20050623Answer and motion to dismiss.pdf

WILLIAM J. BATT, ISB No. 2938
BATT & FISHER, LLP
S. Bank Plaza, Suite 500
101 S. Capitol Boulevard
Post Office Box 1308
Boise, ID 83701
Telephone: [phone]
Facsimile: [phone]
ECEIVED 0
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~nns JUN 23 PM 4: 2~
10 J10 PUBLIC
TJLiTiES COt1r11SSIOri
Adam Sherr
QWEST COMMUNICATIONS, INC.
1600 7th Avenue - Room 3206
Seattle, W A 98191
[phone]
Attorneys for Qwest Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT PETITION
OF ROBERT RYDER, D/B/A RADIO PAGING
SERVICE and JOSEPH B. MCNEAL, d/b/a
AGEDA T A, FOR ARBITRATION OF
INTERCONECTION DISPUTE.
IPUC NO. QWE- T -04-
QWEST CORPORATION'S ANSWER
AND M OTI ON TO DISMISS
PETITION FOR ARBITRATION
Qwest Corporation ("Qwest") hereby responds to the Petition for Arbitration filed by
Joseph McNeal d/b/a PageData and Robert Ryder d/b/a Radio Paging Service (the "Pagers
Qwest first answers the Pagers, and then moves the Commission to dismiss the joint Petition.
On November 26, 2004, the Pagers filed a joint Petition for Arbitration of the terms of their
expired/replaced Interconnection Agreements pursuant to 47 U.C. 9 252(b) of the
Telecommunications Act of 1996 (the "Act"
).
The Pagers filed the Petition for Arbitration even
though there are mandatory arbitration provisions in their agreements and they had not properly
conducted or even requested any negotiation of an amendment. In their Petition, the Pagers
requested that the Commission arbitrate whether they should receive refunds for charges made
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 1
ORIGINAL
by Qwest under the terms of the interconnection agreements, apparently be applying the
reasoning of Commission Order No. 29555 to old expired interconnection agreements through
change in law provisions in those agreements.
The Ne2otiated A2reements
In their Petition, the Pagers asked the Commission to "arbitrate
" "
a dispute between
Petitioners and Qwest . . . arising under interconnection agreements heretofore approved by the
Commission." Petition, p. 1. The interconnection agreements were the product of lengthy,
contentious interconnection negotiations pursuant to Sections 251 and 252 of the
Telecommunications Act of 1996 (the "Act"
).
Negotiations between each Pager and Qwest
covered the period 1997 to 1999.
Under Section 252 of the Act, the Pagers could at that time, during the Act's arbitration
window, have properly filed petitions for arbitration with the Commission for resolution of
interconnection terms and conditions on which the parties did not agree. Each of the Pagers
chose not to do so. Each Pager and Qwest filed fully negotiated, final agreements with the
Commission seeking approval under Section 252. The Pagers represented in their joint
applications with Qwest in Case Nos. USW-99-05 & USW-99-13 that the terms of the
Interconnection Agreements had been reached by "voluntary negotiations without resort to
mediation or arbitration Joint Application at p. 1 , Case No. USW-99-, and "the Agreement
is consistent with the public interest as identified in the pro-competitive policies of the State of
Idaho, the Commission, the United States Congress, and the Federal Communications
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 2
Commission.Id. at 2. Based on these filings and representations, the Commission approved
both agreements in 1999.
The Pagers now deny the validity of the 1999 agreements, and seek in this proceeding to
undo their contracts and replace portions of agreed-to contract language with more favorable
terms. Essentially, the Pagers seek retroactive amendment of these now-terminated contracts;
they seek terms more favorable those they agreed to in 1999, and on this basis ask the
Commission to "refund" charges properly billed by Qwest under the 1999 agreements. Indeed
in keeping with their advocacy in other claims and complaints they have made against Qwest
before this Commission and in the courts, they seek refunds of charges they never even paid.
The Pagers are six years too late in bringing their Petition for Arbitration. They could
have properly invoked the Commission s jurisdiction in 1999, but they chose otherwise, seeking
instead the Commission s approval of the very negotiated agreements they now ask the
Commission to undo. The Commission should find the Pagers are bound by their contracts.
Accordingly, the Commission should deny the relief the Pagers seek.
If the Commission is not inclined to reach the merits of this dispute, it is nonetheless
clear that the Pagers allege, at best, a dispute under an interconnection agreement. Thus
alternatively, the Commission should dismiss the Petition for the reasons the Commission
dismissed PageData s "Formal Complaint" in Order No. 29687 - there, the Commission
declined PageData s invitation to resolve its Interconnection Agreement dispute with Qwest
1 Joint Petition, paragraph 2. The Interconnection Agreements relevant to this matter were approved by
the Commission in Order No. 28032, Case No. USW-99-5 for Radio Paging and Order No. 28139
Case No. USW - T -99-13 for PageData.
2 The Pagers have long since replaced both of the agreements that are the subj ects of this proceeding with
more modem paging interconnection agreements.
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 3
noting that it was undisputed that PageData had voluntarily agreed to the terms of the
agreement. 3
ANSWER
In response to paragraph 1 of the Petition, Qwest admits only that Radio Paging
operates" Type 1 services. Qwest alleges, on information and belief, that PageData "operates
Type 2 services at this time.
II.
Qwest admits the allegations contained in paragraph 2 of the Petition.
III
In response to paragraph 3 of the Petition, Qwest denies the allegations contained therein
and alleges that every statement of Pagers contained in paragraph 3 of the Petition is utterly
false. Qwest affirmatively alleges that the Pagers engaged in voluntary interconnection
negotiations with Qwest, and that each of them agreed voluntarily to the terms and conditions of
their negotiated agreements as approved by the Commission.
IV.
In response to paragraph 4 of the Petition, Qwest denies same. Qwest specifically denies
that the Pagers ' interpretation of Commission Order No. 29555 is correct , or that the change of
law provision in each agreement "incorporates" that Order.
Qwest admits the allegations contained in paragraph 5 of the Petition.
Joseph B. McNeal, d/b/a PageData v. Qwest Corporation IPUC Case No. QWE-03-25.
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 4
VI.
In response to paragraph 6 of the Petition, Qwest denies same, except that Qwest admits
that the Pagers have requested refunds - even of amounts they have not paid Qwest.
AFFIRMATIVE DEFENSES
First Affirmative Defense
This Commission lacks jurisdiction over the matters set forth in the Petition. Moreover
the Commission has no authority under Idaho law to modify a contract where the public interest
is not at stake, as requested by the Pagers. The Commission has no jurisdiction over this dispute
under Idaho Code Section 61- 642, as stated by the Commission in Order No. 28687.
Second Affirmative Defense
The Petition fails to state a claim upon which relief can be granted.
Third Affirmative Defense
To the extent the Pagers seek to amend their agreements in the proceeding, they have not
followed proper contractual procedures for amendment, nor have they even sought amendment.
They never initiated negotiations to implement any change in law. In so alleging, Qwest
acknowledges the Pagers have always taken the position that they were not required to pay for
any telecommunications services.
Fourth Affirmative Defense
Under the agreements, any amendment negotiated on account of a change in law would
have prospective effect only, as of the effective date of the amendment. There is no such thing as
a unilateral retroactive amendment of a contract.
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 5
Fifth Affirmative Defense
The Pagers have failed to mitigate their damages. For years they refused - for reasons not
known to Qwest - to enter into or adopt interconnection agreements that would have provided
more favorable terms and conditions of interconnection.
Sixth Affirmative Defense
PageData has not paid Qwest for the services and facilities for which it now seeks
refunds.
Seventh Affirmative Defense
The relief sought by Pagers - involuntarily forcing Qwest to retroactively "amend" its
agreements with the Pagers - would, if granted by the Commission, violate provisions of the
United States and Idaho Constitutions. Such relief, if granted, would constitute an improper law
respecting a contract, and a taking of Qwest' s property with due process of law.
RELIEF REQUESTED - ANSWER
Based upon the foregoing answer and defenses, Qwest requests the following relief:
An order denying the Pagers' prayer for relief.
An order dismissing the Petition with prejudice.
C. Such other and further relief as may be within the Commission s jurisdiction and
to which the Commission deems appropriate.
MOTION TO DISMISS
Voluntarilv N e2otiated Interconnection A2reements
Qwest firmly believes that no law requires it to deliver transit traffic to the Pagers at no
cost, but will not reargue that point here. This Commission has, however, held that parties
voluntarily negotiating the terms, prices and conditions of an interconnection agreement "may
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 6
negotiate terms prices and conditions that do not comply with either the FCC rules or with the
provision of Section 251(b) or (c)." Order No. 28427 at 11 see also Order No. 28905. The
Commission noted that this comports with the FCC's statement that "a state commission shall
have authority to approve an interconnection agreement adopted by negotiation even if the terms
of the agreement do not comply with the requirements of (Part 51)." 47 C.R. 9 51.3.
Accordingly, the Pagers voluntarily entered into these interconnection agreements which
required them to compensate Qwest for the transit traffic delivered to them. Because they agreed
to terms which they now wish were different is immaterial. Based on the foregoing, the Petition
must be dismissed.
The Dispute Resolution Provisions
Each interconnection agreement at issue in this matter contains detailed procedures for
resolving disputes such as the one raised by the Joint Petition. These provisions make dispute
resolution mandatory and the Petitioners have completely ignored them. Section 17.16 of the
PageData agreement specifically states:
If any claim, controversy or dispute between the Parties, their agents, employees
officers, directors or affiliated agents ("Dispute ) cannot be settled through
negotiation, it shall be resolved by arbitration conducted by a single arbitrator
engaged in the practice of law, under the then current rules of the American
Arbitration Association ("AAA"
).
The Federal Arbitration Act, 9 U.C. Secs. 1-
, not state law, shall govern the arbitrability of all Disputes. The arbitrator shall
not have authority to award punitive damages. All expedited procedures
prescribed by the AAA rules shall apply. The arbitrator s award shall be final and
binding and may be entered in any court having jurisdiction thereof. The
prevailing Party, as determined by the arbitrator shall be entitled to an award of
reasonable attorneys' fees and costs. The arbitration shall occur in Denver
Colorado. Nothing in this Section shall be construed to waive or limit either
Party s right to seek relief from the Commission or the Federal Communications
Commission as provided by state or federal law. No Dispute, regardless of the
form of action, arising out of this Agreement, maybe brought by either Party more
than two (2) years after the cause of action accrues.
4 PageData, USW-99-13 Agreement, Section 17.16. Radio Paging, USW-99-, Section 8.15.
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 7
The dispute resolution section of the Radio Paging agreement is identical with except the last
sentence provides for a three (3) year limitation period. By the terms of these Agreements the
Pagers are contractually bound to resolve all disputes through this provision. Accordingly, the
Commission should dismiss the Joint Petition.
The Commission Should Decline to Exercise Jurisdiction over this Private Contract
Dispute" and has no Le2al Obli2ation to Entertain the Pa2ers' Petition
The Commission has no legal obligation to entertain this purely private contract dispute
and it would be a waste of time and scarce resources for the Commission to do so. The state of
the law regarding paging interconnection remains completely undecided, and the FCC has
recently made clear that it intends to entirely scrap its existing intercarrier compensation system
including paging interconnection rules.5 Indeed, the FCC staff now opines, nearly a decade after
the Metzger Letter, that providing paging carriers with free facilities and services creates
uneconomic incentives and distorts economic markets. Clearly the FCC has given up trying to
make sense out its now-archaic paging rules, and there is no further contribution to the public
interest that this Commission can make by trying to figure out what the FCC might have meant
had it given thought.
The parties and Commission already have two appeals pending at the Idaho Supreme
Court. Significant Commission resources have been spent trying to deal with these difficult and
unrewarding issues over the last six years. Against that backdrop, the Commission should
decline this new opportunity.
In the Matter of Developing a Unified Intercarrier Compensation Regime, Further Notice of Proposed
Rulemaking, CC Docket 01-20 FCC Rcd 4685 4737 (reI. March 3 2005).
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 8
1. The Commission May Exercise Discretion Whether to Entertain a Private
Contract Dispute.
The Commission should decline to exercise its jurisdiction, and should hold that
PageData follow the contract's dispute resolution process. This result is supported by a long line
of decisions from the Idaho Supreme Court and the Commission regarding when the
Commission should assert jurisdiction over a private contract dispute.
The Commission has stated that where there is concurrent jurisdiction over a private
contract dispute with another court or commission, the Commission will exercise restraint and
determine whether assertion of Commission jurisdiction is in the public interest:
The authority and jurisdiction of this Commission is restricted to that expressly
and by necessary implication conferred upon it by the Legislature. . . . . Mindful
of our duty, we recognize that in some instances Commission power, authority
and jurisdiction is coincident or concurrent with that of Idaho courts, specifically
in the area of contracts. Determining when to exercise our jurisdiction is often
predicated on an attitude of self-restraint and a determination of the most
appropriate forum. Idaho Code 99 61-307
, -
502
, -
503
, -
622
, -
623; Idaho
Constitution Article 9 16; Lemhi Telephone Company v. Mountain States Tel
98 Idaho 692, 571 P .2d 753 (1977); Agricultural Products v. Utah Power Light
Idaho 23, 557 P.2d 617 (1976).
The Commission has further stated that this was true, even when the parties had expressly
agreed in the contract that contract disputes were to be decided by the Commission:
The Commission reminds the parties that jurisdiction may not be conferred on the
Commission by contractual stipulation. The authority and jurisdiction of the
Commission is restricted to that expressly and by necessary implication conferred
upon it by enabling statutes. The nature and extent of Commission jurisdiction to
resolve actual disputes will be determined by the Commission on an individual
case-by-case basis, not withstanding P21.! of the Agreement.
Bunker Hill v. Washington Water Power 98 Idaho 249 (1977); Lemhi Telephone Company v. Mountain States Tel
98 Idaho 692, 571 P.2d 753 (1977); Agricultural Products v. Utah Power Light 98 Idaho 23 557 P.2d 617
(1976). See also Forest Fuel Power v. Washington Water Power Case No. U- 1008-246 Order No. 20486 (1986)
We have repeatedly said that the Idaho Public Utilities Commission is not the proper forum for arbitration or
mediation of disputed contracts.
);
Idaho Power Company, vs. Cogeneration, Inc. Case No. IPC- 94-24; Order No.
25918 (1995).
Idaho Power Company v. Cogeneration, Inc.Case No. IPC-94-24 (1996), Order No. 25918 at p. 5.
Id. at pp.
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 9
In this case, the Commission s assertion of jurisdiction over the billing dispute raised by
the Petition does not impact the public interest; it is a purely private matter affecting no one other
than the parties to the interconnection agreement, especially since the parties have obligated
themselves to use a different forum.
The Commission s Jurisdiction Over This Contract Dispute Is Uncertain.
There is no federal or state law clearly granting the Commission jurisdiction over
disputes in an interconnection agreement between an incumbent local exchange company and a
paging carrier, and the Commission does not appear to have a statutory obligation to entertain the
Pagers' filing.
3. The FCC Has Recognized That a State Commission Has No Responsibility to
Decide an Interconnection Dispute If the Parties Have Provided A Dispute Resolution
Mechanism.
Even if there were a clear grant of jurisdiction to the Commission, the FCC has
recognized that a state commission may not have responsibility to decide a dispute under an
interconnection agreement if the parties have contractually agreed to a dispute resolution
mechanism:
We note that, in other circumstances, parties may be bound by dispute resolution
clauses in their interconnection agreement to seek relief in a particular fashion
and, therefore, the state commission would have no responsibility under section
9 Although Idaho statutes may be read to empower the Commission to deal with interconnection disputes generally,
the extent to which Idaho has asserted jurisdiction over wireless interconnection is completely unclear. The
boundary of state commissions ' jurisdiction over wireless interconnection is uncertain; the FCC and courts have
found supreme law jurisdiction outside the 1996 Act. See, e.g., Iowa Utilities Bd. v. FCC, 120 F.3d 753 (8th Cir.
1997), aff'd in part and remanded AT&T Corp. v. Iowa Uti/so Bd. 119 S Ct 721 (1999120 F.3d at 800 n.21 , 820 39
(fmding FCC authority to issue local competition rules of special concern to CMRS providers under sections 2(b)
and 332( c) of the Act and granting motion to lift stay of section 51.703 as it applied to CMRS providers); TSR
Wireless supra n., at ~ 13, n.42 ("An additional basis for authority for the action we take here exists under section
332 of the Act"
);
Developing a Unified Intercarrier Compensation Regime CC Docket No. 01-, Notice of
Proposed Rulemaking, FCC 01-132 (reI. Apr. 27, 2001) (seeking comment on the relationship between the CMRS
interconnection authority assigned to FCC under sections 201 and 332, and that granted to the states under sections
251 and 252; noting FCC's authority for preemption of state entry and rate regulation under section 332(c)(3);
seeking comment on extent to which section 332 preempts state regulation of intrastate LEC-CMRS interconnection
and gives such authority to FCC). Id. ~~ 86-86.
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 10
252 to interpret and enforce an existing agreement. In this case, however, the
relevant interconnection agreements do not expressly specify how the disputes
shall be resolved. 10
4. Dismissal of the PageData Filing Is Supported By the Strong Public Policy
Favoring Arbitration and Alternative Dispute Resolution.
Idaho law strongly favors the enforcement of contractual arbitration clauses. Idaho has
enacted the Uniform Arbitration ACt.
In a recent case, the Idaho Supreme Court stated:
(WJe recognize that arbitration is a favored remedy. AT&T Technologies, Inc.
Communications Workers of America 475 U. S. 643 ,650 89 L. Ed. 2d 648, 106
S. Ct. 1415 (1986). See Bingham County Comm 'v. Interstate Elec. Co., 105
Idaho 36, 665 P.2d 1046 (1983) (Arbitration allows parties to settle their disputes
without expending time and unnecessary expense on needless litigation.) A court
reviewing an arbitration clause will order arbitration unless "it may be said with
positive assurance that the arbitration clause is not susceptible of an interpretation
that covers the asserted dispute.AT&T Technologies, Inc., supra. Doubts are to
be "resolved in favor of coverage. Id; Local Union No.3 70 of In tern t , 1 Union of
Operating Engineers v. Morrison-Knudsen Co., Inc.786 F.2d 1356 (9th Cir.
1986), citing United Steelworkers of America v. Warrior and Gulf Navigation
Co.363 U.S. 574582-, L. Ed. 2d 1409, 80 S. Ct. 1347 (1960). See Iowa City
Community School Dist. v. Iowa City Educ. Ass '343 N. 2d 139, 141 (Iowa
1983); Mayor v. Baltimore Fire Fighters, Local 734, 93 Md. App. 604, 613 A.
1023 ,1026 (Md.App. 1992); Howard Co. Bd ofEduc. v. Howard Co. Educ.
Ass '61 Md. App. 631 487 A.2d 1220 (Md.App. 1985); Mayor City Council of
Baltimore v. Baltimore City Fire Fighters 49 Md. App. 60, 430 A.2d 99 (Md.
App. 1981), cert. denied 291 Md. 771 (1981); West Fargo Pub. School Dist. West
Fargo Educ. Ass 'n, 259 N.2d 612, 620 (N.D. 1977); Corvallis School Dist.
Corvallis Educ. Ass '35 Ore. App. 531 , 581 P.2d 972 974 (Or. App. 1978). In
further support of a strong policy in favor of arbitration, this Court has expressly
stated that public bodies in Idaho are bound by their agreements to arbitrate
disputes. Bingham County Comm 'v. Interstate Elec. Co., 105 Idaho 36 665
2d 1046 (1983); Bear Lake Educ. Ass 'v. School Dist.116 Idaho 443 447, 776
P .2d 452, 456 (1989).
10 In the Matter of Star power Communications, LLC, Petition for Preemption of Jurisdiction of the Virginia State
Corporation Commission Pursuant to Section 252(e)(5) of the Telecommunications Act of 1996, CC Docket No. 00-
, Memorandum Opinion and Order, FCC 00-216 (reI. June 14 2000).
11
Idaho Code ~~ 7-901 - 7-922.
12 International Assoc. of Firefighters, Local No. 672 v. City of Boise 136 Idaho 162; 30 P.3d 940; 2001
Ida. LEXIS 36 (2001).
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 11
This strong Idaho policy requires that the PageData be required to adhere to the
contractually provided dispute resolution clause. The Commission should there decline
jurisdiction and dismiss PageData s filing.
RELIEF REQUESTED - MOTION TO DISMISS
For the foregoing reasons, Qwest respectfully requests that the Commission deny the
relief sought by the Pagers, as well as dismiss the Petition.
DATED this 23rd day of June 2005.
Respectfull y S ubmi tted
William J. Batt
BATT & FISHER, LLP
US Bank Plaza, 5th Floor
101 South Capital Blvd.
Boise, Idaho 83702
[phone]
and
Adam Sherr
QWEST COMMUNICATIONS, INC.
1600 7th Avenue - Room 3206
Seattle, W A 98191
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 12
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 23rd day of June, 2005, I caused a true and correct
copy of the above and foregoing document to be served, in the manner indicated, on the
following:
Bradford M. Purdy
2019 North
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
Hand Delivery
~U.S. Mail
Facsimile
Federal Express
Don Howell
Idaho Public Utilities Commission
472 West Washington
Boise, ID 83702
Telephone: [phone]
Fax: [phone]
Hand Delivery
D U.S. Mail
D F acsimil e
Federal Express
BY:wW~SaWI Ia J. Batt
QWEST CORPORATION'S ANSWER AND MOTION TO DISMISS PETITION FOR ARBITRATION, P. 13