MetroPCS, FCC Headed to Court Over CLEC Compensation Dispute
A federal appeals court will hear Thursday oral argument on whether the FCC “abused its discretion and acted arbitrarily and capriciously and contrary to law,” as argued by MetroPCS, in declining to decide what was “reasonable compensation” to a CLEC for terminating telecom traffic originating on MetroPCS’s network. The FCC had determined that the California Public Utilities Commission was “a more appropriate forum to determine a reasonable compensation rate.” The case involves a dispute between MetroPCS and CLEC North County but has wider implications, MetroPCS said.
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"The Commission cannot abdicate its responsibility to resolve the federal question of ‘reasonable compensation’ under federal Rule 20.11,” MetroPCS said in its opening brief to the U.S. Court of Appeals for the District of Columbia Circuit. “The Commission has a duty” under Sections 201 and 332 of the Communications Act “to ensure just and reasonable rates, and a duty to resolve claims of violations of the Act,” the company said.
The commission’s “proffered reasons” for refusing to make a decision “are unavailing,” MetroPCS said. The agency “also failed to give a reasoned explanation for deferring to the state commission” or to “square its decision” with a 2005 order regarding T-Mobile, MetroPCS said. “Since the FCC’s determination, as feared by MetroPCS, CMRS carriers have been subjected to a patchwork of state regulatory proceedings."
The FCC fired back in its reply brief that the commission “reasonably interpreted and applied Rule 20.11” in the MetroPCS case. “The Commission, from the outset, made clear that while an originating carrier has an obligation under federal law to compensate the terminating carrier with respect to both interstate and intrastate traffic, Rule 20.11(b) does not reach the actual ratesetting function with respect to intrastate traffic,” the agency said.
The FCC said it “held in abeyance” whether MetroPCS was complying with any obligation to compensate North County, until the state PUC had determined the reasonable rate. The court should give deference to the FCC in the “construction and implementation of its own regulation,” the agency said. “In its brief, MetroPCS largely ignores the language and history of Rule 20.11(b) and does not come to grips with the long and consistent series of FCC orders.”
MetroPCS said in its reply that the commission’s brief is “riddled with contradiction.” The FCC “contradicts the plain meaning of the governing regulation, the underlying statutes and the Commission’s prior interpretations thereof, the Commission’s precedent under Rule 20.11(b) … and the Commission’s rationale in the very order on review,” MetroPCS said.
The case has a long history. In 1994, the FCC enacted Rule 20.11, implementing Section 332 of the Telecom Act, which provides that a CMRS provider “shall pay reasonable compensation” to a local exchange carrier for terminating traffic that originates on the other carrier’s network. In a 2005 T-Mobile declaratory order, the FCC amended Rule 20.11 to forbid local exchange carriers from imposing “compensation obligations for traffic not subject to access charges” on CMRS providers pursuant to tariffs and expressed a strong preference for voluntary contract arrangements.
In 2003, North County started billing MetroPCS for the termination of intrastate traffic, despite the absence of a written interconnection agreement. With no agreement, MetroPCS has not paid North County for termination of the traffic. The sides agreed that the FCC was the appropriate forum to make a decision. After almost four years of proceedings, the commission resolved four of the five counts in North County’s complaint but found that the CPUC was “the more appropriate venue” to resolve this federal compensation dispute, because of “the states’ general authority to regulate rates for intrastate traffic as preserved by Section 2(b) of the Act.”