Verizon New England v. Maine Public Utilities, No. CIV.05-53-B-C.

• Decision Date: 30 November 2005
• Docket Number: No. CIV.05-53-B-C.
• Citation: 403 F.Supp.2d 96
• 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

403 F.Supp.2d 96

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

No. CIV.05-53-B-C.

United States District Court, D. Maine.

November 30, 2005.

Catherine R. Connors, Pierce, Atwood LLP, Portland, ME, Donald W. Boecke, Verizon Communications, Boston, MA, Mark E. Porada, Pierce, Atwood LLP, William D. Hewitt, Pierce, Atwood LLP, Portland, ME, for Verizon New England Inc doing business as Verizon Maine, Plaintiff.

Trina M. Bragdon, Maine Public Utilities Commission, Andrew S. Hagler, Maine Public Utilities Commission, Augusta, ME, for Public Utilities Commission of Maine, Stephen L. Diamond In his official capacity as Commissioner of the Maine Public Utilities Commission, Sharon M. Reishus In her official capacity as Commissioner of the Maine Public Utilities Commission, John Doe In his official capacity as Commissioner of the Maine Public Utilities Commission, Kurt W. Adams in his official capacity as Commissioner of the Maine Public Utilities Commission, Defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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 a Preliminary Injunction. Docket Item No. 28. Plaintiff seeks an order that will enjoin the Public Utilities Commission of Maine (hereinafter "PUC") from enforcing its September 3, 2004, March 17, 2005, and September 13, 2005 Orders in Docket No. 2002-682, or issuing any additional orders, setting or enforcing any rates set by the PUC for any network element not required to be unbundled¹ by the FCC under § 251, but required to be provided under § 271 of the Telecommunications Act, 47 U.S.C. §§ 151 et seq., (hereinafter "the Act"). The request for the injunction is based upon the Plaintiff's assertion that Congress gave the Federal Communication Commission (hereinafter "FCC") exclusive jurisdiction to make all such regulatory determinations under § 271, that the PUC's orders conflict with FCC orders and regulations, and that the PUC's orders thwart federal communications policy, all in violation of the Supremacy Clause of the Constitution of the United States. Plaintiff asserts that the PUC orders are causing it irreparable harm, that the balance of harms favors Plaintiff, and that the loss of benefit to the public supports an order of this Court enjoining enforcement of the PUC's allegedly unlawful orders pending resolution of the present case.

I. FACTS

A. FCC Proceedings and Orders

Since 1996 the FCC has issued a series of orders to implement § 251's "impairment" standard for unbundled access to non-proprietary network elements. In 1999 the FCC's UNE Remand Order found that, on a national basis, competitors are impaired in their ability to compete for consumers in the "mass market" (generally residential or small business customers) without unbundled access to selected network elements specified by the FCC. Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, Third Report and Order and Fourth Notice of Proposed Rulemaking, CC Docket No. 96-98, 15 FCC Rcd 3696 (1999) (hereinafter "UNE Remand Order"). One month after issuing the UNE Remand Order, the FCC entered a second order, the Line Sharing Order, in which it held that other network elements were also subject to unbundling pursuant to § 251. Deployment of Wireline Services Offering Advanced Telecommunications Capability and Implementation of Local Competition Provisions of the Telecommunications Act of 1996, Third Report and Order in CC Docket No. 98-147 and Fourth Report and Order in CC Docket No. 96-98 (1999) (hereinafter "Line Sharing Order").

On appeal of the UNE Remand Order and the Line Sharing Order, the Court of Appeals for the District of Columbia Circuit vacated the FCC's unbundling findings, concluding that the FCC had failed to apply reasonable limits to the term "impairment" in the Act. See U.S. Telecom Ass'n v. FCC, 290 F.3d 415, 427-28 (D.C.Cir.2002) ("USTA I"). After remand of USTA I, the FCC issued its Triennial Review Order (hereinafter "TRO"), in which the FCC no longer required unbundled access to certain network elements under § 251. Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers; Implementation of the Local Competition Provisions of the Telecommunications Act of 1996; Deployment of Wireline Services Offering Advanced Telecommunications Capability, Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, CC Docket Nos. 01-338, 96-98, 98-147, 18 FCC Rcd 16978 (2003) ("TRO"). The FCC also determined, however, that § 271 created unbundling obligations in addition to and independent of § 251. Id. ¶ 653. For elements required to be unbundled pursuant to § 271 (hereinafter "§ 271 UNEs"), but not pursuant to § 251 (hereinafter "§ 251 UNEs"), the FCC determined that they must be priced on a "just, reasonable, and not unreasonably discriminatory basis." Id. ¶ 656. The TRO was appealed and the Court of Appeals for the District of Columbia Circuit affirmed in part and vacated in part the actions taken by the FCC in the TRO. U.S. Telecom Ass'n v. FCC 359 F.3d 554, 561-63 (D.C.Cir.2004) ("USTA II").

In 2005, the FCC issued the TRRO, which further limited the incumbent local exchange carriers (hereinafter "ILECs") § 251 unbundling obligation by no longer requiring selected UNEs pursuant to that section. Unbundled Access to Network Elements, Order on Remand, WC Docket No. 04-313; CC Docket No. 01-338, 20 FCC Rcd 2533 (2005) (hereinafter "TRRO"). In addition to delisting certain § 251 UNEs, the TRRO also established a transition plan for the industry.² Id. ¶¶ 226-228.

After the FCC issued the TRRO, Verizon formally notified competitive local exchange carriers (hereinafter "CLECs") that unbundled access to the UNEs eliminated by the FCC in the TRRO for new customer orders would cease to be available on March 11, 2005, the effective date of that order. Several CLECs objected to Verizon's notice and sought declaratory relief and/or a temporary order from the PUC that Verizon must continue to provide unbundled access to de-listed § 251 UNEs until the parties negotiated and amended their interconnection agreements to conform those agreements to the new federal unbundling rules.

B. PUC Proceedings and Orders

The Act specifically delegates to state commissions certain responsibilities. For example, relevant to the issues presented in this case, under § 252 of the Act, the PUC is authorized to evaluate and enforce through arbitration Verizon's compliance with Section 251 unbundling, as those unbundling obligations are determined by the FCC. See 47 U.S.C. §§ 251(c) and 252. In addition, § 271(d) requires the FCC to "consult" with the PUC to verify a BOC's compliance with § 271(c) competitive checklist items. See 47 U.S.C. §§ 271(c) and (d). In March of 2002, Verizon agreed to file a state tariff covering its unbundling obligations as a condition to the PUC's recommendation to the FCC in that Verizon's § 271 application to provide long distance service in Maine be approved. Based in part on the PUC's recommendation, the FCC approved Verizon's § 271 application to enter the long distance market. Application by Verizon New England Inc. for Authorization to Provide In-Region, InterLATA Services in Maine, Memorandum Opinion and Order, CC Docket No. 02-61, 17 FCC Rcd 11659 (2002). On November 1, 2002, Verizon filed a proposed tariff for review by the PUC that incorporated the terms of Verizon's Section 251 unbundling obligations as they existed on that date. Verizon's proposed tariff did not include rates for § 271 UNEs.

The tariff was under PUC review (and thus not effective) when the FCC issued its TRO in August 2003, and that tariff apparently remains under review by the PUC at this time. On October 31, 2003, Verizon submitted modifications to its pending proposed tariff to eliminate rates for those elements of its network to conform its proposed state tariff rates to the FCC's delisting determinations made in the TRO. In December of 2003, various CLECs opposed Verizon's elimination from the pending tariff elements that the FCC ruled in the TRO were no longer § 251 UNEs, arguing that the PUC had authority to require Verizon to tariff its obligations to continue providing the delisted § 251 UNEs.

On September 3, 2004, the PUC issued its first order in the Wholesale Tariff Proceeding resolving preliminary legal issues. 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) (Wholesale Tariff Proceeding) (hereinafter "September 2004 Order") at 1. The PUC found 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 id. at 12. The PUC further found that, by agreeing to file such a tariff in Maine, Verizon had consented to the PUC's review of the tariff for compliance with § 271 obligations.³ Id. at 14. The PUC made clear that it was not suggesting that it had authority to define the scope of Verizon's § 271 obligations where the FCC had clearly spoken. Id. at 14. Instead, the PUC found that, in light of Verizon's specific commitment to the PUC and the PUC's authority under state law, the PUC had an independent role in determining whether those obligations have been met. Id.

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. To support this requirement, the PUC found it had authority to enforce the FCC's "just and reasonable" pricing standard for § 271 UNEs. Id. at 19-20. The PUC adopted the...