Qwest Corporation vs. Public Utilities CO, No. 06-1132 (10th Cir. 2007)
Annotate this Case
Download PDF
F I L E D United States Court of Appeals Tenth Circuit PUBLISH March 5, 2007 UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker Clerk of Court TENTH CIRCUIT QW EST CORPO RATION, a Colorado corporation, Plaintiff - Appellant, No. 06-1132 v. THE PUB LIC U TILITIES C OM M ISSIO N O F TH E STA TE OF COLORADO, a regulatory agency of the State of Colorado; GR EGO RY E. SOPKIN, POLLY PAGE, and CARL M ILLER, in their official capacities as Commissioners of the Public Utilities Commission of Colorado, Defendants - Appellees. ---------------V ERIZO N , Amicus Curiae. QW EST CORPO RATION, a Colorado corporation, Plaintiff - Appellant, v. PU BLIC SER VIC E C OM M ISSION OF U TAH, a regulatory agency of the No. 06-4021 State of Utah; RICHARD M . CAM PBELL; CONSTANCE B. W HITE; TED BOYER, in their official capacities as Commissioners of the Public Service Commission of Utah, Defendants - Appellees. A PPE AL FR OM T HE UNITED STATES DISTRICT COURT FOR T HE D IST RICTS OF COLORADO AND UTAH (D.C. No. 04-CV-2596-W YD-M JW ) (D .C . No. 04-CV-1136-TC) John M . Devaney, Perkins, Coie, L.L.P., W ashington, D.C., for Plaintiff Appellant. M ark T. Valentine, (John Suthers, Colorado Attorney General and Paul C. Gomez, First Assistant Attorney General, State Services Section, on the brief), Denver, Colorado, for Defendants - Appellees Public Utilities Commission of Colorado. Scott H . Angstreich, Kellogg, Huber, H ansen, Todd, Evans & Figel, P.L.L.C., W ashington, D.C. (and G regory M . Romano, General Counsel - Northw est Region, Everett, W ashington, on the brief), for Amicus Curiae Verizon. Sandy J. M ooy, Attorney for Public Service Commission and Individual Commissioners, Salt Lake City, Utah, for Defendants - Appellees Public Service Commission of Utah. Before KELLY, A LA RC à N, * and LUCERO, Circuit Judges. KELLY, Circuit Judge. * The Honorable Arthur L. Alarcón, Senior Circuit Judge, United States Court of Appeals for the Ninth Circuit, sitting by designation. -2- In these consolidated appeals, Plaintiff-Appellant Qwest Corporation asks us to determine whether it was obligated to seek state utility commission approval of a contract in which it agreed to provide M CImetro Access Transmission Services, LLC ( M CImetro ), with access to a service known as Q west Platform Plus ¢ . The Public Utility Commission of Colorado and the Public Service Commission of Utah both independently determined that the Telecommunications Act of 1996 ( the Act ) specifically, 47 U.S.C. § 252(a)(1) required Qwest and M CImetro to submit their agreement for approval, and the district courts in Colorado and Utah agreed. Qwest challenges this conclusion, asserting that the filing obligation in § 252 arises only if an agreement contains network elements that Q west must make available to other carriers pursuant to 47 U.S.C. § 251. Our jurisdiction to review the district courts final orders arises under 28 U.S.C. § 1291, and we affirm. Background Through a merger, Qwest obtained U.S. W est, a former subsidiary of AT& T which was divested pursuant to a consent decree between AT& T and the United States government. Under current parlance, Qwest is known as a Bell operating company ( BOC, meaning a former AT& T subsidiary) and an incumbent local exchange carrier ( ILEC, meaning a local telephone service -3- provider that used to have a monopoly in a certain area) in both Colorado and Utah. As such, the Telecommunications A ct of 1996 requires Q west to share its network resources with other telecommunications carriers ( competitive local exchange carriers or CLECs ), that wish to enter Q west s local markets. M CImetro is a CLEC in Utah and Colorado. I. Statutory Framew ork: The Telecommunications Act of 1996 For most of its history, local phone service was thought to be a natural monopoly. A T& T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371 (1999). Accordingly, states alone regulated the industry, seeking to ensure that each local monopolist provided adequate service at reasonable prices. 1 This regime began to change in 1982, when AT& T agreed to divest itself of the local exchange carriers that it owned. See United States v. AT& T, 552 F. Supp. 131 (D.D.C. 1982), aff d sub nom. M aryland v. United States, 460 U.S. 1001 (1983). Fourteen years later, Congress enacted the Telecommunications A ct of 1996, which fundamentally changed telecommunications regulation by introducing competition in the local service market. Sw. Bell Tel. Co. v. Apple, 309 F.3d 713, 715 (10th Cir. 2002) (internal quotation marks omitted). In passing the legislation, Congress hoped to 1 States typically granted an exclusive franchise in each local service area to a local exchange carrier (LEC), which owned, among other things, the local loops (wires connecting telephones to switches), the switches (equipment directing calls to their destinations), and the transport trunks (w ires carrying calls between switches) that constitute a local exchange network. Id. -4- obtain the benefits of competition for the American consumer while avoiding, as much as possible, the potential that established entities would use their existing m arket pow er to prey on w ould-be market entrants. See Thomas G. Krattenmaker, The Telecommunications Act of 1996, 29 Conn. L. Rev. 123, 12931 (1996). Therefore, incumbent LECs are subject to a host of duties intended to facilitate market entry. Iowa Utils. Bd., 525 U.S. at 371. These duties essentially require the incumbents to interconnect with and to rent parts of their networks to new entrants especially those parts of a local network that it is least economic for a new entrant to duplicate. James B. Speta, Antitrust and Local Competition Under the Telecommunications Act, 71 Antitrust L.J. 99, 102-03 (2003). At the same time, the A ct provides for targeted monitoring of these interconnections by state and federal regulators. See 47 U.S.C. § 252(e). In this case, three provisions of the Act are at issue. The first is § 251, which among other things imposes a duty on ILECs to interconnect w ith would-be competitors. See 47 U.S.C. § 251(a)(1). The second is § 252, which provides that an ILEC faced with a request for interconnection may either negotiate an agreement with the requesting party or submit to arbitration by a state regulatory agency; in either case, the resulting interconnection agreement must be submitted to the state regulatory agency for approval. Id. § 252(a)-(b), (e). The third provision at issue is § 271, which allows BOCs to provide long-5- distance telephone service to their customers as long as they comply with certain conditions enumerated in the statute. Id. § 271(a). The dispute in this case is whether the agreements between Qwest and M CImetro are interconnection agreements that must be approved by state regulatory bodies pursuant to § 252, whether they are simply agreements wherein Qwest agrees to provide the services enumerated in § 271, or whether they are both. A. Section 251: The D uties Imposed on Telecommunications Carriers Section 251 of the Act establishes a three-tier system of obligations imposed on separate, statutorily defined telecommunications entities. A tlas Tel. Co. v. Okla. Corp. Comm n, 400 F.3d 1256, 1262 (10th Cir. 2005). Under the first tier, all carriers have the duty to interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers. 47 U.S.C. § 251(a)(1). In the second tier, all local exchange carriers (both ILECs and CLECs) have the duty to resell telecommunications services without unreasonable or discriminatory conditions or limitations . . . . Id. § 251(b)(1). They are also obligated to provide number portability, dialing parity, access to rights of way, and reciprocal compensation. Id. § 251(b)(2)-(5). Finally, the third tier contains the [f]oremost among these duties[:] . . . the [ILEC s] obligation . . . to share its netw ork with competitors. Iowa Utils. Bd., 525 U.S. at 371; see 47 U.S.C. § 251(c). The statute establishes three methods of providing access to an ILEC s -6- local network. See M CI Telecomm. Corp. v. Bell Atl.-Pa., 271 F.3d 491, 498 (3d Cir. 2001). First, a CLEC may build its own network and interconnect with the [ILEC s] network. Id. (internal quotation marks omitted). 2 Second, a CLEC may lease individual elements of the existing network on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory. Id. at 499 (quoting 47 U.S.C. § 251(c)(3)). Finally, a CLEC may purchase at wholesale prices the entire package of services provided by the ILEC and simply resell them to customers. Id.; see also 47 U.S.C. § 251(c)(4)(A). Each of these options benefits the CLEC because [t]he firm need not build that which the incumbent LEC has already built; the entrant may just plug into it, at prices deemed fair by the FCC. Krattenmaker, supra, at 139. The requirement that ILECs share their networks is an integral part of the new regulatory scheme because [w]ithout [it], a new carrier s entry barriers would be insurmountable. Speta, supra, at 118. B. Section 252: The Filing Obligation Section 252 . . . specifically describes how § 251 s obligations are to be implemented . . . . Iowa Utils. Bd., 525 U.S. at 419 (Breyer, J., concurring in 2 The statute requires ILECs to provide, for the facilities and equipment of any requesting telecommunications carrier, interconnection with the local exchange carrier s network . . . for the transmission and routing of telephone exchange service and exchange access. 47 U.S.C. § 251(c)(2). -7- part and dissenting in part). First, it permits carriers to negotiate interconnection agreements on their own initiative: Upon receiving a request for interconnection . . . services, or network elements pursuant to section 251 of this title, an incumbent local exchange carrier may negotiate and enter into a binding agreement with the requesting telecommunications carrier or carriers without regard to the standards set forth in subsections (b) and (c) of section 251 of this title. . . . The agreement . . . shall be submitted to the State commission under subsection (e) of this section. 47 U.S.C. § 252(a)(1). This subsection allows the ILEC to negotiate and enter into a binding agreement with the new entrant to fulfill the duties imposed by §§ 251(b) and (c) . . . . Verizon M d., Inc. v. Pub. Serv. Comm n of M d., 535 U.S. 635, 638-39 (2002) (internal quotation marks omitted). However, the without regard clause indicates that the parties may make agreements that go beyond or contradict the specific statutory requirements that an incumbent must follow. Speta, supra, at 119. After prescribing the procedure by which a CLEC may seek compulsory arbitration by the state commission, the statute requires that all interconnection agreements those reached by negotiation and those reached by arbitration be submitted to the state agency for approval: Any interconnection agreement adopted by negotiation or arbitration shall be submitted for approval to the State commission. A State commission to which an agreement is submitted shall approve or reject the agreement, with w ritten findings as to any deficiencies. 47 U.S.C. § 252(e)(1). The statute offers only two permissible grounds for -8- rejecting a negotiated agreement: (1) the agreement discriminates against a non-party telecommunications carrier, or (2) the implementation of the agreement is inconsistent with the public interest. Id. § 252(e)(2). Section 252(e)(6) permits a party aggrieved by the action of a state commission to appeal the decision to the district court, which must then determine whether the agreement or statement [submitted for approval] meets the requirements of section 251 of this title and this section. C. Section 271: The Competitive Checklist and InterLATA Service Section 271 allows an ILEC carrier to provide long-distance service ( interLATA services ) 3 in its local market if that market is sufficiently competitive. The ILEC may only provide in-region interLATA services if: (A) it has entered into one or more binding agreements that have been approved under section 252 of this title specifying the terms and conditions under which the [ILEC] is providing access and interconnection to its network facilities for the network facilities of one or more unaffiliated competing providers of telephone exchange service . . . to residential and business subscribers; or (B) no CLEC has requested access and interconnection. 47 U.S.C. § 271(c)(1)(A)-(B). Thus, 3 All former Bell System territory has been divided into Local Access and Transport Areas, or LATAs. InterLATA service refers to what consumers know as long-distance service; intraLA TA to what they know as local service (although some intraLA TA calls may be toll calls, depending upon classifications made by the state regulatory bodies). SBC Commc ns, Inc. v. F.C.C., 138 F.3d 410, 412 n.1 (D.C. Cir. 1998) (internal citation omitted). -9- the first condition visualizes a demonstration of a competitor in the local exchange market, while the second is a default to prevent an ILEC from being penalized simply because no competitor wishes to enter its market. SBC Commc ns, Inc. v. F.C.C., 138 F.3d 410, 413-14 (D.C. Cir. 1998). If the ILEC is operating in a competitive market and wishes to qualify under § 271(c)(1)(A), it must meet the requirements of § 251 as well as the additional requirements of the competitive checklist in § 271(c)(2)(B): [n]ondiscriminatory access to the poles, ducts, conduits, and rights-of-way owned or controlled by the [incumbent LEC] at just and reasonable rates; unbundled local loop transmission; unbundled local transport from the trunk side of a wireline local exchange carrier switch; local switching unbundled from transport, local loop transmission, or other services; and nondiscriminatory access to other network resources (e.g., 911 and E911 services). 47 U.S.C. § 271(c)(2)(B)(ii)-(vii). M ost of these conditions relate to the interconnection obligations . . . that other provisions of that Act impose on each incumbent LEC. . . . In short, the B OCs ability to offer long distance services and to manufacture equipment is conditioned on their meeting their new open interconnection responsibilities. Krattenmaker, supra, at 141-42. II. Regulatory Background: The FCC s Interpretation of the Act In 2002, Qwest petitioned the FCC for a declaratory ruling about the types of negotiated contractual arrangements between incumbent local exchange - 10 - carriers (LECs) and competitive LECs that should be subject to the filing requirements of [§ 252(a)(1)]. In re Qwest Commc ns Int l, Inc., 17 F.C.C.R. 19337, 19337 (2002). Qwest argued that the following categories of arrangements should not be subject to [the filing requirement in] section 252(a)(1): . . . agreements regarding matters not subject to sections 251 or 252 (e.g., . . . network elements that have been removed from the list of elements subject to mandatory unbundling). Qwest Corp. v. Pub. Serv. Comm n of Utah, No. 2:04-CV-1136 TC, 2005 W L 3534301, at *5 (D. Utah Dec. 21, 2005) (quoting Qwest s Petition Br.). The FCC rejected this approach, advising that: [A]n agreement that creates an ongoing obligation pertaining to resale, number portability, dialing parity, access to rights-of-way, reciprocal compensation, interconnection, unbundled network elements, or collocation is an interconnection agreement that must be filed pursuant to section 252(a)(1). . . . [W ]e do not believe that section 252(a)(1) can be given the cramped reading that Qwest proposes. Indeed, on its face, section 252(a)(1) does not further limit the types of agreements that carriers must submit to state commissions. In re Qwest, 17 F.C.C.R. at 19341. However, the FCC also disagreed with commentators w ho had urged that § 252 requires the filing of all agreements between an incumbent LEC and a requesting carrier. Id. at 19341 n.26. Instead, it ruled that only those agreements that contain an ongoing obligation relating to section 251(b) or (c) must be filed under 252(a)(1). Id. Although it held that agreements need not be filed if they simply provide for backward-looking - 11 - consideration, the FCC otherwise decline[d] to address all the possible hypothetical situations presented in the record before [it]. Id. at 19342. Rather, the FCC emphasized that the state commissions should be responsible for applying, in the first instance, the statutory interpretation we set forth today to the terms and conditions of specific agreements. Id. at 19340. III. Procedural Background Shortly after the passage of the Telecommunications Act, Qwest and M CImetro entered into negotiations and reached an interconnection agreement governing their relations in fourteen states, including Colorado and Utah. Pursuant to 47 U.S.C. § 252, the carriers filed their agreement with the state comm issions in Utah and Colorado, which approved it. Then, in early 2004, Qwest and M CImetro culminated additional negotiations and reached two new agreements, which M CImetro filed with both state commissions. The first was an amendment to the earlier interconnection agreement, and the second was the Qwest M aster Services Agreement ( QPP A greement ) at issue in this case. 4 Under the QPP A greement, Qwest contracted to provide M CImetro with a service referred to as Qwest Platform Plus ¢ , which is comprised of two network elements: switching and shared transport. Prior regulations required ILECs like Qwest to provide these network elements pursuant to the duties imposed by 4 Both commissions approved the amendment to the original interconnection agreement, and that action is not challenged here. - 12 - § 251(c)(3), but the FCC s Triennial Review Remand O rder determined that switching and shared transport were no longer required elements in most instances. See In re Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers (TRRO), 18 F.C.C.R. 16978, 16989 (2003), vacated in part, U.S. Telecom Ass n v. F.C.C., 359 F.3d 554 (D .C. Cir. 2004). Accordingly, Qwest may refuse to provide these elements to CLECs without violating its obligations under § 251. How ever, 47 U.S.C. § 271 requires Qwest to provide switching and shared transport if it wishes to offer long-distance service to its local customers, and Qwest asserts that the sole purpose of the QPP Agreement was to satisfy this § 271 obligation. In July 2004, M CImetro petitioned both state commissions seeking approval of the Q PP Agreement. Qwest timely moved to dismiss M CImetro s petitions, arguing that the commissions lacked the authority to approve the QPP Agreement because it w as not an interconnection agreement under 47 U.S.C. § 252. Specifically, Qwest contended that it was not required to provide QPP services by 47 U.S.C. § 251(b) or (c) and that the state commissions only had authority to review agreements for services enumerated in those subsections. Both comm issions disagreed, denying Qwest s motions to dismiss and approving the QPP Agreement. 5 5 Aside from denying Qwest s motion to dismiss, the Utah Public Service Commission took no action with respect to M CImetro s petition for approval. - 13 - Qwest then filed actions against both commissions in the appropriate district courts seeking declaratory and injunctive relief. It argued again that only agreements containing obligations enumerated in § 251(b) and (c) are subject to the filing requirement in § 252. The courts rejected Qwest s arguments, and the commissions orders w ere affirmed. Now, Qwest appeals both district court rulings. The two cases were consolidated for oral argument, and we decide them both in this opinion. Discussion I. Jurisdiction and Standing Before reaching the merits of this case, we have an independent duty to ensure that the district courts properly asserted jurisdiction over Q west s lawsuits. See Phelps v. Hamilton, 122 F.3d 1309, 1315-16 (10th Cir. 1997). Qwest sought both a declaratory judgment, pursuant to 28 U.S.C. §§ 2201 and 2202, and an injunction, invoking the district court s jurisdiction under 28 U.S.C. § 1331 as well as 47 U.S.C. § 252(e)(6). Although § 252(e)(6) by its own terms confers jurisdiction only to determine whether the agreement or statement meets the requirements of section 251 of this title and this section, the Supreme Court has held that this statement does not divest the district courts of their authority under W hen a state commission fails to take action on a petition for approval within ninety days, the agreement is deemed approved. See 47 U.S.C. § 252(e)(4). - 14 - 28 U.S.C. § 1331 to review [a] Commission s order for compliance with federal law. Verizon M d., 535 U.S. at 642. The Court has also held that the district courts federal question jurisdiction extends to lawsuits seeking declaratory and injunctive relief against a state commission even though the challenged action was neither the approval nor the rejection of a filed agreement. Id. at 642-43. Accordingly, we have recognized that § 252(e)(6) grants federal courts jurisdiction in any case in which a state commission makes a determination under this section. Sw. Bell Tel. Co. v. Brooks Fiber Commc ns of Okla., Inc., 235 F.3d 493, 497 (10th Cir. 2000). W e conclude that the district courts properly asserted jurisdiction. W e are likewise obliged to satisfy ourselves that Qwest had standing to invoke the district courts jurisdiction. DaimlerChrysler Corp. v. Cuno, 126 S. Ct. 1854, 1861 (2006). Article III of the Constitution bars the federal courts from issuing advisory opinions; accordingly, [a] plaintiff must allege personal injury fairly traceable to the defendant s allegedly unlawful conduct and likely to be redressed by the requested relief. Allen v. W right, 468 U.S. 737, 751 (1984). Here, the injury-in-fact asserted by Qwest is an obligation (which it contends does not apply) to file under § 252, which could force Qwest to provide switching and shared transport services (no longer required under § 251(c)(3)) to other CLECs on the same terms that it reached with M CImetro. See 47 U.S.C. § 252(i); In re Qwest Corp., 19 F.C.C.R. 5169, 5180 (2004); Aplt. Supp. Br. on Juris. Issues at - 15 - 5-6. This claimed injury could be redressed if we determined that the Utah and Colorado commissions were in error in requiring Qwest to file the QPP Agreement; if we vacated the commissions orders, § 251(i) would be rendered inapplicable and no CLEC could force Qwest to accept the same terms it agreed upon w ith M C Imetro. A ccordingly, we conclude that Qwest has standing, and w e proceed to consider Qwest s appeals on the merits. II. Is the QPP A greement an Interconnection Agreement Subject to Filing? The question presented in these appeals is w hether the QPP Agreement is an interconnection agreement that must be filed pursuant to § 252 of the Telecommunications Act of 1996. W e apply a de novo standard when reviewing state commissions interpretations of the Act . . . , as those decisions turn on determinations of federal law . Sw. Bell, 309 F.3d at 717; see also Atlas Tel. Co., 400 F.3d at 1260. Our own statutory interpretation begins with the plain language of the Act. United States v. Saenz-Gomez, 472 F.3d 791, 793 (10th Cir. 2007). W e construe the words of the statute in their ordinary sense . . . giv[ing] effect, if possible, to every word of the statute. Quarles v. U.S. ex rel. Bureau of Indian Affairs, 372 F.3d 1169, 1172 (10th Cir. 2004). How ever, given that [i]t would be a gross understatement to say that the 1996 Act is not a model of clarity. It is in many im portant respects a model of ambiguity or indeed even self-contradiction, Iow a Utils. Bd., 525 U.S. at 397, we must defer to reasonable FCC interpretations of - 16 - the Act where they are applicable, see Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984). The parties agree that a contract must be filed as an interconnection agreement if it contain[s] an ongoing obligation relating to section 251(b) or (c) . . . . In re Qwest, 17 F.C.C.R. at 19341 n.26. 6 Section 251(c) imposes [t]he duty to provide, for the facilities and equipment of any requesting telecommunications carrier, interconnection with the local exchange carrier s network . . . . 47 U.S.C. § 251(c)(2). Interconnection is defined as the physical linking of two networks for the mutual exchange of traffic. In re Implementation of the Local Competition Provisions in the Telecomms. Act of 1996 (First Local Competition Order), 11 F.C.C.R. 15499, 15514 (1996), vacated in part, People of the State of Cal. v. F.C.C., 124 F.3d 934 (8th Cir. 1997), rev d in part sub nom. AT& T Corp. v. Iowa Utils. Bd. 525 U.S. 366 (1999). 7 Therefore, 6 The parties have not contested the validity of this FCC interpretation, nor could they. See 28 U.S.C. § 2342. Indeed, Qwest asserts that the FCC s interpretation of 47 U.S.C. § 252 in its Declaratory Order is entirely consistent with the plain language and structure of the Act. Qwest Utah Br. at 50. 7 Neither the Eighth Circuit nor the Supreme Court undermined the Commission s definition of interconnection, and it has continued to rely on that definition in its adjudications. See, e.g., In re Verizon New England, Inc., 17 F.C.C.R. 7625, 7740-41 (2002); In re Total Telecomms. Servs., Inc., 16 F.C.C.R. 5726, 5736 (2001) ( W e have previously held that the term interconnection refers solely to the physical linking of two networks, and not to the exchange of traffic between networks. ). Furthermore, the D.C. Circuit has accepted this definition as a reasonable interpretation of the Act. AT& T Corp. v. F.C.C., 317 F.3d 227, 235 (D.C. Cir. 2003); see also Brooks Fiber, 235 F.3d at 494 ( The terms under which the networks are connected are contained in interconnection - 17 - we must affirm if the QPP A greement contains ongoing obligations related to the physical linking of two networks. Alternatively, we must affirm if we conclude that the QPP A greement contains an ongoing obligation relating to unbundled network elements. Section 251(c) imposes the duty to provide . . . nondiscriminatory access to network elements on an unbundled basis at any technically feasible point, 47 U.S.C. § 251(c)(3), if the failure to provide access to such network elements w ould impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer, id. § 251(d)(2)(B). Congress has provided that [t]he term network element means a facility or equipment used in the provision of telecommunications service. Such term also includes features, functions, and capabilities that are provided by means of such facility or equipment . . . . Id. § 153(29). Accordingly, the QPP Agreement was subject to filing under § 252 if it contains an ongoing obligation relating to a facility or equipment used in the provision of telecommunications service. A. Sw itching Switches are equipment directing calls to their destination. Iowa Utils. Bd., 525 U.S. at 371. Although the FCC has not given a simple and authoritative definition of the term switching, its discussion of the term in the TRRO makes agreements. ). Qwest has not challenged its validity here. - 18 - very clear that switching relates to the physical linking of two networks. The FCC began by noting that an important function of the local circuit switch is as a means of accessing the local loop. TRRO, 18 F.C.C.R. at 17244 ¶ 429. M oreover, one of the most essential functions a switch performs is to provide routing information that sends a call to the appropriate destination. Id. at 17246 ¶ 434. The FCC explained that CLECs must either gain access to the ILEC s switches or create physical connections between their own switches and the ILEC s loop in order to provide local service. Id. at 17244 ¶ 429. Additionally, switching performs several specific functions, including connecting loop facilities to the network, switching loops to other lines and trunks, and providing service capabilities to customers, such as dial tone and vertical features. Id. at ¶ 430. The Commission has defined switching to encompass line-side and trunk-side facilities, plus the features, functions, and capabilities of the switch . . . includ[ing] the basic sw itching function of connecting lines to lines, lines to trunks, trunks to lines, and trunks to trunks. Id. at 17245-46 ¶ 433 (internal citations omitted). In the TRRO, the FCC determined that ILECs were not required to provide switching as an unbundled network element pursuant to § 251(c)(3) because the failure to provide access to sw itching would not impair a CLEC s ability to provide local telephone service to its customers. See TRRO, 18 F.C.C.R. at 16989; 47 U.S.C. § 251(d)(2)(B). However, the conclusion that § 251(c)(3) does - 19 - not require ILECs to provide sw itching says nothing about whether sw itching is related to the obligation to interconnect found in § 251(c)(2). Insofar as the FCC has described the basic sw itching function of connecting lines to lines, lines to trunks, trunks to lines, and trunks to trunks, TRRO, 18 F.C.C.R. at 17246 ¶ 433, switching is unmistakably related to the physical connection of two netw orks. See also M CI, 271 F.3d at 502 (characterizing remote switching modules instruments that contain multiple switches as devices used for interconnection ). Accordingly, we conclude that agreements such as the QPP Agreement that permit ongoing access to an ILEC s switches are interconnection agreements that must be filed under 47 U.S.C. § 252. Furthermore, the switching service in the QPP A greement is related to the provision of unbundled network elements under § 251(c)(3). Qwest does not dispute that switching is a network element, see Qwest Utah Br. at 69, and the QPP A greement gives M CImetro ongoing access to switching on an unbundled basis. Although the FCC has concluded that a lack of access to sw itching would not impair M CImetro s ability to provide services within the meaning of § 251(d)(2)(B), the FCC has also determined that access to sw itching generally facilitates a CLEC s ability to provide services, especially in the mass market. TRRO, 18 F.C.C.R. at 17249-55 ¶¶ 438-47. Thus, while access to sw itching is not required by § 251(c)(3), it is related to Qwest s § 251(c)(3) obligations because it will assist M CImetro in providing services. As a result, § 252 required - 20 - Qwest and M CImetro to file the Q PP Agreement with the state commissions. B. Shared Transport Transport trunks are wires carrying calls between sw itches. Iowa Utils. Bd., 525 U.S. at 371. The FCC has defined shared transport as transmission facilities shared by more than one carrier, including the incumbent LEC, between end office switches, between end office switches and tandem switches, and between tandem switches in the incumbent LEC s network. TRRO, 18 F.C.C.R. at 17319 ¶ 533; see also U.S. Telecom Ass n v. F.C.C., 359 F.3d 554, 588 (D.C. Cir. 2004). 8 It has also noted that sw itching and shared transport are inextricably linked, such that a CLEC must be given access to unbundled shared transport if it is entitled to unbundled switching under 47 U.S.C. § 251(c)(3). TRRO, 18 F.C.C.R. at 17319-20 ¶ 534. In light of this understanding of shared transport, we conclude that shared transport relates to the physical linking of two networks. Indeed, calls must often 8 According to the QPP Agreement: Qwest will provide Shared Transport to carry originating access traffic from, and terminating to, M CI Q PP ¢ End User Customers. M CI traffic will be carried on the same transmission facilities between End Office Switches, between End Office Switches and Tandem Switches, and between Tandem Switches in its network facilities that Qwest uses for its own traffic. Qwest Utah Br. Attach. 3 (QPP Agreement) ¶ 1.5.2. This clearly envisions a linking of M CImetro s network and Qwest s network. - 21 - pass through a switch, travel across a shared transport trunk, and then pass through another sw itch in order to cross from one network to another. In this way, switching and shared transport are inextricably linked and both relate to the physical connection of two networks. Likewise, shared transport relates to Qwest s obligation to provide unbundled network elements. Shared transport is a network element that Qwest is providing on an unbundled basis. The FCC has determined that a lack of access to shared transport impairs a CLEC s ability to provide services to the extent that a lack of access to switching impairs the CLEC s ability to provide services. Id. As with switching, access to shared transport facilitates the CLEC s provision of services to its customers. It is therefore related to the ILEC s § 251(c)(3) duty to provide access to unbundled network elements whose absence would impair the CLEC s ability to provide services. III. Qwest s Contrary Arguments Qwest valiantly attempts to persuade us to adopt a very narrow reading of the Act and the FCC s precedents. It conveniently ignores the word relating in the FCC s interpretation of the Act, asserting that [i]f an agreement does not involve these Section 251 [(b) and (c)] duties, the Section 252 process cannot be triggered and the agreement, as a matter of law, cannot be an interconnection agreement subject to the Section 252 filing requirement. Qwest Utah Br. at 3940 (emphasis added). In support of this reading, Qwest advances four main - 22 - arguments, all of which we find unpersuasive. 9 A. Section 252 s Pursuant to Section 251 Clause First, Qwest argues that the introductory clause of § 252(a) excludes the QPP A greement from the filing requirement. According to § 252(a), [u]pon receiving a request for interconnection, services, or network elements pursuant to section 251, an ILEC may negotiate an interconnection agreement, which must be submitted to the state commission. Qwest argues that pursuant to 251 means that the CLEC must have requested access to an element that the ILEC has a duty to provide under § 251(c) and that the ultimate agreement must implement [a] Section 251 requirement. Qwest Utah Br. at 46-47. In support of this position, Qwest points to a recent federal district court decision from M ontana. Qwest Corp. v. Schneider, No. CV-04-053-H-CSO , 2005 U.S. Dist. LEXIS 17110 (D. M ont. June 5, 2005). In Schneider, Qwest appealed from a decision by the M ontana Public Service Commission that asserted jurisdiction over a line sharing agreement betw een Qwest and Covad. Id. at *1-2. The parties in Schneider like the parties in this case agreed that the agreement was for access to an element that was not a required unbundled network element under § 251(c)(3). See id. at *14. Thus, the court was confronted with the legal 9 Qwest has also made innumerable ancillary arguments which we have considered and necessarily rejected given our resolution of the main questions in the 235 pages of briefing that it has submitted in this case. - 23 - question of w hether § 252 s filing obligation could apply to elements that were not required by § 251. In holding that the agreement was not subject to filing under § 252, the court interpreted pursuant to section 251 to limit the filing obligation to those agreements that contain section 251 obligations. Id. at *20 (emphasis added). It also held that its interpretation was consistent with the language ongoing obligation relating to section 251(b) or (c) in the FCC s Declaratory Order. See id. at *21. Qwest argues that the state commissions reached the opposite result after considering that exchange carriers who receive requests pursuant to section 251 may negotiate agreements without regard to the standards set forth in subsections (b) and (c) of section 251. 47 U.S.C. § 252(a)(1). Qwest asserts that the comm issions believed that this phrase freed their approval authority from the specific provisions of those subsections, and it urges us to interpret the phrase as permitting the parties to reach terms not required by § 251 (for example, a different pricing method) but only with respect to the network elements included in § 251(c)(3). An alternative understanding of the statute, Qwest contends, leaves no practical limit on the agreements over which state commissions w ould have jurisdiction. Qwest Utah Br. at 47. However, Qwest s reading of the without regard clause does not confirm its interpretation of pursuant to in § 252(a). The plain language of § 252 directs that when an ILEC has received a request for network access as described - 24 - in § 251(b) and (c) resale, number portability, dialing parity, access to rights-ofway, reciprocal compensation, interconnection, unbundled access, or collocation it may negotiate an agreement for one or more of these means of network access. See 47 U.S.C. § 252(a)(1). The statute does not say that the agreement may only provide what is described in § 251(b) and (c). Instead, it must be given a broader reading that is consistent with the FCC s understanding of interconnection, services, or network elements. 10 Id. § 252(a). The most logical reading of the statute is that the filing obligation in § 252 covers agreements reached following a request for interconnection that is, the physical linking of two networks, First Local Competition Order, 11 F.C.C.R. at 15514 or network elements that is, facilit[ies] or equipment used in the provision of telecommunications service, 47 U.S.C. § 153(29) 11 or services. Qwest s reading is too narrow, both because it would exclude an agreement that contained an ongoing obligation relating to section 251(b) or (c) if it did not specifically include a required element under those subsections and because it would exclude an agreement that contained a required element but was initiated 10 After all, the statute terms the resulting agreements interconnection agreements. 11 Qwest suggests that this definition is so broad that it is difficult to conceive of anything in a telecommunications network that does not fall within its terms. Qwest Utah Br. at 69. W e believe, however, that the breadth of the definition shows Congress s desire to subject a broad range of agreements to the filing requirement. - 25 - by a request for a non-required element. 12 It is notable that Congress chose three terms with broad meanings interconnection, services or network elements rather than the more specific and narrow language it used in § 251. Qwest argues that Congress used the term network elements when it meant unbundled network elements as that term is used in § 251. Adopting this interpretation would require us to ignore the word unbundled in contravention of the familiar principle of statutory construction that courts should give effect, if possible, to every word that Congress has used in a statute. Conn. Dep t of Income M aintenance v. Heckler, 471 U.S. 524, 530 n.15 (1985). This we refuse to do. Sections 251 and 252 were designed to address different concerns, and Congress prescribed different criteria by which to judge compliance with the obligations they impose. W hile the mandatory provision of a network element under § 251(c)(3) is triggered by a finding that a lack of access impairs a CLEC s ability to provide services, see 47 U.S.C. § 251(d)(2)(B), a state 12 Imagine that Qwest s interpretation is correct. In this case, M CImetro initiated the negotiations with a request for switching and shared transport, which are not required unbundled network elements under § 251(c)(3). If Qwest had offered to include collocation in the agreement, as well, the agreement would not be subject to the filing requirement even though collocation is covered by § 251(c)(6) because the initiating request was not made pursuant to section 251. This odd result suggests that Qwest s interpretation is not correct. See Clinton v. City of N ew York, 524 U.S. 417, 429 (1998) (refusing to adopt a statutory reading that w ould produce an absurd and unjust result which Congress could not have intended. ). - 26 - comm ission can only reject a voluntarily negotiated agreement if it finds that the agreement is discriminatory or inconsistent with the public interest, see id. § 252(e)(2)(A)(i)-(ii). Thus, § 251 obligations reflect Congress s concern for the interests of the requesting carrier, whereas the § 252 filing requirement is driven by concerns for the public interest and the interests of other non-party carriers. Congress sensibly recognized that the class of network elements whose nonprovision would impair a CLEC s ability to enter the market is substantially narrower than the class of network elements whose provision on favorable terms could discriminate or impact the public interest. Accordingly, we conclude that Congress used unbundled network elements in § 251(c)(3) and network elements in § 252(a) because it intended to convey different meanings in those tw o sections. It is also significant for the purposes of this case that switching and shared transport are undoubtedly network elements, 13 although they are not included in the category of network elements that must be offered on an unbundled basis pursuant to § 251(c)(3) and § 251(d)(2). Sw itching and shared transport do not qualify as unbundled network elements under § 251(c)(3), but we need not look to § 251(c)(3) for a definition of network element because Congress defined the term in § 153(29). The TRRO leaves no doubt that the FCC considers switching 13 Indeed, Qwest admits as much. See Qwest Utah Br. at 69. - 27 - and shared transport to be network elements, and that understanding is entirely consistent with the definition given in § 153(29). Therefore, we are not persuaded by Qwest s argument that the QPP Agreement was not subject to filing under § 252 because it was not negotiated following a request made pursuant to section 251. Qwest does not challenge the FCC s determination that agreements must be filed if they contain an ongoing obligation relating to section 251(b) or (c), and the Commission s use of the w ord relating is entirely consistent with Congress s use of terms that are similar to, but broader than, those found in § 251. Schneider s holding that agreements containing an ongoing obligation relating to section 251(b) or (c) are those agreements that contain section 251 obligations is entirely untenable. See Schneider, 2005 U.S. Dist. LEXIS at *20-21 (emphasis added). The practical limit that Qwest seeks comes not from the pursuant to clause but from the FCC s use of the word relating. Thus, not all agreements between carriers must be filed; rather, only those containing an ongoing obligation relating to section 251(b) or (c) are subject to § 252 s filing requirement. B. The Arbitration Element of Section 252 Qwest next contends that the range of negotiated agreements subject to filing is coextensive with the range of arbitrated agreements that must be filed pursuant to § 252. Because a CLEC may only compel arbitration of issues that the ILEC is under a duty to negotiate pursuant to § 251(c)(1), the - 28 - interconnection agreements that result from arbitration necessarily include only the issues mandated by § 251(b) and (c). See, e.g., M CI Telecomms. Corp. v. BellSouth Telecomms., Inc., 298 F.3d 1269, 1274 (11th Cir. 2002). Qwest argues that it would be strange to interpret interconnection agreement to cover a broader spectrum of issues when the agreement is generated by negotiation than when it is created by arbitration. W e disagree. It makes perfect sense that the commission may only compel an ILEC to arbitrate with respect to services that it is under a duty to provide. Arbitration is an option specifically designed to address situations where an ILEC is under a duty to provide a service but cannot reach an agreement with a CLEC; deadlock would violate the ILEC s statutory duty to provide the element, but allowing no alternative would permit the CLEC to force the ILEC to accept unfavorable terms in order to avoid violating its duty. W hen negotiations fail, arbitration must be broad enough to allow the ILEC to fulfill its statutory obligation. However, the state commissions cannot create a duty to provide services not required by the statute, so their arbitration power cannot extend beyond the four corners of § 251. Negotiation, on the other hand, has no such constraints. A negotiated agreement may cover any number of issues, som e required by § 251 and others not. Negotiated agreements may include more issues than arbitrated agreements, but both can still be considered interconnection agreements under § 252. - 29 - Nothing in the statute suggests that the term interconnection agreement covers a field precisely as broad as the arbitration option and no more so. The fact that arbitrated agreements are confined to § 251 duties in no way limits the scope of negotiated agreements that are subject to filing under § 252. C. The Limited Scope of Permissible Judicial Review Pursuant to § 252(e)(6), federal courts are empow ered to review determinations by state commissions concerning interconnection agreements to ensure that the agreement or statement meets the requirements of section 251 of this title and this section. 47 U.S.C. § 252(e)(6). Qwest argues that [i]f Congress had intended to give state commissions the authority to review and approve agreements that do not contain the duties listed in Section 251, it would not have limited judicial review in this manner. Qwest Utah Br. at 42. The Supreme Court has made clear, however, that district courts have broad federal question jurisdiction to review determinations made by state commissions, including decisions made wholly independent of § 251. Verizon M d., 535 U.S. at 642. Furthermore, the FCC has ruled that state commissions have approval authority over any agreement that contains ongoing obligations relating to § 251 duties. Thus, even if Qwest is correct that Congress intended the scope of judicial review to be coextensive w ith the scope of the state commissions authority over interconnection agreements, it is clear that the federal courts are empow ered to review a decision under § 252 that an agreement contains ongoing - 30 - obligations related to § 251 duties. D. Section 271 Finally, Qwest urges us to rely on the QPP A greement s selfcharacterization as an effort to fulfill Q west s obligations under 47 U.S.C. § 271. Of course, we determine de novo without regard to the parties stated intent whether the QPP A greement is an interconnection agreement that must be filed pursuant to § 252. M oreover, Qwest s argument is unconvincing because the requirements of § 271 and § 251 are not mutually exclusive. Indeed, the competitive checklist in § 271 specifically requires Qwest to comply with the obligations in § 251(c)(2) and (3). See id. § 271(c)(2)(B). All interconnection agreements that fulfill the duties imposed by § 251(c)(2) or (3) necessarily fulfill competitive checklist obligations, as well. The QPP A greement may well have been intended to satisfy the requirements of § 271, but this has no bearing on whether the agreement should also be considered an interconnection agreement under § 252. W e likewise reject Qwest s contention that the Colorado Commission erred in concluding that § 271 included an independent filing requirement. See Qwest Colo. Br. at 65-67. This is a spurious interpretation of the Commission s order; the Commission merely noted that the filing of interconnection agreements under § 252 assists it in discharging its § 271(c) obligation to consult with the FCC regarding a BOC s compliance with the competitive checklist. See In re: the - 31 - Application for Approval of Interconnection Agreement Between U .S. W est Commc ns, Inc., and M CImetro Access Transmission Servs., LLC, Docket No. 96A-366T, Decision No. C04-1349, Order Approving Interconnection Agreement (P.U.C. Colo. Nov. 16, 2004). The Commission made its holding very clear: W e do not accept Qwest s interpretation of the Declaratory Order. W e believe that the FCC set forth guidelines as to what constitutes an interconnection agreement, and intends that state commissions apply those guidelines in determining what agreements need to be filed for approval. W e believe that the QPP A greement is an interconnection agreement. As argued by M CImetro, the agreement, which relates to mass market switching and shared transport, is an agreement for network elements, even if they are provided under § 271 of the Act. The QPP Agreement meets the criteria set forth in the FCC Declaratory Order . . . for evaluating what is an interconnection agreement. It sets forth ongoing obligations that relate to interconnection and unbundled network elements. As an interconnection agreement, it must be filed under § 252(e)(1). Indeed, we believe that all agreements which set forth ongoing obligations which relate to interconnection and unbundled network elements must be filed with this Commission pursuant to § 252(e)(1). Id. at 8. W e wholly agree. A FFIR ME D. - 32 -
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
