Big River Telephone Co. v. Southwestern Bell Telephone Co.

440 S.W.3d 503, 2014 Mo. App. LEXIS 623, 2014 WL 2466414
CourtMissouri Court of Appeals
DecidedJune 3, 2014
DocketNo. WD 76420
StatusPublished
Cited by2 cases

This text of 440 S.W.3d 503 (Big River Telephone Co. v. Southwestern Bell Telephone Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Big River Telephone Co. v. Southwestern Bell Telephone Co., 440 S.W.3d 503, 2014 Mo. App. LEXIS 623, 2014 WL 2466414 (Mo. Ct. App. 2014).

Opinion

KAREN KING MITCHELL, Judge.

Big River Telephone Company, LLC, appeals from a Report and Order issued by the Public Service Commission (PSC or the Commission), denying Big River’s complaint against Southwestern Bell Telephone, L.P., d/b/a AT & T Missouri (ATT), and granting ATT’s counter-complaint against Big River. The complaints involved a dispute over access charges billed to Big River by ATT: Big River claimed that the charges were improperly assessed on non-chargeable information or enhanced services; ATT claimed that the charges were based on Big River’s provision of interconnected voice over internet protocol (I-VoIP) and were, required by both statute and the parties’ interconnection agreement (ICA). The PSC determined that the services at issue constituted I-VoIP and were subject to charges. Accordingly, the PSC determined that the [505]*505amount billed by ATT was due and owing. We affirm.

Factual and Legal Background

To understand the nature of this dispute, it is necessary to first understand the legal context in which it arose. Before 1996, local telephone service was generally provided by a single local company whose prices were largely regulated by several governmental agencies. Global NAPs Cal, Inc. v. Pub. Utils. Comm’n of State-of Cal, 624 F.3d 1225, 1228 (9th Cir.2010). The local monopoly, known as a local exchange carrier (LEC) “provided all telephone service in a geographically confined area known as a Local Access and Transport Area [ (LATA) ].” Id. In 1996, Congress passed the Telecommunications Act of 1996 (the Act), which effectively ended the pre-existing system of regulated monopolies. Id. “In its place, the Act established a competitive regime under which formerly monopolistic local-service providers, or incumbent local exchange carriers [ (ILECs) ], and new local-service providers, or competitive local exchange carriers [ (CLECs) ], compete to provide telephone service in the same LATA.” Id.

Due to the independent nature of each LEC’s telephone lines, customers of one LEC can call customers of a different LEC “only if these networks are interconnected.” Id. Thus, the Act requires interconnection of the various LEC networks. Id. But because consumers do not typically pay to receive phone calls, interconnection can create a loss of compensation to the call recipient’s LEC. Id. In other words, “[i]f one LEC’s customer calls a second LEC’s customer, the second customer’s LEC will not be compensated for its role in completing the call because it does not bill the caller.” Id. “To ensure that each LEC is compensated for its role in such calls, the Act requires LECs to negotiate interconnection agreements that ‘establish reciprocal compensation arrangements for the transport and termination of telecommunications.’ ” Id. (quoting 47 U.S.C. § 251(b)(5)).

“Under the Act, a service is subject to different regulatory frameworks depending on whether it constitutes an ‘information service’ or a ‘telecommunications service.’ ” In re Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, 22 FCC Red. 5901, 5910 (March 23, 2007). “The Act defines ‘information service’ as the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications.... ” Id. “The Act defines ... ‘telecommunications’ as ‘the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.’ ” Id. (quoting 47 U.S.C. § 153(43)).

The dispute in this case arises under. the terms of the ICA entered into by Big River (a CLEC) and ATT (an ILEC). Following arbitration, the parties entered into an ICA that was approved by the PSC on August 13, 2005.

The ICA’s compensation provisions distinguish between enhanced/information services traffic (which is not subject to access charges) and telecommunications traffic (which is subject to access charges). The ICA defines enhanced services traffic as “traffic that undergoes a net protocol conversion, as defined by the FCC, between the calling and called parties, and/or traffic that features enhanced services that provide customers a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information.” The original ICA classifies voice over Internet protocol (VoIP) traffic as an enhanced service. To aid in billing, the ICA requires the parties to submit to one another reports on their [506]*506respective Percent Enhanced Usage (PEU) factor.

Big River provides voice telephone services to customers in Missouri, wherein the telephone calls are transmitted in internet-protocol (IP) format, sometimes using IP-enabled customer premises equipment. To facilitate its service, Big River partners with cable companies to provide telephone service in IP format over the cable companies’ “last mile” facilities, and in some cases uses DSL (broadband service provided over “last mile” telephone facilities). Big River’s service allows its customers to make voice telephone calls to, and receive voice telephone calls from, the public switched telephone network (PSTN). Pursuant to the ICA’s PEU provision, beginning on October 25, 2005, Big River reported its PEU to ATT as 100%, meaning that all of its traffic was enhanced, and therefore not subject to access charges.

During the 2008 legislative session, the Missouri Legislature passed (and the governor approved) House Bill 1779, a section of which was later codified at section 392.5501 and provided in part: “Interconnected voice over Internet protocol service shall be subject to appropriate exchange access charges to the same extent that telecommunications services are subject to such charges.” § 392.550.2. It further provided that “[ujntil January 1, 2010, this subsection shall not alter intercarrier compensation provisions specifically addressing interconnected voice over Internet protocol service contained in an interconnection agreement approved by the commission pursuant to 47 U.S.C. Section 252 and in existence as of August 28, 2008.” Id. The law also required providers of I-VoIP to register with the PSC and granted the PSC authority “[t]o hear and resolve complaints ... regarding the payment or nonpayment for exchange access services regardless of whether a user of exchange access service has been certificated or registered by the commission and regardless of whether the commission otherwise has authority over such user.” Id. at §§ 392.550.1, .4(5).

Despite Big River’s representation of a PEU at 100%, ATT billed Big River for access charges, which led to Big River filing suit against ATT in St. Louis County Circuit Court on September 29, 2008, alleging that “AT & T billed Big River $487,779.00 for terminating Enhanced/Information Services traffic sent by Big River to AT & T,” that Big River paid the charges, that Big River was entitled to a refund, and that ATT failed to refund the payments.

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440 S.W.3d 503, 2014 Mo. App. LEXIS 623, 2014 WL 2466414, Counsel Stack Legal Research, https://law.counselstack.com/opinion/big-river-telephone-co-v-southwestern-bell-telephone-co-moctapp-2014.