Wwc Holding Co., Inc. v. Sopkin, 04 CV 01682 RPM.
| Decision Date | 08 March 2006 |
| Docket Number | No. 04 CV 01682 RPM.,04 CV 01682 RPM. |
| Citation | 420 F.Supp.2d 1186 |
| Parties | WWC HOLDING CO., INC., Plaintiff, v. Gregory E. SOPKIN, Polly E. Page, and Carl Miller, in their Official Capacities as the Commissioners of the Public Utilities Commission of the State of Colorado, Defendants. |
| Court | U.S. District Court — District of Colorado |
Andrew Robert Newell, Krys Boyle, P.C., Denver, CO, Philip R. Schenkenberg, Briggs and Morgan, P.A., Minneapolis, MN, Stuart Harris Pack, Isaacson Rosenbaum, P.C., Denver, CO, for Plaintiff.
Michael Jay Santisi, Colorado Attorney General's Office, Denver, CO, for Defendants.
The plaintiff WWC Holding Co., Inc. ("Western Wireless"), a wireless telecommunications services provider, seeks declaratory and injunctive relief against the defendants, Commissioners of the Public Utilities Commission of Colorado ("Commission"), for imposing conditions to granting Western Wireless' application to be designated as an "eligible telecommunications carrier" ("ETC") under the Telecommunications Act of 1996, 47 U.S.C. §§ 151 et seq. ("Act"). The defendants are the individual Commissioners sued only in their official capacities on claims that the conditions imposed are preempted under the Act (Counts I-IV), violate Federal statutory and constitutional law for which the plaintiff seeks a remedy under 42 U.S.C. § 1983 (Count V), and exceed statutory authority granted under C.R.S. §§ 40-1-103 & 40-15-401 (Count VI). Subject matter jurisdiction for Counts I through V is claimed and found pursuant to 28 U.S.C. §§ 1331, 1337, and 1343(a) and Count VI pursuant to 28 U.S.C. § 1367. The plaintiff filed a motion for summary judgment on January 10, 2005. From the papers submitted and the January 17, 2006 hearing, the factual context giving rise to the legal questions presented is not in dispute.
The Telecommunications Act of 1996, which amended the Communications Act of 1934, 47 U.S.C. §§ 151 et seq., was enacted "to 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." Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56 (1996). See also Qwest Corp. v. F.C.C., 258 F.3d 1191, 1196 (10th Cir.2001). Affordable, quality telecommunications services for all Americans are referred to as "universal service" and include, among other services, local telephone service and access to emergency, directory-assistance, and long-distance services. 47 U.S.C. § 254(c); 47 C.F.R. § 54.101; Qwest Commun. Intern., Inc. v. F.C.C., 398 F.3d 1222, 1226 (10th Cir.2005); Qwest Corp. v. F.C.C., supra at 1195.
To make universal service available to all users, including customers in rural, insular, and high cost areas, the Act created an explicit funding mechanism.1 Unless exempt, every telecommunications carrier providing interstate telecommunications services must contribute to a Federal Universal Service Fund ("USF") to support universal service. 47 U.S.C. §§ 254(d) & (e). The Universal Service Administrative Company ("USAC") bills contributors, collects contributions, and disburses universal service support funds. 47 C.F.R. § 54.702. Contributions from telecommunications carriers are determined by the USAC using a quarterly contribution factor calculated by the FCC.2 47 C.F.R. § 54.709. Subject to a certain limit, these carriers, in turn, may recover their contribution costs through charges to end users, and may do so through a line item on a customer's bill. 47 C.F.R. § 54.712.
Support from the USF to provide service for high-cost consumers is available to a common carrier who is designated as an "eligible telecommunications carrier" ("ETC") in the service area for which the designation is received. 47 U.S.C. §§ 254(e) & 214(e). Common carriers subject to the jurisdiction of a state commission are designated as ETCs by that state commission under 47 U.S.C. § 214(e)(2) while common carriers who are not subject to the jurisdiction of a state commission are designated as ETCs by the FCC under 47 U.S.C. § 214(e)(6).
The requirements for ETC designation in a requested service area are met if the applicant: 1) is a common carrier; 2) can offer each of the designated services identified in 47 C.F.R. § 54.101; and 3) will advertise its services. 47 U.S.C. § 214(e). To serve an area already served by a rural telephone company, the designation of the applicant as an ETC must serve the "public interest." Id. The "service area" is the geographic area established by a state commission or the FCC, as the case may be, where the ETC is required to comply with universal service obligations and is eligible to receive universal service support. 47 U.S.C. § 214(e)(5). Generally, in an area served by a rural telephone company, it means the rural company's "study area," the area used by the FCC to determine support for rural telephone companies. 47 U.S.C. § 214(e)(5).
The Federal universal service support funds can only be used "for the provision, maintenance, and upgrading of facilities and services" in the service area where the carrier is designated as an ETC and state commissions must file an annual certification to that effect. 47 U.S.C. § 254(e); 47 C.F.R. §§ 54.313 & 54.314. Competitive ETCs serving the service area of an incumbent local exchange carrier ("ILEC") receive the same per-line amount of support that the ILEC would receive for serving the same customer.3 47 C.F.R. § 54.307. Currently, non-rural carriers' support is based on a forward-looking economic cost model of providing services designated for universal service support while rural carriers' support is based on their embedded or historical costs. Kathleen Q. Abernathy, 3 J. Telecom. & High Tech. L. 409, 415-416 (2005); IN THE MATTER OF FEDERAL-STATE JOINT BD. ON UNIV. SERV., Report and Order, 12 F.C.C.R. 8776, 8934-8936, 1997 WL 236383 (1997) ("1997 Report and Order"); IN THE MATTER OF FEDERAL-STATE JOINT BD. ON UNIV. SERV., Recommended Decision, 19 F.C.C.R. 4257, 4259, 4294-4295, 2004 WL 369091 (2004); IN THE MATTER OF FEDERAL-STATE JOINT BD. ON UNIV. SERV., Report and Order, 20 F.C.C.R. 6371, 6376, 2005 WL 646635 (2005) ("2005 Report and Order"). Although limiting federal subsidy support to a single connection per customer has been considered, there is currently no limit on the number of "carriers [that] may receive support in high-cost areas, [or] the number of supported connections each carrier provides to a customer." 3 J. Telecom. & High Tech. L., supra at 416. See 2005 Report and Order, supra at 6376, 2005 WL 646635.
Colorado has created its own state universal service fund, the Colorado High Cost Support Mechanism, with contributions from providers of intrastate telecommunications service to the public. 4 Colo. Code Regs. § 723-41-7.1. A carrier may be eligible to receive this state funding if it is designated as an "eligible provider" or "EP" under 4 Colo.Code Regs. §§ 723-41-1 et. seq. and C.R.S. § 40-15-208. A carrier may be designated as a federal ETC without being designated as a state EP. In Colorado, the Commission is responsible for designating ETCs and EPs.
Western Wireless is a "telecommunications carrier" as that term is defined in the Act and provides commercial mobile radio services ("CMRS") in Colorado and other states. Consistent with the manner in which wireless carriers operate, Western Wireless bundles intrastate and interstate services together in service packages which do not distinguish between or separately bill for interstate and intrastate calls.
In May 2001, upon applications filed by Western Wireless, the Commission designated Western Wireless as a federal ETC and state EP for certain areas ("WWI Areas") in Colorado pursuant to a Stipulation and Settlement Agreement ("Stipulation") entered into by Western Wireless, the Office of Commission Staff ("Staff"), and the Office of Consumer Counsel. (Record Vol. 5 at 001103-1163.) Under the Stipulation, as relevant to this case, the parties agreed to the following:
1. the Stipulation has no legal effect outside of these proceedings and no precedential effect (Record Vol. 5 at 001107 & 001118);
2. Western Wireless will provide its ETC and EP universal service offerings in Colorado pursuant to the Stipulation (including attachments) and in accordance with a written Customer Service Agreement which contains Terms and Conditions in the form contained in Attachment 5 to the Stipulation (Record Vol. 5 at 001113 & 001129-1148);
3. Western Wireless' Operating Procedures applicable to its universal service offering in Colorado are contained in Attachment 6 of the Stipulation (Record Vol. 5 at 001113 & 001149-1160); and
4. Western Wireless will price its initial basic universal service ("BUS") offering in Colorado as described in the Service Description, Attachment 7 to the Stipulation, stated to be $14.99, excluding taxes and governmental assessments (Record Vol. 5 at 001113 & 001161-1163).
On February 14, 2003, Western Wireless filed an application with the Commission for designation as a federal ETC, but not a state EP, in other areas of Colorado ("WWII Areas"). These areas are served by CenturyTel of Eagle, Inc. ("CenturyTel"), the incumbent local exchange carrier. Western Wireless did not submit a BUS plan for review or approval. The Staff, CenturyTel, Colorado Telecommunications Association, Inc., and N.E. Colorado Cellular, Inc. ("NECC") intervened in the proceedings on Western Wireless' second application and a hearing was held. At that time, the Commission consisted of Commissioners Polly Page, Jim Dyer, and Gregory E. Sopkin, the Chairman.
By Decision dated May 26, 2004, the Commission, acting through Commissioners Page and Dyer, conditionally granted Western Wireless' application as follows:
.... [B]ased on the ... findings regarding our legal authority...
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Wwc Holding Co., Inc. v. Sopkin
...regulation, and concluded that the Telecommunications Act prohibited the PUC from engaging in such regulation. WWC Holding Co. v. Sopkin, 420 F.Supp.2d 1186 (D.Colo.2006). The district court also decided that the Telecommunications Act requires the PUC to engage in a rule-making for any con......