P.R. Tel. Co. Inc v. Telecommc'ns Regulatory Bd. Of P.R.

• Decision Date: 18 March 2010
• Docket Number: Civil No. 09-1317 (JP).
• Citation: 704 F.Supp.2d 104
• Parties: PUERTO RICO TELEPHONE COMPANY INC., Plaintiffv.TELECOMMUNICATIONS REGULATORY BOARD OF PUERTO RICO, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

704 F.Supp.2d 104

PUERTO RICO TELEPHONE COMPANY INC., Plaintiffv.TELECOMMUNICATIONS REGULATORY BOARD OF PUERTO RICO, et al., Defendants.

Civil No. 09-1317 (JP).

United States District Court D. Puerto Rico.

March 18, 2010.

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Maria del C. García-García, Esq., Puerto Rico Telephone Co., San Juan, PR, PHV Michael J. Guzmán, Esq., PHV Scott H. Angstreich, Esq., Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, for Plaintiff.

Alexandra Fernández-Navarro, Esq., Santurce, PR, PHV Leslie Paul Machado, Esq., LeClair Ryan, Washington, DC, Alexandra Rodríguez-Díaz, Esq., Miguel J. Rodríguez-Marxuach, Esq., Rodríguez-Marxuach, P.S.C., Hato Rey, PR, for Defendants.

OPINION AND ORDER

JAIME PIERAS, JR., Senior District Judge.

Before the Court are: (1) Plaintiff Puerto Rico Telephone Company's (“PRT”) motion for summary judgment (No. 29) as to its complaint, and the counterclaim and cross-claim filed by Defendant SprintCom, Inc. (“Sprint”); (2) Defendants Miguel Reyes-Dávila, Vicente Aguirre-Iturrino, Nixyvette Santini-Hernández, and Telecommunications Regulatory Board of Puerto Rico's (collectively known as the “Board”) motion for summary judgment (No. 30) as to Plaintiff's complaint and Defendant Sprint's cross-claim; (3) Defendant Sprint's motion for summary judgment (No. 32) as to Plaintiff's complaint, its counterclaim against Plaintiff, and its cross-claim against Defendant Board; and (4) the oppositions thereto (Nos. 35, 36, and 37). This case arises from a Resolution and Order issued by the Board in which it: (1) ruled that Sprint was entitled to invoke the change-of-law provision in its expired contract with PRT and, thereby, obtain the retroactive benefits of the rate caps established by the Federal Communications Commission (“FCC”) in 2001; (2) closed the case without determining the amounts that Sprint overpaid to PRT for reciprocal compensation and without ordering PRT to credit Sprint said amounts; and (3) dismissed Sprint's claims that PRT had been over billing Sprint for transit traffic from December 2002 to July 2005. For the reasons stated herein, PRT's motion for summary judgment is hereby GRANTED IN PART AND DENIED IN PART, Sprint's motion for summary judgment is hereby GRANTED IN PART AND DENIED IN PART, and the Board's motion for summary judgment is hereby GRANTED IN PART AND DENIED IN PART.

I. MATERIAL FACTS NOT IN GENUINE ISSUE OR DISPUTE

The following material facts were deemed uncontested by all parties hereto in their Joint Statement of Undisputed Facts (No. 28).

1. PRT is a Puerto Rico corporation with its principal place of business located at 1515 Roosevelt Avenue, Guaynabo, Puerto Rico 00968. PRT is a telecommunications carrier and incumbent local exchange carrier (“ILEC”) under the jurisdiction of the Board and the FCC that provides local exchange, exchange access, and intra-island long distance services in Puerto Rico.

2. Sprint is a corporation organized and existing under the laws of the State of Kansas and authorized to do business in Puerto Rico. Sprint is a “communications common carrier” and a telecommunications carrier providing “commercial mobile services,” “commercial mobile radio services,” “personal communications services,” and “personal wireless services” as those terms are defined and commonly used in the Communications Act of 1934, the Federal Telecommunications Act, and the FCC rules, regulations, and orders promulgated pursuant thereto. Sprint operates a nationwide wireless network across the United States and its principal place of business in Puerto Rico is located at 304 Ponce de León Ave., 8th Floor, Hato Rey, Puerto Rico 00918.

3. The Board is a “State Commission” under the Telecommunications Act.

4. PRT and Sprint entered into a negotiated interconnection agreement, which the Board approved, which had an effective date of June 26, 2000 (“ICA”).

5. Pursuant to the ICA, PRT and Sprint agreed to interconnect the two companies' networks and to provide services to each other, pursuant to the terms and conditions negotiated and included therein.

6. The ICA had a one-year initial term, ending June 25, 2001.

7. Section I.E. of the ICA states that “[t]he parties agree that if (1) a regulatory agency or court having jurisdiction finds that the terms of this agreement are inconsistent in one or more material respects with applicable federal or state law or any of its respective decisions, rules or regulations, or (2) a regulatory agency or court having jurisdiction alters or preempts the effect of this Agreement, then in the event of the occurrence of (1) or (2), which occurrence is final and no longer subject to administrative or judicial review, the parties shall immediately commence good faith negotiations to conform this Agreement with any such decision, rule, regulation or preemption. The revised agreement shall have an effective date that coincides with the effective date of the original federal or state action giving rise to such negotiations. The parties agree that except as provided herein the rates, terms and conditions of any new agreement shall not be applied retroactively to any period prior to such effective date.”

8. Section XIII.D. of the ICA states in pertinent part that “Sprint PCS may withhold payment of any reasonably disputed amount pending the outcome of the dispute resolution process set forth in Section XIX of this Agreement.”

9. Section III.A. 2 of the ICA states that “[u]ntil the FCC establishes a means of determining the amount of intercarrier compensation for ISP-bound traffic, compensation for such traffic shall be based upon a division of revenues as follows: compensation for traffic delivered to an ISP shall be paid by the carrier whose customer originates the call in the amount of 50% of the amount billed by the originating carrier. Any amount billed by the terminating carrier to the ISP for delivery of such traffic shall be credited against such payments by the originating carrier and the net amount remaining shall be paid by the originating carrier.”

10. Section III.B.4 of the ICA states that “Sprint PCS will compensate PRTC for terminating local traffic which is delivered at the meet point for termination on PRTC's network or other networks in accordance with Paragraph III.A, above. PRTC will compensate Sprint PCS for terminating local traffic which is delivered at the meet point for termination on Sprint PCS's networks in accordance with Paragraph III.A. above. Neither party shall impose any charges on the other for delivery of local originating traffic to the meet point. This paragraph shall not affect the application of all ordinary rates or charges for facilities where one party delivers such originating traffic to the meet point by leasing facilities from the other party.”

11. Appendix A (Price Schedule) of the ICA established the following rates for the following network elements:

(a) transport facility per minute/mile-$0.000087;

(b) transport termination per minute-$0.002056;

(c) tandem switching per minute-$0.001600; and (d) local switching per minute-$0.007485. These four rates result in a composite rate of approximately $0.011 per minute for reciprocal compensation traffic.

12. Section XIII.A. of the ICA states that “[e]ach party is responsible for payment of all charges for completed calls, services, and equipment chargeable to that party under the terms thereof. If objection in writing is not received by the billing party within thirty (30) days after a bill is mailed, the account shall be deemed correct and binding upon the billed party.”

13. Section XVII of the ICA states that “[a] failure or delay of either Party to enforce a provision of this Agreement, to exercise any option that is herein provided, or to require the performance of any provision hereof, shall in no way be construed to be a waiver of such provision or option.”

14. PRT and Sprint agreed on multiple occasions to extend the term of the ICA beyond June 25, 2001; the Board approved each such extension.

15. The ICA terminated on August 8, 2007.

16. Effective August 9, 2007, PRT and Sprint entered into a new, negotiated interconnection agreement (“2007 Agreement”).

17. The 2007 Agreement includes a reciprocal compensation rate of $0.0007 per minute.

18. On April 27, 2001, the FCC released the ISP Remand Order.¹ That order had an effective date of June 14, 2001.

19. In 2001, Sprint was aware that certain incumbent local telephone companies (operating in jurisdictions other than Puerto Rico) had sought to exchange local and ISP-bound traffic pursuant to the rate caps the FCC established in the ISP Remand Order.

20. Those incumbent local telephone companies (operating in jurisdictions other than Puerto Rico), including other subsidiaries of PRT's then-parent Verizon Communications Inc., notified all competitors operating in their jurisdictions, by sending them letters, informing those competitors that the incumbents sought to exchange local and ISP-bound traffic pursuant to the rate caps the FCC established in the ISP Remand Order. PRT did not provide such notification.

21. Effective July 19, 2002, PRT entered into a new interconnection agreement with a competitor in Puerto Rico known as Centennial; that new agreement contained the rate caps the FCC established in the ISP Remand Order for reciprocal compensation.

22. PRT did not inform Sprint that its interconnection agreement with Centennial contained rates for reciprocal compensation based on rate caps the FCC established in the ISP Remand Order.

23. On December 9, 2003, during negotiations between PRT and AT & T over an interconnection agreement, an employee of AT & T wrote to an employee of PRT that “I am disappointed that the rates for reciprocal compensation you have provided are not the ISP rates. You are required to offer them to all carriers once you offer them to one; i.e., Centennial. I would appreciate a written response by tomorrow morning by your legal team

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