Nextel West Corp. v. Indiana Utility Reg., 93A02-0404-EX-315.
| Decision Date | 15 July 2005 |
| Docket Number | No. 93A02-0404-EX-315.,93A02-0404-EX-315. |
| Citation | 831 N.E.2d 134 |
| Parties | NEXTEL WEST CORPORATION, Voicestream Columbus, Inc. d/b/a T-Mobile, Voicestream GSM I Operating Company, Inc. d/b/a T-Mobile, Omnipoint Holdings, Inc. d/b/a T-Mobile, and Powertel Kentucky, Inc. d/b/a T-Mobile, U.S. Cellular Corporation, Cellco Partnership, d/b/a Verizon Wireless, and Smithville Telephone Company, Inc., Daviess-Martin County Rural Telephone Corporation, Rochester Telephone Company, Inc., and Clay County Rural Telephone Co-operative, Inc., Appellants, v. INDIANA UTILITY REGULATORY COMMISSION, Indiana Bell Telephone Company, Inc. d/b/a SBC Indiana, Indiana Exchange Carrier Association, Inc., Sprint Communications Company, L.P. and United Telephone Company of Indiana, Inc. d/b/a Sprint, and AT & T Communications of Indiana GP and TCG Indianapolis, Appellees. |
| Court | Indiana Supreme Court |
Alan M. Hux, Kortepeter, McPherson, Hux, Freihofer & Minton, Indianapolis, Martin C. Rothfelder, Pro Hac, Rotherfelder Stern, L.L.C., Westfield, NJ, Michael B. Cracraft, Joseph M. Hendel, Hackman, Hulett & Cracraft, LLP, Indianapolis, Rick D. Doyle, Greenwood, for Appellants.
Karl L. Mulvaney, A. David Stippler, Christopher M. York, Bingham McHale, LLP, Brian D. Robinson, Clayton C. Miller, Baker & Daniels, Larry J. Wallace, Parr, Richey, Obremsky & Morton, William B. Powers, Boberschmidt & Powers, P.A., Charles R. Mercer, Jr., Indianapolis, for Appellees.
Appellants, consisting of Nextel West Corporation (Nextel); VoiceStream Columbus, Inc. d/b/a T-Mobile, VoiceStream GSM I Operating Company, Inc. d/b/a T-Mobile, Omnipoint Holdings, Inc. d/b/a T-Mobile, and Powertel Kentucky, Inc. d/b/a T-Mobile (collectively, T-Mobile); U.S. Cellular Corporation (U.S. Cellular); Cellco Partnership, d/b/a Verizon Wireless (Verizon) (collectively, the Wireless Carriers); and Smithville Telephone Company, Inc. (Smithville), Daviess-Martin County Rural Telephone Corporation (Daviess-Martin), Rochester Telephone Company, Inc. (Rochester), and Clay County Rural Telephone Cooperative, Inc. (Clay County) (collectively, the RLEC Appellants), appeal a decision and order of the Indiana Utility Regulatory Commission (the Commission), which is defended by Appellees Indiana Bell Telephone Company, Inc. d/b/a SBC Indiana (SBC Indiana); the Indiana Exchange Carrier Association, Inc. and its member telephone companies (INECA); Sprint Communications Company L.P. and United Telephone Company of Indiana, Inc. d/b/a Sprint (Sprint); and AT & T Communications of Indiana GP and TCG Indianapolis (AT & T) (collectively, the Settling Party Appellees).
We affirm and remand in part.
Appellants raise five issues on appeal, which we restate as the following:
(1) Whether the Commission erred in concluding that it had the requisite statutory authority to establish and administer an Indiana Universal Service Fund ("IUSF");1
(2) Whether the Commission's Order (the IUSF Order) approving the Phase II Settlement Agreement (the Settlement Agreement) was supported by sufficient findings of fact and substantial evidence;
(3) Whether the RLEC Appellants' due process rights were violated;
(4) Whether the Commission erred in determining that the Settlement Agreement is in the public interest; and
(5) Whether the Commission erred in determining that the Settlement Agreement complies with federal law.
On November 28, 2001, INECA, an association of rural local exchange carriers (RLECs), filed a petition under Cause No. 42135 requesting that the Commission temporarily suspend its policy of "mirroring" interstate access rates at the intrastate level in light of the "MAG Order" released by the FCC on November 8, 2001.2 On December 27, 2001, the Commission issued an order denying INECA's request for temporary suspension but granting INECA's request for a comprehensive investigation into the effect of the MAG Order on the Commission's mirroring policy. On that same day, the Commission, on its own motion, initiated the investigation through issuance of an order under Cause No. 42144.
Following a prehearing conference held on February 5, 2002, the Commission issued its Prehearing Conference Order on February 14, 2002, announcing that the investigation was to proceed in two phases. Phase I was initiated to allow the parties to focus on resolving "only those issues that needed to be resolved with respect to the Commission's practice of mirroring policies adopted in various orders in Cause No. 40785 and the interstate access rate and rate structure changes scheduled to take effect on July 1, 2002, arising from [the MAG Order]." (Wireless Carriers' App. p. 111). The Prehearing Conference Order provided for the parties to file issues lists and testimony prior to a hearing to resolve the Phase I issues, and provided for an order to be issued by July 1, 2002. Phase II was to "continue the investigation to address the remaining issues, including any appropriate issues identified by interested parties at a later date." (Wireless Carriers' App. p. 106).
On May 29, 2002, the Commission issued the Interim Order approving a settlement agreement executed by some of the parties to the Phase I proceeding.3 The Phase I Settlement Agreement stated that the Commission's mirroring policy should continue "until such time as the Commission orders otherwise." (Wireless Carriers' App. p. 119). As an interim measure, however, the Phase I Settlement Agreement set forth a two-step formula designed to recover, at least in part, the "intrastate revenue reductions [that] have resulted from mirroring changes in the interstate access rate design associated with federal actions." (Wireless Carriers' App. p. 119). According to the Phase I Settlement Agreement, the parties agreed that the Phase I revenue recovery methods would remain in effect until implementation of an alternative method approved by the Commission in Phase II.
The Interim Order also set forth a process for resolving the remaining issues in Phase II. According to a May 15, 2002, docket entry, the parties were to participate in a series of "technical conferences," at which they would discuss and attempt to resolve a variety of interrelated rate design and revenue recovery issues associated with intrastate implementation of the MAG Order's rate design proposals. (Wireless Carriers' App. p. 108). In this same docket entry, the Commission also approved the formation of an Executive Committee consisting of members representing various interests in Cause No. 42144; the Executive Committee was charged with preparing and filing a preliminary and final report with the Commission. The preliminary report was to be filed on June 19, 2002, following the initial technical conference, and was to include a list of the issues to be addressed in Phase II and a list of the wireless companies in the state that should be notified by publication of the proceeding. The final report was to be filed on October 15, 2002, and could include "a Minority Report that expresse[d] the views of any party that disagree[d] with any of the conclusions reached by the majority. . . ." (Wireless Carriers' App. p. 116).4
Additionally, as a preliminary matter, the Commission requested that counsel for each party file with the Commission a legal brief analyzing, discussing, and presenting conclusions regarding the Commission's "legal authority to establish a state universal service fund as part of Phase II of this proceeding." (Wireless Carriers' App. p. 116). The Wireless Carriers (except U.S. Cellular, which did not petition to intervene until September 27, 2002) each sought and were granted permission to intervene and subsequently filed joint or individual briefs arguing against the Commission's legal authority to establish a state universal service fund. By a docket entry dated July 18, 2002, the Presiding Officers, acting on behalf of the Commission in response to a concern expressed by some of the parties that some wireless carriers had not received adequate notice of the investigation, amended the caption of Cause No. 42144 by adding the following: "Respondents: All Telecommunication Service Providers, Including Intrastate Wireless Carriers, in the State of Indiana." (Wireless Carriers' App. p. 131).
On August 9, 2002, the Wireless Carriers filed a motion to dismiss the proceeding, presenting four arguments in support of their contention that the Commission lacked jurisdiction in the proceeding. On December 2, 2002, the Presiding Officers denied the Wireless Carriers' motion. The Wireless Carriers appealed the denial to the full Commission, which subsequently affirmed the denial.
On December 5, 2002, INECA, AT & T Communications of Indiana, Ameritech Indiana, and Sprint submitted a Phase II Settlement Agreement (the Settlement Agreement) to the Commission for its approval. The Settlement Agreement supports the Commission's continued mirroring of interstate access rates and rate structures at the intrastate level but also provides for the partial recovery of intrastate access rates. It provides in pertinent part as follows:
The revenues from RLECs' intrastate access rates were negatively impacted by the FCC's MAG Order. As a result, the public interest will be served by providing for the RLECs' recovery, in part, of such intrastate revenue losses resulting from the continued mirroring of interstate access rates: (1) through the process of rate rebalancing by the establishment of "benchmark" residential and single-line business local exchange service rates for the RLECs that are reasonably comparable to rates for those services in urban areas, and which are just, reasonable[,] and affordable (the "Benchmark Rates"); and (2) through the creation of an Indiana Universal Service Fund (hereafter "IUSF") to provide for recovery of (i) any remaining revenue shortfall that...
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