Broadvox-CLEC, LLC v. AT&T Corp.
| Decision Date | 31 March 2016 |
| Docket Number | Case No.: PWG-13-1130 |
| Citation | 184 F.Supp.3d 192 |
| Parties | Broadvox-CLEC, LLC, Plaintiff/Counter-Defendant, v. AT&T Corporation, Defendant/Counter-Plaintiff. |
| Court | U.S. District Court — District of Maryland |
Charles A. Zdebski, James C. Falvey, Jeffrey Paul Brundage, Eckert Seamans Cherin & Mellott LLC, Washington, DC, for Plaintiff/Counter-Defendant.
Michael Joseph Hunseder, Justin A. Benson, Noah T. Katzen, Sidley Austin LLP, Washington, DC, Brian Anthony McAleenan, Sidley Austin LLP, Chicago, IL, for Defendant/Counter-Plaintiff.
Plaintiff/Counter-Defendant Broadvox-CLEC, LLC ("Broadvox") is a competitive local exchange carrier ("LEC"); Defendant/Counter-Plaintiff AT&T Corporation ("AT&T") is an interexchange (long-distance) carrier. Jt. Stmt. ¶¶ 1–2, Jt. Ex. 1, ECF No. 102-1. Broadvox partners with tandem access providers to provide long-distance telephone access services to AT&T and charges AT&T tandem and end office (local) switching charges for traffic it receives in Internet Protocol ("IP") format, as well as for prepaid calling card ("PPCC") traffic, ostensibly pursuant to its federal and state tariffs. Id. ¶¶ 5–9, 11–13. The end office switching charges "are among the highest recurring intercarrier compensation charges." AT&T Corp. v. YMax Commc'ns Corp. , 26 FCC Rcd. 5742, ¶ 40 (2011). The parties dispute whether AT&T must pay end office switching charges on calls it sends to a Voice over Internet Protocol ("VoIP") provider or to a PPCC platform provider, as well as whether it must pay tandem switching charges on its PPCC traffic.
Broadvox sued AT&T to obtain payment for those services, alleging that AT&T violated Broadvox's federal tariff (Count I) and state tariffs (Count IV). Broadvox also claims that AT&T violated the Communications Act, 47 U.S.C. §§ 201(b) and 202 (Counts II and III), because it was not "just and reasonable" for AT&T to withhold these payments, and AT&T's payment of "the access charges of some carriers while withholding payments to Broadvox" was an "unjust or unreasonable discrimination in ... practices." Alternatively, Broadvox seeks recovery in quantum meruit (Count V). Am. Compl., ECF No. 3.
AT&T counterclaims to recover any potential overpayment, alleging violations of Broadvox's tariffs and the Communications Act, 47 U.S.C. §§ 203(a) and (c) and 201(b), based on AT&T's view that Broadview did not terminate the PPCC calls (Count I), and did not provide end office switching for the over-the-top ("OTT") VoIP traffic (Count II).1 AT&T also seeks a declaratory judgment confirming AT&T's view of the services Broadvox provides. Countercl. ¶¶ 61, 74, 92–95, ECF No. 20.
Following an orgy of briefing (often in violation of page limits established in the Court's Local Rules), the parties' cross-motions for summary judgment on liability are fully briefed and ready for a ruling. ECF Nos. 81, 81–1, 87, 87–1, 95, 101.2 A hearing is not necessary. See Loc. R. 105.6. Because the unambiguous language of Broadvox's tariffs obligates AT&T to pay end office switching charges on OTT VoIP traffic, I will grant Broadvox's motion as it pertains to this VoIP traffic and deny AT&T's motion as it pertains to it. But, because Broadvox cannot charge access charges on PPCC traffic, I therefore will deny Broadvox's motion as it pertains to PPCC traffic and grant AT&T's motion as it pertains to this traffic. Further, Broadvox fails to state a claim under the Communications Act, and therefore I will enter judgment in AT&T's favor on Counts II and III of the Amended Complaint. Finally, because the filed rate doctrine proscribes Broadvox's claim in quantum meruit , I will grant summary judgment in AT&T's favor on Count V of the Amended Complaint. This order moots AT&T's request for a declaratory judgment.
Traditionally, telephone carriers employed "TDM" or "Time Division Multiplexing" format, which is "a method of transmitting and receiving signals over the Public Switched Telephone Network (PSTN)." FCC Tariff § 1, Jt. Ex. 16; see Broadvox's Mem. 6; AT&T's Mem. 7 & App'x A, at 4. A TDM network involves "physical connections," including an end office, or "local switch connecting the trunk to the termination line/end-point phone device" to "ensure[ ] a connection from the transport (across the network) to the termination point (phone device)." In re Connect Am. Fund , 30 FCC Rcd. 1587, ¶¶ 27–28 (Feb. 11, 2015) (" 2015 Declaratory Ruling" or " In re Connect Am. Fund ").
But, technology has moved beyond exclusive employment of TDM format, to embrace newer methods of communication, such as Voice over Internet Protocol, or "VoIP." For over-the-top VoIP service, carriers transmit communications "by aid of wire, cable, radio, or other like connection using [VoIP] that is originated or terminated in Internet Protocol (IP) format." FCC Tariff § 1, Jt. Ex. 16. The use of IP format eliminates the need for a carrier to have physical transmission facilities, which is what drives up the cost of end office switching services. See CoreTel Va., LLC v. Verizon Va., LLC , 752 F.3d 364, 374–75 (4th Cir. 2014) (). VoIP-PSTN traffic is traffic that "starts as PSTN traffic and is terminated as VoIP traffic." Broadvox's Mem. 6, ¶ 12; AT&T's Mem. App'x A, at 4 ¶ 12; see FCC Tariff § 1.
The parties agree that 47 C.F.R. § 51.913(b), the "VoIP Symmetry Rule" ("VSR") that the Federal Communications Commission ("FCC" or "Commission") implemented on December 29, 2011, following In re Connect America Fund , Report & Order and Further Notice of Proposed Rulemaking, WC Docket No. 10–90, 26 FCC Rcd. 17663 (rel. Nov. 18, 2011) (" Connect America Fund Order" or " 2011 CAF Order"), and clarified in the 2015 Declaratory Ruling, permits Broadvox to charge for access services it provides in conjunction with calls passed to over-the-top VoIP providers, as long as its tariffs incorporate the VSR. Broadvox's Mem. 8–9, ¶¶ 17–18; AT&T's Mem. App'x A, at 5–6, ¶¶ 17–18. Section 51.913(b) provides:
Notwithstanding any other provision of the Commission's rules, a local exchange carrier shall be entitled to assess and collect the full Access Reciprocal Compensation charges prescribed by this subpart that are set forth in a local exchange carrier's interstate or intrastate tariff for the access services defined in § 51.903 regardless of whether the local exchange carrier itself delivers such traffic to the called party's premises or delivers the call to the called party's premises via contractual or other arrangements with an affiliated or unaffiliated provider of interconnected VoIP service, as defined in 47 U.S.C. 153(25), or a non-interconnected VoIP service, as defined in 47 U.S.C. 153(36), that does not itself seek to collect Access Reciprocal Compensation charges prescribed by this subpart for that traffic. This rule does not permit a local exchange carrier to charge for functions not performed by the local exchange carrier itself or the affiliated or unaffiliated provider of interconnected VoIP service or non-interconnected VoIP service. For purposes of this provision, functions provided by a LEC as part of transmitting telecommunications between designated points using, in whole or in part, technology other than TDM transmission in a manner that is comparable to a service offered by a local exchange carrier constitutes the functional equivalent of the incumbent local exchange carrier access service.
47 C.F.R. § 51.913(b) (emphasis added). Section 51.903 defines, inter alia , "End Office Access Service," which is "[t]he switching of access traffic at the carrier's end office switch and the delivery to or from of such traffic to the called party's premises"; "[t]he routing of interexchange telecommunications traffic to or from the called party's premises, either directly or via contractual or other arrangements with an affiliated or unaffiliated entity, regardless of the specific functions provided or facilities used"; or "[a]ny functional equivalent of the incumbent local exchange carrier access service provided by a non-incumbent local exchange carrier." 47 C.F.R. § 51.903(d). It also defines "Tandem-Switched Transport Access Service," which is "[t]andem switching and common transport between the tandem switch and end office," or "[a]ny functional equivalent of the incumbent local exchange carrier access service provided by a non-incumbent local exchange carrier via other facilities." 47 C.F.R. § 51.903(i). While AT&T acknowledges that Broadvox theoretically could charge for these services and that Broadvox's tariffs incorporate the VoIP Symmetry Rule from § 51.913(b), it refuses to pay the charges because, according to AT&T, Broadvox's tariffs do not authorize them, as they do not incorporate the language from § 51.903(d), pertaining to end office access service. AT&T's Mem. 17–18.
Broadvox's federal tariff, filed with the FCC, and its state tariffs govern the charges and other fees it can assess on long-distance carriers like AT&T. Under its federal tariff, Broadvox may charge for "Access Service," which FCC Tariff § 1, Jt. Ex. 11. Tandem switching and end office switching are access services. Id.
As noted, Broadvox's tariffs incorporate the VoIP Symmetry Rule:
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