A federal court in Me. denied a Verizon request for an injunction...
A federal court in Me. denied a Verizon request for an injunction to bar the Me. PUC from enforcing orders in 2004 and 2005 that continued state rate regulation of certain unbundled network elements (UNE) under Telecom Act Sec.…
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271 even though those UNEs had been deregulated by the FCC under Sec. 251 in its Triennial Review Orders. Verizon had wanted the PUC order blocked until its appeal of the decision could be decided. Judge Gene Carter of the U.S. Dist. Court, Portland, in Case 05-53-B-C said Thurs. that Verizon is unlikely to succeed on the merits because it couldn’t point to anything specific in the Telecom Act or FCC policies that prohibits states from setting “just and reasonable” UNE rates under Sec. 271, even if those UNEs had been released from rate regulation under Sec. 251. The court said the FCC orders demonstrated its preference for market-based UNE rates -- but there was nothing in federal law or FCC policy that preempted a state’s use of TELRIC-based pricing for Sec. 271 UNEs on an interim basis until permanent just & reasonable rates can be set. The court also said Verizon failed to quantify its claims that it would suffer irreparable harm if TELRIC-based UNE rates were kept in place pending the outcome of its appeal. The court said the difference between the TELRIC rate and probable negotiated rates isn’t great enough to impose an unreasonable refund burden on either Verizon or CLECs by the time the case is decided. The court also said nothing in the case record demonstrates that continued application of TELRIC pricing on the 271-UNEs would impair market competition. The court also said Verizon’s waiting a year from the initial state order in Sept. 2004 before filing for an injunction raised doubts about its financial hardship claims. Verizon said it delayed filing until the PUC nailed down which UNEs were covered by its order in Sept. 2005, but the court said some of the UNEs would obviously be included from day one, so Verizon could have challenged on those. Sec. 271 required Bell companies to meet certain local competition tests, including network unbundling, as a prerequisite to their long distance market entry.