FCC Win in MetroPCS Wouldn’t Open Floodgates, Lawyer Assures Appeals Judges
An FCC victory in the MetroPCS case wouldn’t open the floodgates to wireless-LEC litigation in the states, commission lawyer Nick Bourne assured a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit Responding to concerns expressed during oral argument Thursday by Judge Janice Rogers Brown that an FCC victory would force wireless companies to litigate separately in all 50 states, Bourne said the lengthy litigation stemming from a dispute between commercial mobile radio service (CMRS) company MetroPCS and CLEC North County Communications (CD Oct 13 p5) resulted mainly from North County’s “idiosyncratic business model” and was only likely to be replicated for the few LECs that don’t use two-way calls.
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But similar litigation is already under way in Michigan and New York, said MetroPCS lawyer Stephen Kinnaird. He said many LECs are in similar “traffic pumping” schemes with wireless companies and this has become “a major problem for the industry.”
Also on the appeals panel Thursday were Judges Brett Kavanaugh and Thomas Griffith. None of the judges pressed either side firmly during 30-plus minutes of oral argument.
Bourne acknowledged that FCC rule 20.11(b), at the center of the MetroPCS dispute, is vague. But he said the 1994 order that created the rule is clear: The FCC can preempt state authorities on rates but is not required to do so.
Under Section 332 of the Telecom Act, CMRS providers must “pay reasonable compensation” to local exchange carriers for terminating traffic that originates on the CMRS providers’ networks. In 2003, North County billed MetroPCS for intrastate traffic in California. But there was no intercarrier agreement and MetroPCS didn’t pay. The sides agreed to bring the case to the FCC. The FCC resolved four counts of the dispute, but sent a fifth to California regulators, citing “the states’ general authority to regulate rates for intrastate traffic” under Section 2(b) of the Telecom Act.
Kinnaird reiterated the view that Section 208 of the Act made FCC intervention “mandatory.” “You can’t just punt,” he told the judges. He also repeated MetroPCS’s contention that the FCC’s stance contradicts its previous positions, including its 2005 order regarding T-Mobile and tariffs (CD Feb 25 p1). The case should at least be remanded to the FCC, so the commission can explain its reasoning more clearly, Kinnaird said.