P.R. Tel. Co. v. Telecomms. Regulatory Bd. of P.R.
| Decision Date | 31 March 2014 |
| Docket Number | Civil No. 12-1893 (JAF) |
| Court | U.S. District Court — District of Puerto Rico |
| Parties | PUERTO RICO TELEPHONE COMPANY, INC., Plaintiff, v. TELECOMMUNICATIONS REGULATORY BOARD OF PUERTO RICO, et. al., Defendants. |
We must decide, among other issues, whether the Telecommunications Regulatory Board of Puerto Rico wrongly interpreted federal regulations when it authorized an interconnection agreement between two competitive local telephone exchange carriers.
Because we must view all facts in the light most favorable to the non-moving party when considering a summary judgment motion, to the extent that any facts are disputed the facts set forth below represent the plaintiff's version of the events at issue. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, where the plaintiff's asserted facts do not properly comply with Local Rules 56(c) and (e), we deem the defendants' properly-supported statements as admitted. See Cosme-Rosado v. Serrano-Rodriguez, 360 F.3d 42, 45 (1st Cir. 2004) ().
This case arises out of a dispute between two local exchange carriers with operations in Puerto Rico: Puerto Rico Telephone Company, the incumbent local exchange carrier, and Liberty Cablevision of Puerto Rico, LLC, a certified competitive local exchange carrier.
On April 2, 2012, Liberty petitioned the Telecommunications Regulatory Board of Puerto Rico for the arbitration of twenty-seven open issues remaining in its negotiations for an interconnection agreement with Puerto Rico Telephone.
Puerto Rico Telephone did not file a response to Liberty's petition for arbitration. Instead, Puerto Rico Telephone filed two separate motions to dismiss. Puerto Rico Telephone's first motion to dismiss was based on the contention that Liberty is not entitled to interconnection under 47 U.S.C. § 251(c). The Board denied the motion, but held that it would reconsider the issue when the facts were fully developed at a hearing. After a full hearing, the Board held that Liberty had the legal right to seek interconnection under § 251(c)
Puerto Rico Telephone's second motion to dismiss argued that the proposed merger between OneLink Communications and Liberty undermined any potential arbitration process and that the Board should dismiss Liberty's petition for arbitration as untimely. The Board denied Puerto Rico Telephone's motion.
After negotiations resumed, the parties presented the Board with four issues for resolution. The Board appointed a Hearing Examiner for the arbitration. The Hearing Examiner, subject to the Board's oversight and approval, supervised discovery and conducted a two-day hearing in San Juan, Puerto Rico, on August 13-14, 2012. Seven witnesses testified at the hearing. Prior to the hearing, the parties submitted direct and reply testimony and related exhibits. The parties also filed pre-hearing briefs, made opening statements and closing arguments, and filed post-hearing briefs, including reply briefs. Thosedocuments, all discovery-related motions/orders, evidentiary motions/orders, and the transcripts of the hearing and closing arguments, constitute the official record.
On September 25, 2012, the Board issued the Report and Order that resolved all of the outstanding issues. On October 25, 2012, Puerto Rico Telephone and Liberty filed the completed interconnection agreement with the Board, which was approved by operation of law on November 25, 2013. Neither party sought reconsideration. On October 25, 2012, Puerto Rico Telephone filed suit.
Puerto Rico Telephone challenges five of the Board's conclusions: (1) after Liberty's purchase of OneLink, Liberty ceased existing as a corporate entity, and there was no information in the arbitration record about the new entity's capacities to offer or provide telecommunications services; (2) because Liberty was historically a cable provider, and the FCC has never extended rights under § 251(c) to cable providers, it was error for the Board to hold that Liberty is entitled to the rights available under § 251(c) of the Act; (3) the Board erred by holding that, under Commonwealth Law 213, Puerto Rico Telephone must offer to Liberty the same facility construction Puerto Rico Telephone offers to its retail customers; (4) the Board erred in adopting performance intervals that were not offered by either party; and (5) when the Board adopted a dispute resolution provision in the event discussions between Puerto Rico Telephone and Liberty over IP-to-IP interconnection break down, this was error because the FCC has not permitted states to regulate IP-to-IP interconnection.
The Board moved for summary judgment. (Docket Nos. 15, 31.) Puerto Rico Telephone moved for judgment on the pleadings. (Docket No. 23.)
The defendants are entitled to summary judgment on a claim if they can show that there is no genuine dispute over the material facts underlying the claim. Celotex Corp. v.Catrett, 477 U.S. 317, 323 (1986). We must decide whether a reasonable juror could find for plaintiffs on each of their claims when all reasonable inferences from the evidence are drawn in their favor. See Scott v. Harris, 550 U.S. 372, 380 (2007).
We review de novo a state agency determination based on federal law. Global NAPs, Inc. v. Verizon New Eng., Inc., 396 F.3d 16, 23 (1st Cir.2005); see also id. at 23 n.7 (). Where the state agency determination is based on state law, we review same with due deference to the agency's superior knowledge of its governing statute. See WorldNet Telecomms., Inc. v. P.R. Tel. Co., 497 F.3d 1, 11 (1st Cir.2007) ().
Where no error of law is alleged, we review a state agency's determination under the arbitrary and capricious standard. See Global NAPs, 396 F.3d at 23 n.7. An agency's determination is deemed arbitrary and capricious where the agency fails to "examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (internal quotation marks omitted).
Should the Board have stayed or terminated the interconnection arbitration until the conclusion of the Liberty-OneLink merger? No. Puerto Rico Telephone fails to identifyhow the Board violated 47 U.S.C. § 251(c) by issuing the Report and Order while the Liberty-OneLink merger was under review.
§ 251(c) does not require the cancelation of a pending interconnection agreement if a telecommunications carrier merges or is acquired. In fact, § 251(c) is silent regarding whether a competitive provider that is party to an interconnection agreement may be acquired or by whom. Moreover, nothing in the text of § 251(c) would absolve the Board from its duty under § 252(b)(4)(C) to conclude the resolution of any open issues presented in a petition for arbitration simply because the petitioner is involved in a pending reorganization or merger.
Puerto Rico Telephone argues that by issuing the Report and Order while the Liberty-OneLink merger was under review, the Board granted interconnection rights to OneLink—an entity that was not a party to the arbitration, or eligible for interconnection. This might be true enough if Puerto Rico Telephone's characterization of the Liberty-OneLink merger was accurate. Liberty's parent corporation, LGI Broadband, acquired OneLink not, as Puerto Rico Telephone asserts, the other way around. Liberty and OneLink then merged to form an entity also named Liberty. Consolidation of ownership was followed quickly by the absorption of the new Liberty into LGI Broadband's management structure. Indeed, on September 12, 2012, Liberty sought approval to transfer its local exchange carrier certificate to the new post-merger entity—in essence, swapping the name "Liberty" for "Liberty II."
Similarly, Puerto Rico Telephone claims that the Liberty-OneLink merger resulted in the assignation of Liberty's rights under the interconnection agreement to a subsidiary of OneLink. But, here again Puerto Rico Telephone's characterization fails to correspond with the record. The Board noted that any interconnection agreement between Liberty and Puerto Rico Telephone in effect at the time of the Liberty-OneLink merger would become bindingupon any subsequent entity formed out of the merger. Puerto Rico Telephone confuses language in the interconnection agreement prohibiting assignment or delegation.
Did the Board violate 47 U.S.C. § 251(c) by granting Liberty interconnection rights? No. Puerto Rico Telephone argues that Liberty, formerly a provider exclusively of cable services, cannot be accorded § 251(c) rights.
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