Ameritech Michigan v. Michigan Public Service Com'n

• Decision Date: 19 May 1998
• Docket Number: 199383,Docket Nos. 198706
• Citation: 229 Mich.App. 664,583 N.W.2d 458
• Parties: In the Matter of the Complaint of MCI Telecommunications Corporation Against Ameritech Michigan and GTE North Incorporated Relative to their not making IntraLATA Equal Access Available to MCI in the State of Michigan. AMERITECH MICHIGAN, Appellant, v. MICHIGAN PUBLIC SERVICE COMMISSION, Attorney General of the State of Michigan, MCI Telecommunications Corporation, and AT & T Communications of Michigan, Inc., Appellees. AT & T COMMUNICATIONS OF MICHIGAN, INC., and MCI Telecommunications Corporation, Plaintiffs-Appellees, and Michigan Public Service Commission and Attorney General of the State of Michigan, Intervening Plaintiffs-Appellees, v. Michigan Bell Telephone Co., d/b/a AMERITECH MICHIGAN, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 458

583 N.W.2d 458

229 Mich.App. 664

In the Matter of the Complaint of MCI Telecommunications

Corporation Against Ameritech Michigan and GTE North

Incorporated Relative to their not making IntraLATA Equal

Access Available to MCI in the State of Michigan.

AMERITECH MICHIGAN, Appellant, v. MICHIGAN PUBLIC SERVICE COMMISSION, Attorney General of the

State of Michigan, MCI Telecommunications

Corporation, and AT & T Communications

of Michigan, Inc., Appellees.

AT & T COMMUNICATIONS OF MICHIGAN, INC., and MCI

Telecommunications Corporation, Plaintiffs-Appellees,

and

Michigan Public Service Commission and Attorney General of

the State of Michigan, Intervening Plaintiffs-Appellees, v. Michigan Bell Telephone Co., d/b/a AMERITECH MICHIGAN,

Defendant-Appellant.

Docket Nos. 198706, 199383.

Court of Appeals of Michigan.

Submitted Oct. 14, 1997, at Lansing.

Decided May 19, 1998, at 9:15 a.m.

Released for Publication Aug. 26, 1998.

Dickinson, Wright, Moon, Van Dusen & Freeman (by Joseph A. Fink, Peter H. Ellsworth, Jeffery V. Stuckey, Lansing, and Michael Gadola), Detroit, Michael A. Holmes, and Ault & Maier, P.C. (by James A. Ault), Okemos, for Ameritech Michigan.

Don L. Keskey, David A. Voges, and Henry J. Boynton, Assistant Attorneys General, for Public Service Commission.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, J. Peter Lark, Assistant in Charge, and Orjiakor N. Isiogu, Assistant Attorney General for Attorney General.

Dykema Gossett PLLC (by Albert Ernst, William J. Perrone, and David T. Arlington), Lansing, (William Single, IV, of Counsel), Washington D.C., for MCI Telecommunications Corporation.

Fischer, Frankling & Ford (by George Hogg, Jr., Anthony J. LeVasseur, and Sidney M. Berman), Detroit, Joan Marsh, and Larry Salustro, East Lansing, for AT & T Communications of Michigan, Inc.

Before YOUNG, P.J., and MARKMAN and SMOLENSKI, JJ.

SMOLENSKI, Judge.

In Docket No. 198706 of these consolidated appeals, Ameritech Michigan appeals as of right an October 1996 order of the Public Service Commission that denied Ameritech's petition for a rehearing of a June 1996 PSC order. In Docket No. 199383, Ameritech appeals as of right a November 1996 circuit court order issuing a writ of mandamus. In both appeals, the PSC, the Attorney General, MCI Telecommunications Corporation, and AT & T Communications of Michigan, Inc., respond as appellees. We reverse.

I

This case concerns whether Ameritech is required to provide "intraLATA toll dialing parity" in the absence of "interLATA relief."

Before 1982, American Telephone and Telegraph Company, a provider of both local and long distance telephone service, dominated the telecommunications industry. ¹ The key to AT & T's domination was its control of local telephone service. ² AT & T provided local telephone service through its numerous Bell operating companies, one of which was Michigan Bell Telephone Company, ³ now doing business as Ameritech.

In 1982, AT & T agreed to the entry of a consent decree entitled "Modification of Final Judgment" in federal court (the AT & T consent decree). See, generally, United States v. American Telephone & Telegraph Co., 552 F.Supp. 131 (D.D.C., 1982). For the purpose of ending AT & T's monopoly over local telephone service, the AT & T consent decree provided that AT & T would divest itself of its Bell operating companies. ⁴ The AT & T consent decree provided that the Bell operating companies would be authorized to provide telephone service only within certain defined geographic regions generally corresponding to telephone area code regions called "local access transport areas" ⁵ (LATAs). ⁶ This service, called intraLATA service, includes local calls, i.e., typically telephone calls within a city or town, as well as toll calls, i.e., calls covering a distance beyond local calls but within the same LATA (intraLATA toll calls). ⁷ However, the AT & T consent decree provided that the Bell operating companies were prohibited from providing interLATA service, i.e., telephone service between LATAs. ⁸ The AT & T consent decree further provided that the interLATA prohibition could be removed when a Bell operating company showed that there was no substantial possibility that it could use its monopoly power to impede competition in the market it sought to enter. ⁹ As a result, at least in part, of the AT & T consent decree, during the 1980s in Michigan a customer's intraLATA toll calls were carried by a local carrier such as Ameritech while a customer's interLATA calls were carried by an interexchange (long distance) carrier such as AT & T of Michigan or MCI. ¹⁰

In the late 1980s, the PSC authorized AT & T of Michigan and MCI to begin competing in the Michigan intraLATA toll market. ¹¹ However, in order for an interexchange carrier such as AT & T of Michigan or MCI to provide service for a customer's intraLATA toll call, the customer must dial a five-digit "10xxx" prefix to the number to be called, with the "xxx" being a three-digit identification code assigned to each interexchange carrier. ¹² The PSC allowed local carriers such as Ameritech to retain the use of what is termed "1 +" or "0 +" dialing, meaning that Ameritech provides service for a customer's intraLATA toll call when the customer adds only a single digit prefix (either a "1" or "0") to the number to be called. ¹³

These dialing arrangements are the root of this case. MCI and AT & T of Michigan do not like these dialing arrangements for intraLATA toll calls because they believe "1 +" and "0 +" dialing gives Ameritech a substantial competitive advantage in the intraLATA toll market. MCI and AT & T of Michigan want "intraLATA toll dialing parity," i.e., "uniform 1 + dialing arrangements for all intraLATA service by all providers ...." ¹⁴ However, Ameritech's position has always been that it should not be required to provide intraLATA toll dialing parity until it has been accorded "interLATA relief," i.e., the authority to compete in the interLATA market.

In July 1992, MCI commenced this proceeding in the PSC, U-10138, by filing a complaint alleging, in part, that Ameritech was violating various provisions of the Michigan Telecommunications Act, 1991 P.A. 179, M.C.L. § 484.2101 et seq.; M.S.A. § 22.1469(101) et seq. (Act 179 or the MTA), by failing to make intraLATA toll dialing parity available to MCI. ¹⁵ At some point, the Attorney General and AT & T of Michigan intervened in this proceeding. Although finding that Ameritech's failure to provide intraLATA toll dialing parity did not violate Act 179, the PSC ultimately determined that implementation of intraLATA toll dialing parity was in the public interest and, in a February 1994 decision, ordered Ameritech to implement intraLATA toll dialing parity in Michigan "no later than January 1, 1996." ¹⁶ The decision also provided that a task force would be established to work out the procedures for implementing intraLATA toll dialing parity. ¹⁷ Ameritech moved for a rehearing and reconsideration, which was denied by the PSC in a July 1994 decision. ¹⁸

After the task force submitted a report to the PSC containing certain recommendations and noting certain disputed issues, the PSC issued a March 1995 decision in which it ordered Ameritech to begin implementing intraLATA toll dialing parity on January 1, 1996, in those offices in which it was technically possible to do so and to adopt a firm schedule for converting to intraLATA toll dialing parity for those offices in which it was not technically possible to do so by January 1, 1996. The decision also provided that a fifty-five percent discount on access charges would be imposed on those offices that did not meet the schedule for converting to intraLATA toll dialing parity. Access charges apparently are paid by an interexchange carrier such as AT & T of Michigan and MCI to a local carrier such as Ameritech for the interexchange carrier's use of the local carrier's local network during the initial and final link of an intraLATA toll call serviced by the interexchange carrier. In imposing the discount, the PSC rejected the contention that the discount was a penalty. The PSC reasoned that the discount was warranted because nonconverted access services whereby customers would have to continue to dial five-digit access codes plus the number to be called in order for an interexchange carrier to service an intraLATA toll call were of lesser quality than converted access services whereby an interexchange carrier would service the call simply when customers dialed a one-digit prefix plus the number to be called. ¹⁹

Effective November 30, 1995, the Legislature enacted 1995 P.A. 216, M.C.L. § 484.2101 et seq.; M.S.A. § 22.1469(101) et seq. (Act 216 or the MTA), which substantially amended and added several new sections to the MTA. In particular, Act 216 added § 312a ²⁰ and § 312b, ²¹ both of which specifically addressed ²² the implementation of intraLATA toll dialing parity in Michigan:

Sec. 312a. Effective January 1, 1996, if a waiver to the inter-LATA prohibitions has been granted for a specific service area and the service area has 2 or more providers of local exchange service, the provider of basic local exchange service shall provide 1 + intra-LATA toll dialing parity within the service area that is subject to the waiver.

Sec. 312b. (1) Except as otherwise provided in subsection (2) or (3), a provider of basic local exchange service shall provide 1 + intra-LATA toll dialing parity and shall provide inter-LATA toll service to an equal percentage of customers within the same service exchange on the following dates:

(a) To 10% of the customers by January 1, 1996.

(b) To 20% of the customers by February 1, 1996.

(c) To 30% of the customers by March 1, 1996.

(d) To 40% of the customers by April 1, 1996.

(e) To 50% percent of the customers by May 1, 1996.

(2) If the inter-LATA prohibitions are removed, the commission, shall immediately order the providers of...