Bellsouth Telecommunications, Inc. v. Georgia Psc
Decision Date | 03 January 2008 |
Docket Number | No. 1:06-CV-00162-CC.,No. 1:06-CV-00972-CC.,1:06-CV-00162-CC.,1:06-CV-00972-CC. |
Citation | 587 F.Supp.2d 1258 |
Parties | BELLSOUTH TELECOMMUNICATIONS, INC., Plaintiff, v. The GEORGIA PUBLIC SERVICE COMMISSION, et al., Defendants. Competitive Carriers of the South, Inc., et al., Plaintiffs, v. The Georgia Public Service Commission, et al., Defendants. |
Court | U.S. District Court — Northern District of Georgia |
Matthew Henry Patton, Michael E. Brooks, Kilpatrick Stockton LLP, E. Earl Edenfield, Jr., Meredith Ellen Mays, Atlanta, GA, Sean A. Lev, Kellogg Huber Hansen Todd Evans & Figel, Washington, DC, for Plaintiff BellSouth Telecommunications, Inc.
Anne Ware Lewis, Strickland Brockington Lewis, Atlanta, GA, William L. Magness, Casey, Gentz & Magness, LLP, Austin, TX, for Plaintiffs.
Daniel S. Walsh, Sidney R. Barrett, Jr., Office of State Attorney General, Atlanta, GA, for Defendants.
The Court has consolidated these two cases for purposes of hearing and decision because they both turn on a common question of law—namely, whether the Georgia Public Service Commission ("PSC") has authority to implement 47 U.S.C. § 271, a federal statute that imposes conditions on Bell operating companies that the Federal Communications Commission ("FCC") has authorized to provide long-distance services.
Having considered the parties' written submissions and having heard extensive oral argument on November 27, 2007, the Court finds that the PSC lacks authority to set rates for § 271 checklist items. That conclusion resolves the principal issue in the case brought by BellSouth Telecommunications, Inc. ("BellSouth") as well as the sole issue presented by Competitive Carriers of the South, Inc. ("CompSouth"). The Court remands the remaining issues raised by BellSouth to the PSC for reconsideration in light of this Order.
Section 251. To promote competition for local telecommunications services, Congress enacted the Telecommunications Act of 1996 ("1996 Act").1 One provision of that Act—47 U.S.C. § 251—obligates incumbent local exchange carriers ("ILECs"), which are companies like Bell-South that have traditionally provided local telephone service in a particular geographic area, to allow competitors, known as competitive local exchange carriers ("CLECs") to lease elements of the ILECs' telephone networks at regulated rates. See 47 U.S.C. § 251(c)(3). When § 251 requires an ILEC to provide access to a particular network element at regulated rates, that element is known as an unbundled network element (or "UNE").
To implement the duties of § 251, ILECs and CLECs enter into "interconnection agreements." Those parties are required, in the first instance, to negotiate terms implementing the § 251 duties. See id. §§ 251(c)(1), 252(a). As discussed in more detail below, if those negotiations are unsuccessful, state commissions are empowered to resolve "open issues" by applying the requirements of § 251 and the FCC regulations implementing § 251. See id. § 252(c), (d). Agreements reached by either negotiation or arbitration must be approved by a state commission. See id. § 252(e).
Facilities at Issue Here. Under the 1996 Act, the FCC determines which network facilities will be subject to unbundling under § 251 (and thus become UNEs). The FCC may require an ILEC to provide access to (i.e., to "unbundle") an element only if it determines that CLECs would be "impair[ed]" in their ability to provide service if they did not have access to the element as a UNE. Id. § 251(d)(2). These cases principally concern three particular network facilities: (i) switches, the computers that route traffic on a telecommunications network; (ii) loops, the copper wires or equivalent facilities that connect customers' premises to the ILEC network; and (iii) transport facilities, cables that connect switches to each other. Also at issue here is a service known as "line sharing," which allows a CLEC to provide high-speed data service over a portion of the frequency on a copper loop, without paying BellSouth to lease the entire loop.
Although the FCC previously required access to these facilities, more recently (after several adverse federal court decisions2), the FCC issued the Order on Remand,3 which prohibited the mandatory leasing of switching and (in the circumstances presented here) loops and transport as UNEs. See 20 FCC Red. at 2537, ¶ 5, 2652-54, ¶¶ 218, 220 (switching); id. at 2575-76, ¶ 66, 2614, ¶ 146 (loops and transport). The FCC also held in 2003 that, contrary to the agency's prior judgment, line sharing should not be made available as a UNE under § 251. See Triennial Review Order,4 18 FCC Rcd. at 17132-33, ¶ 255.
Section 271. A separate provision of the 1996 Act, § 271, establishes a process under which so-called Bell operating companies ("BOCs")—companies such as Bell-South that were created by the 1982 federal antitrust decree that broke up the original AT & T—may seek authority to provide long-distance services. A BOC may apply only to the FCC to obtain authority on a state-by-state basis to provide long-distance services. See 47 U.S.C. § 271(d)(1). In particular, Congress specified a list of conditions—known as the "competitive checklist"—that the FCC must conclude that a BOC has satisfied in order for that federal agency to authorize the BOC to provide long-distance services. See id. § 271(c), (d)(3). Those checklist items include access to "[l]ocal switching," id. § 271(c)(2)(B)(vi); "[l]ocal loop transmission," id. § 271(c)(2)(B)(iv); and "[l]ocal transport," id. § 271(c)(2)(B)(v)
Congress likewise empowered the FCC to determine whether, after a BOC has obtained § 271 authority, the company continues to meet the conditions for that approval. See id. § 271(d)(6).
In January 2006, the PSC issued the first of the orders at issue in these cases— an order initiating hearings to set rates that BellSouth must charge for access to facilities and services that BellSouth offers to satisfy § 271.5 The PSC held "that it is reasonable to assert jurisdiction to set just and reasonable rates for de-listed UNEs"—which are network elements to which BellSouth no longer must provide access as UNEs under § 251—"pursuant to Section 271 of the Federal Telecom Act." Order Initiating Hearings at 4 (emphasis added).
Having declared its authority to implement § 271, the PSC subsequently issued an order requiring BellSouth to charge particular regulated rates for access to switching, loops, and transport.6 The PSC later issued a reconsideration order in which it declined to set a rate for switching.7 Additionally, the PSC issued a separate order addressing a variety of related issues.8 As relevant here, that order required BellSouth to provide line sharing under § 271. See Order on Remaining Issues at 39-40.
In this Court, BellSouth challenges the PSC's assertion of authority to set rates for loop and transport facilities that must be provided only to satisfy § 271, and CompSouth challenges the PSC's decision on reconsideration declining to set a rate for switching. BellSouth also challenges the PSC's authority to mandate line sharing under § 271 and to set a rate for access to that arrangement. Finally, Bell-South challenges several other aspects of the PSC's orders in its amended complaint, but the Court need not specifically address those issues, as explained below.
A. The Court holds that the PSC lacks authority to set rates for § 271 checklist items. As the First Circuit has explained in rejecting the same claim of state authority, the PSC's contrary position is "at odds with the statutory language, history and policy of section 271 and most relevant precedent." Verizon New England, Inc. v. Maine Pub. Utils. Comm'n, 509 F.3d 1, 7 (1st Cir.), reh'g denied, 509 F.3d 13 (1st Cir.2007). Indeed, eight of the nine other federal courts to have addressed this issue have reached that same conclusion.9 The only court to have gone the other way, a district court in Maine, was subsequently reversed on this point by the First Circuit. See Verizon New England, 509 F.3d at 6-10. Moreover, as detailed in BellSouth's submissions to the Court, the overwhelming majority of state commissions have held that they cannot enforce the requirements of § 271.
The text and structure of the statute confirm the correctness of these conclusions. In § 271, Congress created two administrative duties and assigned both solely to the FCC. First, a BOC seeking authority under § 271 to provide long-distance services must "apply to the Commission"—that is, to the FCC—and it is "the Commission" that "shall issue a written determination approving or denying the authorization requested" after "[t]he Commission" determines whether the specified criteria, including the competitive checklist, are satisfied. 47 U.S.C. § 271(d)(1), (3); see id. § 271(c)(2)(B). Second, the FCC must address any enforcement issues: "The Commission shall establish procedures for the review of complaints" that a BOC is not complying with § 271; "the Commission shall act on such [a] complaint within 90 days"; and "the Commission may" take action to enforce the requirements of § 271 if "the Commission determines" that a BOC is not in compliance with its obligations under § 271. Id. § 271(d)(6).
Congress gave state commissions, by contrast, only an advisory role at the application stage of the § 271 process. The FCC is to "consult with the State commission of any State that is the subject of a § 271 application before the FCC rules on the application. Id. § 271(d)(2)(B). The fact that Congress considered the appropriate role for the state commissions and explicitly limited them to this consultative task "works against" the PSC's claim of a power to set rates or otherwise implement § 271. Verizon New England, 509 F.3d at 7.
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