Aventure Commc'ns Tech., LLC v. Sprint Commc'ns Co.
| Decision Date | 19 March 2015 |
| Docket Number | No. 4:08–cv–00005–JEG1,4:08–cv–00005–JEG1 |
| Citation | 224 F.Supp.3d 706 |
| Parties | AVENTURE COMMUNICATIONS TECHNOLOGY, LLC, Plaintiff/Counterclaim Defendant, v. SPRINT COMMUNICATIONS COMPANY L.P., and Qwest Communications Corporation, Defendants/Counterclaim Plaintiffs. |
| Court | U.S. District Court — Southern District of Iowa |
Paul D. Lundberg, Lundberg Law Firm P.L.C., Sioux City, IA, for Plaintiff.
Bret Alan Dublinske, Fredrikson & Byron, P.A., Des Moines, IA, Charles W. Steese, Armstrong Teasdale LLP, Denver, CO, for Defendants.
Before the Court and addressed in this Order are Motions to Dismiss filed by Plaintiff/ Counterclaim Defendant Aventure Communications Technology, LLC (Aventure) against Defendants/Counterclaim Plaintiffs Qwest Communications Corporation2 (Qwest) and Sprint Communications Company, L.P. (Sprint) pursuant to Federal Rule of Civil Procedure 12(b). Also before the Court and addressed in this Order are Motions for Judgment on the Pleadings filed by Qwest and Sprint against Aventure pursuant to Federal Rule of Civil Procedure 12(c).
On July 23 and July 24, 2014, the Court conducted omnibus hearings on the motions in this case and on the motions in related cases 4:07–cv–00043, 4:07–cv–00078, 4:07–cv–00194, and 5:07–cv–04095 (NDIA). Representing Aventure were attorneys Paul Lundberg and Gary Joye; representing Qwest were attorneys Charles Steese and Sandra Potter; and representing Sprint was attorney Bret Dublinske. The motions are fully submitted and ready for disposition.3
Aventure filed this action asserting jurisdiction based on diversity of citizenship, pursuant to 28 U.S.C. § 1332, and federal question, pursuant to 28 U.S.C. § 1331. Aventure alleges claims against Qwest and Sprint that arise under the Telecommunications Act of 1996, 47 U.S.C. § 201 et seq., as well as claims that arise under Iowa state law. This Court has original jurisdiction over the federal law claims, see 28 U.S.C. § 1331, and supplemental jurisdiction over the state law claims, see id. § 1367.
The Communications Act of 1934, 47 U.S.C. § 151 et seq., is the comprehensive act that codified telecommunication regulations and created the Federal Communications Commission (FCC or Commission) to oversee and regulate the telecommunications industry.5
The Communications Act of 1934 required telecommunications carriers to file tariffed rates with the FCC and to provide notice to the FCC and to the public when they changed their tariffs, see § 203(c), but it did nothing to regulate or protect equipment sellers or competitors, see Essential Commc'ns Sys. , 610 F.2d at 1120. Thus, American Telephone and Telegraph (AT&T), the parent company of the Bell System, continued to dominate the telecommunication industry. See id.
In the 1980s, fifty years after the 1934 Communications Act was passed, and following decades of litigation between the U.S. Department of Justice (DOJ) and AT&T, the telecommunication industry confronted a massive corporate reorganization.7 As part of a consent decree in the second of two cases between the DOJ and AT&T, United States v. Am. Tel. & Tel. Co. , 552 F.Supp. 131 (D.D.C. 1982), aff'd sub nom. Maryland v. United States , 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983), AT&T was divested of the local arms of the Bell System—the Bell Operating Companies (BOCs)—which were reorganized into seven Regional BOCs (RBOCs). United States v. W. Elec. Co. , 569 F.Supp. 990, 993–94 & n.11 (D.D.C. 1983). The Bell System territories were divided into 164 local access and transport areas (LATAs) that "mark[ed] the boundaries beyond which a Bell Operating Company [could] not carry telephone calls." Id. The BOCs (1) performed exchange telecommunications, that is, transported traffic between telephones located within a LATA; and (2) provided exchange access within a LATA, that is, linked a subscriber's telephone to their long distance carrier's nearest transmission facility, but only to and from telephones located within the same LATA (intra–LATA traffic). Id. Because BOCs held local monopoly positions, they could not carry calls between different LATAs (inter–LATA traffic); only AT&T and its competitors, such as MCI and Sprint, could carry telecommunications traffic that originated in one LATA and terminated in another. Id.
Predictable obstacles and pervasive changes in technology compounded judicial oversight of the consent decree and resulted in more than a decade of subsequent litigation. See generally SBC Commc'ns, Inc. v. FCC , 154 F.3d 226, 231 (5th Cir. 1998) (). "Congress—responding, in part, to the argument that competition in the huge telecommunications industry should no longer be governed by an antitrust consent decree administered by a single federal district judge, see S. Rep. No.104–23, at 5, 9 (1995)—set forth a new legislative framework, the Telecommunications Act of 1996 ...." SBC Commc'ns Inc. v. FCC , 138 F.3d 410, 412 (D.C. Cir. 1998).
The Senate Report on the Telecommunications Act of 1996 (the Act) cited several reasons for the legislation.
The 1934 Act has not been rewritten since its original passage. Its provisions are no longer adequate in a world of competition for telephone services and increasing diversity of media. Further, much of current communications policy is being set by a single Federal district court enforcing the [consent decree]. Reducing regulation of the telecommunications industry will spur the development of new technologies and increase investment in these industries, which will create jobs and greater choices for consumers. The United States telecommunications industry is competitive worldwide. By reducing regulation and barriers to competition, the bill will help ensure the future growth of these industries domestically and internationally.
S. Rep. 104–23, at 9–10 (1995).
The preamble of the Act declares it is: "[...
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