Communications Vending Corp. of Arizona, Inc. v. Citizens Communications Co.
| Decision Date | 19 November 2002 |
| Docket Number | EB-02-MD-018-030 |
| Court | Federal Communications Commission Decisions |
| Parties | Communications Vending Corporation of Arizona, Inc., et al., Complainants, v. Citizens Communications Company f/k/a Citizens Utilities Company and Citizens Telecommunications Company d/b/a Citizens Telecom, et al., Defendants |
Adopted: November 15, 2002
By the Commission:
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we partially grant 13 formal complaints[1] filed by independent payphone providers ("IPPs") against local exchange carriers ("LECs"), asserting that Defendants violated Sections 201(b) and 203(c) of the Communications Act of 1934 as amended, [2] and Part 69 of the Commission's rules [3] by improperly assessing end user common line ("EUCL") charges on the Complainants' payphones. These complaints were brought by Communications Vending Corporation of Arizona, Inc ("CVCA"), IMR Capital Corporation ("IMR"), Indiana Telcom Corporation, Inc. ("ITC"), National Telecoin Corporation, Inc. ("NTC"), NSC Communications Public Services Corporation ("NSC"), and Payphone Systems (collectively "Complainants") against Citizens [4] Qwest, [5] Verizon, [6] ALLTEL, [7] SBC, [8] BellSouth, [9] Century, [10] and TDS[11] (collectively "Defendants").[12]
2. We note that approximately 3000 informal complaints pending with the Commission raise virtually identical issues to those we rule on today.[13] Many of the parties in these thirteen cases are also involved in the pending informal complaints. Given the similarity in the issues and the parties, we believe the rulings contained in this order will facilitate informal resolution among the parties of the pending informal complaints. Finally, we note that, because the Commission amended its access charge rules on April 15, 1997, the issues addressed in this order will only have retrospective application.[14]
II. BACKGROUND AND SUMMARY
3. As noted above, the Complainants in these cases are independent payphone providers, and the Defendants are local exchange carriers, to whose telephone lines Complainants' payphones were connected.[15] The complaints concern EUCL charges that the Defendants imposed on Complainants' pay telephones from 1986 through April 15, 1997.[16]
A. The History of the EUCL Dispute
4. The issue of EUCL charges for payphones first arose several years ago, after the Commission first adopted access charge rules that required LECs to impose EUCL charges. A review of the history of this issue will help to put the current disputes into context.
5. When the Commission first adopted access charge rules in 1982, it permitted LECs to recover certain non-traffic sensitive costs from end users through the monthly, flat-rated EUCL charge.[17] Because the end users of public payphones, [18] however, consist of the "transient general public, " rather than identifiable subscribers, [19] the Commission in 1983 exempted public payphones from the EUCL charge.[20] The Commission determined that the EUCL charge should be imposed on semi-public payphones, [21] however, because subscribers to that service constitute identifiable business end users.[22]
6. At the time the access charge scheme was developed, the only entities authorized to provide payphone service were LECs.[23] IPPs were later permitted to enter the market in 1984, essentially interposing a 'middle man, ' as it were, between the LECs and the ultimate payphone users.[24] The controversy here was created because the access charge rules were not modified in 1984 to specify the manner of imposing EUCL charges on IPP payphones.
7. With the advent of IPP payphones in 1984, Defendants, on their own accord, determined that IPPs were end users and assessed the EUCL charge on all IPP payphones, irrespective of whether they were public or semi-public.[25] Defendants, however, did not assess the EUCL on their own public payphones.[26] The IPPs disputed these charges, and two IPPs lodged informal complaints (in 1988 and 1989).[27] In response to both, Commission staff interpreted the Commission's rules and found that the LECs' assessment on the IPPs was permissible.[28]Subsequently, on April 21, 1989, the American Public Communications Council ("APCC"), a payphone industry association, filed with the Commission a petition seeking a declaratory ruling that the Commission's rules do not authorize the assessment of the EUCL because the IPPs are not "end users" and they only owned public payphones.[29] Also in 1989, the United States District Court for the Western District of Wisconsin referred to the Commission a complaint filed by C.F. Communications Corporation ("CFC"), an IPP, which challenged the assessment of the EUCL charge by certain LECs.[30]
8. Pursuant to the district court's primary jurisdiction referral, on May 10, 1989, CFC filed 13 formal complaints with the Commission objecting to the LECs' assessment of EUCL charges.[31]The Common Carrier Bureau and the Commission denied CFC's claims.[32] In the CFC I Order, the Commission determined that CFC's payphones were subject to EUCL charges because CFC was an "end user" and that CFC's payphones were not "public telephones" under the Commission's rules.[33]The D.C. Circuit, however, rejected the Commission's determinations and remanded the case to the Commission.[34] The Court held that CFC was not an "end user, " and, alternatively, that the Commission had improperly discriminated between similarly situated services (IPP-owned and LEC-owned public payphones) without a rational basis.[35]
9. In its April 13, 2000 Liability Order on remand, the Commission applied the Court's analysis and found that CFC and the other IPPs cannot be considered "end users" under Section 69.2(m).[36] The Commission also determined, however, that irrespective of whether CFC was an "end user, " the primary determination the Commission should have made was whether CFC's payphones were "public" or "semi-public."[37] Accordingly, the Commission found that the LECs imposed an unreasonable charge in violation of Section 201(b) by classifying all IPP payphones as semi-public and assessing EUCL charges against IPP payphones that were deployed in the same manner as LEC-owned "public payphones."[38]
10. The Commission also rejected arguments that awarding damages to the IPPs would be inappropriate because the LECs were acting in accordance with Commission rules. The Commission found that the access charge orders did not, in fact, require carriers to assess the EUCL charge indiscriminately on all IPP-owned payphones, given that the rules required LECs to evaluate whether individual payphones should be classified as "public" or "semi-public."[39] The Commission, thus, ruled that the IPPs were entitled to damages.[40] The Liability Order was upheld on appeal.[41] In particular, the Court held that "it was appropriate for the FCC to find the LECs liable for the EUCL charges."[42] Because the Commission had not ruled on individual damages claims, the Court also stated that it would "express no opinion as to the Commission's authority to impose damages on the LECs for charges that they may have collected in reliance on the agency's initial (and mistaken) interpretations of the Access Charge Reconsideration rules."[43]
B. The Current Cases
11. As a result of the D.C. Circuit's 1997 decision, the Commission received several thousand informal complaints from late 1997 through 1998 raising claims similar to those asserted by CFC.[44] Because the issues raised by the IPPs in their informal complaints were similar to those being considered by the Commission in the remand proceeding, for administrative efficiency, Commission staff issued a waiver order tolling for a number of informal complaints the six-month relation back requirement contained in Section 1.718 of the Commission's rules.[45] Pursuant to the waiver order, any informal complaint relating to issues raised in the CFC proceeding that had to be converted to a formal complaint pursuant to Section 1.718 after June 15, 1998, would be deemed to relate back to the filing date of the relevant informal complaint if it was filed no later than 90 days after a final nonappealable order had been entered in that proceeding.[46] The Enforcement Bureau has extended the waiver order several times since then to allow parties to await the Commission's adjudication of the formal complaints presently before us.[47]
12. The cases now before us arise from a number of the previously-mentioned informal complaints, which have been converted to formal complaints. Complainants allege that Defendants violated the Commission's rules, [48] as well as Sections 201(b) and 203(c) of the Act[49] by imposing EUCL charges on Complainants' payphones.[50] Complainants assert here that it was not proper to assess the EUCL on any of their payphones, regardless of whether they were public or semi-public, because Complainants are not "end users."[51] Complainants also seek a waiver of the Section 415(b) statute of limitations in order to obtain damages for all improperly assessed EUCL charges, regardless of when their informal complaints were filed.[52]
13. Defendants deny Complainants' allegations and maintain that their imposition of EUCL charges on Complainants' payphones was consistent with the Commission's rules.[53] Furthermore, Defendants raise a number of defenses regarding the payment of damages to Complainants. In particular, Defendants argue that, regardless of liability, equitable principles bar any recovery by Complainants.[54] Defendants also maintain that any recovery of damages is subject to the two-year limitations period in Section 415 of the Act.[55] In addition, Defendants argue that certain claims should be barred for procedural reasons.[5...
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