Michigan Bell Telephone Co. v. MCIMetro Access Transmission Services, Inc.

323 F.3d 348, 2003 WL 909978
CourtCourt of Appeals for the Sixth Circuit
DecidedMarch 10, 2003
DocketNo. 01-1312
StatusPublished
Cited by5 cases

This text of 323 F.3d 348 (Michigan Bell Telephone Co. v. MCIMetro Access Transmission Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michigan Bell Telephone Co. v. MCIMetro Access Transmission Services, Inc., 323 F.3d 348, 2003 WL 909978 (6th Cir. 2003).

Opinions

BOYCE F. MARTIN, Jr., C.J., delivered the opinion of the court, in which WISEMAN, D.J., joined. MOORE, J. (pp. 361-366), delivered a separate concurring opinion.

OPINION

BOYCE F. MARTIN, JR., Chief Circuit Judge.

The dispute here between MCIMetro Access Transmission Services, Inc. and Ameritech arose when MCI, a competing entrant into the local telecommunications market in Michigan, tried to submit resale orders to Ameritech, an incumbent telephone carrier, via facsimile. The orders were to place or modify services that MCI provided to its customers by purchasing telephone usage from Ameritech and selling it to MCI customers. Ameritech protested that faxing orders violated the interconnection agreement, an agreement between the two parties that allows MCI to share network elements with Ameritech and to provide phone service. Ameritech believes this agreement should be the sole document governing the submission of resale orders. MCI relied upon a state tariff issued by the Michigan Public Service Commission, arguing the state tariff would allow MCI to fax the orders. The Commission agreed with MCI’s position and allowed faxing as an acceptable alterative to the terms of the interconnection agreement. Ameritech appealed to the district court from the Commission’s decision. The district court concluded that MCI could not fax orders under Ameritech’s tariff terms and that the Michigan Public Service Commission’s interpretation was arbitrary and capricious. We disagree.

I. Background and Regulatory Framework

To deregulate the telephone industry, Congress enacted the Telecommunications Act of 1996, codified in 47 U.S.C. Section 151 et seq. The Act has been called one of the most ambitious regulatory programs operating under “cooperative federalism,” and creates a regulatory framework that gives authority to state and federal entities in fostering competition in local telephone markets. We have often reiterated the Act’s purposes, which are ending local telephone company monopolies and promoting competition in local telephone markets. E.g., Mich. Bell [352]*352Tel. Co. v. Strand, 305 F.3d 580, 582 (6th Cir.2002).

The Act encourages competitive local telephone markets by imposing several duties on incumbent local exchange carriers, the telephone companies holding monopolies in local markets prior to the Act’s implementation. The incumbent must negotiate or arbitrate agreements with competing local carriers, the new entrants into the deregulated market, by providing one of three methods of competition: (1) the incumbent carrier must provide interconnection to its network to a competing carrier that builds or has its own network, 47 U.S.C. § 251(c)(2); (2) the incumbent carrier must provide access to its network elements on an “unbundled basis” to a competing carrier wishing to lease all or part of the incumbent’s network, rather than build its own, 47 U.S.C. § 251(c)(3); and (3) the incumbent must sell its retail services at wholesale prices to a competing carrier that will resell the services at retail prices. 47 U.S.C. § 251(c)(4).

Interconnection agreements set forth terms, rates, and conditions of the arrangements between the incumbent local exchange carrier and a competing local exchange carrier. The Act provides for arbitration of an agreement, review of arbitrated or negotiated agreements, and judicial review of agreements. State utility commissions review and give final approval to interconnection agreements. 47 U.S.C. § 252(e)(1); § 252(e)(2)(A); Verizon Md. v. Pub. Serv. Comm’n, 535 U.S. 635, 122 S.Ct. 1753, 1756, 152 L.Ed.2d 871, 878 (2002). A party aggrieved by a commission decision may bring suit in federal district court to review whether the agreement or statement of terms complies with the Act. 47 U.S.C. § 252(e)(6); Verizon Md., 122 S.Ct. at 1758.

Efforts to foster competition in telecommunications have, in recent years, given rise to complex litigation regarding the relationships between telephone service carriers and between state and federal systems. The Supreme Court has stated “[i]t would be a gross understatement to say that the [Act] is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.” AT & T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 395-96, 119 S.Ct. 721, 738, 142 L.Ed.2d 834, 859 (1999). Much of the complexity has resulted from the Act’s incorporation of the concept of “cooperative federalism.” Under cooperative federalism, “federal and state agencies should endeavor to harmonize their efforts with one another, while federal courts oversee this partnership by insisting on articulations of regulatory policy that respect the values embodied in the underlying legislation.” Philip J. Weiser, Federal Common Law, Cooperative Federalism, and the Enforcement of the Telecom Act, 76 N.Y.U. L.Rev. 1692, 1732 (2001). In this regulatory regime state commissions are directed by provisions of the Act and FCC regulations in making decisions, which are subject to federal court review. P.R. Tel. Co. v. Telecomms. Regulatory Bd. of P.R., 189 F.3d 1, 14 (1st Cir.1999).

At the same time, the Act gives the state commissions latitude to exercise their expertise in telecommunications and needs of the local market. Id. We acknowledge that, within applicable standards of review, state commissions, arbitration panels, and administrative law judges have a refined expertise in telecommunications matters that come infrequently before the regional federal courts. Or, as commentators have suggested, “intricate matters, such as rate-setting and determining the feasibility of regulatory mandates, lie beyond the core of judicial competence.” Weiser, supra, at 1724; see also Mich. Bell. Tel. Co. v. Level 3 Communications, Inc. 218 F.Supp.2d [353]*353891, 894 (E.D.Mich.2002)(stating “[t]his court should not sit as a surrogate public utilities commission to second-guess the decisions made by the state agency to which Congress has committed primary responsibility for implementing the Act.” (citation omitted)).

Section 251(d)(3) of the Act provides that a state regulation, order or policy of a state commission that establishes access and interconnection obligations of incumbent carriers will be upheld, as long is it meets federal requirements. The prerequisite for preserving state commission regulations, policies and orders is that these decisions must be consistent with Section 251, and not substantially prevent implementation of the purposes of the Act.

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323 F.3d 348, 2003 WL 909978, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michigan-bell-telephone-co-v-mcimetro-access-transmission-services-inc-ca6-2003.