D.C. CIRCUIT STRUGGLES WITH PAYPHONE RULES
A panel of federal judges indicated annoyance with both sides of a payphone regulation dispute Fri., leading attorneys in the audience to speculate the court would uphold the FCC on the disputed rules. “I expect the court to say a pox on both your houses,” said lawyer after the 90 min. oral argument before the U.S. Appeals Court, D.C. Although the case -- Communications Vending Corp. v. FCC -- challenged the FCC’s Nov. 2002 payphone rules, the real dispute was between LECs and independent payphone providers (IPPs). It centered on a long-standing debate over whether LECs can impose access charges on independent payphone providers (IPPs).
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Ruling on complaints filed by IPPs, the FCC in 2002 said the LECs were wrong to impose end user common line (EUCL) charges on IPP payphones because IPPs weren’t end users. It also said the IPPs were entitled to EUCL refunds. Both the LECs and the IPPs challenged the decision, leading to Fri.’s oral argument where the judges found fault with arguments by both sides, and sometimes with the FCC as well. The judges basically said neither the IPPs nor the LECs had strong arguments.
IPP attorney Katherine Henry tried to convince the judges that the FCC shouldn’t have kept IPPs from going back further than 2 years in seeking EUCL payment refunds. However, the judges appeared fairly certain the statute of limitations barred pushing the time period further back. “The law says you have to make a claim within 2 years of the injury,” Judge David Sentelle said: “It’s not brain surgery.”
LEC attorney Aaron Panner said the FCC should have made IPPs liable for access charges at least for semi-public payphones. The LECs have argued that semi-public payphones place IPPs in a more-active end user position because IPPs act as agents for end users when they install semi-public payphones. Semi-public payphones often are located in areas where there isn’t a big public demand -- sometimes placed there at the request of a premises owner, such as a retailer, to benefit customers. The FCC has made distinctions between regular payphones and semi-public payphones for regulatory purposes.
The court spent about a half hour struggling with the idea of IPPs acting as agents for premises owners and the nature of semi-public payphones. Judge David Tatel said he couldn’t see any evidence, such as agreements, showing an agent relationship between IPPs and premise owners. “I could understand [the agent argument] if the premises owner pays the IPP for the benefit of having a phone there, but all the payments seem to be going the other way,” said Judge Raymond Randolph.
“It’s very easy to get lost in the weeds of payphone cases,” said FCC attorney Richard Welch, who concluded by asking the court “to affirm the Commission and put us out of our misery.” LEC challengers included Citizens Communications, Qwest, SBC and Verizon. IPP challengers were Communications Vending Corp., IMR Capital, Ind. Telcom Corp., National Telecoin, NSC Communications and Payphone Systems. The D.C. Circuit has dealt with the payphone issue twice before, for example ruling in 1997 that payphone service providers weren’t required to pay EUCL charges because they weren’t end users. IPPs then filed numerous complaints at the FCC based on the court’s 1997 ruling. The FCC order under review Fri. was in response to some of those complaints.