FCC APPEARS TO WIN ONE, LOSE ONE IN COURT ORAL ARGUMENTS

In colocation case (01-1371), Verizon challenged colocation rules agency developed after D.C. court remanded earlier set of rules. Verizon questioned, among other things, agency’s revised standard for determining what CLEC equipment was eligible for colocation in ILEC central offices, which parties referred to as the “necessary” standard. Argument centered on how agency -- and Congress -- defined equipment for which colocation was “necessary.” Verizon attorney Mark Evans argued that FCC had too broad a definition of “necessary” because it included all equipment needed for interconnection and access to unbundled network elements (UNEs) rather than limiting it to CLEC equipment that couldn’t operate adequately unless it were located inside ILEC central office. However, FCC’s John Rogovin said Verizon never brought up that “on premises” argument during proceeding that led to new rules.

All 3 judges on panel -- Chief Judge Douglas Ginsburg and Judges Raymond Randolph and David Tatel -- fired animated questions at both Evans and Rogovin but argument soon developed into grammatical dispute over sentence structure used by Congress in requiring colocation of “necessary” equipment. At issue in grammatical dispute was wording of Sec. 251(c)(6) of Telecom Act that requires “physical colocation of equipment necessary for interconnection or access to unbundled network elements at the premises of the [ILEC].” Question was whether word “necessary” applied to words that came right afterward -- equipment used for interconnection and UNE access -- or to word “premises” further into sentence.

Judge Tatel told Evans that he thought FCC read statute differently from Verizon and “they have just not picked the limitation” that Verizon wanted. He later asked Evans about proper legal basis for court’s denying Verizon’s complaint. Evans told him that court probably could use particular grounds he mentioned -- “you could but you shouldn’t.” FCC’s Rogovin argued that Verizon’s “on premises” argument “was not part of the debate” when FCC was considering colocation revisions. “They did not argue the out-of-premises issue.” Verizon didn’t get as restrictive colocation rules as it wanted “and that’s when they undertook this grammar exercise,” he said.

FCC didn’t appear to gain as much support from judges in separate AT&T case that stems from carrier’s refusal to pay access charges to CLECs that charged rates much higher than ILEC access charges (01-1467). AT&T had challenged FCC declaratory ruling that required company to pay access charges to CLECs even though long distance company had told those CLECs not to send traffic to it. Ruling came at request of U.S. Dist. Court, Alexandria, in suit brought by Advamtel and other CLECs against AT&T for nonpayment of access charges. FCC since has issued order requiring CLECs to reduce their access rates but that order also didn’t give long distance companies right to refuse payment or interconnection.

AT&T attorney Peter Keisler told court that company didn’t want the traffic but CLECs sent it anyway and there was no way to separate it out. He said FCC forced AT&T to pay, even though there was no agreement to do so. FCC attorney Richard Welch said AT&T could have filed rate complaint with FCC but instead “engaged in self-help actions… in a game of chicken” that wasn’t not permitted under Communications Act.

Judges were particularly interested in Keisler’s argument that agency had violated Sec. 201(a) of Communications Act that requires common carriers to establish “physical connections with other carriers” only if ordered to do so by FCC after hearing. Keisler said Commission required AT&T to interconnect with those CLECs without hearing or order required by Sec. 201(a). That section is 70 years old, Welch told court, and it was clear AT&T already was interconnected with those CLECs -- it had been providing service to their customers for more than year before refusing to continue. However, Tatel responded that “we have to deal with the section as written” and if FCC disagreed with it, agency should “go back to Congress” for rewrite. Welch said AT&T’s reading of statute “forces individual customers to be hostage to an order at the FCC.” Tatel disagreed: “No, it doesn’t, it forces customers to use carriers that have agreements” with AT&T.