Atlas Telephone Co. v. Oklahoma Corp. Commission

400 F.3d 1256, 35 Communications Reg. (P&F) 1047, 2005 U.S. App. LEXIS 4020
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 10, 2005
DocketNos. 04-6096, 04-6098, 04-6100, 04-6101
StatusPublished
Cited by6 cases

This text of 400 F.3d 1256 (Atlas Telephone Co. v. Oklahoma Corp. Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlas Telephone Co. v. Oklahoma Corp. Commission, 400 F.3d 1256, 35 Communications Reg. (P&F) 1047, 2005 U.S. App. LEXIS 4020 (10th Cir. 2005).

Opinion

PAUL KELLY, JR., Circuit Judge.

In these consolidated appeals, Plaintiffs-Appellants rural telephone companies (“RTCs”) collectively appeal the district court’s orders affirming final orders of the Oklahoma Corporation Commission (“OCC”). The OCC orders established interconnection obligations under the federal Telecommunications Act of 1996 between the RTCs and Defendant-Appellees commercial mobile radio service (“CMRS”) providers. Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm.

Background

The RTCs are traditional landline telecommunications carriers doing business in Oklahoma. CMRS providers are wireless telecommunications carriers. This dispute arose from negotiations for interconnection agreements between the RTCs and CMRS providers.

The Telecommunications Act of 1996 (“Telecommunications Act” or “Act”), 47 U.S.C. §§ 151-614, opened the previously [1260]*1260monopolized telecommunications industry to competition. Under the Act, local exchange carriers (“LECs”),1 like the RTCs, have a duty to interconnect with competitors and negotiate agreements in. good faith. 47 U.S.C. §§ 251(a)(1), (c)(1). In the instant cases, the RTCs and CMRS providers resolved many outstanding issues during voluntary negotiations entered into pursuant to § 252(a)(1) of the Act. However, negotiations broke down over compensation for the transport and termination of telecommunications traffic. The CMRS providers subsequently filed petitions with the OCC seeking arbitration of the contested issues pursuant to § 252(b)(1) of the Act.

The parties raised numerous issues before the OCC-appointed arbitrator. Relevant here, the RTCs and CMRS providers disputed the compensation regime that would apply to the transport and termination of telecommunications between the parties’ networks. Under the terms of the interconnection agreements, the CMRS providers were not required to establish physical connections with the RTC networks, although the agreements, do not preclude such connections. Rather, telecommunications traffic could be routed through an interexchange carrier (“IXC”), Southwestern Bell Telephone Company (“SWBT”). When an RTC customer places a call to a CMRS customer, the call must first pass from the RTC network through a point of interconnection with the SWBT network. SWBT then routes the call to a second point of interconnection between its network and the CMRS network. The call is then delivered to the CMRS customer.2 In contrast, were the RTC and CMRS networks directly connected, the call would pass only through a single point of interconnection.

The CMRS providers maintained that, regardless of the presence of the IXC, the telecommunications exchange referenced above is subject to the reciprocal compensation obligations found in § 251(b)(5) of the Act. The Federal Communications Commission (“FCC”), charged with effectuating the provisions of the Act, has determined that reciprocal compensation should only apply to telecommunications traffic originating and terminating in the same local area. First Report and Order, FCC 96-325, CC Docket Nos. 96-98, 95-185, ¶ 1034 (Aug. 8, 1996) (“First Report and Order”). Under a typical reciprocal compensation agreement between two carriers, the carrier on whose network the call originates bears the cost of transporting the telecommunications traffic to the point of interconnection with the carrier on whose network the call terminates. Id. Having been compensated by its customer, the originating network in turn compensates the terminating carrier for completing the call. Id. In contrast, the RTCs maintained that traffic passing through an IXC is subject to the access charge, or long-distance calling, regime. Under the access charge regime, the originating caller pays the IXC, which in turn compensates the originating and terminating networks. Id. Thus, the RTCs contend that they have no obligation to compensate CMRS providers for transporting and terminating such traffic.

In the context of the instant cases, the difference between the compensation schemes is more than semantic. Under these reciprocal compensation agreements, [1261]*1261the originating network bears the cost of transporting telecommunications traffic across SWBT’s network to the point of interconnection with the terminating network. The originating network is then required -to compensate the terminating network for terminating the call. Under the Act, reciprocal compensation is based solely on the costs of transport and termination incurred by the terminating provider. 47 U.S.C. § 252(d)(2)(A). In contrast, under the access charge regime, both the originating and terminating carriers would be compensated by the IXC. Under this scenario, neither carrier bears the cost of transporting traffic on the IXC network.

Excepting traffic to or from a CMRS provided, state commissions are responsible for determining what areas are local for purposes of applying the reciprocal compensation obligation found in § 251(b)(5). First Report and Order ¶ 1035. However, the FCC has determined that “traffic to or from a CMRS network that originates and terminates within the same [Major Trading Area] is subject to transport and termination rates under section 251(b)(5), rather than interstate and intrastate - access charges.” Id. ¶ 1036. A major trading area (“MTA”) is the largest FCC-authorized wireless license territory, and might encompass all or part of numerous state-defined local calling areas. Id. Relying on this FCC determination, the OCC-appointed arbitrator determined that reciprocal compensation would apply to agreements between the RTCs and CMRS providers in the instant cases. The OCC subsequently approved provisions in the arbitrated agreements reflecting this determination.

In addition, and solely with respect to Defendant-Appellee WWC License L.L.C. (“Western Wireless”), the arbitrator determined that Western Wireless should have the option under the agreements to establish local numbers without establishing direct connections with the RTCs. This determination resulted in a provision under the OCC-approved interconnection agreement requiring an RTC to deliver calls to Western Wireless at a SWBT switch.

On completion of the arbitration, the conformed agreements were submitted to and approved by the OCC. The RTCs initially appealed the OCC orders approving the interconnection agreements to the Oklahoma Supreme Court, but their suit was dismissed for lack of jurisdiction. The RTCs then brought suit in federal district court. In its first order and judgment, the district court'affirmed various aspects of the OCC orders, including the determination that compensation for the transport and termination of telecommunications would be reciprocal. Atlas Tel. Co. v. Corp. Com’n of Okla., 309 F.Supp.2d 1299, 1309-10 (W.D.Okla.2004) (“Atlas I”). In its second order and judgment, the district court affirmed that part of the OCC’s final order approving the provision in the interconnection agreement that requires an RTC to deliver calls to Western Wireless at a SWBT switch. Atlas Tel. Co. v. Corp. Com’n of Okla., 309 F.Supp.2d 1313, 1316-17 (W.D.Okla.2004)

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Western Radio Services Co. v. Qwest Corp.
678 F.3d 970 (Ninth Circuit, 2012)
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Atlas Telephone Co. v. Oklahoma Corp. Comm.
400 F.3d 1256 (Tenth Circuit, 2005)

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Bluebook (online)
400 F.3d 1256, 35 Communications Reg. (P&F) 1047, 2005 U.S. App. LEXIS 4020, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlas-telephone-co-v-oklahoma-corp-commission-ca10-2005.