425 F.3d 964 (11th Cir. 2005), 05-11880, BellSouth Telecommunications, Inc. v. MCIMetro Access Transmission Services, LLC

Docket Nº:05-11880.
Citation:425 F.3d 964
Party Name:BELLSOUTH TELECOMMUNICATIONS, INC., Plaintiff-Counter-Defendant-Appellee, v. MCIMETRO ACCESS TRANSMISSION SERVICES, LLC, a Delaware Limited Liability Company, Defendant-Counter-Claimant-Appellant, NuVox Communications, Inc., a Delaware Corporation, KMC Telecom Holdings, Inc., a Delaware Corporation, KMC Telecom V, Inc., a Delaware Corporation, KMC
Case Date:September 15, 2005
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 964

425 F.3d 964 (11th Cir. 2005)

BELLSOUTH TELECOMMUNICATIONS, INC., Plaintiff-Counter-Defendant-Appellee,

v.

MCIMETRO ACCESS TRANSMISSION SERVICES, LLC, a Delaware Limited Liability Company, Defendant-Counter-Claimant-Appellant,

NuVox Communications, Inc., a Delaware Corporation, KMC Telecom Holdings, Inc., a Delaware Corporation, KMC Telecom V, Inc., a Delaware Corporation, KMC Telecom III, LLC, a Delaware limited liability company, Xspedius Management Co. Switched Services, LLC, AT&T Communications of the Southern States, LLC, Xspedius Management Co. of Atlanta, Talk America, Inc., a Pennsylvania Corporation, LecStar Telecom, Inc., a Georgia Corporation, ITCDeltaCom Communications, Inc., an Alabama Corporation d.b.a. ITCDeltaCom, Business Telecom, Inc., a North Carolina Corporation, Broadriver Communications Corp., a Delaware Limited Liability Company, Cbeyond Communications, LLC, a Delaware Limited Liability Company, Consumers' Utility Counsel Division of the Governor's Office of Consumer Affairs, DIECA Communications, Inc., d.b.a. Covad Communications Corporation, Southern Digital Network, Inc., d.b.a. FDN Communications, USCarrier Telecom, a Georgia Limited Liability Co., US LEC of Georgia, Inc., Georgia Public Service Commission, Defendants-Appellants,

XO Communications Services, Inc., et al., Defendants.

No. 05-11880.

United States Court of Appeals, Eleventh Circuit.

Sept. 15, 2005

Page 965

Appeals from the United States District Court for the Northern District of Georgia, D. C. Docket No. 05-00674-CV-CC-1.

Jeffrey A. Rackow, MCI, Inc., Washington, DC, Teresa Wynn Roseborough, Dara Loren Steele-Belkin, Sutherland, Asbill & Brennan, LLP, Daniel Stephen Walsh, Asst. Atty. Gen., Dept. of Law, Clare A. McGuire, Governor's Office of Consumer Affairs, Barry J. Armstrong, McKenna, Long & Aldridge, LLP, Atlanta, GA, Newton M. Galloway, Galloway & Lyndall, LLP, Griffin, GA, for Appellants.

Jill Warner, Matthew H. Patton, Michael E. Brooks, Kilpatrick & Stockton, L.L.P., Atlanta, GA, Sean A. Lev, Kellogg, Huber, Hansen, Todd & Evans & Figel, P.L.L.C., Washington, DC, for Appellees.

Joseph M. Ruggiero, Arlington, VA, Bruce David Cohen, Verizon, Newark, NJ, for Amici Curiae.

Before TJOFLAT, PRYOR and ALARCÓN[*], Circuit Judges.

Page 966

PRYOR, Circuit Judge:

The key issue in this appeal is whether the district court abused its discretion when it entered a preliminary injunction that barred enforcement of an order of the Georgia Public Service Commission, which had required BellSouth Telecommunications, Inc., to negotiate the terms of providing its competitors unlimited access to its facilities. Because the Federal Communications Commission, in a regulatory order, had ruled that unlimited access was no longer permitted, the district court did not abuse its discretion when it determined that BellSouth showed a substantial likelihood of success on the merits and both the balance of harms and the public interest supported the entry of a preliminary injunction.

I. BACKGROUND

In the Telecommunications Act of 1996, Congress sought to enhance competition in the local telephone service market to promote better quality and lower prices. Pub. L. No. 104-104, 110 Stat. 56. Congress delegated to the FCC the task of implementing this scheme of enforced competition. The FCC responded by requiring "Incumbent Local Exchange Carriers" (ILECs) to offer "Competitive Local Exchange Carriers" (CLECs) "unbundled" access to various components of the local telephone network known collectively as "unbundled network elements" (UNEs). In practical terms, unbundled access meant that ILECs provided CLECs access to UNEs at greatly reduced rates.

UNE components include "loops," "switches," and "transport facilities." Loops are copper wires that connect a home or business to the local phone company switch. A switch is a device, usually software, that routes a call from a home or office to the intended recipient. Transport facilities are devices such as copper wires or fiberoptic cables that transport calls between switches.

For eight years, the FCC tried and failed to implement a regulatory scheme that, after review by federal courts, satisfied the 1996 Act. For most of those eight years, the FCC required unbundling on the theory that it enhanced competition. The FCC required ILECs and CLECs to enter "voluntary" agreements to provide unbundled access to local telephone networks. If the parties could not agree, an agreement was provided either by the FCC or by state commerce commissions. States were given the authority to oversee voluntary agreements and arbitrate disputes arising from those agreements. 47 U.S.C. § 252(a), (b).

Under this regulatory scheme, BellSouth entered many agreements with CLECs. BellSouth agreed to provide network access at specified rates. Included in those agreements was a standard "change of law" provision, which required the parties, upon any change of law that materially altered the agreement, to "renegotiate in good faith...

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