Illinois Bell Telephone Co. v. WorldCom Technologies, Inc.

• Citation: 157 F.3d 500
• Decision Date: 10 September 1998
• Docket Number: No. 98-3150,98-3150
• Parties: ILLINOIS BELL TELEPHONE COMPANY, doing business as Ameritech Illinois, Plaintiff-Appellant, v. WORLDCOM TECHNOLOGIES, INC., et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 500

157 F.3d 500

41 Fed.R.Serv.3d 1420

ILLINOIS BELL TELEPHONE COMPANY, doing business as Ameritech Illinois, Plaintiff-Appellant, v. WORLDCOM TECHNOLOGIES, INC., et al., Defendants-Appellees.

No. 98-3150.

United States Court of Appeals Seventh Circuit.

Submitted Sept. 8, 1998.

Decided Sept. 10, 1998. ^*

Issued Sept. 23, 1998.

Demetrios G. Metropoulos (submitted on briefs), Theodore A. Livingston, Dennis G. Friedman, Mayer, Brown & Platt, Chicago, IL, for Plaintiff-Appellant.

Henry T. Kelly (submitted on briefs), Michael W. Ward, John F. Ward, Jr., O'Keefe, Ashenden, Lyons & Ward, Chicago, IL, for Defendant-Appellee WorldCom Technologies, Incorporated.

Frederick J. Artwick (submitted on briefs), Sidley & Austin, Chicago, IL, for Defendant-Appellee Teleport Communications Group, Incorporated.

Darryl M. Bradford (submitted on briefs), John R. Harrington, John J. Hamill, Jenner & Block, Chicago, IL, for Defendant-Appellee MCI Telecommunications Corporation.

John P. Kelliher (submitted on briefs), Office of Attorney General, Illinois Commerce Commission, Thomas R. Stanton, Illinois Commerce Commission, Chicago, IL, for Defendants-Appellees Dan Miller and Richard Kolhauser.

Before EASTERBROOK, MANION, and KANNE, Circuit Judges.

EASTERBROOK, Circuit Judge.

Local telecommunications carriers must provide reciprocal compensation for local calls that use each other's networks. 47 U.S.C. § 251(b)(5). If a subscriber of Company A calls a subscriber of Company B, then A must share with B some of the revenues A collects from its subscriber, to compensate B for the use of its facilities. Like many other provisions of the Telecommunications Act of 1996, this requirement is enforced by state agencies--in Illinois, by the Illinois Commerce Commission. Decisions of state agencies implementing the 1996 Act are reviewable in federal district courts. 47 U.S.C. § 252(e)(6). Ameritech sought review under this section of an order requiring it to compensate other companies for calls originating on Ameritech's network. Phone companies compensate each other under § 251(b)(5) and parallel agreements only when the call is received ("terminated" in the statutory argot) locally. Ameritech believes that a call placed to a nearby Internet service provider (ISP) is a form of long-distance switching, because the ISP connects the caller to a world-wide communications network. In March 1998 the Illinois Commerce Commission rejected this contention and ordered Ameritech to pay past-due compensation (it had quit paying in July 1997 for calls that terminate with ISPs) and to calculate reciprocal compensation for the future on the assumption that calls to ISPs located within 15 miles of the originating customer's phone are local calls. Twenty other state commissions have come to the same conclusion; none has disagreed. The district court denied Ameritech's request that this decision be upset. Two other district courts, and one state court, likewise have enforced administrative decisions to this effect. Thus the score at the moment is 25-0 against Ameritech and the other Baby Bells.

Soon after Ameritech filed this suit, the district court issued what it called a stay of the Commission's order. The judge did not conclude that the order would cause irreparable injury or that it was likely to be reversed, and said only that the court planned to expedite decision--which neither explains nor justifies interfering with the decision of a state agency in the interim. After rejecting Ameritech's position on the merits, the district court again forbade the Commission to enforce its order. About a week before this second stay was to expire, Ameritech asked us to issue a stay pending appellate review. Characterizing the state agency's decision as one to pay money, Ameritech wants us to treat it like a litigant that has suffered a money judgment in the district court. By posting a supersedeas bond, the appellant may obtain a stay of execution. Fed. R. Civ. P. 62(d). Ameritech offers to post a bond that will cover whatever it owes the other carriers. Yet it does not want the district court to stay execution of its own order, the domain of Rule 62. Stays of district court orders by the court of appeals are covered not by Fed. R. Civ. P. 62 but by Fed. R. App. P. 8. What Ameritech wants, however, is not a stay of anything the district court has done, but a postponement of the effective date of the Commission's order, which already has been postponed for almost six months by the district court. That is the domain of Fed. R. App. P. 18 rather than of Rule 8 or Rule 62--if it is the domain of any rule at all. Appellate Rule 18 applies only to agency decisions that are directly reviewed by the court of appeals. For a stay of a state agency's decision, none of the rules applies directly, which means that the court normally would use general equitable principles that center around issues such as probability of success on the merits and irreparable harm. Nonetheless, Ameritech insists, we ought to analogize the Commission's order to a money judgment, use the approach of Civil Rule 62(d), and issue a stay without regard to the standards that govern the entry of interlocutory injunctions. That would not be sound, for two reasons.

First, the Commission issued "an order to do, rather than an order to pay," so the rationale as well as the text of Rule 62(d) is inapplicable. Donovan v. Fall River Foundry Co., 696 F.2d 524, 526 (7th Cir.1982). The Commission did not liquidate the sum Ameritech owes the other carriers; it just ordered Ameritech to treat calls to ISPs the same way it treats calls to other phone subscribers for purposes of calculating both past and future compensation obligations. Rule 62(d) is designed to prevent execution on a litigant's assets while an appeal is pending, in exchange for which the appellant must obtain a bond that makes the victor indifferent between immediate and deferred collection. Execution on Ameritech's assets is not in the offing; compliance with the Commission's order is instead a condition of being a phone carrier in good standing, and remedies other than seizure of its assets lie in store if Ameritech disdains the order. The Commission's order tells Ameritech how to conduct future operations even as it calls for past-due compensation. Moreover, the order applies to all phone companies in Illinois; this is a system of reciprocal compensation, and other originating carriers must pay Ameritech when the ISP is an Ameritech customer, just as Ameritech must compensate them. Giving Ameritech an automatic stay while other carriers perform their obligations would set the system...