Iowa Network Services, Inc. v. Qwest Corp.

Decision Date17 August 2005
Docket NumberNo. 4:02 CV 40156.,4:02 CV 40156.
Citation385 F.Supp.2d 850
PartiesIOWA NETWORK SERVICES, INC., Plaintiff, v. QWEST CORPORATION, Defendant.
CourtU.S. District Court — Southern District of Iowa

James H. Lister, Matthew R. A. Heiman, Sean F. Murphy, McGuire Woods LLP, McLean, VA, James Urquhart Troup, McGuire Woods LLP, Washington, DC, Lawrence P. McLellan, Michael P. Joynt, Sullivan & Ward, PC, Des Moines, IA, for Plaintiff.

Bobbee Joan Musgrave, Steven James Perfrement, Musgrave & Theis LLP, Joseph V. Hatala, Qwest Corporation, Roy E. Hoffinger, Perkins Coie LLP, Denver, CO, David S. Sather, Sheila K. Tipton, Amy M Omvig, Dorsey & Whitney LLP, Des Moines, IA, for Defendant.

ORDER ON INITIAL BRIEFS AND DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

GRITZNER, District Judge.

This action is presently before the Court on the initial briefing of the parties (Clerk's Nos. 50, 54) filed pursuant to this Court's July 6, 2004, scheduling order. Qwest chose to pursue summary judgment as part of this process, and therefore the Court will analyze the parties' arguments under the summary judgment standard. Attorneys for Plaintiff are Lawrence P. McLellan, James U. Troup, Tony S. Lee, James H. Lister, and David E. Lampp; attorneys for Defendant are Sheila K. Tipton, Dennis W. Johnson, Amy M. Omvig, and Roy E. Hoffinger. The parties did not request a hearing, and the Court finds a hearing is not necessary. Accordingly, the Court considers the issues presented in the initial briefings and in Qwest's motion for summary judgment to be fully submitted and ready for ruling.

                TABLE OF CONTENTS
                PROCEDURAL HISTORY ........................................................854
                BACKGROUND FACTS ..........................................................854
                  A.  Preliminary Statement ...............................................854
                  B.  Plaintiff's Action ..................................................855
                  C.  Telecommunications in Iowa ..........................................856
                  D.  The Telecommunications Act and FCC Implementing Decisions ...........858
                  E.  Decisions of the IUB ................................................861
                  F.  INS' Tariffs ........................................................863
                  G.  The Present Action ..................................................864
                ANALYSIS ..................................................................864
                  A.  Standard for Summary Judgment .......................................865
                  B.  Compensation Sought .................................................865
                  C.  The Parties and the Traffic at Issue ................................866
                      1.  Type of Traffic .................................................866
                          a.  "Local" versus "Long Distance" Traffic ......................866
                          b.  IntraMTA Versus InterMTA and Wireless Versus Wireline .......870
                      2.  Regulatory Classification of Parties ............................871
                          a.  INS .........................................................871
                  D.  Reciprocal Compensation and Access Charges ..........................876
                      1.  Access Charges and Tariffs ......................................876
                      2.  Applicability of Reciprocal Compensation Rules ..................878
                          a.  Transiting Carriers .........................................878
                          b.  Intermediary Carriers and the Further NPRM ..................887
                      3.  Negotiation and Arbitration and Section 252 Exclusivity .........890
                      4.  IXC Exception ...................................................893
                      5.  Commingling .....................................................893
                      6.  Billing Information .............................................894
                  E.  Tariffs .............................................................894
                      1.  Tariffs in General ..............................................895
                      2.  Tariffs Involved ................................................895
                      3.  Tariffs as Appropriate Method to Seek Compensation ..............897
                      4.  The FCC's Recent T-Mobile Wireless Termination Order ............900
                  F.  The Self-help Claim .................................................902
                  G.  Unjust Enrichment ...................................................904
                  H.  Implied Contract/quantum Meruit Claim ...............................909
                
                CONCLUSION ................................................................916
                
PROCEDURAL HISTORY

Plaintiff Iowa Network Services, Inc. ("INS"), initiated the present action against Defendant Qwest Corporation ("Qwest") by filing a Complaint and Demand for Jury Trial with this Court on March 27, 2002. Qwest successfully moved to dismiss,1 only to have the Eighth Circuit, in a ruling dated April 7, 2004, reverse the dismissal and remand for further proceedings.2 On December 2, 2004, this Court filed an Order on Pending Motions (Clerk's No. 82), granting Plaintiff's Motion to Amend and determining the Court's review was not limited to "judicial review" of an agency decision, "as INS' Complaint is an original action and not an appeal of the administrative agency decision requiring a deferential judicial review of that decision," and as a result, the record is not limited to the administrative record. Order on Pending Motions at 31, 36-37. The parties subsequently filed the pending briefs/motions in order to clarify and narrow the issues for trial.

In a somewhat convoluted briefing plan, both parties filed initial briefs on August 11, 2004, with Qwest's brief being a motion for summary judgment. The parties were then given opportunity to resist/respond to the opposing parties' brief, and again to reply to the filed response/resistance. After this Court granted Plaintiff's Motion to Amend in the Court's Order on Pending Motions, the Court allowed the parties additional opportunity to "provide the Court with any necessary supplement to their prior briefing ... [with t]hese briefs ... limited to the new issues raised in the Amended Complaint, i.e., the self-help and quantum meruit counts." Order on Pending Motions at 13. The parties completed this briefing, including responses, on December 27, 2004. The Court then took the matter under advisement, accepting notice of supplemental authority, including responses, on two occasions in March, 2005. The Court now considers the matter fully submitted.

The purpose of this initial briefing was to allow the Court to become aware of the issues and rule on any initial matters, thereby narrowing the focus of the case and clarifying the issues as the action proceeds toward trial. Because Qwest chose to pursue summary judgment as part of this process, the Court will analyze the parties' contentions under the summary judgment standard as set out below.

BACKGROUND FACTS
A. Preliminary Statement

This case concerns intercarrier compensation for telephone calls ("traffic") placed by customers of third-party commercial mobile radio service ("CMRS") providers (i.e., "wireless carriers")3 to end-user customers served by third-party Incumbent Local Exchange Carriers ("ILECs")4 located in the same calling area.5 The calls at issue are (1) placed (i.e., "originated") by end-user customers of third-party CMRS wireless carriers, (2) delivered by the wireless carriers to Qwest as an intermediate, or transiting, carrier, (3) transported approximately six blocks by Qwest and delivered to INS, a second intermediate, or transiting, carrier, (4) transported by INS to the ILECs serving the called parties, and (5) routed and delivered (i.e., "terminated") by the ILECs to the premises of the called parties, the ILECs' end-user customers. Qwest and INS are involved in the transport of these calls because the originating third-party wireless carriers and the terminating ILECs have elected to "interconnect" their networks "indirectly" to permit calls between their end-user customers.6

B. Plaintiff's Action

In its Amended Complaint before this Court, INS states, "This is a collection action to recover unpaid charges for telecommunication services that Qwest has received and continues to receive while refusing to pay INS the lawful charges for these services." INS then seeks payment under both federal and Iowa tariffs or, in the alternative, for unjust enrichment and implied contract/quantum meruit. INS has also brought a claim for self-help in violation of the Communications Act. Further, as part of its action, INS alleges the Iowa Utilities Board ("IUB" or "the Board") issued a series of orders in docket number SPU-00-7 that violate federal law. Specifically, INS asserts the IUB misinterprets and misapplies various provisions of the Telecommunications Act, section 251 in particular. The Board's determinations that are being challenged include the following: (a) wireless calls that are placed and received by subscribers of different carriers located in the same major trading area ("MTA")7 are classified as "local", and are not subject to long distance access charges, notwithstanding the fact that the originating and terminating carriers are interconnected indirectly through one or more additional carriers; (b) the termination of such calls is subject to the "reciprocal compensation" provisions of 47 U.S.C. § 251(b), as implemented through negotiated or arbitrated interconnection agreements between the originating and terminating carriers pursuant to 47 U.S.C. § 252; and (c) Qwest, which provides an indirect interconnection and transiting service between the CMRS provider and INS is not responsible for payment to INS of access charges or other compensation for its transport or termination of calls placed by subscribers of the CMRS providers.

Qwest has countered that the Board's determinations do not violate federal law and must therefore be upheld and enforced by this Court. Qwest further contends INS cannot circumvent the result of the Board's determinations through unilaterally filing a...

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