Verizon New England v. Maine Pub. Utilities Com'n, Civil No. 05-53-B-C.

• Citation: 441 F.Supp.2d 147
• Decision Date: 18 July 2006
• Docket Number: Civil No. 05-53-B-C.
• Parties: VERIZON NEW ENGLAND INC. d/b/a Verizon Maine, Plaintiff v. MAINE PUBLIC UTILITIES COMMISSION et al., Defendants.
• Court: U.S. District Court — District of Maine

441 F.Supp.2d 147

VERIZON NEW ENGLAND INC. d/b/a Verizon Maine, Plaintiff v. MAINE PUBLIC UTILITIES COMMISSION et al., Defendants.

Civil No. 05-53-B-C.

United States District Court, D. Maine.

July 18, 2006.

COPYRIGHT MATERIAL OMITTED

Catherine R. Connors, Mark E. Porada, William D. Hewitt, Pierce, Atwood LLP, Portland, ME, Donald W. Boecke, Verizon Communications, Boston, MA, Scott H. Angstreich, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, for Plaintiff.

Trina M. Bragdon, Andrew S. Hagler, Maine Public Utilities Commission, Augusta, ME, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, FOR JUDGMENT ON THE PLEADINGS

GENE CARTER, Senior District Judge.

This case is before the Court on the Motion of the Plaintiff, Verizon New England Inc. d/b/a Verizon Maine for Summary Judgment or, Alternatively, for Judgment on the Pleadings (Docket Item No. 74) and on Defendants Maine Public Utilities Commission and the Commissioners of the Maine Public Utilities Commission's Motions for Judgment on the Pleadings (Docket Item No. 71)¹ and for Summary Judgment (Docket Item No. 82). Verizon Maine ("Verizon") seeks an order declaring that the Maine Public Utilities Commission's ("PUC") September 3, 2004, March 17, 2005, and September 13, 2005 Orders, and other Orders in collateral dockets, are unlawful. The Court previously denied Verizon's Motion for Preliminary Injunctive relief. Docket Item No. 70.

I. FACTS²

Verizon is an "incumbent local exchange carrier" ("ILEC") within the meaning of the 1996 Telecommunications Act ("TCA"). See 47 U.S.C. § 251(h)(1). Verizon, as successor to New England Telephone and Telegraph Company, is also a Bell Operating Company ("BOC") within the meaning of the TCA. See 47 U.S.C. § 153(4). In a letter dated March 1, 2002, the PUC advised Verizon that as a condition of its support of Verizon's Application to the FCC for permission to enter the Inter-LATA long distance market in Maine, it would require a commitment by Verizon to, inter alia, file a wholesale tariff for the Commission's review and approval. In a letter dated March 4, 2002, Verizon responded to the Commission's letter by committing to meet all of the PUC's conditions set forth in the March 1, 2002 letter, including the requirement that it file a wholesale tariff for the Commission's review and approval. Verizon filed a proposed wholesale tariff covering Verizon's network interconnection, unbundling, and resale obligations under § 251 with the PUC on November 1, 2002.

On September 3, 2004, the PUC issued its first order in Verizon's Wholesale Tariff Proceeding finding that Verizon's agreement to file a "wholesale tariff" included all of Verizon's wholesale obligations, both those under § 251 as well as those under § 271 of the Act. See VERIZON MAINE, Proposed Schedules, Terms, Conditions and Rates for Unbundled Network Elements and Interconnection (PUC 20) and Resold Services (PUC 21), Order-Part II, Docket No. 2002-682 (Me.P.U.C. Sept. 3, 2004) at 12. Verizon's proposed tariff did not include rates for § 271 unbundled network elements ("UNEs"). With regard to the pricing of Verizon's wholesale offerings, the PUC found that until Verizon submitted and the PUC approved tariffs for § 271 UNEs, Verizon must continue to provide § 271 UNEs at TELRIC rates.³ The PUC adopted the previously-approved TELRIC rates for § 271 UNEs as a temporary measure until Verizon filed a tariff proposing rates which used the FCC's "just and reasonable" standard under §§ 201 and 202. Id.

In February 2005, after the FCC issued the Triennial Review Remand Order ("TRRO") further modifying the ILECs' unbundling requirements pursuant to § 251, additional disputes arose between Verizon and the CLECs regarding Verizon's obligations to provide UNEs in Maine and resulted in supplemental filings at the PUC by Verizon and the CLECs. Triennial Review Remand Order, Unbundled Access to Network Elements, Order on Remand, WC Docket No. 04-313; CC Docket No. 01-338, 20 FCC Red 2533 (2005). On March 17, 2005, the PUC issued an order denying the CLECs' requested relief from the TRRO. See VERZON MAINE, Proposed Schedules, Terms, Conditions and Rates for Unbundled Network Elements and Interconnection (PUC 20) and Resold Services (PUC 21), Order, Docket No. 2002-682 (Me. P.U.C. March 17, 2005). In addition, the PUC reminded Verizon that it remained obligated to comply with the September 3, 2004 order and encouraged the parties to bring any disagreements concerning which UNEs qualify as § 271 UNEs to the commission. Finally, on September 13, 2005, the PUC issued an order addressing the current legal status of each of the UNEs appearing on a joint matrix submitted by the parties in September 2004. See VERZON MAINE, Proposed Schedules, Terms, Conditions and Rates for Unbundled Network Elements and Interconnection (PUC 20) and Resold Services (PUC 21), Order, Docket No. 2002-682 (Me. P.U.C. Sept. 13, 2005) (hereinafter "September 13, 2005 Order"). The PUC found that it had "authority to make such determinations, absent an order from the FCC making specific contrary findings, under sections 251, 252 and 271 of the TelAct and under the terms of Verizon's commitment to file a wholesale tariff in our 271 Proceeding", and that it was "acting within [its] authority under both state and federal law." Id. at 6. Additionally, the PUC purported to resolve a dispute between Verizon and Biddeford Internet Corporation d/b/a Great Works Internet ("GWI"), determining that their interconnection agreement required Verizon to provide GWI with § 271 elements at the rates set by the PUC.

Verizon contends that these orders are unlawful for four reasons: (1) the PUC lacks authority to set rates for elements required by § 271; (2) federal law preempts the PUC's requirement that elements required by § 271 be provided at TELRIC rates on a temporary basis; (3) the PUC erroneously interpreted § 271 to include elements not covered by that section; and (4) the PUC erroneously interpreted the interconnection agreement to require the provision of elements required by § 271 at rates set by the PUC. For the reasons stated below, Verizon is unable to succeed on any of these claims, and, accordingly, Defendants are entitled to judgment as a matter of law.

II. ANALYSIS

Summary judgment is appropriate only if the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "In this regard, `material' means that a contested fact has the potential to change the outcome of the suit under the governing law if the dispute over it is resolved favorably to the nonmovant. By like token, `genuine' means that the evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party.'" Navarro v. Pfizer Corp., 261 F.3d 90, 93-94 (1st Cir.2001) (quoting McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 315 (1st Cir.1995)). The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether this burden is met, the court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor. Nicolo v. Philip Morris, Inc., 201 F.3d 29, 33 (1st Cir.2000). Once the moving party has made a preliminary showing that no genuine issue of material fact exists, the nonmovant must "produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue." Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir.1999) (citation and internal punctuation omitted); Fed.R.Civ.P. 56(e). "As to any essential factual element of its claim on which the nonmovant would bear the burden of proof at trial, its failure to come forward with sufficient evidence to generate a trialworthy issue warrants summary judgment to the moving party." In re Spigel, 260 F.3d 27, 31 (1st Cir.2001) (citation and internal punctuation omitted).

A. Whether the PUC may lawfully set rates for elements required by § 271

Verizon first argues that the PUC cannot lawfully set rates for elements required by § 271.⁴ The resolution of this matter, Verizon contends, turns upon whether "Congress conferred on state commissions the authority to regulate and enforce the Section 271 obligations." Plaintiff's Motion for Summary Judgment at 14. The Court disagrees. Federal law is not the only source of the PUC's authority. The state of Maine "has granted broad authority to the PUC to make orders that are necessary to carry out the purpose of making modern telecommunications services more available and affordable to Maine residents upon terms that are just and reasonable." ⁵ Verizon New England, Inc., v. Public Utilities Commission, 2005 ME 64, ¶ 19, 875 A.2d 118, 123. Thus, in order to succeed on its claim, Verizon must demonstrate that this power has been preempted; an argument that Verizon fails to make here.⁶ Accordingly, Verizon is unable to demonstrate that the PUC may not lawfully set rates for elements required by § 271.

B. Whether the PUC's Decision to Require TELRIC Rates is Preempted

Verizon next argues that, even if the PUC has some authority to set rates for elements required by § 271, the PUC's decision to temporarily require TELRIC pricing for § 271 elements conflicts with federal law and is, therefore, preempted. On this issue, Verizon presents no new facts and makes no additional arguments to those it offered in seeking preliminary injunctive relief. For the reasons stated in the Court's Order Denying Preliminary Injunction, Verizon New England, 403 F.Supp.2d at 102-05, the Court remains persuaded that Verizon is unable to demonstrate that the...