North County Communications Corp. v. MetroPCS California, LLC
| Decision Date | 30 March 2009 |
| Docket Number | EB-06-MD-007,DA 09-719 |
| Court | Federal Communications Commission Decisions |
| Parties | North County Communications Corp., Complainant, v. MetroPCS California, LLC, Defendant. |
Kris Anne Monteith Chief, Enforcement Bureau
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we dismiss in part and otherwise deny the claims alleged in the formal complaint[1] that North County Communications Corp. ("North County") filed against MetroPCS California LLC ("MetroPCS") under section 208 of the Communications Act of 1934, as amended ("Act").[2] In short, the Complaint alleges that MetroPCS violated sections 201(b), 202(a), and 251(b)(5) of the Act, [3] and sections 20.11, 51.301, and 51.715 of the Commission's rules, [4] by (a) failing to pay North County for the transport and termination of intrastate traffic originated by MetroPCS; (b) failing to establish an interim reciprocal compensation arrangement with North County for the transport and termination of intrastate traffic originated by MetroPCS; and (c) failing to enter into a final interconnection agreement with North County for the transport and termination of intrastate traffic originated by MetroPCS.[5]
2. As explained below, we dismiss Count I of the Complaint without prejudice because North County should first obtain from the California Public Utilities Commission ("PUC") a determination of a reasonable compensation rate. We deny Counts II and IV of the Complaint because the Commission rules upon which those Counts are predicated apply only to incumbent local exchange carriers ("incumbent LECs"), and neither North County nor MetroPCS is an incumbent LEC. Finally, we deny Counts III and V of the Complaint because the record does not demonstrate a violation of either section 201(b) or section 202(a) of the Act.
II. BACKGROUND
3. North County is a licensed competitive local exchange carrier ("CLEC") that provides switched and non-switched local exchange, exchange access, and other telecommunications services in California.[6] Most, if not all, of North County's end user customers are either chat-line providers or telemarketers.[7]
4. MetroPCS is a Commercial Mobile Radio Service ("CMRS") carrier that provides wireless communications services in California.[8] MetroPCS is indirectly interconnected with North County in California through the switching facilities of other local exchange carriers ("LECs").[9]MetroPCS does not have a written interconnection agreement with North County.[10]
5. All of the traffic exchanged between North County and MetroPCS at issue here is jurisdictionally intraMTA[11] and intrastate (hereinafter "intrastate" traffic).[12] Moreover, all of the traffic exchanged between the parties is in-bound to North County from MetroPCS.[13] That is because North County's chat line provider customers generate no outbound calls, and according to North County, legal restrictions preclude its telemarketer customers from calling wireless phones.[14]
6. Despite the absence of a written interconnection agreement with MetroPCS, North County began billing MetroPCS for the termination of intrastate traffic sometime in 2003.[15] MetroPCS has not paid North County any amount of money for the traffic terminated by North County.[16] In MetroPCS' view, a default "bill-and-keep" arrangement exists, whereby neither party pays the other for traffic termination.[17] Between August 2005 and approximately June 2006, North County and MetroPCS attempted to negotiate a written interconnection agreement, without success.[18]
7. Upon reaching an impasse in its negotiations with MetroPCS regarding a written interconnection agreement, North County filed its Complaint. Count I of the Complaint alleges that MetroPCS is violating rule 20.11(b)[19] by failing to pay North County for terminating traffic originated on MetroPCS' network.[20] Count II of the Complaint alleges that MetroPCS is violating section 251(b)(5) of the Act[21] and rule 51.301[22] by failing to negotiate and execute a written interconnection agreement with North County in good faith.[23] Counts III and V of the Complaint allege that MetroPCS is violating sections 201(b) and 202(a) of the Act, [24] respectively, by refusing to enter into a written interconnection agreement with North County.[25] Count IV of the Complaint alleges that MetroPCS is violating rule 51.715[26] by refusing to enter into an interim interconnection agreement with North County.[27] The Complaint asks the Commission to issue an order (i) prescribing a rate for terminating intrastate traffic between the parties at or above the rate billed by North County to MetroPCS, and (ii) awarding North County past due amounts consistent with the Commission's prescribed intrastate termination rate, plus reasonable interest.[28]
III. DISCUSSION
8. Rule 20.11(b) provides, in pertinent part, that "[a] commercial mobile radio service provider shall pay reasonable compensation to a local exchange carrier in connection with terminating traffic that originates on the facilities of the commercial mobile radio service provider."[29] Count I of the Complaint alleges that MetroPCS is violating that rule by failing to pay for North County's termination of intrastate traffic originated by MetroPCS.[30]
9. We decline to determine, in the first instance, what constitutes "reasonable compensation" in this case.[31] The Commission has repeatedly held that (i) states have authority under section 2(b) of the Act[32] to establish rates charged by LECs for termination of intrastate traffic from CMRS providers, and (ii) the Commission has not preempted such state authority.[33] Thus, the more appropriate venue for determining what constitutes "reasonable compensation" for North County's termination of intrastate traffic originated by MetroPCS is not this Commission, but rather the California PUC, via whatever procedural mechanism it deems appropriate under state law (e.g., complaint proceeding, declaratory ruling proceeding, generic cost or rulemaking proceeding). In turn, unless and until what constitutes reasonable compensation for North County's termination of intrastate traffic originated by MetroPCS is determined, the Commission cannot determine whether or to what extent MetroPCS has violated its duty under rule 20.11(b)(2) to pay such compensation. Accordingly, we dismiss without prejudice Count I of the Complaint. If after the California PUC prescribes a reasonable rate North County believes that MetroPCS has failed to pay what is owed pursuant to that rate under rule 20.11(b)(2), then North County may seek resolution of that dispute at that time.
10. In North County's view, because rule 20.11(a) permits parties to file complaints under section 208 of the Act alleging violations of rule 20.11(b)(2), rule 20.11(a) implicitly requires the Commission to determine what a reasonable compensation rate under rule 20.11(b)(2) is in this complaint proceeding.[34] According to North County, "[a]n ability to adjudicate a refusal to pay compensation without an ability to adjudicate the rate is nonsensical."[35] We disagree. Construing the Commission's adjudicatory role under rule 20.11 as permitting states to determine in the first instance whether the charged rate is reasonable is perfectly consistent with the plain language of rule 20.11 and with the Commission's multiple orders - including the order adopting rules 20.11(a)-(b) - expressly declining to preempt state authority to establish intrastate rates charged by LECs to terminate traffic from CMRS providers.[36] Indeed, in an order inaptly relied upon by North County, the Commission squarely held that, "although LECs were required to pay mutual compensation to CMRS carriers [and vice-versa] for intrastate traffic pursuant to [rule 20.11] …, the determination of the actual rates charged for intrastate interconnection would be left to the states."[37] Thus, North County's interpretation of rule 20.11(a) is wrong.
11. MetroPCS argues that allowing the California PUC to establish a reasonable compensation rate for North County's termination of intrastate traffic would violate section 332(c)(3)(A) of the Act, which provides, in pertinent part, that "no State or local government shall have any authority to regulate the … rates charged by any commercial mobile service…."[38] That position is not supported by Commission precedent. The rates charged by North County to MetroPCS for transport and termination are not "rates charged by any commercial mobile service" within the meaning of section 332(c)(3)(A) of the Act. The Commission has interpreted section 332(c)(3)(A) to prohibit States from "prescribing, setting or fixing" rates, and determined that the proscription extends to regulation of rate levels and structures for CMRS, including how much may be charged for CMRS.[39] Thus, the Commission has stated that this provision applies to retail charges to end users of CMRS, rather than to termination charges to other carriers associated with CMRS.[40] In other words, by explicitly declining to preempt state regulation of intrastate rates that LECs charge CMRS providers for termination after the passage of section 332(c)(3)(A) of the Act, the Commission has not applied section 332(c)(3)(A) to such intercarrier rates.[41] Therefore, allowing the California PUC to establish a reasonable compensation rate for North County's termination of intrastate traffic does not conflict with section 332(c)(3)(A) of the Act.
12. North County and MetroPCS also contend that allowing the California PUC to establish a reasonable compensation...
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