CONSOLIDATED TELEPHONE v. WESTERN WIRELESS

• Decision Date: 28 December 2001
• Docket Number: No. 20010146.,20010146.
• Citation: 2001 ND 209,637 N.W.2d 699
• Parties: CONSOLIDATED TELEPHONE COOPERATIVE, Plaintiff and Appellant, v. WESTERN WIRELESS CORPORATION, Defendant and Appellee, and North Dakota Public Service Commission, Defendant.
• Court: North Dakota Supreme Court

637 N.W.2d 699

2001 ND 209

CONSOLIDATED TELEPHONE COOPERATIVE, Plaintiff and Appellant, v. WESTERN WIRELESS CORPORATION, Defendant and Appellee, and North Dakota Public Service Commission, Defendant.

No. 20010146.

Supreme Court of North Dakota.

December 28, 2001.

Michael J. Maus (argued), Hardy, Maus & Nordsven, P.C., Dickinson, N.D., and Michael A. Bosh (appeared), Pringle & Herigstad, P.C., Minot, N.D., for plaintiff and appellant.

Mark J. Ayotte (argued), Lisa M. Agrimonti (on brief), Briggs and Morgan, P.A., St. Paul, MN, and Thomas D. Kelsch (appeared), Kelsch, Kelsch, Ruff & Kranda, Mandan, N.D., for defendant and appellee.

NEUMANN, Justice.

[¶ 1] Consolidated Telephone Cooperative ("Consolidated") appealed from a judgment upholding the Public Service Commission's ruling that Western Wireless Corporation ("Western") need not obtain a certificate of public convenience and necessity before offering wireless residential service in Regent. We conclude the Commission's finding that Western's wireless residential service is a commercial mobile radio service as defined by federal law is supported by a preponderance of the evidence. We further conclude the Commission correctly ruled Western need not obtain a certificate of public convenience and necessity under N.D.C.C. ch. 49-03.1 for its wireless residential service because that requirement is preempted by 47 U.S.C. § 332(c)(3)(A) of the Communications Act of 1934, as amended. We, therefore, affirm.

I

[¶ 2] Consolidated is an incumbent local exchange carrier headquartered in Dickinson that provides landline local exchange telephone service to customers in and around Regent in southwestern North Dakota. Consolidated has acquired certificates of public convenience and necessity from the Commission under N.D.C.C. ch. 49-03.1 to provide this service. Western, also known as Cellular One, provides mobile cellular telephone service to customers in North Dakota under licenses issued by the Federal Communications Commission ("FCC"). In August 1998, Western requested direct interconnection and direct inward dialing numbers from Consolidated at Regent, and Consolidated provided those services for Western. On January 7, 1999, Western began offering wireless residential service to its customers in Regent to compete with the local exchange service provided by Consolidated. On January 11, 1999, Consolidated disconnected the service and telephone numbers that were being used for interconnecting Western's customers with Consolidated's local exchange service network, resulting in Western's customers being unable to receive local telephone calls.

[¶ 3] On January 15, 1999, Western filed a complaint with the Commission, alleging Consolidated's actions violated state and federal law. Consolidated alleged in its answer and counterclaim that Western could not offer wireless residential service to its Regent customers unless Western obtained a certificate of public convenience and necessity from the Commission. Following an administrative hearing, the Commission found Consolidated violated N.D.C.C. §§ 49-21-07 and 49-21-10, and N.D. Admin. Code § 69-09-05-02, and fined the company $15,000, with $13,500 of the amount suspended on the condition Consolidated have no other violations for a two-year period. The Commission dismissed Consolidated's counterclaim, ruling Western's wireless residential service was a commercial mobile radio service as defined by federal law, thereby rendering the Commission without authority to require Western to comply with the certificate of public convenience and necessity law.

[¶ 4] Consolidated appealed to the district court, requesting it to reopen the record so the Commission could review additional evidence. The district court granted Consolidated's request and remanded the case to the Commission for reconsideration of its decision in light of the additional evidence. The Commission held a second hearing on the matter on September 26, 2000, considered the additional evidence, and reaffirmed its earlier ruling. Consolidated appealed from the Commission's decision, and the district court affirmed.

II

[¶ 5] On appeal, Consolidated argues the Commission erred in finding Western's wireless residential service qualifies as a commercial mobile radio service under federal law and in ruling North Dakota's certificate of public convenience and necessity law is preempted by federal law.

[¶ 6] When an administrative agency decision is appealed to the district court and then to this Court, we review the decision of the agency and look to the record compiled before the agency. Northern States Power Co. v. North Dakota Pub. Serv. Comm'n, 502 N.W.2d 240, 242 (N.D.1993). Our review of an agency decision is governed by N.D.C.C. § 28-32-46,¹ which requires us to affirm unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

[¶ 7] We will affirm the Commission's findings of fact if a reasoning mind reasonably could have determined the findings were proven by the weight of the evidence. Aggie Inv. GP v. North Dakota Pub. Serv. Comm'n, 470 N.W.2d 805, 813 (N.D.1991). Questions of law, including an interpretation of a statute, are fully reviewable on appeal. Klein v. North Dakota Workers Comp. Bureau, 2001 ND 170, ¶ 6, 634 N.W.2d 530. However, we give some deference to a reasonable interpretation of a statute by the agency responsible for enforcing it, and give appreciable deference to agency expertise if the subject matter is highly technical. Cass County Elec. Coop. Inc. v. Northern States Power Co., 518 N.W.2d 216, 220 (N.D. 1994).

A

[¶ 8] Some background about regulation of the telecommunications industry is necessary to fully understand the issues on appeal. Telecommunications companies are regulated by state law. See N.D.C.C. ch. 49-21. Section 49-21-08, N.D.C.C., provides in part:

Whenever any telecommunications company furnishes adequate local exchange telecommunications service and supplies the reasonable wants of the people of the city or community in which it is operating, and complies with the orders of the commission, the commission shall not grant to any other telecommunications company the right to compete with such telecommunications company in the provision of local exchange telecommunications service until after a public hearing of all parties interested, and a finding by the commission that the public convenience and necessity may require such competing plant.

Therefore, a telecommunications company generally must apply for a certificate of public convenience and necessity under N.D.C.C. ch. 49-03.1 if it wishes to compete with another company furnishing adequate local exchange telecommunications service. See generally Shark v. U.S. West Communications, Inc., 545 N.W.2d 194, 195-96 (N.D.1996)

.

[¶ 9] Before 1993, the regulation of wireless telecommunications services was divided between federal and state authorities, largely along an interstate/intrastate line. Ball v. GTE Mobilnet of California, 81 Cal.App.4th 529, 96 Cal.Rptr.2d 801, 804 (2000). The FCC distinguished between common carrier service and private carrier service, and regulated the former to a much greater degree than the latter. Connecticut Dep't of Pub. Util. Control v. Fed. Communications Comm'n, 78 F.3d 842, 845 (2nd Cir.1996). Recognizing the rapid growth of the cellular telecommunications industry, Congress, in 1993, dramatically revised the regulation of that industry by amending the Communications Act of 1934 ("Act") in the Omnibus Budget Reconciliation Act of 1993; Pub.L. No. 103-66, 107 Stat. 312 (1993). Tenore v. AT & T Wireless Services, 136 Wash.2d 322, 962 P.2d 104, 110 (1998). Congress created new statutory classifications of "commercial" and "private" mobile radio services ("CMRS" and "PMRS," respectively), and directed the FCC to implement these categories in its regulations and provide for comparable regulation of substantially similar CMRS systems. Cellnet Communications, Inc. v. Fed. Communications Comm'n, 149 F.3d 429, 433 (6th Cir.1998); see also Connecticut Dep't of Pub. Util. Control,78 F.3d at 846 (noting "congressional intent of creating regulatory symmetry among similar mobile services"). To foster the growth and development of cellular and related mobile wireless communications that, by their nature, operate without regard to state lines, Ball, 96 Cal. Rptr.2d at 804, Congress also enacted 47 U.S.C. § 332(c)(3)(A):

Notwithstanding sections 152(b) and 221(b) of this title, no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. Nothing in this subparagraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such State) from requirements imposed by a State commission on all providers of telecommunications services necessary to ensure the universal availability of telecommunications service at affordable rates.

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