Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | CC Docket No. 94-54          |
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MEMORANDUM OPINION AND ORDER ON RECONSIDERATION

**Adopted: May 1, 2001 Released: May 9, 2001**

Before the Commission:

# introduction

1.  By this order we deny the petition for reconsideration filed by the
    Association of Communications Enterprises (ASCENT)[^1] of the
    *Fourth Report and Order* in this proceeding.[^2] Specifically, we
    affirm the decision reached in that Order that facilities-based
    commercial mobile radio service (CMRS) providers are not required to
    interconnect with resellers' switches. This decision will permit
    CMRS providers to continue to compete and provide innovative
    services without unnecessary regulatory restrictions, but gives the
    Commission flexibility to consider specific requests for
    interconnection on a case-by-case basis.

#  Background

2.  In the *Fourth Report and Order,* we determined that
    facilities-based CMRS providers are not required to interconnect
    with each other or to permit resellers to interconnect their
    switches between the CMRS mobile telephone switching office (MTSO)
    and the facilities of LECs. Specifically, we determined that (1)
    neither the Communications Act nor precedent requires the Commission
    to mandate reseller switch interconnection; and (2) the public
    interest does not require mandatory reseller switch
    interconnection.[^3] Subsequently, the Wireless Telecommunications
    Bureau (WTB) released an order dismissing two 1995 reseller
    complaints that alleged that cellular carriers had refused to
    discuss interconnection proposals made by the resellers, and that
    resellers were entitled to physical interconnection so long as no
    public detriment was occasioned thereby.[^4] WTB dismissed the
    complaints partly on the ground that the *Fourth Report and Order*
    held that Sections 201 and 332 do not require mandatory
    interconnection between CMRS networks and the resellers' switches
    and that resale switch interconnection would not be necessary or
    desirable in the public interest.[^5]

3.  ASCENT filed a petition for reconsideration, primarily on the
    grounds that the Commission determined that no possible request by a
    wireless reseller for interconnection of its switch could ever be
    considered to be in the public interest.[^6] ASCENT requests that,
    assuming that the Commission upholds its ruling that there should be
    no general requirement for mandatory interconnection of a reseller's
    switch with a CMRS provider's network, the Commission make clear
    that it will consider future requests for interconnection on the
    facts presented.[^7] Alloy, CTIA and Verizon filed oppositions, in
    whole or in part, to ASCENT's reconsideration request. Alloy argues
    that resellers' requests for interconnection of their switches with
    a CMRS provider's network should be precluded.[^8] Verizon and CTIA
    contend that the Commission correctly determined that there should
    be no general requirement for interconnection, but disagree with
    ASCENT that the Commission's order precludes consideration of future
    interconnection requests on a case-by-case basis.[^9] In their view,
    case-by-case interconnection determinations are permitted under the
    *Fourth Report and Order.* WorldCom filed comments in support of
    ASCENT's petition;[^10]and ASCENT filed a reply.[^11]

# discussion

## The Commission Did Not Preclude Future Requests for Interconnection That Show They Are Necessary or Desirable in the Public Interest

4.  **[Background.]{.underline}** The *Fourth Report and Order*
    determined, based on the Commission's analysis of the record, that
    the public interest does not support the establishment of a rule
    requiring that facilities-based CMRS carriers interconnect with
    resellers'switches.[^12] ASCENT contends that the Commission
    effectively determined that no possible request by a wireless
    reseller for interconnection of its switch with a CMRS provider's
    network could ever be considered in the public interest, and
    requests that the Commission make clear that it would consider
    future requested on the facts presented.[^13] WorldCom agrees with
    ASCENT.[^14] CTIA and Verizon argue, on the other hand, that the
    Commission did not preclude such requests.[^15] Alloy does not
    contend that the Commission precluded such requests, but argues that
    such requests should be barred.[^16]

5.  **[Discussion.]{.underline}** We conclude that the *Fourth Report
    and Order* did not preclude future requests for interconnection
    based on different facts than were shown in the record in this
    proceeding. ASCENT contends that (1) Sections 201 and 332 of the Act
    require the Commission to consider reasonable individual requests
    for interconnection in a hearing, (2) the Bureau's denial of the
    complaints in the *Complaint Order* shows that the Commission
    intended to preclude the consideration of such individual requests,
    and (3) there will be many interconnection requests which have
    merit, including those arising from the "networks of networks"
    concept discussed in the *Competitive Networks NPRM*.[^17] ASCENT
    requests that the Commission make clear that it will consider future
    interconnection requests upon the facts presented.[^18]

6.  Contrary to ASCENT's contention, the *Fourth Report and Order* does
    not preclude the Commission from considering other requests for
    interconnection, but, as Verizon and CTIA recognize, merely rejected
    a rule requiring mandatory interconnection based on the record in
    this proceeding.[^19] This decision was based on a proposal under
    which the resellers would place their switches between the MTSO of
    the CMRS carrier and the facilities of the local exchange carrier
    (LEC)) or interexchange carrier (IXC).[^20] We found that such a
    proposal was distinguishable from long distance resale. In long
    distance resale, a reseller configures its service so that its
    customers originate resale calls without any action on the part of
    the facilities-based provider.[^21] By contrast, under the CMRS
    reseller proposal, the reseller's facilities would be interconnected
    between the CMRS provider and the LEC or IXC, to provide additional
    switching and allow the reseller to offer value-added services.
    Thus, the proposal would require the facilities-based provider to
    take affirmative action to switch the call. We further found, among
    other things, that this proposal would raise a number of technical
    issues relating to possible degraded service to consumers, and would
    require the Commission to be embroiled in cost and rate issues.

7.  Furthermore, we disagree with ASCENT's contention that the
    *Complaint Order* shows that the Commission intended to preclude all
    resale switch interconnection requests. The *Complaint Order*
    concerned allegations that CMRS carriers had refused to discuss
    interconnection proposals made by the resellers, and that resellers
    were entitled to physical interconnection so long as no public
    detriment was occasioned thereby. The reseller proposals would have
    established reseller switches between the CMRS carrier's MTSO and
    the landline telephone network, and would assume all switching and
    administrative functions with respect to the resellers'
    customers.[^22] The *Complaint Order* properly dismissed the
    complaints because, as Verizon states, the record in that case was
    based on the identical proposal as was the basis of our finding in
    the *Fourth Report and Order* that there was no right to mandatory
    interconnection and the proposals were not in the public
    interest.[^23] In fact, the positioning of the reseller's switch
    between the MTSO and the IXC or LEC, as shown in the record of the
    *Complaint Order,* was the basis of several of the Commission's
    findings in the *Fourth Report and Order* that the proposal would
    not be in the public interest.[^24]

8.  Should other requests for interconnection be submitted to the
    Commission, they would have to be evaluated based on whether it
    would be necessary or desirable in the public interest. However, any
    such request would have to be distinguishable from the proposals
    that were the basis of the record in this proceeding.[^25] In sum,
    the *Fourth Report and Order* does not prevent the consideration of
    future interconnection requests on a case-by-case basis.

## Neither the Communications Act nor Commission Precedent Requires the Commission to Mandate Reseller Switch Interconnection

9.  **[Background.]{.underline}** ASCENT also takes issue with the
    finding in the *Fourth Report and Order* that neither the
    *Hush-A-Phone*[^26] case nor other Commission precedent required
    mandatory resale switch interconnection. Following the reasoning of
    the U.S. Court of Appeals for the Sixth Circuit in the *Cellnet*
    case,[^27] the Commission determined that *Hush-A-Phone* was limited
    to restrictions on a customer's use of his telephone.[^28] Further,
    we determined that Commission cases upon which petitioners relied
    were inapplicable because (1) they also involved the right of end
    users to connect their private equipment to the network,[^29] (2)
    there had been a previous Commission finding that the
    interconnection in question was in the public interest,[^30] and (3)
    they involved a dominant carrier.[^31] ASCENT argues that the cases
    relying on *Hush-A-Phone* did not focus on the fact that the carrier
    was dominant, and implies that *Cellnet* was wrongly decided.

10. **[Discussion.]{.underline}** We conclude that our interpretation of
    the precedents is correct, and that *Hush-A-Phone* and other cases
    cited by ASCENT did not involve inter-carrier interconnection,
    especially where there is no dominant carrier involved. In relevant
    part, Section 201 requires interconnection only after the Commission
    has found such action reasonable or desirable in the public
    interest.[^32] ASCENT relies on a number of cases regarding the
    right of the telephone subscriber to use its telephone equipment in
    ways that are "privately beneficial without being publicly
    detrimental."[^33] However, these cases all involved the ability of
    private subscribers to attach their telephone equipment to the
    dominant telephone network, not the inter-carrier connection to the
    networks of competitive CMRS providers that the resellers sought in
    this proceeding. The Sixth Circuit in *Cellnet* properly ruled that
    the *Hush-A-Phone* case only involved "an unwarranted interference
    with a person's use of their telephone."[^34] There is no basis for
    ASCENT's argument that *Cellnet* was wrongly decided, and we find
    that ASCENT has provided no new arguments that warrant the expansion
    of *Hush-A-Phone* that it advocates. We therefore deny ASCENT's
    petition for reconsideration.

# IV. ordering clause {#iv.-ordering-clause .unnumbered}

11. Accordingly, IT IS ORDERED that the Petition for Reconsideration
    filed by ASCENT is DENIED.

    FEDERAL COMMUNICATIONS COMMISSION

    Magalie Roman Salas Secretary

[^1]: Petition for Reconsideration of the Association of Communications
    Enterprises, filed September 13, 2000.

[^2]: Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, *Fourth Report and Order*, CC Docket No.
    94-54, 15 FCC Rcd 13523 (2000)(*Fourth Report and Order*).

[^3]: *Fourth Report and Order* at 13527-28, 13531-32.

[^4]: The reseller proposals would have established reseller switches
    between the CMRS carrier's mobile telephone switching office (MTSO)
    and the landline telephone network, and would assume all switching
    and administrative functions with respect to the resellers'
    customers. Cellnet Communications, Inc. v. New Par, Inc. d/b/a
    Cellular One and Nationwide Cellular Service, Inc. v. Comcast
    Cellular Communications, Inc., *Order*, File Nos. WB/ENF-F-95-010
    and WB/ENF-F-95-011, 15 FCC Rcd 13814, 13815 (2000) (*Complaint
    Order*).

[^5]: 15 FCC Rcd at 13817.

[^6]: ASCENT Petition at 2.

[^7]: *Id.* at 14.

[^8]: Opposition to Petition for Reconsideration of Alloy LLC (Alloy),
    filed October 11, 2000.

[^9]: Opposition to Petition for Reconsideration of the Cellular
    Telecommunications Industry Association (CTIA), filed October 11,
    2000; and Opposition of Verizon Wireless (Verizon), filed October
    11, 2000.

[^10]: Comments of WorldCom, Inc.(WorldCom), filed October 11, 2000.

[^11]: Reply to Oppositions to Petition for Reconsideration filed
    October 23, 2000.

[^12]: 15 FCC Rcd at 13531.

[^13]: ASCENT Petition at 2, 14.

[^14]: WorldCom Comments at 2.

[^15]: CTIA Opposition at 4; Verizon Opposition at 4.

[^16]: Alloy Opposition at 7.

[^17]: ASCENT Petition at 3-8; Promotion of Competitive Networks in
    Local Telecommunications Markets, *Notice of Proposed Rulemaking and
    Notice of Inquiry in WT Docket No. 99-2217, and Third Further Notice
    of Proposed Rulemaking in CC Docket No. 96-98*, CC Docket No. 96-98,
    14 FCC Rcd 12673 (1999).

[^18]: ASCENT Petition at 14.

[^19]: Verizon Opposition at 4-6; CTIA Opposition at 4-5.

[^20]: 15 FCC Rcd at 13524.

[^21]: For instance, a reseller can have its customers dial to connect
    to its switch, and then dial a second number to designate the call's
    desired end point. The reseller's switch uses the second number to
    dial the call pursuant to a facilities-based carrier's bulk discount
    plan.

[^22]: 15 FCC Rcd at 13815, 13817.

[^23]: Verizon Opposition at 6; Complaints Order at paras. 2-4.

[^24]: 15 FCC Rcd at 13531-32.

[^25]: To the extent that ASCENT implies at page 6 of its petition that
    we may not dispose of interconnection requests in rulemaking
    proceedings, that implication is without merit. The Commission and
    the courts have long held that the Commission may rule on
    interconnection requests in rulemaking proceedings. *See Bell
    Telephone Company of Pennsylvania v. FCC*, 503 F. 2d 1250 (3d Cir.
    1974), cert. denied, 422 U.S. 1026, reh. denied, 423 U.S. 886
    (1975); Joint Petition of CPI Microwave, Inc. and Midwestern Relay
    Co. for an Order to Show Cause with Respect to American Telephone &
    Telegraph Co., Illinois Bell Telephone Co., and Southwestern Bell
    Telephone Co., *Memorandum Opinion and Order,* Docket No. 20199, 49
    FCC 2d 778 (1974); ITT World Communications v. The Western Union
    Telegraph Company and RCA Global Communications, Inc. v. The Western
    Union Telegrtaph Company, *Memorandum Opinion and Order*, File Nos.
    TS-8-77 and TS-15-77, 87 FCC 2d 624 (1981)

[^26]: *Hush-A-Phone Corp. v. United States*, 238 F. 2d 266, 269 (D.C.
    Cir. 1956) ( *Hush-A-Phone).*

[^27]: *Cellnet Communications, Inc. v. FCC,* 149 F. 3d 429, 437 (6^th^
    Cir. 1998 )( *Cellnet).*

[^28]: 15 FCC Rcd at 13527.

[^29]: Use of the Carterphone Device in Message Toll Telephone Service,
    *Memorandum Opinion and Order*, Docket Nos. 16942 and 17073, 13 FCC
    2d 420 (*Carterphone), recon. denied,* 14 FCC 2d 571 (1968).

[^30]: American Telephone and Telegraph Company Restrictions on Private
    Line Service, *Memorandum Opinion and Order*, Transmittal Nos. 12171
    and 12306, 60 FCC 2d 939 (1976) (*AT&T Piece Out Order).*

[^31]: 15 FCC Rcd at 13527-28.

[^32]: 47 U. S.C. § 201(a). ("It shall be the duty of every common
    carrier engaged in interstate or foreign communication by wire or
    radio...in accordance with the orders of the Commission, in cases
    where the Commission, after opportunity for hearing, finds such
    action necessary or desirable in the public interest, to establish
    physical connections with other carriers....")

[^33]: ASCENT Petition at 12-13, citing *Fort Mill Telephone Company v.
    FCC*, 719 F. 2d 89 (4^th^ Cir. 1983); *Public Utility Commission of
    Texas v. FCC*, 886 F. 2d 1325 (D.C. Cir. 1989); *American Telephone
    and Telegraph Company,* 71 FCC 2d 1 (1979).

[^34]: 149 F. 3d at 437.