Broadview Networks Inc. v. Verizon Telephone Companies and Verizon New York, Inc.
| Decision Date | 10 November 2004 |
| Docket Number | EB-03-MD-021,DA 04-3569 |
| Court | Federal Communications Commission Decisions |
| Parties | Broadview Networks, Inc., Complainant, v. Verizon Telephone Companies and Verizon New York, Inc., Defendants. |
Adopted: November 9, 2004
DAVID H. SOLOMON, CHIEF, ENFORCEMENT BUREAU
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we grant a Motion to Dismiss or, in the Alternative, Defer filed by Verizon New York Inc. ("Verizon").[1] The Motion requests that the Commission either dismiss the formal complaint filed by Broadview Networks, Inc. ("Broadview") against Verizon, [2] or defer further proceedings in connection with the Complaint, in light of a recent order issued by the Supreme Court of the State of New York directing the parties to proceed to commercial arbitration.[3] As discussed below, we grant the Motion to the extent that we defer proceedings relating to the Complaint, pending the outcome of the court-ordered arbitration. Additionally, for internal administrative purposes only, we convert the Complaint into an informal complaint.
II. BACKGROUND
2. Broadview is a competitive provider of local exchange exchange access, interexchange, and information services in New York and other states.[4] Verizon is an incumbent local exchange carrier ("incumbent LEC"), as defined by section 251(h) of the Communications Act of 1934, as amended ("Act"), 47 U.S.C. § 251(h).[5]
3. On December 18, 1998, Broadview and Verizon entered into their first interconnection agreement pursuant to sections 251 and 252 of the Act, 47 U.S.C. §§ 251-252.[6] They subsequently entered into three other interconnection agreements, the last of which became effective on July 20, 2003, and remains in force today.[7]
4. The Interconnection Agreement provides that the dispute resolution procedures set forth in the Agreement are the "exclusive remedy for all disputes between Verizon and [Broadview] arising out of th[e] Agreement or its breach."[8] Those procedures require that, if certain informal mechanisms fail to resolve a dispute, "the Parties shall initiate an arbitration in accordance with the AAA rules for commercial disputes."[9] The New York Public Service Commission required inclusion of the mandatory arbitration provisions in the Interconnection Agreement.[10]
5. Pursuant to section 251(c)(6) of the Act, [11] the Interconnection Agreement addresses Verizon's provision of "Collocation" to Broadview.[12] Specifically, the Interconnection Agreement states that "Collocation shall be provided pursuant to Verizon's applicable federal and state Tariffs as amended from time to time."[13] The Interconnection Agreement further states that Broadview "shall purchase Cross Connection to Verizon services or facilities as described in Verizon's applicable Tariffs."[14] The Interconnection Agreement also states that "[e]ach Party hereby incorporates by reference those provisions of its Tariffs that govern the provision of any of the services or facilities provided hereunder."[15] Between May 27, 1999 and February 24, 2000, Broadview submitted approximately 112 applications to Verizon ordering collocation pursuant to the Interconnection Agreement and Verizon's tariffs.[16]
6. In 2001, Broadview and Verizon became embroiled in a dispute concerning charges that Verizon levied for cable terminations and associated equipment - known as "terminations" or "cross-connects" - used to physically connect Broadview's collocated equipment with Verizon's equipment.[17]In short, Verizon asserted that (i) Broadview failed to pay Verizon for voice-grade terminations that Broadview ordered pursuant to the Interconnection Agreement and Verizon's New York state tariff;[18] and (ii) as result of certain November 13, 2000 amendments to Verizon's FCC Tariff No. 11, Broadview owes Verizon additional amounts for DS1 and DS3 terminations that Broadview ordered in 1999 and 2000.[19]
7. Following a series of unsuccessful settlement discussions between the parties in 2002 and 2003, [20] on October 9, 2003, pursuant to Part 28.11 of the parties' Interconnection Agreement, Verizon sent Broadview a Demand for Arbitration regarding Broadview's voice-grade terminations in New York, and filed documents with the American Arbitration Association ("AAA").[21] After the AAA inquired of Verizon whether both parties consented to AAA administration of the arbitration, Verizon sent a letter to the AAA requesting that the AAA return the paperwork and filing fee submitted with the Demand for Arbitration.[22] On October 21, 2003, Broadview transmitted a letter to Verizon pursuant to section 1.721 of the Commission's rules (47 C.F.R. § 1.721(a)(8)), indicating, inter alia, that if the parties were unable to resolve their dispute, Broadview would file a formal complaint with the Commission.[23] On November 3, 2003, Verizon sent Broadview a second Demand for Arbitration and filed the demand with the AAA.[24] The next day, Broadview sent a letter to the AAA opposing the second Demand for Arbitration.[25] The AAA subsequently advised the parties that it will accept an arbitration demand only if both parties submit to AAA administration of the arbitration.[26] On November 17, 2003, Broadview sent a letter to the AAA reiterating its view that the AAA is not the proper forum for resolution of the dispute.[27]
8. Broadview filed its Complaint with the Commission on December 30, 2003. In the Complaint, Broadview asserts that Verizon accepted Broadview's collocation applications, provisioned the collocation arrangements and terminations, and submitted bills "for all associated charges, " which Broadview paid on a timely basis.[28] Broadview maintains that Verizon subsequently sent further bills for those terminations more than two years after it provisioned the terminations.[29] The Complaint alleges that Verizon violated the Act by (i) improperly "backbilling" for the additional collocation charges; (ii) imposing charges that are not listed in Verizon's federal tariff (FCC Tariff No. 11); and (iii) imposing charges from a state tariff for services ordered under a federal tariff.[30] Verizon filed an answer to the Complaint, [31] asserting, inter alia, that the Interconnection Agreement's mandatory arbitration provision bars the Complaint.[32] Thereafter, Broadview filed a reply.[33]
9. After Broadview filed the Complaint, Verizon filed a Petition to Compel Arbitration with the Supreme Court of the State of New York.[34] In the Petition to Compel Arbitration Verizon argued that the dispute between the parties arises under and is governed by the parties' Interconnection Agreement, which requires arbitration of all disputes arising from the Interconnection Agreement or its breach.[35]Broadview opposed the Petition to Compel Arbitration, arguing that the services at issue in the Complaint were not provided under the Interconnection Agreement, but rather were ordered under Verizon's federal or state tariff, and, accordingly, that the Commission should resolve the matter. [36] Broadview maintained that, because the tariffs "conclusively and exclusively enumerate the rights and liabilities of the contracting parties, "[37] the terms of the Interconnection Agreement cannot apply as a matter of law, and the arbitration provision is inapposite.[38]
10. The Supreme Court of the State of New York granted Verizon's Petition to Compel Arbitration on July 28, 2004, and directed the parties to proceed to arbitration within 20 days after service of the order.[39] The New York Order found, inter alia, that there is a valid written agreement between the parties to arbitrate disputes, [40] and that the instant dispute "clearly falls within the broad scope of the arbitration agreement, " because it is a dispute "arising out of the [Interconnection] Agreement or its breach."[41] The Court described Broadview's assertion that the dispute arises out of Verizon's tariffs, not the Interconnection Agreement, as being "without merit, " explaining that the "terms of the tariff(s) are part of the Interconnection Agreement."[42] Moreover, the Court rejected Broadview's contention that enforcement of the arbitration provision would violate the filed tariff doctrine.[43] Finally, the Court dismissed Broadview's argument that the claim Verizon seeks to arbitrate is an "inarbitrable statutory claim, "[44] and noted that the Interconnection Agreement provides a mechanism for dealing with any inconsistent rulings that may result from a Commission decision to exercise jurisdiction over Broadview's Complaint.[45]
11. Verizon thereafter filed the Motion with the Commission, which Broadview opposes.[46]In a conference call on September 7, 2004, Commission staff informally granted the Motion and indicated that a formal order would follow. This Memorandum Opinion and Order formally grants the Motion and provides the reasons for our ruling.
III. DISCUSSION
12. We first examine whether the mandatory arbitration provision of the parties' Interconnection Agreement applies to this dispute. That question has two subparts: (i) whether the Interconnection Agreement, rather than Verizon's tariffs standing alone, governs the collocation orders at issue, and if so, (ii) whether the language of the Interconnection Agreement's mandatory arbitration provision encompasses this dispute. The New York Order answered both of those questions in the affirmative.[47] For the following reasons, we reject Broadview's contention that we should ignore the determinations of the Supreme Court of New York.[48]
13....
To continue reading
Request your trial