Advamtel, LLC v. Sprint Communications Co., L.P.

• Decision Date: 05 January 2001
• Docket Number: No. CIV. A. 00-1074-A.,CIV. A. 00-1074-A.
• Citation: 125 F.Supp.2d 800
• Court: U.S. District Court — Eastern District of Virginia
• Parties: ADVAMTEL, LLC et al., Plaintiffs and Counterclaim-Defendants, v. SPRINT COMMUNICATIONS CO. L.P., Defendant and Counterclaim-Plaintiff.

Page 800

125 F.Supp.2d 800

ADVAMTEL, LLC et al., Plaintiffs and Counterclaim-Defendants, v. SPRINT COMMUNICATIONS CO. L.P., Defendant and Counterclaim-Plaintiff.

No. CIV. A. 00-1074-A.

United States District Court, E.D. Virginia, Alexandria Division.

January 5, 2001.

Douglas Paul Lobel, Kelley, Drye & Warren, Washington, D.C., for Plaintiffs.

Laura Rosenstein White, McGuire Woods, L.L.P., Richmond, VA, for Defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

Plaintiffs, competitive local exchange carriers ("CLECs"), brought this action to collect from defendant, Sprint Communications Co. ("Sprint"),¹ unpaid tariff rates for originating and terminating access charges. Sprint, a long-distance or inter-exchange carrier ("IXC"), claims it is not obligated to pay these charges (i) because the tariff rates are unreasonable and (ii) because Sprint and AT & T Corp. ("AT & T") claim they never ordered plaintiffs' services. The issue of the reasonableness of the tariff rates was earlier referred to the Federal Communications Commission ("FCC") on primary jurisdiction grounds,² and at issue now is Sprint's motion to refer the remaining issues. For the reasons that follow, the motion must be granted in part.

I

The underlying facts of this dispute are set forth in two Memorandum Opinions already issued in this case. See Advamtel, LLC v. AT & T Corp., 105 F.Supp.2d 507 (E.D.Va.2000) ("Advamtel I"); Advamtel, LLC v. AT & T Corp., 118 F.Supp.2d 680 (E.D.Va.2000) ("Advamtel II"). Thus, only a brief summary is warranted here.

Plaintiffs are three CLECs — CTC Telecom, Inc. ("CTC Telecom"), Business Telecom, Inc., and Intermedia Communications, Inc. — who provide local telephone service to subscribers in the areas where they operate and originating and terminating access service to IXCs.³ Local telephone networks are necessary to make local calls and to originate and terminate long-distance calls. Typically, when an end user dials a long-distance number, the CLEC serving that customer routes the call to the customer's long-distance carrier or IXC.⁴ This service is referred to as "originating access." The long-distance carrier, the IXC, then routes the call to the local carrier serving the called customer, and that local carrier completes the call by routing it to the called customer. This service is referred to as "terminating access." Thus, long-distance calls generally cannot be completed without originating and terminating access from a CLEC.

Sprint, an IXC, began receiving originating and terminating access services from plaintiffs in April 1997. While Sprint initially paid for these services at the full published tariff rates, it ceased doing so in June 1999, on the ground that the CLECs' tariff rates were unreasonable. Thus, after June 1999, Sprint paid only the amount it deemed to be reasonable for the CLECs' originating and terminating access services. Accordingly, plaintiffs claim that Sprint owes them approximately $2,864,303, the difference between the amount due under the published tariff rates and the amount Sprint has paid.⁵ To collect these charges, plaintiffs filed the instant action in April 2000. Sprint responded, asserting that it is not obligated to pay the tariff rates (i) because the rates are unreasonable and (ii) because Sprint never ordered the CLECs' originating or terminating access services or, alternatively, has taken reasonable steps to cancel any ordered or constructively ordered service. As noted, the first defense — the reasonableness of the rates — has been referred to the FCC on primary jurisdiction grounds. See Advamtel I, 105 F.Supp.2d at 511-12.

The instant motion seeks to refer Sprint's second defense to the FCC, namely, that no services were ordered, or alternatively, that any services ordered or deemed ordered had been cancelled. This defense has two components: (i) whether Sprint, as an IXC, must pay for services it did not order according to the terms specified in the tariff, i.e., whether an IXC may be deemed under certain circumstances to have constructively ordered a CLEC's services, and, if so, (ii) what steps must an IXC take to cancel services ordered or to avoid the constructive ordering of services. Advamtel II, which resolved the parties' cross-motions for summary judgment, addressed the first prong. Typically, long-distance carriers order access services from CLECs according to the ordering provisions specified in their tariffs. Most tariffs require the submission of an Access Service Request ("ASR") to order access services. Advamtel II held that IXCs must pay not only for services ordered pursuant to the terms specified in the tariff, but also for those services that are constructively ordered.⁶ Thus, remaining for determination after Advamtel II is the second prong of Sprint's defense, which includes three separate questions:

(i) whether any statutory or regulatory constraints prevent Sprint, as an IXC, from terminating or declining services ordered or constructively ordered; and, if not,

(ii) what steps IXCs must take either to avoid ordering or to cancel service after it has been ordered or constructively ordered; and

(iii) whether Sprint has taken these steps.

The first two issues are legal questions and are candidates for referral to the FCC. The third question involves a straightforward determination of fact and is therefore not an appropriate candidate for referral to the FCC.

To help resolve whether questions (i) and (ii) should be referred to the FCC, it is helpful to separate plaintiffs' claims against defendant into four distinct categories. Category I consists of those instances in which Sprint, as an IXC, submitted an ASR to the plaintiff CLEC and then ceased paying for the CLEC's services without taking any steps to terminate the services. Category II consists of instances where, like Category I, an IXC has submitted an ASR, but where, unlike Category I, the IXC has taken some steps to cancel the service, such as sending a letter to the CLEC requesting that it cease routing long-distance calls to Sprint. Categories III and IV consist of scenarios where no ASR has been submitted, yet Sprint nonetheless received services from the plaintiff CLECs under circumstances that amount to constructive ordering. Category III consists of claims where Sprint has taken no steps to prevent the receipt of the CLEC's services, while Category IV similar to Category II, consists of claims in which Sprint, as an IXC, has taken some steps to cancel the service. A further variable in each scenario is whether the access service in question involves terminating or originating access service.

Viewing plaintiffs' claims as falling into one or another of these categories helps clarify whether referral to the FCC is appropriate. Thus, it is apparent that Category I claims, if any exist, raise no referral issue, as it is clear that Sprint may not escape paying for CLEC services it has properly ordered, but taken no steps to cancel or terminate. As to these claims, summary judgment for plaintiffs is appropriate; Sprint must pay plaintiffs for these services at the tariff rate and seek a refund later, if warranted by the FCC's resolution of the already-referred issue concerning the reasonableness of the tariff. Similarly, plaintiffs' claims in Category III also merit summary judgment, as Sprint must pay plaintiffs for services it received, but took no steps to avoid or cancel. Here again, Sprint's sole remedy, if any, is a refund it may seek, if warranted by the FCC's resolution of the reasonableness of the CLECs' tariff rates. By contrast, claims falling into Categories II and IV are not subject to summary judgment because the two candidate questions for referral, i.e., (i) and (ii) above, must be answered before these claims can be resolved. Put differently, the two legal questions necessarily precede the application of the constructive ordering doctrine or the determination of whether an IXC took reasonable steps to terminate its relationship with a CLEC from which it received services.⁷

Not surprisingly, given the consequences, the parties dispute the categories in which each remaining plaintiffs' claims belong. Plaintiffs contend that claims brought against Sprint by CTC Telecom are properly in Category I. Sprint disagrees, contending CTC Telecom's claims against Sprint belong in Category II. In this regard, Sprint argues that it took steps to terminate service with CTC Telecom by sending CTC Telecom a letter informing the CLEC that it no longer wished to receive access services at the tariff rate.⁸ The parties also dispute the placement of claims by the two remaining plaintiffs: BTI and Intermedia. Plaintiffs argue that the claims brought by these plaintiffs are properly placed in Category III because sending a letter is not sufficient to create a triable issue of fact regarding whether an IXC took reasonable steps to avoid the constructive ordering of services. Sprint disputes this contention and argues that these two plaintiffs should be in Category IV.⁹ It is undisputed that in all instances, Sprint sent a letter to the CLEC informing them that it did not want to receive originating or terminating access service at the published tariff rates. The parties dispute whether this action, by itself, constitutes a sufficient step to cancel or avoid receipt of services. While this contention will be addressed in greater depth, see infra Part II, the analysis proceeds on the premise that simply sending a letter to the CLEC is sufficient to place a claim within either Category II or IV, depending on whether an ASR was submitted.

Thus, remaining for consideration on this motion is whether to refer to the FCC on primary jurisdiction grounds the two outstanding legal questions: (i) whether any statutory or regulatory constraints prevent Sprint, as an IXC, from terminating or declining services ordered or constructively ordered, and if not, (ii) what steps IXCs must take...