Bellsouth Telecommunications v. Mcimetro Access

• Decision Date: 10 January 2003
• Docket Number: No. 00-12809.,00-12809.
• Citation: 317 F.3d 1270
• Parties: BELLSOUTH TELECOMMUNICATIONS, INC., Plaintiff-Counter-Defendant-Appellant-Cross-Appellee, United States of America, Intervenor-Appellant, v. MCIMETRO ACCESS TRANSMISSION SERVICES, INC., Defendant-Counter-Claimant-Appellee, Georgia Public Service Commission, Robert B. Baker, Jr., in his official capacity as Chairman, Lauren "Bubba" McDonald, in his offficial capacity as Commissioner, Robert Durden, in his official capacity as Commissioner, Stancil O. Wise, in his official capacity as Commissioner, Defendants-Appellees-Cross-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

317 F.3d 1270

BELLSOUTH TELECOMMUNICATIONS, INC., Plaintiff-Counter-Defendant-Appellant-Cross-Appellee United States of America, Intervenor-Appellant, v. MCIMETRO ACCESS TRANSMISSION SERVICES, INC., Defendant-Counter-Claimant-Appellee Georgia Public Service Commission, Robert B. Baker, Jr., in his official capacity as Chairman, Lauren "Bubba" McDonald, in his offficial capacity as Commissioner, Robert Durden, in his official capacity as Commissioner, Stancil O. Wise, in his official capacity as Commissioner, Defendants-Appellees-Cross-Appellants.

No. 00-12809.

United States Court of Appeals, Eleventh Circuit.

January 10, 2003.

Michael E. Brooks, Kilpatrick Stockton, LLP, Robert David Powell, Atlanta, GA, Mark B. Stern, Washington, DC, Michael K. Kellogg, Sean A. Lev, Aaron M. Panner, Kellogg, Huber, Hansen, Todd & Evans, P.L.L.C., Charles W. Scarborough, U.S. Dept. of Justice, Civ. Div., App. Staff, Washington, DC, for Appellants.

Brian J. Leske, WorlCom, Inc., Washington, DC, Kennard B. Woods, Roswell, GA, Teresa Wynn Roseborough, Haley B. Riddle, David Isaac Adelman, Carla W. McMillian, Sutherland, Asbill & Brennan, LLP, Atlanta, GA, Darryl M. Bradford, John J. Hamill, Jenner & Block, Chicago, IL, Thomas K. Bond, c/o Georgia Pub. Serv. Comm., Harold D. Melton, Georgia Dept. of Law, John W. Sandifer, Gerry, Friend & Sapronov, LLP, Daniel Stephen Walsh, Office of Consumer Affairs, Atlanta, GA, for Appellees.

C. LeeAnn McCurry, William N. Withrow, Jr., Troutman Sanders, Atlanta, GA, for Intervenor.

Appeals from the United States District Court for the Northern District of Georgia.

Before EDMONDSON, Chief Judge, and TJOFLAT, ANDERSON, BIRCH, BLACK, CARNES, BARKETT, MARCUS and WILSON, Circuit Judges.^*

BARKETT, Circuit Judge:

In this appeal we were originally asked to review two orders of the Georgia Public Service Commission (the "GPSC"), which interpreted the contract between BellSouth Telecommunications, Inc. ("BellSouth") and MCImetro Access Transmission Services, Inc. ("MCImetro"), and the contract between BellSouth and WorldCom Technologies, Inc. ("WorldCom"). Both contracts were interconnection agreements mandated by the Federal Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) ("FTCA"). The GPSC was asked to interpret the meanings of provisions in each contract which established reciprocal compensation rates for local telephone traffic.¹ BellSouth claimed that calls made to internet service providers ("ISPs") could not be considered "local traffic" subject to reciprocal compensation under the contracts. MCImetro and WorldCom both claimed that such calls were "local" and therefore subject to reciprocal compensation. They demanded payment under their respective contracts and sought relief before the GPSC. The GPSC determined that calls to ISPs were "local traffic" under the contracts and thus reciprocal compensation must be paid by BellSouth. BellSouth then commenced an action in the district court, asserting that the GPSC decision was contrary to federal law and claiming that the district court had jurisdiction under 47 U.S.C. § 252(e)(6) and 28 U.S.C. § 1331. The district court affirmed the GPSC's order and BellSouth appealed. A split panel of this court did not reach the merits of the appeal, reversing the district court's order on the grounds that there was no statutory authority for the GPSC to interpret and enforce these interconnection agreements in the first instance.

A majority of the judges in active service granted the petition for rehearing en banc filed by MCImetro Access Transmission Services and WorldCom Technologies and vacated the panel opinion in this case. We now address, en banc, the appropriateness of the GPSC's order and the extent of federal jurisdiction over challenges to that order.

Discussion

To address the natural monopoly in place in the telecommunications industry and promote competition in local telephone service, Congress passed the FTCA in 1996. Pub. L. No. 104-104, 110 Stat. 56. Its regulatory scheme was designed to counteract the deterrence of competition inherent in the high, fixed initial cost of telephone service and the need for all customers to interconnect with one another. Thus, in order to open intrastate telephone markets to competition, it required incumbent Local Exchange Carriers ("ILECs"), such as BellSouth, to share access to loops and exchanges with competing LECs ("CLECs"), like MCImetro and WorldCom. 47 U.S.C. § 251(a)(1).² The FTCA further required ILECs and CLECs that are sharing resources to "establish reciprocal compensation arrangements for the transport and termination of telecommunications." 47 U.S.C. § 251(b)(5).³ These agreements were to be submitted for approval or rejection to the state public service commission and, in making this determination, the commissions were to consider several specific factors. 47 U.S.C. § 252(e) provides:

(e) Approval by State commission.

(1) Approval required.

Any interconnection agreement adopted by negotiation or arbitration shall be submitted for approval to the State commission. A State commission to which an agreement is submitted shall approve or reject the agreement, with written findings as to any deficiencies.

(2) Grounds for rejection.

The State commission may only reject —

(A) an agreement (or any portion thereof) adopted by negotiation under subsection (a) of this section if it finds that —

(i) the agreement (or portion thereof) discriminates against a telecommunications carrier not a party to the agreement; or

(ii) the implementation of such agreement or portion is not consistent with the public interest, convenience, and necessity; or

(B) an agreement (or any portion thereof) adopted by arbitration under subsection (b) if it finds that the agreement does not meet the requirements of section 251 [47 U.S.C. § 251], including the regulations prescribed by the Commission pursuant to section 251 [47 U.S.C. § 251], or the standards set forth in subsection (d) of this section.

(3) Preservation of authority.

Notwithstanding paragraph (2), but subject to section 253 [47 USC § 253], nothing in this section shall prohibit a State commission from establishing or enforcing other requirements of State law in its review of an agreement, including requiring compliance with intrastate telecommunications service quality standards or requirements.

(4) Schedule for decision.

If the State commission does not act to approve or reject the agreement within 90 days after submission by the parties of an agreement adopted by negotiation under [47 U.S.C. § 252(a)], or within 30 days after submission by the parties of an agreement adopted by arbitration under [47 U.S.C. § 252(b)], the agreement shall be deemed approved. No State court shall have jurisdiction to review the action of a State commission in approving or rejecting an agreement under this section.

(5) Commission to act if State will not act.

If a State commission fails to act to carry out its responsibility under this section in any proceeding or other matter under this section, then the Commission shall issue an order preempting the State commission's jurisdiction of that proceeding or matter within 90 days after being notified (or taking notice) of such failure, and shall assume the responsibility of the State commission under this section with respect to the proceeding or matter and act for the State commission.

(6) Review of State commission actions.

In a case in which a State fails to act as described in paragraph (5), the proceeding by the Commission under such paragraph and any judicial review of the Commission's actions shall be the exclusive remedies for a State commission's failure to act. In any case in which a State commission makes a determination under this section, any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement or statement meets the requirements of [47 U.S.C. § 251] and this section.

While § 252 expressly gives state commissions authority to approve or reject interconnection agreements, the statute does not specifically say that this empowerment includes the interpretation and enforcement of interconnection agreements after their initial approval. We agree with all the parties before us, however, that a common sense reading of the statute leads to the conclusion that the authority to approve or reject agreements carries with it the authority to interpret agreements that have already been approved. We find further support for this conclusion in the recent decision of the Supreme Court in Verizon Md., Inc. v. PSC, 535 U.S. 635, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002), in the decisions of all other circuit courts to have considered the question, and in the determination of the Federal Communications Commission, (" FCC"), which is entitled to deference in the interpretation of the pertinent statute. See In re Starpower, 15 F.C.C.R. 11277, ¶ 6, at 1129-80, 2000 WL 767701 (2000).

The Verizon case involved a public service commission order like the one before us that had resolved the question of whether calls made to an ISP could be considered "local calls" subject to reciprocal compensation pursuant to the interconnection agreement of the parties. While the procedural posture of Verizon differs from that of the case at bar, the Verizon case arose from a set of facts identical to those here. In Verizon, WorldCom and Verizon had negotiated an interconnection agreement that had been approved by the Maryland Public Service Commission (the "MPSC"). Several months after the interconnection agreement had been approved, Verizon refused to pay WorldCom for calls made to ISPs. WorldCom filed a complaint with the MPSC. The MPSC determined that, as a matter of state contract law, ISP calls were compensable local traffic under the interconnection agreement between Verizon and WorldCom. Verizon sued the MPSC in federal...