 000 in cash5 for Qwest delivering Qwest originated traffic (47 CFR ~ 51.703(b)
unequivocally prohibits Qwest from charging for delivery of Qwest originated traffic
with no exception ), but Qwest has not remitted one cent to PageData for reciprocal
compensation or refunded the overcharges. Qwest has manipulated the regulatory process
to keep unjust gains of hundreds of small, family-owned businesses throughout Qwest
fourteen state territory and has cannibalized a once great company so that a few
individuals at the top can receive million dollar bonuses (as attested to by former Qwest
employees at http://www.tsewq.com
Owest's Scheme
It is PageData s belief that all the invoices that PageData has received from Qwest
are an orchestrated systemization of errors that includes a scheme to force PageData and
other carriers to pay Qwest for delivery of Qwest-originated traffic in the LATA in direct
contradiction of the 1996 Telecommunications Act. This scheme has been well
articulated in the recent Mountain Decision.
Decided January 16, 20044 Qwest Corporation s Limited Response to Joseph B. McNeal d/b/a PageData's Complaint, (Case No.
QWE- T -03-25) p. 45 Verified by Qwest during the hearing process of Case No. USW-99-24 at the Idaho PUC6 United States Court of Appeals for the Fourth Circuit Decision dated December 18, 2003, in the case of
MCImetro Access Transmission Services, Inc, v. Bel/South Telecommunications Inc. and the North
Carolina Utilities Commission No. 03-1238
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 3
Reciprocal Compensation
Qwest has been obligated to pay reciprocal compensation since 1996, but Qwest
has erected barriers and roadblocks to prevent the payment of reciprocal compensation to
CMRS carriers that Qwest considered paging only. To date, PageData has not received
any reciprocal compensation from Qwest or any acknowledgement from Qwest that
Qwest owes PageData reciprocal compensation. In light of the Mountain Decision, Qwest
no longer has any excuse for withholding reciprocal compensation from PageData.
Qwest's objections to paying PageData reciprocal compensation have no merit. The
reciprocal compensation due and owing from Qwest to PageData has never been taken
into account in any of the Idaho PUC's decisions and this must be corrected. Not
addressing reciprocal compensation skews the numbers and gives Qwest an unfair
advantage.
Sinele Point of Presence
It has long been PageData s contention that since 1996 Qwest has been obligated
to provide a single point of presence in the LATA. This has been born out by subsequent
FCC and court decisions. The Idaho PUC has not taken this statutory benefit, granted to
PageData by the 1996 Telecommunications Act, into any of its decisions, and this must
be corrected. Since August 29, 1998, and on more than fifty occasions such as by letter
telephone, formal hearings, Idaho PUC complaints, informal complaints at the FCC
interconnection agreement negotiations, and formal hearings, PageData has requested a
single point of presence with lOT -1 s from Qwest.
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 4
It was Qwest's company policy not to provide a single point of presence to Type
1 or Type 2 CMRS carriers, that Qwest considered paging only, until the introduction of
the single point of presence amendment to the AirTouchlArch interconnection agreement
approximately one year ago. This single point of presence amendment was not timely
filed and had a short expiration date. Qwest filed the amendment with the various state
PUCs in response to an informal complaint filed by PageData with the FCC.
PageData should have been able to peaceably enjoy the statutory right of a single
point of presence afforded by the 1996 Telecommunications Act. However, Qwest put
PageData on unofficial provisioning hold to lock PageData into pre-1996 facilities with
exorbitant and unlawful rates. PageData has been rescued from this scheme by the
Metzger letter and the TSR Order, which totally exempted CMRS carriers from tariff.
The TSR Order further stated that carriers did not need to have an interconnection
agreement in order to receive the best rates. Qwest is just now in the process of installing
the facilities for a traditional single point of presence for PageData.
U nflled Interconnection Aereements
It has long been PageData s contention that PageData has been discriminated
against by Qwest's failure to file interconnection agreements with favorable terms and
conditions, which made the terms and conditions unavailable for PageData to adopt. For
example, PageData has not had access to Vice-Presidents and the President of Qwest for
dispute resolution in a timely manner, as other carriers have received in their previously
secret, unfiled interconnection agreements.
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 5
Both Minnesota and Arizona aggressively pursued Qwest for illegally intervening
in the regulatory process with fines, but have not required Qwest to file the
interconnection agreements with the Commissions so those terms and conditions would
be available to other carriers, which would cost Qwest more than the fines. Qwest was
fined $8 000 000 and $24 000 000 by Arizona and Minnesota, respectively, for breaking
laws that are similar to Idaho statutes. The Idaho PUC should similarly fine Qwest for its
illegal behavior in the state ofIdaho. The citizens ofIdaho deserve the same
representation.
Transit Charees
The U. S. Court of Appeals decision on the Mountain case has also addressed
Qwest's contention that it can collect charges for a transit factor while denying PageData
the third party calling information. Qwest's withholding of third party information denies
PageData the right to be compensated for terminating third party traffic.
FCC Pre-emotion of Tariff
Qwest's legal counsel very clearly articulated that tariff rates , rules and
regulations do not apply to billing ofCMRS carriers such as PageData
The long-standing confusion over the extent of FCC preemption led to
considerable difficulty in interconnection negotiations and ultimately
litigation in interconnection arbitrations, in the courts, and at the FCC. The
extent of the preemption was very uncertain until approximately one year
ago. 13
7 Qwest Corporation s Limited Response to Joseph B. McNeal d/b/a PageData's Complaint dated
November 26, 2003, Case No. QWE- T -03-25 before the Idaho Public Utilities Commission.
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 6
Footnote 13The principal issues concerning preemption were: (i) the extent to
which FCC rules, as interpreted by the FCC, preempted state tariffs and
state commission decisions; (ii) whether paging carriers may obtain LEC
facilities from the LECs without paying and if so, within what geographic
area; (iii) whether paging carriers are entitled to compensation or free
facilities even if they purchased the facilities under state tariffs and have
not entered into section 251/252 interconnection agreements; (iv) transit
traffic.
These questions raised by Qwest's legal counsel were addressed and answered by
the 1996 Telecommunications Act, but it was Qwest's policy to delay and hinder the
implementation of the Act. Qwest s continued insistence on using the obsolete tariff
billing regime constitutes false billing. The U.S. Court of Appeals Mountain Decision
chastised both the FCC and Qwest by stating, "We therefore rather easily conclude that
the Commission s decision on this issue is arbitrary and capricious."g The u.S. Appeals
Court upheld that 47 C.R. ~ 51.703 (b) "unequivocal(ly) prohibit ( s) LECs from levying
charges for traffic originating on their own networks, and, by its own terms, admits of no
exceptions (See MCImetro Access Transmission Servs. V. BellSouth Telecomms, Inc.
No. 03-1238 2003 u.S. App. LEXIS 25782, at *24 (4th Cir. Dec. 18 2003)
Disoute Process
Qwest has been penalizing PageData even though Qwest has not implemented
any formal dispute process such as filing a formal complaint or seeking arbitration, and
has been trying to apply tariff rules and regulations to a co-carrier, which is prohibited by
law.
8 Page 9, US Court of Appeals, Mountain Decision
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 7
Qwest knows these accounts have been in dispute for over five years. However
this has not been reflected on any of the invoices. Qwest cannot penalize a co-carrier in
any way (including withholding of reciprocal compensation or facilities) for actively
disputing illegal charges for over five years.
Call to Action
PageData is calling on the PUC to put an end to this charade. It was easy for the
Idaho PUC to originally side with a multi-billion dollar, multi-national company. Several
small paging carriers - three of which were Idaho companies -yelled that the emperor
Qwest, has no clothes. The u.S. Court of Appeals vindicated our yell and shined the
spotlight on the naked monarch who has orchestrated a false and systematic way of
bilking carriers by charging for Qwest originated and transit traffic. For paging carriers in
Idaho, Qwest has designated the traffic split as 76% Qwest originated and 24% transit.
Qwest is prohibited from passing on or cost shifting its costs for delivery of Qwest
originated traffic to CMRS carriers. Since the originating carrier is responsible for paying
all transport costs, the 24% transit traffic costs is prohibited from being shifted to the
CMRS carrier. Under current rules, it is impossible for a carrier such as PageData to have
a monthly billing on one-way facilities. This is a fact oflaw that even to this day Qwest
refuses to accept. PageData is calling on the Idaho PUC to enforce this law.
LECs, such as Qwest, have erected elaborate schemes by coercing carriers into
signing unlawful interconnection agreements or not signing interconnection agreements
at all. The FCC and federal courts have systematically struck down each barrier that the
LECs erected. They recognize the monopolistic position that a company such as Qwest
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 8
has in the marketplace. The LEC must be in compliance with the 1996
Telecommunications Act whether or not the carrier has an interconnection agreement.
The TSR Order covers not having an interconnection agreement and the MClmetro
decision covers interconnection agreements with terms that violate the 1996
Telecommunications Act. 9
Formula for Charees
The u.S. Appeals Courts' Mountain and MClmetro Decisions set out the formula
that is to be used to determine what the billing rate should be. The formula is a basic
tenth grade story problem. The outline of the story and the formula is listed below.
Through testimony given at the Idaho PUC for Case No. USW-99-
PageData established its point of interconnection (POI) was Boise. Qwest is
unequivocally prohibited from levying charges for traffic originating on its network, with
or without an interconnection agreement. Questionably Qwest has determined that 24%
of the traffic delivered to PageData s network is transit traffic, i., third party traffic. It is
undisputed that Qwest need not absorb these costs. Nor should Qwest look to PageData
to absorb these costs. It is the originating carrier who is obligated to bear all transport
costs.
76% Qwest originated traffic
24% Transit traffic
100% Total
9 Page 14, US Court of Appeals, MCI Decision
10 In The Matter of the Joint Petition afRobert Ryder, d/b/a Radio Paging Service, Joseph B. McNeal, d/b/a
PageData and InterPage of Idaho, for Declaratory Order and Recovery of Overcharges from Us. West
Communications. Inc.
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 9
Seventy-six percent (76%) Owest originated traffic
Qwest is unequivocally prohibited from charging the terminating carrier
(pageData).
Twenty-four (24%) Transit traffic
Qwest has not identified to PageData the originating carrier, who must bear all
costs for transport. Qwest is prohibited from transferring the originating carrier
obligation to pay transport to the terminating carrier.
Reciprocal Compensation
One hundred percent of Qwest originated traffic is subject to reciprocal
compensation, with or without an interconnection agreement.
Because all the accounts listed below are subject to this formula, the scheme is
revealed and it is actually Qwest that owes PageData money.
Disouted Spurious Billine Accounts
As requested by Qwest's billing department, PageData has identified and listed
the long disputed accounts as follows:
208 R55-2312 312
208 R51-0454 454
208 R51-0485 085
208-642-8000-188B
208- D08-6826-826
6058670 (old Act # 178793)
208-111-1770-117M
208-111-1771- 7718
208-111-1769- 7698
208-373-9000-260B
208-375-9003-192B
208-375-9844-00-
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 10
208-375-8896-00-
As of June 2003, the fictitious billing balance totaled $278 597.42 (including
$70 290.54 + in interest charges and $38 425.92 + in overcharges according to Qwest's
billing methods). These fictitious billings continue to date and are disputed in full as
such. The u.S. Court of Appeals Mountain ruling validates PageData s claim that these
bills are fictitious and have no basis in law for a CMRS carrier.
208-375-8896-012B
The reciprocal compensation that Qwest is holding should be applied to accounts
208 R51-0454 454 and 208-375-8896-0 12B, so Qwest cannot claim that PageData owes
Qwest money on any account.
Wide Area Calline
In the Mountain Decision, the U.S. Court of Appeals ruled that Qwest could not
charge for delivery of traffic to the carrier s POI. The Court of Appeals called Wide Area
Calling dubious, by the fact that there are no additional services provided by wide area
calling and the only difference between wide area calling and traditional telephony is the
entity billed for the tolls. The u.S. Court of Appeals said the LEC could not force a
carrier into a wide area calling arrangement. 11 The Court of Appeals declared that there
could not be wide area calling between co-carriers in the LATA since the originating
carrier is responsible for all transport costs and Qwest is unequivocally prohibited for
charging for traffic originating on its network.
11 Page 8, U. S. Court of Appeals, Mountain Decision
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT-PAGE 11
76% Qwest originated traffic
24% Transit traffic - Originating Carrier Responsible for Cost
100% = zero charge to PageData
76% = Qwest originated traffic - reciprocal compensation due PageData
Qwest should not be allowed to gain a competitive edge through the use of
unlawful behavior. On August 29, 1998, PageData submitted a written request for a
single point of presence to Qwest, which would have eliminated the "wide area calling
debate because Qwest was obligated to connect at any technically feasible point in the
LATA.
Conclusion
For every issue that PageData presented to the Idaho PUC - some the Idaho PUC
took and some they did not - Qwest has lost through either FCC Decisions and Orders or
federal court. PageData is demanding that the PUC's Decisions and Orders start
reflecting the u.S. Court of Appeals tone to the FCC and Qwest
, "
We therefore rather
easily conclude that the Commission s decision on this issue is arbitrary and
capricious." 12
Despite the invoices that Qwest continues to send PageData, with the
implementation of the 1996 Telecommunications Act, PageData does not owe Qwest any
money. Rather, Qwest owes PageData money. We have provided these accounts in this
letter so the correct Qwest personnel can properly note on the accounts that each of these
invoices and accounts are disputed and PageData does not owe Qwest any money.
Qwest is prohibited from charging for recurring costs associated with transport
and is obligated to correct that part ofPageData s invoices. Qwest is prohibited from
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 12
charging for traffic originated on its network and must correct that part of the billing.
Qwest is prohibited from charging the terminating carrier transit charges and must correct
that part of the billing. Qwest must correct the interest charges on the disputed amounts.
Qwest is responsible for paying PageData reciprocal compensation and must correct that
part of the billing. Qwest must recognize it is PageData that determines the POI and not
Qwest and that POI for PageData is Boise. When all components of the billing are
corrected, the formula in the story problem outlined by the Fourth Circuit Court
Appeals MClmetro decision and the District of Columbia Circuit Court of Appeals
Mountain decision shows that PageData has been unlawfully billed for terminating Qwest
originated traffic and has been denied reciprocal compensation for terminating such
traffic.
Therefore, according to the formulas laid out by the Appeals Courts, in a timely
manner PageData s accounts should be zeroed out; PageData should receive a refund of
all cash paid to Qwest for interconnection activities; and Qwest should remit reciprocal
compensation through January 2003 directly to PageData. The reciprocal compensation
that Qwest is holding for the time period from January 2003 forward should be applied to
the same corresponding invoices under account 208 R51-0454 454 and 208-375-8896-
0 12B on a going forward basis, with any additional credits remitted to PageData by
check. If Qwest does not voluntarily implement the formula laid out by the court and
continues its fraudulent billing practices being delivered by u.s. Postal Service or
common carrier in violation offederal and state law, then the Idaho PUC should follow
the actions of Minnesota and Arizona and fine Qwest no less than $2 000 000.
12 U.S. Court of Appeals, Mountain Decision, p. 9
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 13
All the Qwest managers/personnel that are involved need to be brought up to date
so this can get resolved quickly and concisely. The billing problem will be perpetuated if
the reciprocal compensation issue is not settled along with the invoices being corrected.
Qwest is perpetuating the problem by not recognizing its obligations to correct the billing
in a timely manner and to remit reciprocal compensation to PageData in a timely manner.
PageData has made it quite clear that PageData s reciprocal compensation credits are
designated to offset PageData s invoices from Qwest. Qwest is creating this crisis by
giving an illusion that PageData is in arrears and PageData owes Qwest money when the
opposite is true.
RESPECTFULLY SUBMITTED this 29th day of January, 2004.
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT-PAGE 14
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 29th day of January, 2004, I caused to be
served a true and correct copy of the foregoing by the method indicated below, and
addressed to the following:
Jean Jewell
Idaho Public Utilities Secretary
472 W. Washington Street
PO Box 83720
Boise, ill 83720-0074
u.S. Mail Fax By Hand
William 1. Batt
Marshall Batt & Fisher, LLP
US Bank Plaza, 5th Floor
101 S. Capitol Blvd.
Boise, ill 83701
u.S. Mail Fax By Hand
Adam Sherr
Qwest
1600 7th Avenue - Room 3206
Seattle, W A 98191
u.S. Mail Fax By Hand
rA~i~(
PAGEDATA'S REQUEST FOR SUMMARY JUDGMENT - PAGE 15
EXHIBIT
Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that con-ections may be made
before the bound volumes go to press.
Wnittb ~tatt5' ((ourt of ~ptal5'
FOR THE DISTRICT OF COLUMBIA CIRCillT
Argued November 18, 2003 Decided January 16, 2004
No. 02-1255
MOUNTAIN COMMUNICATIONS, INC.
PETITIONER
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS
MOBILE USA, INC., ET AL.
INTERVENORS
On Petition for Review of an Order of the
Federal Communications Commission
Benjamin J. Aron argued the cause for petitioner. With
him on the briefs was Robert H. Schwaninger, Jr.
Charles W. McKee argued the cause for WIreless Carrier
intervenors T-Mobile USA, Ine., et aI., in support of petition-
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
er. With him on the briefs were Luisa Lancetti, Doanne
F. Kieche~ Thomas J. Sugrue, David M. Wilson, Laura R.
Hand:man, Jonathan E. Canis, and Douglas 1. Brandon.
Stewart Block, Counsel, Federal Communications Com-
mission, argued the cause for respondents. On the briefs
were R. Hewitt Pate, Assistant Attorney General, U.S. De-
partment of Justice, Catherine G. O'Sullivan and Nancy
Garrison, Attorneys, John Rogovin, General Counsel,
Federal Communications Commission John E. Ingle, Deputy
Associate General Counsel, and Laurel R. Bergold, Counsel.
Robert B. McKenna, Jr. argued the cause for intervenors
Qwest Communications International Inc., et al., and amici
curiae Verizon Telephone Companies. With him on the brief
were Michael E. Glover, John M. Goodman, and Edward H.
Shakin.
Before: SENTELLE and GARLAND Circuit Judges, and
SILBERMAN Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN .
SILBERMAN, Senior Circuit Judge: Mountain Communica-
tions, Inc. is a paging carrier that petitions for review of an
FCC order dismissing its complaint against Qwest-the local
exchange carrier (LEC) serving the areas where Mountain
operates-for charging petitioner two types of fees. The
dispute between the carriers as to one of the fees evaporated
at oral argument, but we hold that the FCC's decision as to
the other was arbitrary and capricious.
Mountain serves customers in three Colorado local calling
areas: Colorado Springs, Walsenburg, and Pueblo. All three
local calling areas are within the same Local Access and
Transport Area (LATA), and Qwest is the provider of local
service within each of those local calling areas. Calls from a
Qwest customer to another Qwest customer in the same local
calling area are local calls, but if a Qwest customer were to
call from one of these local calling areas to another, he or she
would incur a toll.
Though Mountain services all three local calling areas, it
uses a single point of interconnection (POI) with Qwest, as it
is entitled by statute. See 47 V.C. ~ 251(c)(2)(B) (providing
that LECs must provide interconnection facilities with other
carriers "at any technically feasible point within the (incum-
bent local exchange) carrier s network"
);
see also 47 C.
~ 51.321(a); In re: Developing a Unified Intercarrier Com-
pensation Regime, 16 FCCR 9610, 9650-51 ~ 112 (2001). The
POI is located in Pueblo. Customers in each of the three
calling areas have pager numbers associated with their indi-
vidual local calling areas. It is therefore the paging custom-
s residence that correlates with the paging number, and a
call from a telephone in a local calling area to a pager
associated with the same local calling area will seem to the
calling party to be a local call. But Mountain's maintenance
of a single POI in Pueblo, however, means that every call to a
Mountain customer, regardless of the place where the call
originated, must pass through Pueblo before Qwest hands it
off to Mountain and Mountain delivers it to the pager. Thus,
a Colorado Springs resident attempting to page a Colorado
Springs Mountain customer dials a Colorado Springs ex-
change, but the call is fIrst routed to Pueblo before being re-
routed to Colorado Springs.
Qwest has sought to collect fees from Mountain for these
types of calls-calls that originate and terminate in Colorado
Springs or Walsenburg but go through Mountain's POI in
Pueblo. Qwest considers these calls to be toll calls, but does
not charge its own customer-the caller-for placing such calls,
perhaps because it lacks the technological ability to do so.
See Starpower Communications, LLC v. Verizon South, Inc.,
2003 FCC LEXIS 6245, at *23 ~ 17(Nov. 7, 2003) (attributing
such a technological incapacity to Verizon). Instead, Qwest
determines whether a customer s call is a toll call by compar-
ing the number of the caller with the number of the person
receiving the call. If both are Colorado Springs numbers,
Qwest does not charge the customer a toll even if the call is
routed to Pueblo and then back to Colorado Springs.
Qwest claimed in response to Mountain's complaint before
the FCC that it was entitled to charge Mountain for the tolls
it was unable to charge its own customers. According to
Qwest, Mountain could avoid the toll charges by establishing
a POI in each of the three local calling areas-doubtless at an
increased cost. Then, if a paging call were placed from a
local number to another local number, no toll would
charged to anyone. If, on the other hand, a paging call were
made from one local calling area to another, Qwest would
transport the call to Mountain's POI-without crossing a local
calling area boundary-at which time Mountain would assume
responsibility for delivering the call across the local calling
areas, presumably at Mountain's expense.
Mountain claimed before the FCC that the Commission
regulations, specifically 47 C.R. ~ 51.703(b), which states
that LECs such as Qwest "may not assess charges on any
other telecommunications carrier for telecommunications traf-
fic that originates on the LEC's network " prohibit Qwest
from charging for transmitting calls from Qwest customers to
Mountain's POI. Mountain also relied on a recent FCC
decision, TSR Wireless, LLC v. US West Communications,
Inc.15 FCCR 11166, 11184 ~ 31 (2000), which interpreted
that regulation and rejected a similar effort on the part of an
LEC to charge a paging carrier for transmitting calls to the
paging carriers' POI, where the POI and the caller are in the
same LATA but different local calling areas.
The Commission rejected Mountain contention. The
FCC said that in its TSR decision it had cautioned,
nothing prevents (the LEC) from charging its end
users for toll calls completed (between local calling
areas). Similarly, section 51.703(b) does not pre-
clude (the paging carrier and the LEC) from enter-
ing into wide area calling or reverse billing arrange-
ments whereby (the paging carrier) can 'buy down
the cost of such toll calls to make it appear to end
users that they have made a local call rather than a
toll call.
15 FCCR at 11184 ~ 31 (emphasis added). This buy-down
arrangement is the same concept behind conventional 800
numbers, where the called party is billed for the toll ordinari-
ly incurred by the calling party.
The Commission concluded that here, by establishing a POI
in Pueblo and then asking Qwest for lines to connect local
customer numbers in Walsenburg, Colorado Springs, and
Pueblo to the POI, Mountain made it appear to Qwest
customers that they were making local calls from Colorado
Springs numbers to Colorado Springs paging numbers-even
though they passed through a Pueblo POI. "By configuring
its interconnection arrangement in this manner, Mountain
prevents Qwest from charging its customers for what would
ordinarily be toll calls to access Mountain's network" Moun-
tain Communications, Inc. v. Qwest Communications Int'
Inc.17 FCCR 15135, 15138 ~ 5 (2002). The Commission
determined that Mountain had obtained a wide area calling
service which is similar to a wide area calling arrangement,
and therefore Qwest was entitled to charge Mountain for that
service.
II.
Although petitioner does not quarrel with the Commission
caveat in TSR-that the regulation does not prohibit a wide
area calling arrangement-it insists that this case is no differ-
ent than TSR; the Commission has simply turned 180 de-
grees without explanation, and adopted a position at odds
with its own regulation and the statutory provision allowing
Mountain to make use of one POI within a LATA We are
befuddled at the Commission s efforts to explain away its
TSR decision; the facts seem-and are conceded to be-identi-
cal, but the results are opposite. In TSR the FCC prohibit-
ed US West, the LEC, from charging TSR, the paging
carrier, for the costs of transporting calls from US West
customers to TSR'POV In that case, just as in the present
situation the paging carrier served separate local calling
1 US West was the predecessor company to Qwest, the LEG
involved in the present dispute.
areas (Yuma and Flagstaff, Arizona), both of which were
within the same LATA and served by the same LEC. TSR
used a single POI, and a US West customer wishing to page a
TSR customer within the same local calling area would have
to place a call that would be routed across local calling area
boundaries. US West attempted, as Qwest attempts here, to
charge the paging carrier a fee for transporting those calls to
the paging carrier s POI. The FCC ruled that such a charge
would violate 47 C.R. ~ 51.703(b), because the calls origi-
nated on US West's network, and an LEC may not charge
another carrier for traffic originating on the LEC's network.
See TSR 15 FCCR at 11176 ~ 18, 11181 ~ 25, 11184 ~ 3V
The FCC concedes that the facts of TSR are identical to
those presented here, but argues that the present network
configuration nevertheless may be considered wide area call-
ing, even if the same configuration in TSR was not
considered.
The Commission s attempt to stretch the concept of a wide
area calling arrangement (essentially an agreement) to a wide
area calling "service" is logically inconsistent with its TSR
decision.3 The premise, according to the Commission TSR
2 In the words of the Commission, "(s)ection 51.703(b), when read
in conjunction with Section 51.701(b)(2), requires LECs to deliver,
without charge, traffic to (wireless) providers anywhere within the
MTA (Major Trading Area) in which the call originated. . . .TSR
15 FCCR at 11184 ~ 31. An MTA is the area within which wireless
providers offer service, and within which the FCC's reciprocal
compensation rules apply. All three local calling areas at issue here
are within the same MTA Section 51.701(b)(2), to which the
Commission referred, defines "telecommunications traffic" as that
traffic "exchanged between a LEC and a (wireless) provider that, at
the beginning of the call, originates and terminates within the same
Major Trading Area, as defined in ~ 24.202(a) of this chapter.
3 Mountain argues that under Qwest's tariffs, wide area calling
services exist only where the wireless carrier uses an interconnec-
tion known as Type 2. Mountain uses a Type 1 interconnection
which differs from Type 2 in that Mountain's customers have
telephone numbers associated with their individual local calling
reasoning, of a wide area calling arrangement is that the
LEC can charge a toll call to its customers. In that event the
paging carrier has an incentive to "buy down" that charge so
that Qwest's customer is not deterred by the toll from making
a paging call. Here, for reasons not entirely clear to us
Qwest does not charge its customers for what it regards as
toll call if the originating number and the paging number are
in the same local calling area. See generally Starpower
Communications, 2003 FCC LEXIS 6245 at *23 ,-r 17 (Nov. 7
2003) (noting that "industry practice among local exchange
carriers. . . appears to have been that calls are designated as
either local or toll by comparing the (phone numbers) of the
calling and called parties Accordingly, Mountain has no
incentive to enter into a wide area calling arrangement with
Qwest. Mountain s system of interconnection provides it no
advantages other than those to which, presumably, it is
entitled for free.5 The Commission nevertheless chooses to
areas instead of having numbers associated with the location of the
POI, here, Pueblo. Before us, the FCC denies that there is any
distinction between Type 1 and Type 2 interconnections for the
purpose of establishing whether there is a wide area calling ar-
rangement. We need not decide whether there can be a wide area
calling arrangement in a Type 1 system, and our analysis does not
turn on a conception of wide area calling being limited to Type 2
systems.
4 Mountain further argues that Qwest would not legally be per-
mitted to charge for calls by Qwest customers to paging customers
with numbers in the same local calling area as the caller. See
C. ~ 153(48) (allowing a "separate charge" beyond that re-
quired for local service for "telephone service between stations in
different exchange areas ) (emphasis added); 47 C.R. ~ 51.701(d)
(defining a call's termination as the point at which the call is
delivered to the called party). We need not decide whether the
FCC could reasonably interpret the statute and regulation to allow
a toll where a call begins and ends within a single local calling area
but passes through a different one.
5 Neither in TSR nor in this case has the Commission suggested,
or has Qwest claimed, that Qwest had any right to refuse to allow
term what Mountain has ordered from Qwest as wide area
calling service,which presto becomes a reasonable facsimile
of a wide area calling agreement. The FCC's characteriza-
tion of Mountain's arrangement as a wide area calling "ser-
vice," -sort of a constructive agreement-is rendered even
more dubious by the fact that there are no additional services
provided by wide area calling. The only difference between
wide area calling and traditional telephony is the entity billed
for the tolls.
Unfortunately for the Commission, the exact same analysis
could have been applied in TSR-but was implicitly rejected.
Therefore the Commission has, just as Mountain has claimed,
changed direction without explanation, indeed without even
acknowledging the change.
Perhaps more fundamental, by abandoning the concept of a
buy-down agreement between the parties and simply desig-
nating the service M-ountain-obtained as a wide area calling
service, the Commission seemingly comes into direct conflict
with its own regulation. See MCImetro Access Transmission
Servs. v. BellSouth Telecomms, Inc.No. 03-1238, 2003 U.
App. LEXIS 25782, at *24 (4th Cir. Dec. 18, 2003) (holding
that 47 C.R. ~ 51.703(b) "unequivocal(ly) prohibit(s) LECs
from levying charges for traffic originating on their own
networks, and, by its own terms, admits of no exceptions
In TSR, the Commission had interpreted its regulation
51.703(b), which prohibits LECs from assessing charges
other carriers for delivering traffic originating on the LEC'
network, as not applying to a voluntary agreement that a
paging carrier enters into with the LEC to compensate the
LEC for foregoing its option to charge its customers.
other words, the Commission implicitly construed such an
agreement as not a "charge" for telecommunications traffic
but rather compensation for a separate benefit. The Com-
mission described "wide area calling" as "a service in which a
Mountain to obtain paging numbers associated with each local
calling area. See In re: Numbering Resource Optimization
FCCR 7574, 7577 n.2 (2000) ("A carner must obtain a central office
code (the first three digits of a seven-digit phone number) for each
rate center in which it provides service in a given area code.
LEC agrees with an interconnector not to assess toll charges
on calls from the LEC's end users to the interconnector's end
users, in exchange for which the interconnector pays the
LEC a per-minute fee to recover the LEC's toll carriage
costs.TSR, 15 FCCR at 11167 n.6 (emphasis added). But
in this case the Commission abandoned that construction,
instead allowing Qwest to charge Mountain for the wide area
calling service it was deemed to enjoy, though there was no
agreement. By shifting its characterization of the exception
to ~ 51.703(b)'s prohibition on charges from an agreement to
compensate LECs for a foregone opportunity, to a charge for
the telecommunications traffic, the FCC decision appears to
run afoul of ~ 51.703(b)'s prohibition on charges.
The Commission, moreover, has not even tried to explain
how its position can be reconciled with the statutory provi-
sion, 47 D.C. ~ 251(c)(2)(B), which, it will be recalled,
obliges an LEC to provide interconnection facilities with any
other carrier at a single "technically feasible" POI. Mountain
maintains that that statutory provision implicitly precludes an
LEC from charging for such an interconnection, and the
Commission has not responded to that argument. We do not,
therefore, decide whether the Commission could reasonably
interpret the statute to allow for such charges.
We therefore rather easily conclude that the Commission
decision on this issue is arbitrary and capricious. See gener-
ally, e., Ramaprakash v. FAA 346 F.3d 1121, 1124-25 (D.
Cir. 2003).
III.
In addition to the charges Qwest has assessed for deliver-
ing Qwest-originated calls to Mountain s POI, Qwest has also
assessed "transit" charges for the delivery of calls originated
by a customer of an entirely different network. If a non-
Qwest customer wishes to page a Mountain customer, the callis routed to Qwest. Qwest then carries the call on its
network-in like manner as if a Qwest customer had placed
the call-to Mountain s POI. Mountain then assumes respon-
sibility for delivering the call to the Mountain customer.
Qwest incurs costs for switching and routing these calls over
the Qwest network, and Qwest charged Mountain for the last
of five parts of those expenses-the cost of delivering the call
from the Qwest end office switch to Mountain's POI. The
FCC allowed Qwest to charge for this service, but indicated
that Mountain could seek reimbursement from the originating
carrier for whatever charges it paid to Qwest. See Mountain
Communications, 17 FCCR at 15137 n.13. Mountain's peti-
tion challenged this FCC decision as well, claiming that the
charge is arbitrary and capricious because it does not follow
the standard practice of charging the cost of calls to the
network of the party initiating the call. Mountain insisted
that the prospect of reimbursement from the originating
carrier was illusory, because Mountain never receives infor-
mation from Qwest about which carrier initiates any individu-
al call, and it is therefore impossible for Mountain to seek
reimbursement from a third carrier.
It is undisputed that Qwest need not absorb these costs;
the only question is whether Qwest can charge Mountain for
one of the five portions of this cost or must instead look to the
originating carrier for all of the costs. It might well be
reasonable for the Commission to authorize Qwest to appor-
tion those costs, but we do not understand why the Commis-
sion did so. It did not explain why it rejected Mountain'
contention that the originating carrier should be charged for
all the costs. In any event, by indicating that Mountain could
charge the originating carrier, it suggested that Mountain
was essentially correct in claiming that the originating carrier
should bear all the transport costs. At oral argument,
Qwest's counsel obviated any need for us to decide this issue
by indicating that Qwest would provide Mountain with the
information necessary so that Mountain could charge the
originating carrier for reimbursement. Under those circum-
stances, Mountain dropped that part of its petition.
*****
Accordingly, the Commission s order is vacated in part and
the case is remanded.