Wisconsin Bell, Inc. v. PUBLIC SERVICE COM'N,
| Decision Date | 19 August 2003 |
| Docket Number | No. 02-2783.,02-2783. |
| Citation | 670 N.W.2d 97,2003 WI App 193,267 Wis.2d 193 |
| Parties | WISCONSIN BELL, INC., (d/b/a Ameritech Wisconsin), a Wisconsin corporation, Petitioner-Respondent-Cross-Appellant, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent-Appellant-Cross-Respondent, MCI TELECOMMUNICATIONS CORPORATION, WorldCom Technologies, Inc., AT&T Communications of Wisconsin, L.P. and TCG Milwaukee, d/b/a AT&T Local Services, Co-Appellants-Cross-Respondents. |
| Court | Wisconsin Court of Appeals |
On behalf of the respondent-appellant-cross-respondent, the cause was submitted on the briefs of Michael S. Varda of Public Service Commission of Wisconsin, Madison. There was oral argument by Michael S. Varda.
On behalf of the co-appellants-cross-respondents, the cause was submitted on the briefs of Anne E. Rea and Sherry A. Knutson of Sidley Austin Brown & Wood, Chicago, Illinois; Niles Berman and Janet Kelly of Wheeler, Van Sickle & Anderson, S.C., Madison; Clark M. Stalker and Douglas W. Trabaris of AT&T Communications, Chicago, Illinois; William Single, IV and Brian J. Leske of WorldCom, Inc., Washington, DC; and John R. Harrington of Jenner & Block, LLC, Chicago, Illinois. There was oral argument by Niles Berman and Douglas W. Trabaris.
On behalf of the petitioner-respondent-cross-appellant, the cause was submitted on the briefs of John E. Flanagan and Jordan J. Hemaidan of Michael Best & Friedrich LLP, Madison; Theodore A. Livingston, John E. Muench and Demetrios G. Metropoulos of Mayer, Brown, Rowe & Maw, Chicago, Illinois; Steven R. Beck of Ameritech Wisconsin, Milwaukee; and John T. Lenahan of Ameritech Corporation, Chicago, Illinois. There was oral argument by Demetrios G. Metropoulos and John E. Flanagan.
Before Wedemeyer, P.J., Fine and Curley, JJ.
¶ 1.
AT&T Communications of Wisconsin, L.P., TCG Milwaukee (d/b/a AT&T Local Services), MCI Telecommunications Corporation, WorldCom Technologies, Inc., and the Public Service Commission of Wisconsin appeal from a modified trial-court judgment vacating part of an order issued by the Commission. Wisconsin Bell, Inc. (d/b/a Ameritech Wisconsin), cross-appeals from the same judgment.1 The sole issue on this appeal is whether the Commission acted within its statutory authority when it imposed what it characterizes as a "remedy plan" to ensure that Wisconsin Bell will make its facilities available fairly and efficiently to its competitors. The trial court, in a well-written and carefully reasoned decision, held that the remedy plan was structured as a prohibited penalty. We agree and affirm.2
¶ 2. The monopoly days of the Ma Bell of either our youth or of our institutional memory are gone. The old American Telephone and Telegraph Company spawned not only a gaggle of multi-generational offspring but its once ubiquitous Bakelite black telephones have given way to marvels beyond the dreams of most, even a bare decade ago.3 And competition among Ma Bell's progeny and others seeking a slice from the telecommunications pie is fierce. Congress passed the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996), to, as phrased by the Act's preamble, "promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies." Among the ways to achieve these goals is to have so-called "incumbent local exchange providers" (companies like Wisconsin Bell, who own the telephone infrastructure in a community, see 47 U.S.C. § 251(h)(1)), share their facilities with their competitors. See generally AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371-373 (1999). The Federal Communications Commission has called the Act a "momentous step of requiring that the incumbent [local exchange providers] open the traditionally non-competitive local exchange and exchange access markets to competition in order to foster the entry of alternative service providers." Matter of Application by Bell Atlantic New York, 15 F.C.C.R. 3953, 3956 (1999). Once they do so, the Act allows the incumbent local exchange providers to expand beyond their communities and enter the lucrative long-distance market. Ibid.; 47 U.S.C. § 271. The trial court characterized the prospect of entry into the long-distance market as Congress's "carrot"—the incentive for incumbent local exchange providers to eliminate the historical barriers to competitive local exchange service.
¶ 3. As noted, Wisconsin Bell, a Ma Bell descendant, is an incumbent local exchange provider. By virtue of that incumbency, it controls the infrastructure necessary for the provision of telecommunications services in the relevant area, which the Commission decision characterizes only as "many major urban areas of Wisconsin." The new folks on the block, those who want a piece of the action without having to build or provide their own facilities, are known as "competitive local exchange carriers." The corporate co-appellants are "competitive local exchange carriers," and they need access to Wisconsin Bell's facilities—designated as "operational support systems."4 Under the law, Wisconsin Bell has to share these services, and it must share fairly—it may not relegate the dregs to its competitors or the retail customers of those competitors. See 47 U.S.C. § 251(a)-(e),(g), & (h); and 47 U.S.C. § 259.
¶ 4. Congress recognized the important role state regulatory bodies, like the Commission, have in fulfilling the Congressional mandate for deregulation, technical growth, and consumer benefit, and gave them broad berth within their respective areas of responsibilities. See 47 U.S.C. § 251(c)(4)(B), (c)(6) & (d)(3); and 47 U.S.C. § 252(a), (b)(4), & (d)-(f). The main Wisconsin statute governing the Commission's responsibilities in connection with the issue presented by this appeal is WIS. STAT. § 196.219, the "Protection of Telecommunications Consumers" law. Section 196.219 "was part of 1993 Wis. Act 496, the `Information Superhighway Act,' taken up by the legislature in special session to partially deregulate the telecommunications utilities and encourage development of a competitive `telecommunications marketplace.'" Public Serv. Comm'n v. Wisconsin Bell, Inc., 211 Wis. 2d 751, 759 n.4, 566 N.W.2d 496, 500 n.4 (Ct. App. 1997). As we will see, other provisions of WIS. STAT. ch. 196 apply as well.
¶ 5. This case flows from, as phrased by its Final Decision, the Commission's sua sponte decision "to investigate and determine whether or not [Wisconsin Bell's operational support systems] for wholesale transactions with its competitors operate without discriminatory impact upon the competitors and provide access to [Wisconsin Bell]'s network." As the Commission's decision relates, most of the complex issues surrounding its investigation were resolved either by the Commission or by "extensive negotiations" by the parties assisted by the Commission's staff and a "consulting facilitator," and that this cooperation enhanced "the public interest in maximum competition" by having "fair `rules of engagement'" developed by "the market place participants themselves." Cooperation and negotiation are consistent with the Congressional goal of having incumbent local exchange providers attempt to work out fair and reasonable terms with their new competitors, the competitive local exchange carriers, under which the incumbents will supply the necessary operational support systems to the competitors. See 47 U.S.C. § 252(a). Congress also wanted the state regulatory bodies to help the negotiation process by either mediation, 47 U.S.C. § 252(a)(2), or compulsory arbitration, 47 U.S.C. § 252(b). There was one major issue, however, that the parties were not able to resolve, and, ultimately, was imposed by the Commission on its own: how to ensure that Wisconsin Bell does not discriminate against the competitive local exchange carriers in their access to the operational support systems.
¶ 6. As noted, the Commission set the parameters of an operational-support-systems plan under which Wisconsin Bell would supply support services to the competitive local exchange carriers and this plan was based partly on the parties' agreements and partly on the Commission's dictates. None of the parties on this appeal challenges that plan. Rather, Wisconsin Bell contends that the Commission did not have authority to impose what it calls its "remedy plan," which the Commission hoped would make the support-systems plan self-enforcing.
¶ 7. In its findings of fact underlying its decision to impose its remedy plan, the Commission determined:
None of the parties disputes these findings. Indeed, both sides, Wisconsin Bell on the one hand, and the competitive local exchange carriers on the other hand, submitted proposed remedy plans. The Commission rejected those plans, and, as noted, imposed one of its own, which is the subject of this appeal. Portions of the Commission's plan were based on Wisconsin Bell's proposal.
¶ 8. The Commission's core finding in support of its remedy plan is:
A reasonable remedy plan will encourage [Wisconsin Bell] to provide nondiscriminatory wholesale service comparable to its own retail service and impose a monetary disincentiveupon [Wisconsin Bell] if it fails to deliver that quality of service.
(Emphasis added.) Wisconsin Bell contends that the "monetary disincentive" imposed by the Commission is really a penalty because it is not tied to any actual damage or harm that might be suffered by either the competitive local exchange carriers or their retail customers, and, as such, it was beyond the Commission's power. We agree.
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