Wwc License, L.L.C. v. Boyle, 05-1725.

• Citation: 459 F.3d 880
• Decision Date: 23 August 2006
• Docket Number: No. 05-1726.,No. 05-1725.,05-1725.,05-1726.
• Parties: WWC LICENSE, L.L.C., Plaintiff-Appellee, v. Anne C. BOYLE, Chairman, in their official capacities as Commissioners of the Nebraska Public Service Commission; Frank E. Landis, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Lowell C. Johnson, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Rod Johnson, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Gerald L. Vap, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Defendants, Great Plains Communications, Inc., Defendant-Appellant. WWC License, L.L.C., Plaintiff-Appellant, v. Anne C. Boyle, Chairman, in their official capacities as Commissioners of the Nebraska Public Service Commission; Frank E. Landis, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Lowell C. Johnson, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Rod Johnson, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Gerald L. Vap, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

459 F.3d 880

WWC LICENSE, L.L.C., Plaintiff-Appellee, v. Anne C. BOYLE, Chairman, in their official capacities as Commissioners of the Nebraska Public Service Commission; Frank E. Landis, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Lowell C. Johnson, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Rod Johnson, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Gerald L. Vap, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Defendants, Great Plains Communications, Inc., Defendant-Appellant.

WWC License, L.L.C., Plaintiff-Appellant, v. Anne C. Boyle, Chairman, in their official capacities as Commissioners of the Nebraska Public Service Commission; Frank E. Landis, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Lowell C. Johnson, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Rod Johnson, Jr., Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Gerald L. Vap, Commissioner, in their official capacities as Commissioners of the Nebraska Public Service Commission; Defendants-Appellees.

No. 05-1725.

No. 05-1726.

United States Court of Appeals, Eighth Circuit.

Submitted: December 12, 2005.

Filed: August 23, 2006.

COPYRIGHT MATERIAL OMITTED

Paul M. Schudel, argued, Lincoln, NE. (James A. Overcash, Lincoln, NE, on the brief), for appellant.

Philip R. Schenkenberg, argued, Minneapolis, MN (Steven G. Seglin, Lincoln, NE, on the brief), for appellee.

Before MELLOY, COLLOTON and BENTON, Circuit Judges.

MELLOY, Circuit Judge.

Both sides appeal a district court¹ judgment affirming in part and reversing in part two rulings from the Nebraska Public Service Commission ("Commission") under 47 U.S.C. § 252(e)(6), a section of the Telecommunications Act of 1996 ("Act"). In the first ruling, the Commission ordered amendments to an interconnection agreement between Great Plains Communications, Inc. ("Great Plains"), an incumbent local exchange carrier, and WWC License, L.L.C. ("Western Wireless" or "Western"), a competitive wireless carrier. In the second ruling, the Commission approved the amended agreement. The rulings dealt with various issues including: the duty to interconnect the two parties' telephone networks under 47 U.S.C. § 251(a); the scope of the incumbent's statutory duty to provide dialing parity under § 251(b)(3); the reciprocal compensation rate to be paid between the two parties under § 251(b)(5); and the payment of interim compensation under 47 C.F.R. § 51.715 for a period of time predating the effective date of the interconnection agreement. We affirm the judgment of the district court.

I. General Background

Historically, incumbent local exchange carriers served as the exclusive providers of local telephone service and operated as state-sanctioned monopolies. With the Act, Congress moved to abolish the system of monopolies in favor of a competitive system with multiple potential carriers. Under the Act, competitive carriers — land-based or wireless—may compete with incumbent carriers for the provision of local service. To facilitate the market entry of competitors and ensure the integration of competitors' networks with incumbents' networks, the Act imposes certain specific duties and costs upon incumbent carriers. See 47 U.S.C. § 251(c)(1)-(6) (enumerating incumbent-specific duties). The Act imposes other duties on incumbent and competitive carriers alike, such as the duty to interconnect directly or indirectly and to provide number portability, dialing parity, access to rights-of-way, and reciprocal compensation for the transport and termination of telecommunications. 47 U.S.C. § 251(a) and (b).²

The specific statutory duties in dispute in this case are subsection (a) and (b) duties. One of these duties is the duty of both carriers to directly or indirectly interconnect their networks under § 251(a)(1). As the labels suggest, direct connections between carriers involve actual physical points of interconnection between networks; indirect connections involve connections via third parties' networks.

Another duty at issue is the duty of carriers to provide local dialing parity. Local dialing parity includes the recognition of local numbers for competitors' customers and the treatment of certain calls between carriers' customers as local calls, with seven-digit dialing. The obligation to provide dialing parity is found in § 251(b)(3) and 47 C.F.R. § 51.207. This obligation reflects a congressional determination that local dialing is important to provide a level playing field, promote competition, and eliminate artificial barriers that might prevent customers from switching carriers. See Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, 11 F.C.C.R. 19392, 19398-400 at ¶¶ 1, 3-4, 1996 WL 819798 (August 8, 1998) ("Second Report and Order") (discussing the Act and its history, including S. Conf. Rep. No. 104-230).

The final duty at issue is the duty of the parties to pay one another reciprocal compensation. Reciprocal compensation is payment from the carrier who originates a call to the carrier who terminates or receives a call. Reciprocal compensation is intended to permit the carrier for the customer who receives a call to recoup from the caller's carrier those expenses incurred for terminating the call or sending it to its final destination. See Ace Tel. Ass'n v. Koppendrayer, 432 F.3d 876, 878 (8th Cir.2005); 47 U.S.C. § 252(d)(2)(A)(i) (stating that reciprocal compensation must "provide for the mutual and reciprocal recovery by each carrier of costs associated with the transport and termination on each carrier's network facilities of calls that originate on the network facilities of the other carrier"). The parties dispute the per-minute rate to be used for reciprocal compensation as well as the obligation to pay one another for telecommunications traffic that predated the Nebraska Commission's approval of the interconnection agreement.

II. Factual Background

Great Plains, the incumbent local exchange carrier, operates in specific areas of Nebraska known as local exchange service areas. Western Wireless, the competitive wireless carrier, operates under the trade name CellularOne throughout a substantial part of Nebraska known as a major trading area. The Western Wireless major trading area is larger than and overlaps or encompasses multiple Great Plains local exchange service areas.³

Great Plains, as an incumbent local exchange carrier, has substantial network infrastructure in each of its local exchange areas. This infrastructure includes wire loops that connect land-line phones as well as switching equipment for the physical routing of calls. The switches Great Plains currently uses are called end office switches. From these end office switches, Great Plains delivers and receives calls to and from locations outside its own networks over trunk lines. The trunk lines are connected to different switches called tandem switches. The tandem switches are owned by larger, interexchange carriers such as Qwest (formerly U.S. West Communications) and Alltel. Often, the tandem switches owned by the larger carriers are located at points that are physically outside the Great Plains local exchange networks.

Historically, when Great Plains routed calls outside its local exchange networks and passed the calls off to the interexchange carriers at the tandem switches, Great Plains treated the calls as toll calls for dialing and billing purposes, with the Great Plains customers using ten-digit dialing to place the calls. Great Plains treated calls within its individual local exchange networks, between numbers assigned to the same rate center, as local calls with seven-digit dialing.

Western Wireless began sending calls from its wireless customers to the land-line customers of Great Plains via interexchange carriers prior to March 1998. This practice was possible because Western Wireless entered into contracts with interexchange carriers and established physical points of interconnection with the interexchange carriers. Through these contracts and physical points of interconnection, Western Wireless was indirectly connected to the Great Plains networks.

The amount of traffic between Western Wireless and Great Plains increased quickly and substantially, and the two companies began informal negotiations on their own interconnection agreement in July 2001. Informal negotiations continued through August 26, 2002, when Western Wireless submitted a formal, bona fide request for the commencement of negotiations under Section 252 of the Act. See 47 U.S.C. § 251(c)(1) (imposing on requesting competitive carriers and incumbent carriers alike the duty to negotiate in good faith to establish terms and conditions for interconnection agreements); Id. at § 252 (setting forth the procedure for the negotiation, arbitration, and approval of interconnection agreements). Formal negotiations resulted in partial resolution, but the companies deadlocked on eight separate issues. The Nebraska Commission, which is required to approve interconnection agreements, referred the disputed issues to a neutral arbitrator for resolution. See 47 U.S.C. § 252(e)(1) (assigning the duty to approve interconnection agreements to state commissions).

Both parties submitted proposed contract language, testimony, and evidence in hearings before the arbitrator. On July 1, 2003, the arbitrator issued an opinion resolving most of the outstanding issues in Western's favor. Subsequently, on September 23, 2003, the Nebraska Commission reversed or modified the arbitrator's decision as to every issue presently on appeal. Western...