United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 2002 Decided January 24, 2003

No. 01-1188

AT&T Corporation,

Petitioner

v\.

Federal Communications Commission and

United States of America,

Respondents

Atlas Telephone Company, Inc., and

Total Telecommunications Services, Inc.,

Intervenors

Consolidated with

01-1201

On Petitions for Review of an Order of the

Federal Communications Commission

\-\-\-\-\-\-\-\--

Russell M. Blau argued the cause and filed the briefs for petitioners
Atlas Telephone Company, Inc. and Total Telecommunications Services,
Inc.

Daniel Meron argued the cause for petitioner AT&T Corporation. With him
on the briefs were David W. Carpenter, Mark C. Rosenblum, and Peter H.
Jacoby. Peter D. Keisler entered an appearance.

Richard K. Welch, Counsel, Federal Communications Commission, argued the
cause for respondents. On the brief were John Rogovin, Deputy General
Counsel, John E. Ingle, Deputy Associate General Counsel, and Laurel R.
Bergold, Counsel, and Marion L. Jetton and Robert B. Nicholson,
Attorneys, U.S. Department of Justice.

Daniel Meron, C. John Buresh, David W. Carpenter, Mark C. Rosenblum and
Peter H. Jacoby were on the brief for intervenor AT&T Corporation.

Russell M. Blau was on the brief for intervenors Atlas Telephone
Company, Inc. and Total Telecommunications Services, Inc.

Before: Ginsburg, Chief Judge, Sentelle, Circuit Judge, and Silberman,
Senior Circuit Judge.

Opinion for the Court filed by Chief Judge Ginsburg.

Ginsburg, Chief Judge: Atlas, Total, and AT&T appeal different parts of
a single order of the Federal Communications Commission. The Commission
held that Atlas, an incumbent local exchange carrier (ILEC), created
Total, ostensibly a competitive access provider, as a sham entity solely
in order to increase the rates charged to AT&T, an interexchange carrier
(IXC), and thereby engaged in an unjust and unreasonable practice, in
violation of § 201(b) of the Communications Act of 1934, 47 U.S.C. § 151
et seq. The Commission also held that AT&T had legitimately blocked
calls to Total; Atlas must pay damages to AT&T in the amount that AT&T
paid to Atlas for tandem switched transport; and AT&T is liable to Atlas
for reasonable access charges. The Commission then dismissed AT&T\'s
counterclaim under the Telephone Disclosure and Dispute Resolution Act
(TDDRA), 47 U.S.C. § 228, \"as moot, without prejudice.\"

We reject all Atlas\' claims and deny its petition for review. We reject
the Commission\'s argument that AT&T does not have standing to seek
review of the Order, the preclusive effect of which could prejudice AT&T
in defending against Total\'s pending lawsuit to collect access charges.
We grant in part AT&T\'s petition for review and remand the Order to the
Commission to consider AT&T\'s argument that Total did not provide
access service and to clarify the effect of its having dismissed AT&T\'s
counterclaim.

I. Background

Atlas Telephone Co., Inc. is the ILEC in Big Cabin, Oklahoma, where it
serves approximately 1,500 customers. Atlas provides local exchange
service to the end users and provides originating and terminating access
service to IXCs. Total Telecommunications Services, Inc., formed in
1995, offers service to only one customer, Audiobridge of Oklahoma,
Inc., which runs a free chat-line service allowing multiple callers to
dial in and talk to one another. During the relevant time period, a
long-distance call to Audiobridge placed by an AT&T customer went
through that customer\'s local telephone company to AT&T, which provided
interexchange service by transporting the call across its network to a
point of presence (POP) located near Big Cabin and served by
Southwestern Bell Telephone Company. From the POP, Southwestern Bell
transmitted the call through its facilities to a \"meet point\" with
Atlas, which then carried the call through its tandem switch to Total.
As the \"terminating access provider,\" Total completed the call to
Audiobridge. (Total provided no local exchange or originating access
service.)

Atlas and Total have a close relationship \-- to say the least. The
President of Atlas is the Chairman of Total\'s Board of Directors; Total
received a \$20,000 startup loan from the Atlas pension fund; Total\'s
only office is in an Atlas building; and Total leased all its
transmission facilities from Atlas.

As an ILEC, Atlas was subject to \"dominant carrier\" regulation of its
rates and therefore had to get its tariffs preapproved by the
Commission. To that end, Atlas elected to charge the rates in the tariff
filed by the National Exchange Carriers Association (NECA), which
prepares and files a joint tariff on behalf of 1100 small ILECs. NECA
participants pool their revenues, and each receives an amount equal to
its costs and its pro rata share of all earnings. Thus, for calls to
Audiobridge, Atlas charged AT&T the tandem switching transport fee in
the NECA tariff.

In July 1995 Total, as a non-dominant carrier, filed its own tariff,
which was effective immediately, pursuant to which it charged AT&T at a
rate 27 percent higher than what Atlas was charging under the NECA
tariff. Total then split with Audiobridge the revenues Total received
from AT&T. This was Audiobridge\'s only source of income.

Total began completing calls from AT&T customers to Audiobridge in
August 1995. When AT&T received from Total unexpected bills for
terminating access service \-- in addition to Atlas\' bills for tandem
switching transport \-- and found out about the relationship between
Total and Atlas, it first threatened to, and starting on November 22
did, block calls from its customers to Audiobridge. AT&T also refused to
pay Total, which had already terminated about 10 million minutes of
calls. Unbeknownst to AT&T, in July 1996 Total gave Audiobridge
different numbers that AT&T did not block.

On November 24 Atlas and Total filed suit against AT&T in the United
States District Court for the Northern District of Oklahoma. That court
referred the case to the Commission pursuant to the doctrine of primary
jurisdiction. See Total Telecommunications, Inc. v. AT&T, Civ. Action.
No. 95-C-1163 (N.D. Okla.); see also Reiter v. Cooper, 507 U.S. 258,
268-69 (1993). Atlas and Total then brought essentially the same suit in
the United States District Court for the District of Columbia, with the
same result. See Total Telecommunications Services, Inc. v. AT&T Co.,
919 F. Supp. 472, 483-84 (D.D.C. 1996), aff\'d, 99 F.3d 448 (D.C. Cir.
1996).

Finally Atlas and Total filed a complaint with the Commission, alleging
that AT&T\'s blocking calls to Audiobridge violated the Communications
Act of 1934. AT&T counter-claimed, alleging that Atlas and Total had
violated the Act by creating a sham entity and charging unreasonable
rates.

The Commission denied Atlas\' and Total\'s claims. 16 F.C.C.R. 5726
(2001) (Order). The Commission first concluded that \"Atlas created
Total as a sham entity designed to impose increased access charges on
calls made to Audiobridge.\" Id. at p 14. Therefore, the Commission
held, Atlas and Total had engaged in an unjust and unreasonable
practice, in violation of 47 U.S.C. § 201(b). Order, 16 F.C.C.R. 5726 at
p p 15-18. As a consequence, AT&T did not have an obligation under 47
U.S.C. § 201(a) to complete calls to Audiobridge through Total:
\"Requests by AT&T\'s customers to send traffic to Audiobridge via Total
do not constitute \'reasonable requests\' for service for purposes of
section 201(a), because they would require AT&T to purchase access
service that we have previously determined is unreasonably priced and
the product of a sham arrangement.\" Id. at p 21.

Atlas and Total had argued that AT&T\'s blocking calls also violated the
IXC\'s duty under 47 U.S.C. § 251(a)(1) to \"interconnect directly or
indirectly with the facilities and equipment of other telecommunications
carriers.\" The Commission rejected that argument, too, reading the text
and structure of the Act, along with its own regulation defining
\"interconnection,\" to mean that \"interconnect\" refers to a
\"physical linking of two networks, and not to the exchange of traffic
between networks.\" Id. at p 23 (emphasis in original).

The Commission denied in part and granted in part AT&T\'s counterclaims.
Whereas AT&T had argued that it should pay nothing to Atlas and Total,
the Commission con-cluded that AT&T would have to pay a \"reasonable
access charge,\" which in this case was \"the fee that Atlas would have
charged AT&T for terminating traffic directly to Audiobridge, had Total
never existed,\" id. at p 38, and that the NECA tariff supplied the
appropriate rate. Id. at p 39. The Commission, however, did not order
AT&T to pay Atlas and Total because, it determined, they had failed in
their complaint explicitly to \"state a claim for relief based on \[the
calls made by AT&T customers from August 1 to November 22, 1995\].\" Id.
at p 37 n.82. (The Commission did not advert to AT&T\'s possible
liability for access charges with respect to calls made by AT&T
customers to Audiobridge after July 1996, when Total activated the new
numbers.) The Commission also held that Atlas should pay damages to AT&T
in the amount AT&T had paid Atlas for tandem switched transport because
\"\[b\]ut for its unlawful relationship with Total, Atlas would not have
charged AT&T anything at all for tandem switched transport to Total.\"
Id. at p 40. Finally, the Commission dismissed \"as moot, without
prejudice\" AT&T\'s claim that Atlas and Total violated the TDDRA; even
if Atlas and Total violated the TDDRA, the Commission stated, that
violation \"would not vitiate AT&T\'s obligation to pay a reasonable
access charge for services already provided.\" Order, 16 F.C.C.R. 5726
at p 41.

II\. Analysis

Atlas and Total, which filed a joint brief, and AT&T each challenge
various aspects of the Order. Atlas/Total argues that the Commission
erred in (1) finding that Total was a sham entity; (2) interpreting
\"reasonable request\" in § 201(a); (3) interpreting \"interconnect\" in
§ 251(a)(1); (4) ordering Atlas to refund tandem switched transport
charges; and (5) denying Total a remedy for AT&T\'s refusal to pay for
access services. AT&T (1) complains that the Commission failed to
address its claim that Total did not provide \"access service,\" and
argues that the agency (2) arbitrarily resolved its unreasonable rate
claim, and (3) erred in dismissing its counterclaim (in the nature of a
defense) under the TDDRA. We may set aside the Order only insofar as it
is \"arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.\" 5 U.S.C. § 706(2)(A).

A. The Atlas/Total Petition

1\. Total as a sham entity

Section 201(b) of the Act declares unlawful \"any \[communication common
carrier\'s\] charge, practice, classification, or regulation that is
unjust or unreasonable.\" The Commission found that \"Atlas created
Total as a sham entity designed solely to extract inflated access
charges from IXCs, and that this artifice constitutes an unreasonable
practice \... in violation of section 201(b) of the Act.\" Order, 16
F.C.C.R. 5726 at p 16. Atlas/Total does not quarrel with the underlying
facts upon which the Commission based its determination that Total was a
sham entity. Rather, Atlas/Total argues that the \"FCC\'s finding that
Total was a sham entity because it was not truly independent of Atlas is
inconsistent with many past FCC rulings concerning affiliates of
dominant carriers,\" such as those allowing an affiliate to sell
cellular or interexchange service. In response, the Commission points
out that those rulings involved an affiliate offering a competitive
service; the provision of access service by an ILEC, in contrast, is
subject to dominant carrier rate regulation, which would be circumvented
if an ILEC could offer access service through an affiliate. The
Commission also argues that because Total is not independent of Atlas,
those prior decisions do not apply.

We agree with the Commission in both respects. None of the cases cited
by Atlas/Total supports the proposition that an ILEC may create an alter
ego to provide access service in the same geographic area as the ILEC
and thereby avoid regulation as a dominant carrier. If accepted,
Atlas/Total\'s argument would enable every ILEC completely to avoid
dominant carrier regulation by a mere artifice. In this respect, it is
noteworthy that, although the Commission determined that \"Atlas created
Total to increase access charges for calls to Audiobridge,\" id.,
Atlas/Total does not argue on appeal that Total had any other purpose,
or indeed that it had any economic substance at all. Clearly, the entire
arrangement was devised solely in order to circumvent regulation of
Atlas as a dominant carrier, deserves to be treated as a sham, and
cannot benefit from precedents set with respect to legitimate
affiliates.

2\. Section 201(a) \"reasonable requests\"

Section 201(a) of the Act provides that a communications common carrier
has a duty to \"furnish \... communication service upon reasonable
request.\" 47 U.S.C. § 201(a). The Commission determined that an AT&T
customer who called Audiobridge was not thereby making a \"reasonable
request\" for service because AT&T would have had to purchase a service
that was \"unreasonably priced and the product of a sham arrangement.\"
Order, 16 F.C.C.R. 5726 at p 21. Because the Congress has not \"directly
spoken to the precise question at issue,\" we must decide whether the
Commission permissibly construed the statute. Chevron USA Inc. v.
National Resources Defense Council, 467 U.S. 837, 842-43 (1984).

Atlas/Total argues the Commission misinterpreted § 201(a) because
AT&T\'s refusal to serve customers who wanted to call Audiobridge
frustrated the goal of universal service assertedly underlying that
section. According to Atlas/Total, instead of unilaterally blocking
calls to Audiobridge, AT&T should have paid Total and then sought a
refund by filing a complaint with the Commission pursuant to § 208 of
the Act. The Commission responds that AT&T could legitimately block
service because Total was a sham entity.

If, as Atlas/Total suggests, AT&T could not refuse as \"unreasonable\" a
request for service the provision of which would have required it in
turn to procure a service available only at an unreasonable price from a
sham entity, then the modifier \"reasonable\" in § 201(a) would have
little if any meaning. The inclusion of that term in the statute implies
that a common carrier may lawfully deny service to a customer in some
circumstances, whatever its effect upon universal service. The question
is, were there here such circumstances or, more precisely, could the
Commission reasonably so conclude? Surely the answer is yes.

As a rule, grievances are to be raised, as Atlas/Total says, via § 208
and not by resort to self-help. The Commission itself has so stated.
See, e.g., Bell Atlantic-Delaware v. Frontier Communications Services,
Inc., 15 F.C.C.R. 7475, p 9 (2000) (\"\[T\]he proper way for an IXC to
challenge a LEC\'s \[rate\] is to initiate a Section 208 proceeding at
the Commission\"). Here the Commission recognized an exception to the
rule, that allowing an IXC to block calls when a sham entity is charging
it unreasonable rates for access services. If the Commission later held
that Total was not a sham entity or that Total had charged reasonable
rates, then the agency presumably would have found AT&T liable to Total
for blocking the calls. In other words, by blocking calls to Audiobridge
AT&T was acting at its peril. Elkhart Telephone Co., Inc. v.
Southwestern Bell Telephone Co., 11 F.C.C.R. 1051, p 34 (1995) (\"Those
who choose the course of non-compliance are on notice that they will be
acting at their own peril, should the question of the legitimacy of
their refusal to meet their common carrier obligations be decided
against them\").

The Commission\'s decision is not inconsistent with its precedents: None
of the cases Atlas/Total cites for the proposition that AT&T first had
to file a complaint with the Commission involved a sham entity. Nor do
we see how the seemingly narrow exception for a sham entity charging an
unreasonable rate will swallow the rule of § 208, as Atlas/ Total
predicts. The Commission specifically declined \"to address the broader
question of what other circumstances might permit an IXC to refuse to
purchase, or discontinue purchasing, access service from a competitive
LEC.\" Order, 16 F.C.C.R. 5726 at p 21 n.50. Any carrier that engages in
self-help, therefore, runs the risk that the Commission will find
against it \-- even if its underlying position is vindicated \-- and
hold it liable solely for engaging in self-help. In these circumstances,
the Commission\'s judgment that it has not opened Pandora\'s box is
surely reasonable.

3\. Section 251(a)(1) \"interconnect\"

Section 251(a)(1) provides in part that \"\[e\]ach telecommunications
carrier has the duty \... to interconnect directly or indirectly with
the facilities and equipment of other telecommunications carriers.\" In
the Order, the Commission interpreted this duty to \"interconnect\" as
referring \"solely to the physical linking of two networks, and not to
the exchange of traffic between networks.\" 16 F.C.C.R. 5726 at p 23
(emphasis in original).

Atlas/Total argues that \"the duty \... to interconnect\" in § 251(a)(1)
\"encompasses the duty to exchange traffic\" between networks, not just
the duty to establish a physical linkage between networks. Atlas/Total
contends that (1) the history of the requirement of interconnection and
the legislative history of § 251 both indicate that to \"interconnect\"
means to exchange traffic, and (2) the meaning given to \"interconnect\"
in the Order (a) ignores the phrase \"or indirectly\" in § 251(a)(1),
and (b) does not comport with 47 C.F.R. § 51.5. We review the
Commission\'s interpretation of \"interconnect\" under the two-step test
of Chevron, 467 U.S. at 842-43, looking first to the intent of the
Congress and then, if the term is still ambiguous, determining whether
the agency\'s construction of the statute is a reasonable one. Here we
need not go beyond the first step.

As the Commission points out, both the text of § 251(a)(1) and the
structure of § 252 strongly indicate that to \"interconnect\" and to
exchange traffic have distinct meanings. The former section refers only
to \"facilities and equipment,\" not to the provision of any service.
See also Competitive Telecommunications Ass\'n v. FCC, 117 F.3d 1068,
1072 (8th Cir. 1997) (stating of § 251(c)(2), \"By its own terms, this
reference is to a physical link, between the equipment of the carrier
seeking interconnection and the LEC\'s network\"). The latter section,
which establishes pricing standards for agreements between carriers,
provides separately for \"interconnection and network element charges\"
(s 252(d)(1)) and for \"charges for transport and termination of
traffic\" (s 252(d)(2)). Section 252 thus contemplates the very
distinction between physical linkage and exchange of traffic the
Commission applied in the Order.

Atlas/Total argues that the Commission\'s definition of \"interconnect\"
ignores the phrase \"or indirectly\": \"If AT&T were not required to
exchange traffic with Atlas or Total, and is not required to establish a
physical connection to their facilities, then section 251(a)(1) would
not require AT&T to do anything at all.\" But Atlas/Total has no basis
for saying AT&T is not required to establish a physical connection with
them; the Commission has never said that, and in fact AT&T does connect
indirectly with Atlas through a meet point established by Southwestern
Bell. Nothing in the Commission\'s approach, therefore, deprives the
term \"indirectly\" of a role in the statute. Because \"we do not resort
to legislative history to cloud a statutory text that is clear,\"
Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994), we do not
consider Atlas/Total\'s argument that the background of the
interconnection requirement and the legislative history of § 251 require
a different interpretation of \"interconnect.\" The Commission\'s
definition of \"interconnect\" in the Order faithfully follows the
meaning of that term in § 251(a)(1).

4\. Tandem switched transport charges

Atlas/Total argues that the Commission should not have ordered it to
refund the tandem switched transport charges paid by AT&T because Atlas
would have provided and AT&T would have had to pay for the same service
even if Total had never existed. We must turn first, however, to the
Commission\'s objection that we do not have jurisdiction to address that
argument because it was not raised before the Commission.

Section 405 of the Act bars a court from considering any issue of law or
fact upon which the Commission \"has been afforded no opportunity to
pass.\" Where, as here, the issue was not raised explicitly, we must
determine whether \"a reasonable Commission necessarily would have seen
the question raised before \[the Court\] as part of the case presented
to it.\" Time Warner Entertainment Co., v. FCC, 144 F.3d 75, 81 (D.C.
Cir. 1998) (emphasis in original). We do so bearing in mind that
Atlas/Total, as a litigant before the Commission, had \"at least a
modicum of responsibility for flagging the relevant issues which its
documentary submissions presented.\" Bartholdi Cable Co., Inc. v. FCC,
114 F.3d 274, 280 (D.C. Cir. 1997).

Atlas/Total argues that it raised the present issue in a single sentence
in its opposition to AT&T\'s motion to dismiss and in an exhibit listing
Atlas\' and Total\'s various charges for different types of services.
The sentence in question, which Atlas/Total points out was intended to
rebut AT&T\'s claim \"that Total charged \'nearly ten times\' as much to
terminate an AT&T call\" as did Atlas, is: \"A call terminated \[by
Atlas\] at one of AT&T\'s own customer premises would be subject to a
total charge, under NECA Tariff No. 5, of 6.63 cents, consisting of
tandem switched transport and tandem switching charges plus local
switching, carrier common line, RIC and an information surcharge.\" This
sentence, which is not self-evidently about the tandem switched
transport charges AT&T would have paid if Total did not exist, merely
states a fact; it does not constitute an argument, let alone an argument
made with the requisite clarity. See Bartholdi, 114 F.3d at 279 (\"The
Commission need not sift pleadings and documents to identify arguments
that are not stated with clarity by a petitioner\"). Therefore, we
cannot say that a reasonable Commission \"necessarily would have seen\"
that Atlas/Total had presented a question to the agency about payment of
tandem switched transport charges. Atlas/Total claims it could not
foretell the need for this specific argument. Perhaps not, but then
under § 405 Atlas/Total should have filed a petition for rehearing so
the Commission could consider the argument in the first instance.

As a fallback, Atlas/Total argues that we should loose the bond of § 405
in this case because \"unreasonable delay \[by the Commission\]
preclude\[s\] strict application of the exhaustion doctrine.\" The
Commission is supposed to decide a case within 15 months after the
filing of the complaint, see 47 U.S.C. § 208(b), but in this case the
agency did not issue a decision for four and one half years. Atlas/Total
contends that because it could have no confidence the Commission would
issue a ruling on a petition for reconsideration within the 90-day
deadline set in 47 U.S.C. § 405(b), it should be allowed to bypass the
agency and seek judicial review at once.

The case upon which Atlas/Total relies for this argument states that
\"exhaustion is not required when unreasonable delay would render the
administrative remedy inadequate.\" Southwestern Bell Telephone Co. v.
FCC, 138 F.3d 746, 750 (8th Cir. 1998). But in this case the petitioners
seek only damages for AT&T\'s failure to pay Total\'s bills and for
AT&T\'s blocking calls to Audiobridge. We fail to see how giving the
Commission more than 90 days to consider the issue of AT&T\'s liability
for tandem switched transport charges would render any resulting
monetary relief inadequate.

In sum, Atlas/Total has not shown it comes within any exception to §
405. That provision therefore bars our consideration of the issue
whether the Commission should have ordered Atlas to refund the tandem
switched transport charges paid by AT&T.

5\. Remedy for AT&T\'s refusal to pay

Atlas/Total argues that the Commission erred in denying it a remedy for
AT&T\'s refusal to pay access charges for calls to Audiobridge between
August 1, 1995 and November 22, 1995. The Commission concluded that
\"although \[Atlas/ Total\'s\] complaint refers to AT&T\'s failure to
pay certain access charges incurred before AT&T began blocking calls to
Audiobridge the complaint does not state a claim for relief based on
that conduct.\" 16 F.C.C.R. 5726 at p 37 n.82 (emphasis in original).

Unlike a complaint governed by the notice pleading system of the Federal
Rules of Civil Procedure, a complaint filed with the Commission must set
forth \"\[a\]ll matters concerning a claim \... fully and with
specificity\" and must \"complete\[ly\] identif\[y\] \... \[the\]
conduct complained of and the nature of the injury sustained.\" 47
C.F.R. §§ 1.720(a), 1.721(a)(6) (1994). Atlas/Total\'s complaint clearly
seeks damages for AT&T\'s having blocked service to Audiobridge but
never specifically alleges that Atlas is entitled to recover from AT&T
access charges for calls completed before the blocking began.

Atlas/Total tries to salvage its claim by arguing that \"\[t\]he issue
of unpaid access charges was raised in the Complaint as a component of
the larger interconnection issue.\" There is no logical connection,
however, between the alleged duty to interconnect and the payment of
bills for access services; this is even more apparent once one realizes
that the duty to interconnect requires only a physical linkage of
facilities, not the provision of services. Therefore, we agree with the
Commission that Atlas/Total\'s complaint failed to state a claim for
AT&T\'s nonpayment of access charges allegedly incurred prior to
November 22, 1995.

B. AT&T\'s Petition

AT&T argues that it should not be liable for access service because the
Commission (1) failed to address its claim that Total did not provide
\"access service,\" (2) arbitrarily resolved its unreasonable rate
claim, and (3) erred in dismissing as moot its counterclaim under § 228.
The Commission, before defending the Order on its merits, maintains that
AT&T does not have standing under Article III of the Constitution of the
United States to challenge the Order because it has not been injured
thereby. Because the question of standing goes to our jurisdiction over
the case, we must consider it first. See Steel Co. v. Citizens for a
Better Env., 523 U.S. 83, 94-95 (1998).

1\. Standing

For standing to pursue its objections, AT&T must show that it has
suffered an \"actual or imminent injury,\" that the conduct of which it
complains caused that injury, and that a favorable decision of the Court
would redress the injury. See Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-61 (1992). The Commission contends that AT&T has not suffered
an injury because, \"\[a\]lthough the Commission in the Order held that
Total lawfully could assess AT&T reasonable terminating access charges
for the calls it had completed to the Audiobridge chat-line \... the
Order did not require AT&T to pay Total anything.\" The Commission also
asserts that any charges Total might seek under the Order are
time-barred.

AT&T responds that its standing rests upon the collateral estoppel
effects of two closely related rulings in the Order. AT&T contends that
the ruling in the Order requiring AT&T to pay Total a \"reasonable
access charge\" will harm it in pending litigation between itself and
Total. Total Telecommunications Services, Inc. v. AT&T Corp., Civil
Action No. 02-0813 (D.D.C. filed April 29, 2002). First, since July
1996, when Total changed the exchange on which it terminated calls to
Audiobridge, AT&T has not been able to block those calls. Total has
continued to bill AT&T, and indeed has billed it \$2.8 million for calls
terminated within the last two years and therefore within the statute of
limitations.

Second, AT&T argues that the Commission\'s dismissal as moot of its
counterclaim \-- in which it alleged that the revenue-sharing
arrangement between Total and Audiobridge violated sections 228 and
201(b) of the Act \-- could be given collateral estoppel effect not only
in Total\'s but also in other like actions pending against AT&T.
Specifically, the Commission held that the alleged violation, \"standing
alone, would not vitiate AT&T\'s obligation to pay a reasonable access
charge for services already provided.\" Upon this basis the Commission
purported to dismiss parts of AT&T\'s counter-claim \"as moot, without
prejudice.\"

With respect to AT&T\'s first point \-- that the Commission\'s ruling on
access charges exposes it to liability in litigation \-- we note the
Supreme Court\'s teaching that \"\[i\]n an appropriate case, appeal may
be permitted from an adverse ruling collateral to the judgment on the
merits at the behest of the party who has prevailed on the merits, so
long as that party retains a stake in the appeal satisfying the
requirements of Art. III.\" Deposit Guaranty Nat\'l Bank v. Roper, 445
U.S. 326, 334 (1980) (citing Electrical Fittings Corp. v. Thomas & Betts
Co., 307 U.S. 241 (1939)). As we observed recently in Alabama Municipal
Distributors Group v. FERC, 312 F.3d 470 (D.C. Cir. 2002), however,
neither the Supreme Court nor this court \"has actually found standing
on the basis of collateral estoppel.\" Id. at 474. Nonetheless, we think
this is \"an appropriate case\" in which to do so. The Commission issued
its Order after the district court had referred the case to it pursuant
to the doctrine of primary jurisdiction. Although AT&T ultimately
prevailed before the Commission on the merits, along the way the
Commission determined that AT&T was liable to Total for reasonable
access charges and, as it turns out, some of those charges do not appear
to be time-barred. Upon the resumption of the litigation, the district
court will be bound to follow the Order, giving it a preclusive effect
more akin to law of the case than to mere collateral estoppel. The Order
thus injures AT&T and gives it a stake in this appeal sufficient to
support its standing to petition for review of the Commission\'s ruling
on its liability for access charges. In addition, since the Total claim
is ripe and AT&T\'s counterclaim is intertwined with that claim, it
would make little sense to decline to decide AT&T\'s claim now.

With respect to AT&T\'s second point \-- that it is prejudiced by the
Commission\'s having dismissed its counterclaim as moot \-- we are
unable to determine the preclusive effect, if any, of the Commission\'s
ruling. The Commission reasoned that AT&T\'s counterclaim based upon §
228 was moot because AT&T is obligated in any event to pay reasonable
access charges. Nonetheless, the Commission dismissed AT&T\'s claim
against Atlas \"as moot, without prejudice.\" We simply do not know what
it means to dismiss a claim \"as moot, without prejudice.\" If a claim
is moot, then it cannot be refiled; if a claim is dismissed without
prejudice, then it can be refiled. So which is it? At oral argument
counsel for the Commission could not say, and neither can we. Hence, we
cannot determine whether the dismissal will have the preclusive effect
that would give AT&T standing to seek review of that ruling. We
therefore remand the Order to the Commission to explain or reform its
disposition of AT&T\'s counterclaim. Consequently, we do not reach
AT&T\'s standing to argue that § 228 bars Atlas and Total from
recovering anything from AT&T.

2\. Access service

We now turn to the merits of AT&T\'s argument with respect to its
liability for access service. Before the Commission AT&T argued, among
other things, that Total in fact had not provided AT&T with \"access
service\":

In its tariff \[Total\] claims to provide \"local transport\" and
\"local switching,\" and it has billed AT&T for purportedly providing
those services. Both industry practice and Commission regulation,
however, establish that \"local transport\" consists of the carriage of
calls to an end office, and there is clearly no end office behind
\[Total\], only an end user.

Motion of AT&T to Dismiss or for Judgment on the Pleadings at 26. The
Commission acknowledges that it did not consider AT&T\'s argument in the
Order, but maintains that \"\[h\]aving successfully urged the Commission
to pierce the Atlas/Total corporate veil, AT&T should not be heard to
complain that the Commission failed to consider whether Total would have
provided exchange access if it had not been a creature of Atlas.\"

We do not understand AT&T to be questioning \"whether Total would have
provided exchange access if it had not been a creature of Atlas.\"
AT&T\'s position is simply that Total did not provide exchange access
and therefore AT&T should not have to pay it for that. The Commission
may regard AT&T as ungrateful but that is not a reason for failing to
address its argument. Yet the Order is silent regarding whether any
entity \-- Total or Atlas or the two combined \-- actually provided
access service to AT&T. We therefore remand the Order to the Commission
to consider AT&T\'s argument that Total did not provide access service.

3\. Unreasonable rate claim

AT&T contends that the Commission erred by assuming that, if Total had
not existed, then Atlas would have served Audiobridge under the NECA
tariff: \"no carrier that decides to engage in a chat line revenue
sharing scheme would continue participating in the NECA pool,\" which
could mean sharing its revenue with the 1100 other members of the NECA.
The Commission argues that AT&T raises this argument for the first time
in this court. In order to give the agency an opportunity to pass upon
the issue, the Commission maintains that AT&T should have filed a
petition for rehearing pursuant to § 405.

AT&T responds that \"no claim can be made that \[the relevant\] evidence
was not in the record.\" And, of course, no such claim is made. But
enough of the passive voice: the Commission claims that AT&T did not
make the argument, not that the record evidence does not support the
argument. The point could not be lost upon AT&T\'s counsel, which is, no
doubt, why the company\'s half-hearted rejoinder lies buried in a
footnote. In any event, we are barred by § 405 from reaching the
question whether the Commission erred in assuming Atlas would have
adhered to the NECA tariff.

III\. Conclusion

We deny Atlas/Total\'s petition for review. We grant in part AT&T\'s
petition for review and remand the Order to the Commission (1) to
clarify its disposition of AT&T\'s counter-claim, which it dismissed
\"as moot, without prejudice,\" and (2) to respond to AT&T\'s argument
that Total did not provide it with access service.

So ordered.