NCCC v. Qwest, No. 14-15115 (9th Cir. 2016)
Annotate this CaseNorth County filed suit against Qwest, a rival local exchange carrier, and, in their official capacities, the Arizona Commission and the Oregon Commission. The commissions are state agencies whose responsibilities include regulating contracts between such carriers. The Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, classifies local exchange carriers into two categories: incumbent local exchange carriers (ILECs), and competitive local exchange carriers (CLECs). Qwest is an ILEC, and North County is a CLEC. The parties entered into interconnection agreements (ICAs) in 1997. When subsequent negotiations for extension agreements were not successful, Qwest filed suit to compel arbitration. The district court granted summary judgment to Qwest. Given (1) the language of the 1997 ICAs’ negotiation clause and the way it was interpreted by both state Commissions below; (2) North County’s conduct in the time leading up to the arbitration proceedings; and (3) North County’s lack of any rebuttal argument before this court; the court is satisfied that the state Commissions had authority to arbitrate the 2011 ICAs because the 1997 ICAs themselves gave Qwest the power to invoke the negotiation-and-arbitration mechanism set forth in 47 U.S.C. 252. The court examined six specific provisions of the 2011 ICAs and rejected North County's challenges.
Court Description: Telecommunications Act. The panel affirmed two district courts’ summary judgments in favor of Qwest Corporation and two state regulatory commissions in actions brought under the Telecommunications Act of 1996 by local exchange carriers that provide telecommunications services to their customers in Arizona and Oregon. The plaintiffs sued Qwest Corp., a rival local exchange carrier, and the commissioners of the Arizona Corporation Commission and the Public Utility Commission of Oregon, state agencies whose responsibilities include regulating contracts between local exchange carriers. Qwest is an incumbent local exchange carrier (ILEC), which previously enjoyed a monopoly on local phone service, and North County is a competitive local exchange carrier (CLEC). North County requested to interconnect with Qwest, and the parties entered into interconnection agreements in 1997. They subsequently entered into unsuccessful negotiations for successor agreements, and Qwest petitioned for arbitration before the state Commissions. The Commissions held arbitration hearings and approved new interconnection agreements in 2011. Qwest argued that the Commissions had authority to arbitrate the 2011 agreements because Qwest had the power 4 NCCC V. QWEST under 47 U.S.C. § 252 to initiate negotiations with North County to replace their existing interconnection agreements and thereafter to force North County into binding arbitration. Qwest relied on the FCC’s Triennial Review Order, which states that either a CLEC or an ILEC may initiate negotiations. Qwest also argued that the language of the initial interconnection agreements authorized it to initiate negotiations. The panel held that the state Commissions had authority to arbitrate the 2011 agreements because the 1997 agreements gave Qwest both the power to initiate negotiations and the power to compel arbitration. The panel rejected North County’s challenges to six specific provisions of the 2011 interconnection agreements: (1) the requirement that North County interconnect with Qwest directly rather than through a third-party tandem provider; (2) the agreements’ “Relative Use Factor;” (3) the requirement that North County use digital signaling technology known as SS7 signaling if and when it originates calls to Qwest; (4) the requirement that North County pay Qwest for certain call detail records; (5) the cap on the number of minutes for which North County can bill Qwest; and (6) the agreements’ failure to allow North County to interconnect using Voice over Internet Protocol.
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