MCImetro Access Transmission Services, Inc. v. Bellsouth Telecommunications, Inc.

352 F.3d 872, 2003 U.S. App. LEXIS 25782, 2003 WL 22973784
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 18, 2003
DocketNo. 03-1238
StatusPublished
Cited by2 cases

This text of 352 F.3d 872 (MCImetro Access Transmission Services, Inc. v. Bellsouth Telecommunications, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MCImetro Access Transmission Services, Inc. v. Bellsouth Telecommunications, Inc., 352 F.3d 872, 2003 U.S. App. LEXIS 25782, 2003 WL 22973784 (4th Cir. 2003).

Opinion

[874]*874Reversed in part, vacated in part, and remanded by published opinion. Judge WILLIAMS wrote the opinion, in which Judge LUTTIG and Judge KING joined.

OPINION

WILLIAMS, Circuit Judge:

In this appeal, MCImetro Access Transmission Services LLC (MCI) challenges the legality, under the Telecommunications Act of 1996 (the 1996 Act), see 47 U.S.C.A. §§ 251-276 (West 2001 & Supp.2003), of three aspects of the interconnection agreement between it and BellSouth Telecommunications, Inc. (BellSouth) that the North Carolina Utilities Commission (NCUC) arbitrated and approved. Specifically, MCI argues (1) that the provision in the interconnection agreement allowing BellSouth to charge MCI the incremental cost of transporting calls originating on BellSouth’s network from the originating caller’s local calling area to MCI’s distant point of interconnection violates 47 C.F.R. § 51.703(b) (2002); (2) that the provision in the interconnection agreement restricting MCI’s use of BellSouth’s unbundled network elements under certain circumstances violates various FCC rules; and (3) that the provision in the interconnection agreement limiting BellSouth’s obligation to provide access to two-way trunking to only those circumstances where there is insufficient traffic to support one-way trunks violates 47 C.F.R. § 51.305(f) (2002). MCI initiated this action in the United States District Court for the Eastern District of North Carolina pursuant to the 1996 Act’s judicial review procedure. See 47 U.S.C.A. § 252(e)(6). The district court found the challenged provisions to be consistent with federal law and accordingly granted summary judgment in favor of BellSouth. MCI appeals, and for the reasons that follow, we reverse in part, vacate in part, and remand for farther proceedings.

I.

Prior to the passage of the 1996 Act, the laws of the various states governed the provision of local telephone service, and almost without exception, each state conferred an exclusive franchise to a single company to provide such service. Under the protection of these state-conferred monopolies, each of these companies, called Local Exchange Carriers (LECs), built the infrastructure necessary to provide local telephone services, including elements such as the local loops (wires connecting telephones to switches), the switches (computerized equipment routing calls to their destinations), and the transport trunks (high capacity wires transmitting traffic between switches). See AT & T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999). Thus, not only were these LECs the only entities allowed by law to provide local telephone service, they were the only entities with the networks necessary to do so.

Through the 1996 Act, Congress sought to supplant the system of state-sanctioned monopoly in favor of a system of free competition. In addition to pre-empting the state laws that protected existing LECs1 from competition, see 47 U.S.C.A. § 253, Congress, recognizing both that the provision of local service required significant infrastructure and that the prohibitive cost of duplicating an incumbent LEC’s infrastructure would be an insuperable barrier to entry, imposed on incumbents a number of affirmative duties intended to facilitate market entry by potential competitors. See 47 U.S.C.A. § 251(c) (West [875]*8752001). Two of these duties are relevant to the issues MCI raises in this appeal.

First, Congress required incumbent LECs to “interconnect” their networks with the new networks constructed by the new entrants, known as competing LECs (CLECs). See 47 U.S.C.A. § 251(c)(2). Such interconnection is necessary to the viability of the multi-provider system envisioned by the 1996 Act because, absent interconnection, customers of different LECs in the same local calling area would not be able to call each other, and CLECs consequently would never attract customers. Under this provision, an incumbent must allow a CLEC to select any point of interconnection (POI) with the incumbent’s network that is “technically feasible,” 47 U.S.C.A. § 251(c)(2)(B), and must provide interconnection “on rates, terms, and conditions that are just, reasonable, and nondiscriminatory,” 47 U.S.C.A. § 251(c)(2)(D). Pursuant to the Federal Communications Commission’s (FCC) regulations, just, reasonable, and nondiscriminatory interconnection requires incumbents to provide access to “two-way trunking” upon request for interconnection where technically feasible. A two-way trunk is a single trunk connecting the CLEC’s switch to the incumbent’s switch for transmission of traffic both to and from the incumbent, as opposed to two separate trunks, each dedicated to transmitting traffic in one direction.

Second, Congress required incumbents to lease the constituent elements of their local networks (e.g., loops, switches, etc.) to CLECs on a separately priced, or “unbundled” basis. 47 U.S.C.A. § 251(c)(3). The incumbents also must allow the CLECs to use leased unbundled network elements (UNEs) to provide any “telecommunications service,” see id., a term defined by statute as “the offering of telecommunications for a fee,” 47 U.S.C.A. § 153(46) (West 2001). As with interconnection, incumbents must make UNEs available “on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.” 47 U.S.C.A. § 251(c)(3).

The 1996 Act likewise imposes obligations on all LECs, incumbents and CLECs alike, see 47 U.S.C.A. § 251(b), one of which is relevant here. Under § 251(b)(5), each LEC has the duty “to establish reciprocal compensation arrangements for the transport and termination of telecommunications.” Reciprocal compensation agreements must “provide for the mutual and reciprocal recovery by each carrier of costs associated with the transport and termination on each gamer’s network facilities of calls that originate on the network facilities of the other carrier.” 47 U.S.C.A. § 252(d)(2)(A). In other words, for calls generated on one LEC’s network and bound for a destination on another LEC’s network, the receiving LEC may charge the originating LEC for the cost of transporting the call from the POI to its destination and terminating that call with the intended recipient.

In addition to imposing these and other substantive requirements, Congress established a procedural framework through which incumbents and CLECs are to negotiate the CLECs’ entry into the incumbent’s market. First, the parties must attempt to establish terms of interconnection through negotiation. See 47 U.S.C.A. § 252(a)(1). To the extent they cannot reach agreement, either LEC may ask the governing state utility commission to conduct an arbitration to resolve the disputed issues. See 47 U.S.C.A. § 252(b)(1). The results of that arbitration are then memorialized in an “interconnection agreement” between the LECs, which is then submitted for approval to the state utility commission. 47 U.S.C.A. § 252(e). A party aggrieved by the state utility commission’s resolution of disputed issues may seek re[876]*876view of that decision in federal district court, which has exclusive jurisdiction over such matters. 47 U.S.C.A. § 252(e)(6).

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352 F.3d 872, 2003 U.S. App. LEXIS 25782, 2003 WL 22973784, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcimetro-access-transmission-services-inc-v-bellsouth-ca4-2003.