US West Communications v. MFS Intelenet, Inc.

193 F.3d 1112, 1999 WL 799082
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 8, 1999
DocketNos. 98-35146, 98-35203
StatusPublished
Cited by30 cases

This text of 193 F.3d 1112 (US West Communications v. MFS Intelenet, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
US West Communications v. MFS Intelenet, Inc., 193 F.3d 1112, 1999 WL 799082 (9th Cir. 1999).

Opinion

JAMES R. BROWNING, Circuit Judge:

The Telecommunications Act of 1996(Act) is designed to foster competition in local and long distance telephone markets. The local competition provisions of the Act require incumbent local exchange carriers (defined in 47 U.S.C. § 251(h)(1)) to allow other local exchange carriers access to the incumbent carrier’s networks or services to enable them to compete in providing local telephone services: (1) incumbent carriers must interconnect their networks with new entrants “at any technically feasible point,” and the interconnection must be “at least equal in quality” to the interconnection the incumbent carrier provides for itself, 47 U.S.C. § 251(c)(2); (2) incumbents must provide nondiscriminatory, unbundled access to network elements 2 in a manner that allows new entrants to combine the elements to provide telecommunications services, see 47 U.S.C. § 251(c)(3); and (3) incumbents must offer for resale, at wholesale rates, any telecommunications service an incumbent offers at retail, and permit new entrants to resell those services to end-users. See 47 U.S.C. § 251(c)(4). The Act prohibits incumbent carriers from imposing unreasonable or discriminatory conditions or limitations on the resale of the services. See id.

Incumbent carriers must negotiate in good faith agreements (commonly referred to as interconnection agreements) with competing carriers setting forth particular terms and conditions upon which incumbent carriers will satisfy their duties under the Act. See 47 U.S.C. § 251(c)(1). If the parties are unable to reach agreement through good faith negotiations, a party to the negotiation may request that the state utilities commission arbitrate unresolved issues. See 47 U.S.C. § 252(b)(1). A state commission may impose terms by arbitration only if the terms meet the substantive requirements of section 251, including regulations implementing that section, and the pricing standards of section 252. See 47 U.S.C. § 252(c). After the state commission approves an interconnection agreement, a party to the agreement may bring an action in district court “to determine whether the agreement or statement meets the requirements” of the Act. 47 U.S.C. § 252(e)(6).

The Federal Communications Commission (FCC) issued rules implementing the local competition provisions of the Act. See In re Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, 11 F.C.C.R. 15499 (Aug. 8, 1996) (Local Competition Order). Suits challenging the rules were consolidated in the Eighth Circuit. The Eighth Circuit vacated the pricing rules on the ground that the Act authorized state utility commissions, not the FCC, to set rates. See Iowa Utilities Bd. v. FCC, 120 F.3d 753, 793-800 (8th Cir.1997). The court expressly declined to review the pricing rules on the merits. See id. at 800. The court also vacated non-pricing rules that required incumbent carriers to combine unbundled network elements for competing carriers, and prohibited incumbent carriers from separating already combined network elements before leasing them to competing carriers.

In relevant part, the Supreme Court reversed the Eighth Circuit’s ruling that the FCC did not have jurisdiction to promulgate pricing rules, holding the FCC had jurisdiction to “prescribe such rules and regulations as may be necessary in the public’s interest to carry out the provisions of the Act,” including the “jurisdiction to design a pricing methodology.” See AT & T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 119 S.Ct. 721, 729, 733, 142 L.Ed.2d 835 (1999). The Supreme Court also reinstated the rule prohibiting incumbent carriers from separating already combined network elements. See id. 119 S.Ct. at 737-38.

[1117]*1117Procedural Background

MFS Intelenet, Inc. (MFS) and TCG Seattle (TCG), competing local exchange carriers, asked U.S. West Communications (U.S. West), the incumbent local exchange carrier, to negotiate an interconnection agreement. The parties were unable to resolve all issues by negotiation, and MFS and TCG requested arbitration by the Washington Utilities and Transportation Commission (Commission). The Commission appointed an arbitrator in each case, and arbitration hearings were held. Arbitrators’ reports and decisions were filed and comments and objections received. The Commission concluded the agreements met the requirements of sections 251 and 252 of the Act, and approved them. US West challenged the Commission’s decisions and asserted takings claims in district court. The district court held that the agreements complied with the Act and dismissed the taking claims as unripe. US West appealed.

Standard of Review

We review the district court’s grant of summary judgment de novo. See San Diego Gas & Elec. Co. v. Canadian Hunter Mktg., 132 F.3d 1303, 1306 (9th Cir.1997). The Act confers jurisdiction upon district courts to review interconnection agreements for compliance with the Act:

In any case in which a State commission makes a determination under this section, any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement or statement meets the requirements of section °f this title and this section.

47 U.S.C. § 252(e)(6) (emphasis added). We apply the same standard the district court should apply, considering de novo3 whether the agreements are in compliance with the Act and the implementing regulations, see Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1495 (9th Cir.1997) (a state agency’s interpretation of a federal statute is considered de novo), and considering all other issues under an arbitrary and capricious standard. See, e.g., U.S. West Communications, Inc. v. Hix, 986 F.Supp. 13, 19 (D.Colo.1997) (holding that courts should apply the de novo standard to all issues involving a “determination of the [state commission’s] procedural or substantive compliance ‘with the requirements of the [Telecommunications Act] and its implementing regulations,’ ” and an arbitrary and capricious standard to all other issues). We agree with the district court that the agreements complied with the Act and the FCC regulations, and that other decisions of the Commission challenged by U.S. West were not arbitrary and capricious. Although the district court applied the wrong standard in its review of some of the issues,4

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Bluebook (online)
193 F.3d 1112, 1999 WL 799082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/us-west-communications-v-mfs-intelenet-inc-ca9-1999.