Us West Communications, Inc. v. Jennings
| Decision Date | 23 September 2002 |
| Docket Number | No. 99-16264.,No. 99-16247.,No. 99-16330.,99-16247.,99-16264.,99-16330. |
| Citation | 304 F.3d 950 |
| Parties | US WEST COMMUNICATIONS, INC., a Colorado corporation, Plaintiff-counter-defendant-Appellee, v. Renz D. JENNINGS, as a member of the Arizona Corporation Commission; Carl J. Kunasek, as a member of the Arizona Corporation Commission; James M. Irvin, as a member of the Arizona Corporation Commission, Defendants-cross-defendants-Appellees, American Communications Services, Inc., a Delaware corporation aka espire Communications, Inc., Defendant-counter-claimant-cross-claimant-Appellant. US West Communications, Inc., a Colorado corporation, Plaintiff-Appellee, v. Renz D. Jennings, as a member of the Arizona Corporation Commission; Carl J. Kunasek, as a member of the Arizona Corporation Commission; TCG Phoenix, a general partnership; Arizona Corporation Commission; James M. Irvin, Defendants, and Brooks Fiber Communications of Tucson, Inc., a Delaware corporation; MCI Telecommunications Corporation, a Delaware corporation; MCImetro Access Transmission Services, Inc., a Delaware corporation; MFS Communications Company, Inc., a Delaware corporation; MFS Intelenet of Arizona, Inc., a Delaware corporation; Worldcom Technologies, Inc., a Delaware corporation, Defendants-Appellants. US West Communications, Inc., a Colorado corporation, Plaintiff-counter-defendant-Appellee, v. Renz D. Jennings, as a member of the Arizona Corporation Commission; Carl J. Kunasek, as a member of the Arizona Corporation Commission; James M. Irvin, as a member of the Arizona Corporation Commission, Defendants-cross-defendants-Appellees, AT & T Communications of the Mountain States, Defendant-counter-defendant-Appellant, TCG Phoenix, a general partnership, Defendant-cross-claimant-Appellant, American Communications Services, Inc., a Delaware corporation aka espire Communications, Inc., Defendant-counter-claimant-cross-claimant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Timothy J. Berg, Fennemore Craig, Phoenix, AZ, for plaintiff-counter-defendant-appellee US West Communications.
Michael D. Warden, Sidley & Austin, Washington, DC, for defendants-appellees-cross-appellants TCG Phoenix, AT & T Communications of the Mountain States, Inc.
Jodie L. Kelley, Jenner & Block, Washington, DC, for defendants-appellees-cross-appellants MCI Telecommunications Corp., MCImetro Access Transmission Services, Inc., Worldcom Technologies, Inc., and Brooks Fiber Communications of Tucson, Inc.
Michael Patten, Brown & Bain, P.A., Phoenix, AZ, for defendant-appellee-cross-appellant e-spire Communications.
Daniel M. Waggoner, Davis Wright Tremaine LLP, Seattle, WA, for defendants-appellees-cross-appellants AT & T Wireless Services, Inc.
Maureen A. Scott, Phoenix, AZ, for defendants-appellees Arizona Corporate Commission.
Appeal from the United States District Court for the District of Arizona; Owen M. Panner, Senior Judge, Presiding. D.C. No. CV-97-00026-OMP.
Before GOODWIN, GRABER, and W. FLETCHER, Circuit Judges.
These appeals require us to determine whether various interconnection agreements, arbitrated and approved by the Arizona Corporation Commission ("ACC"), between U.S. West Communications ("US West")1 and competing telephone companies are consistent with the Telecommunications Act of 1996, Pub.L. 104-104, 100 Stat. 56 ("the Act"), and its implementing regulations. We address the threshold issue of whether Federal Communication Commission ("FCC") regulations that have taken effect after the ACC's decisions are applicable to the interconnection agreements before us, and we conclude below that they are. We then apply those regulations to the terms of the interconnection agreements and address the remaining eleven disputes.
Providing telephone service requires physically wiring each customer's premises to a network of other customers who also have telephone lines. These networks traditionally have been owned and operated by a single utility, the local telephone company, referred to under the Act as the incumbent local exchange carrier ("ILEC"). The prohibitive cost to potential competitors, referred to under the Act as competitive local exchange carriers ("CLECs"), of laying wire and creating other facilities to support an alternative physical network has stifled competition in local phone markets. The traditional legal approach to this "natural" monopoly has been for states to regulate the ILECs and their rates.
The Act was designed to alter this state-supported monopolistic market structure by creating a meaningful potential for competition in the provision of local and long-distance telephone service. To achieve this end, the Act preempts state laws that have the effect of prohibiting competitors' ability to enter the telecommunications market. See 47 U.S.C. § 253(a). The Act further requires, among other things, telecommunications carriers to connect with each other; ILECs to provide requesting CLECs with access to "unbundled network elements" (that is, to discrete components of the existing ILEC network); and ILECs to offer for resale at wholesale rates any telecommunications services that an ILEC sells to its subscribers. See id. § 251(a)-(c). The Act charges the FCC with "establish[ing] regulations to implement the[se] requirements." Id. § 251(d)(1). The FCC accordingly has promulgated various rules that provide access and pricing standards for network elements and retail services.
The Act directs the ILECs and CLECs to negotiate in good faith to reach an agreement over the terms of their interconnection. See id. §§ 251(c)(1), 252(a). If an ILEC and a CLEC are unable to agree, the Act provides for binding arbitration conducted under the aegis of a state public utilities commission. See id. § 252(b). Arbitrated interconnection agreements, the only type of agreement at issue in these cases, must meet the requirements of § 251, including the FCC's regulations implementing § 251; set prices for network elements and services pursuant to § 252(d); and provide an implementation schedule. See id. § 252(c). State commissions must formally approve arbitrated agreements, ensuring that they comply with the above requirements. See id. § 252(e). After such approval, any party to the agreement may bring suit in federal district court "to determine whether the agreement ... meets the requirements" of the Act. Id. § 252(e)(6).
In Arizona, U.S. West is the ILEC, and the ACC is the state body that regulates telephone service. In the spring of 1996, shortly after the Act was passed, U.S. West began negotiating interconnection agreements with numerous CLEC competitors. Without exception, those negotiations failed, and the parties petitioned the ACC for arbitration. Beginning in late 1996, the ACC arbitrated and approved interconnection agreements among the parties. The ACC issued the last of the relevant arbitration decisions, establishing permanent prices (to replace the interim rates for unbundled loop and network elements set in earlier agreements) based on cost studies, on January 30, 1998. The parties filed separate suits in federal district court in Arizona challenging various portions of the agreements. The cases were consolidated in the district court which, on May 4, 1999, granted summary judgment, upholding some provisions of the agreements and invalidating others. US West timely appealed, and several CLECs timely cross-appealed. US West subsequently dismissed its appeal, so only the CLECs' cross-appeals remain before us.
We originally submitted these appeals following oral argument on July 12, 2000. Six days later, the Eighth Circuit Court of Appeals vacated a number of FCC regulations, including certain provisions potentially relevant to the issues on appeal. See Iowa Utils. Bd. v. FCC, 219 F.3d 744 (8th Cir.2000). The Eighth Circuit, in part, (1) 47 C.F.R. § 51.505(b)(1), holding that the FCC's pricing methodology based on the total element long-run incremental cost ("TELRIC") of an element was contrary to § 252(d)(1) to the extent that it was based upon a hypothetical network standard; (2) 47 C.F.R. § 51.609, holding that the "avoided cost" discount for wholesale rates under § 252(d)(3) must be based on actual costs rather than "costs that reasonably can be avoided"; (3) vacated proxy price rules 47 C.F.R. §§ 51.513, 51.611, and 51.707, holding that setting specific prices intrudes on the states' right to set the actual rates pursuant to § 252(c)(2) and that the FCC was estopped from arguing otherwise; (4) 47 C.F.R. § 51.317 (), in light of Supreme Court precedent finding parallel standards invalid; and (5) vacated additional combination rule 47 C.F.R. § 51.315(c) through (f), holding that requiring ILECs to combine unbundled network elements was contrary to § 252(c)(3). See id. at 750-51, 755-59. Because the Eighth Circuit is the sole forum for addressing the validity of those FCC rules, see MCI Telecomms. Corp. v. U.S. West Communications, 204 F.3d 1262, 1267 (9th Cir.2000), cert. denied, 531 U.S. 1001, 121 S.Ct. 504, 148 L.Ed.2d 473 (2000), we withdrew these appeals from submission and ordered supplemental briefing on the effect of the Eighth Circuit's decision.
The Supreme Court then granted certiorari, limited to certain questions, in the Eighth Circuit case on January 22, 2001. See Verizon Communications, Inc. v. FCC, 531 U.S. 1124, 121 S.Ct. 877, 148 L.Ed.2d 788 (2001). On May 13, 2002, the Supreme Court reversed the Eighth Circuit, holding (1) that the FCC can require state commissions to set rates for network elements based on TELRIC methodology with reference to a...
To continue reading
Request your trial
-
Verizon New York Inc. v. Global Naps, Inc.
...proposed by a CLEC, the ILEC must show that it is not technically feasible. See 47 C.F.R. § 51.305(e). See also US West Comms., Inc. v. Jennings, 304 F.3d 950, 961 (9th Cir.2002). At the same time, "[w]hile the ILEC cannot be required to allow interconnection at technically unfeasible point......
-
W. Radio Servs. Co. v. Qwest Corp.
...an arbitrated, approved ICA complies with the requirements of the Act and its implementing regulations. U.S. W. Commc'ns, Inc. v. Jennings, 304 F.3d 950, 958 (9th Cir.2002). We review all other issues, including the state commission's factual findings, under an arbitrary and capricious stan......
-
Indiana Bell Tel. Co., Inc. v. McCarty
...251 and 252 of the Act. Id. On appeal, we review the district court's interpretation of the Act de novo. US W. Communications v. Jennings, 304 F.3d 950, 956 (9th Cir. 2002). II. We turn now to the issues before us on appeal. Each of these issues was contested during the IURC arbitration and......
-
Comcast of Or. II, Inc. v. City of Beaverton
...any level of deference or conducting an independent analysis of the soundness of the FCC order. See, e.g. , US W. Commc'ns, Inc. v. Jennings , 304 F.3d 950, 958-63 (9th Cir. 2002) (stating that under the Hobbs Act, the court must "apply all valid implementing FCC regulations now in effect" ......
-
Rules for patents.
...involve appellate review by more than one court). (295.) 28 U.S.C. [section] 2342. (296.) See, e.g., U.S.W. Commc'ns, Inc. v. Jennings, 304 F.3d 950, 958 n.2 (9th Cir. 2002); GTE South, Inc. v. Morrison, 199 F.3d 733, 743 (4th Cir. (297.) See 35 U.S.C. [section] 282. (298.) See, e.g., Doug ......