**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

# Washington, D.C. 20554

In the Matter of )

)

Ameritech Illinois, U S WEST )

Communications, Inc., *et al*., )

COMPLAINANTS, )

)

v\. ) File Nos. E-98-51, E-98-53

)

MCI Telecommunications Corporation, )

DEFENDANT, )

)

and )

> )

Ameritech Illinois, Pacific Bell, *et al.,* )

COMPLAINANTS, )

)

v\. ) File Nos. E-98-50, E-98-54,

) E-98-55, E-98-56, E-98-57,

Frontier Communications Services, Inc. *et al.* ) E-98-58, E-98-59, and
E-98-60.

DEFENDANTS. )

)

**MEMORANDUM OPINION AND ORDER**

Adopted: November 4, 1999; Released: November 8, 1999

By the Chief, Common Carrier Bureau:

**I. INTRODUCTION**

1.  Number range level0Number range level1Number range level2Number
    range level3Number range level4Number range level5Number range
    level6Number range level7In this order, we resolve several formal
    complaints filed by local exchange carriers (LECs) Pacific Bell, *et
    al.* (SBC), Ameritech Illinois, *et al.*, (Ameritech) and U S WEST
    Communications Corporation (U S WEST) (collectively
    Complainants)[^1] against defendant interexchange carriers (IXCs)
    Frontier Communications Services, Inc. *et al.* (Frontier)[^2] and
    MCI Telecommunications Corporation (MCI)[^3] (collectively
    Defendants), pursuant to section 208 of the Communications Act of
    1934, as amended (Act).[^4] Complainants contend that Defendants
    violated section 276 of the Act and section 64.1300 of the
    Commission\'s rules by refusing to pay payphone compensation for
    compensable calls that originated on Complainants\' payphones even
    though Complainants had certified their compliance to the IXCs.
    Pursuant to section 276 of the Act, and the Commission\'s
    implementing rules and orders, IXCs are required to compensate
    payphone service providers---including LEC payphone service
    providers---for certain completed intrastate and interstate calls
    originated from the payphone service providers' payphones.

2.  Defendants each filed an answer arguing that Complainants are not
    entitled to payphone compensation for the calls at issue because
    Complainants have not adequately certified that they have complied
    with the payphone compensation prerequisites set forth in the
    *Payphone Orders*.[^5] Defendants argue that certification requires
    that each complainant prove to Defendants\' satisfaction that it has
    met all of the payphone compensation prerequisites, including the
    removal of intrastate payphone subsidies from the LEC's rates.[^6]

3.  On ­September 24, 1999, the Common Carrier Bureau (Bureau) adopted an
    order resolving Bell Atlantic's formal complaints against Frontier
    and MCI concerning their refusal to pay payphone compensation to
    Bell Atlantic.[^7] In that order, the Bureau concluded that the term
    "certification" as set forth in the *Order on Reconsideration*, does
    not require a LEC payphone service provider to demonstrate to the
    IXC payor that the LEC has satisfied each payphone compensation
    prerequisite.[^8] Instead, the Bureau concluded that under the
    Commission\'s rules and orders, a LEC sufficiently \"certifies\" its
    compliance with the prerequisites by attesting authoritatively to an
    IXC payor that such LEC has satisfied each payphone compensation
    prerequisite.[^9] The complaints resolved in this Order raise the
    same issues addressed in *Bell Atlantic v. Frontier*: specifically,
    whether the term "certification" requires a LEC to provide evidence
    to the IXC payor demonstrating that such LEC has satisfied each
    payphone compensation prerequisite. Defendants have not raised any
    new legal arguments in response to the complaints now before us to
    support their claim that certification requires a LEC to demonstrate
    its compliance with the payphone compensation prerequisites to the
    IXC payors. Thus, we find that the analysis set forth in the *Bell
    Atlantic v. Frontier* order is applicable to the instant complaints.
    Accordingly, we incorporate by reference into this Order, the
    analysis and supporting rationale of the *Bell Atlantic v. Frontier*
    order.

4.  Applying the analysis set forth by the Bureau in *Bell Atlantic v.
    Frontier*, we conclude in this Order that each complainant
    adequately certified to Defendants that it satisfied the payphone
    compensation prerequisites. We order Defendants to pay payphone
    compensation to Complainants for all compensable calls routed to
    them that originated from Complainants\' payphones during the fourth
    quarter of 1997, the first quarter of 1998, and all subsequent
    calls, as required by the Act and the Commission\'s rules.

**II. BACKGROUND**

**A. Statutory Authority.**

5.  In the *Payphone Orders*,[^10] the Commission adopted new rules and
    policies governing the payphone industry to implement section 276 of
    the Act. Those rules and policies: (1) establish a plan to ensure
    fair compensation for \"each and every completed intrastate and
    interstate call using \[a\] payphone\[;\]\" (2) establish a plan to
    discontinue intrastate and interstate carrier access charge service
    elements and payments in effect on such date of enactment, and all
    intrastate and interstate payphone subsidies from basic exchange
    services; (3) prescribe nonstructural safeguards for Bell Operating
    Company (BOC) payphones; (4) permit the BOCs to negotiate with
    location providers regarding the interLATA carrier presubscribed to
    their payphones; (5) permit all payphone service providers to
    negotiate with location providers about the intraLATA carriers that
    are presubscribed to their payphones; and (6) adopt guidelines for
    use by the states in establishing public interest payphones to be
    located \"where there would otherwise not be a payphone\[.\]\"[^11]

6.  In the *Payphone Orders*, consistent with section 276 of the Act,
    the Commission concluded that all payphone service providers,
    including LEC payphone service providers, must be compensated for
    \"each and every completed intrastate and interstate call\"
    originated from their payphones.[^12] The Commission further
    concluded that IXCs, the primary economic beneficiary of such calls,
    would be responsible for compensating the payphone service
    providers.[^13] The Commission determined that LEC payphone service
    providers would be eligible to receive compensation for completed
    calls originated from their payphones once they had satisfied
    certain requirements. Specifically, to receive compensation, the
    Commission required that each LEC \"must be able to certify\" that
    it had complied with those prerequisites.[^14]

7.  In the *Payphone Orders*, the Commission did not set forth any
    requirements for the form of such a certification. The Commission
    subsequently stated in the *Second Report and Order*, however, that
    LEC payphone service providers are not required to file such a
    certification with any state or federal regulatory agency or to
    obtain a formal certification of compliance from either the
    Commission or the states to be eligible to receive per-call
    compensation pursuant to the *Payphone Orders*.[^15] Addressing
    certification in the *Bureau Intrastate Tariffing Waiver Order*, the
    Bureau stated that, although the Commission does not require a LEC
    payphone service provider to file a certification with it, nothing
    in the *Payphone Orders* prohibits an IXC payor from requesting such
    a certification from the LECs.[^16] In the *Bureau Coding Digit
    Waiver Order*, the Bureau further stated that \"LECs that have
    certified to the IXC that they comply with the requirements of the
    *Payphone Orders* must receive per-call compensation.\"[^17] In
    *Bell Atlantic v. Frontier*, the Bureau concluded that certification
    does not require a LEC to prove to the IXCs\' satisfaction that such
    LEC has complied with the prerequisites to payphone
    compensation.[^18]

**B. The Complaints.**

8.  Complainant LECs provide local exchange and payphone services in
    certain regions within the United States.[^19] Defendants Frontier
    and MCI are IXCs that provide both interstate and intrastate
    telephone toll service.[^20] Defendants are subject to payphone
    compensation obligations set forth in the Commission's rules and
    orders and the Act.[^21] Since October 7, 1997, the beginning of
    per-call compensation, each Complainant has delivered calls from its
    payphones to Defendants.[^22]

9.  To obtain compensation for calls that originated from its payphones,
    each Complainant sent letters to Defendants stating that it was
    eligible to receive payphone compensation.[^23] Defendants Frontier
    and MCI responded similarly to Complainants' letters, each stating
    that it would not pay compensation until the LEC had provided
    evidence to the IXC payor that demonstrated that such LEC had
    complied with the payphone compensation prerequisites.[^24] Both
    Frontier and MCI, however, paid compensation in some states.[^25]

10. Additionally, in June 1998, representatives from each LEC met with
    representatives from MCI and Frontier (on separate occasions), along
    with certain Commission staff members, to discuss Defendants\'
    obligations to pay payphone compensation.[^26] During these
    meetings, Commission staff stated that the *Payphone Orders* clearly
    mandated that IXCs must compensate a LEC payphone service provider
    upon receipt of the LEC\'s certification of eligibility without
    further inquiry or requirements. Nonetheless, each Defendant stated
    that it would not compensate the LECs until the LEC *had proven* to
    each Defendant's satisfaction that the LEC had satisfied the
    payphone compensation prerequisites.[^27]

11. In August 1998, Ameritech brought a formal complaint against MCI and
    Frontier, and U S WEST brought a formal complaint against MCI.[^28]
    In September 1998, SBC brought a formal complaint against Frontier.
    Each complaint alleged that Defendants\' refusal to pay payphone
    compensation violated section 276 of the Act and the Commission\'s
    implementing rules and orders. To facilitate resolution of the
    issues addressed in each complaint, the Enforcement Division of the
    Common Carrier Bureau (Division) held a status conference in each
    particular case for the parties. At each conference, the Division
    directed the parties to brief two specific issues: (1) what
    constitutes a \"certification\" as required by the Commission\'s
    *Payphone Orders*, and has the LEC complied with this certification
    requirement; and (2) are there any circumstances under which an IXC
    may refuse to pay payphone compensation after receiving a
    certification from a payphone service provider.

**III. DISCUSSION**

**A. Certification does not require proof of compliance to the IXC
payor.**

12. In the *Payphone Orders*, the Commission set forth prerequisites
    that LEC payphone service providers must satisfy to be eligible to
    receive payphone compensation.[^29] In doing so, the Commission
    delineated explicit guidelines that LECs must follow to satisfy each
    prerequisite, including, in some cases, filing tariffs satisfying
    the prerequisite.[^30] In the *Order on Reconsideration*, the
    Commission stated that once these prerequisites had been met,
    \"\[t\]o receive compensation, a LEC must be able to certify the
    following\"

\(1\) it has an effective cost accounting manual (CAM) filing; (2) it
has an effective interstate CCL tariff reflecting a reduction for
deregulated payphone costs and reflecting additional multiline
subscriber line charge (SLC) revenue; (3) it has effective intrastate
tariffs reflecting the removal of charges that recover the costs of
payphones and any intrastate \[payphone\] subsidies; (4) it has
deregulated and reclassified or transferred the value of payphone
customer premises equipment (CPE) and related costs as required in the
*Report and Order*; (5) it has in effect intrastate tariffs for basic
payphone services (for \"dumb\" and \"smart\" payphones); and (6) it has
in effect intrastate and interstate tariffs for unbundled
functionalities associated with those lines.[^31]

The Commission also required these LECs that are BOCs to \"have approved
\[comparably efficient interconnection (CEI)\] plans for basic payphone
services and unbundled functionalities prior to receiving
compensation.\"[^32]

13. Complainants contend that they are entitled to receive payphone
    compensation from Defendants because each LEC \"certified\" to
    Defendants that it complied with the Commission\'s payphone
    compensation prerequisites.[^33] Defendants argue that the
    statements that the LEC \"certifies\" that it has complied with the
    Commission\'s prerequisites do not constitute a \"certification\" as
    required by the Commission\'s orders. Instead, Defendants contend
    that certification requires a LEC to provide evidence to the IXC
    payors demonstrating that the LEC actually has met the Commission\'s
    payphone compensation prerequisites.[^34] Defendants thus contend
    that the LECs are not entitled to payphone compensation, because the
    LECs have not provided the IXCs proof positive that such LECs
    satisfied the compensation eligibility prerequisites, including the
    requirement that the LEC remove intrastate payphone subsidies from
    its intrastate rates.[^35]

14. To resolve the complaints before us, we must determine whether each
    of the LEC's purported certification letters, which state that the
    LEC has complied with each compensation eligibility prerequisite,
    constitute a valid certification thus triggering a payment
    obligation by Defendants. In *Bell Atlantic v. Frontier*, which
    presented the same legal issues raised in the present complaints,
    the Bureau concluded that the term \"to certify\" as set forth in
    the *Order on Reconsideration* does not require a LEC to demonstrate
    to the IXC payor's satisfaction that such LEC has met each
    compensation eligibility prerequisite. Instead, the Bureau concluded
    that \"to certify\" requires a LEC to attest that it has complied
    with each compensation eligibility prerequisite.[^36]

15. In the present case, Defendants contend that certification should
    require a LEC to provide actual proof of compliance of each payphone
    compensation prerequisite to the IXC payor, not solely an
    attestation of compliance. Defendants recognize that the Commission
    has not specifically defined the term "certification" in the context
    of payphone compensation.[^37] Defendants argue, however, that
    certification mechanisms are used in other contexts that are
    analogous to the instant matter, and that such mechanisms require
    the submission of evidence to constitute certification.[^38] For
    example, Defendants argue that D.C. Circuit Court's decision in
    *Committee to Elect Lyndon LaRouche v. Federal Election
    Commission*,[^39] which found a candidate's certification to be
    insufficient without supporting documentation, illustrates that
    certification requires proof of actual compliance.[^40] In contrast,
    Complainants contend since neither the Commission's orders nor
    statutory authority define the term "to certify," the ordinary
    meaning of the term should be applied.[^41]

16. We reject Defendants arguments for the reasons stated in *Bell
    Atlantic v. Frontier*. In that order, the Bureau found that
    certification requires a LEC to attest that it has complied with the
    payphone compensation prerequisites.[^42] The Bureau stated that
    certification does not require a LEC to prove to the IXC payor that
    such LEC has satisfied each payphone compensation prerequisite.[^43]
    In reaching that conclusion, the Bureau examined the use of the
    ordinary meaning of the term \"to certify\"---the formal assertion
    in writing of some fact[^44]---and found that in the context of
    payphone compensation, the ordinary meaning of the term
    "certification" signifies an assertion or representation by the
    certifying party, not, as Defendants\' assert, a demonstration of
    proof of the facts being asserted.[^45] The Bureau further stated
    that the Commission also has applied the ordinary meaning of the
    term \"to certify\" in other contexts where the Commission has not
    identified specific criteria to constitute \"certification,\" such
    as in the context of a formal complaint.[^46] The Bureau found that
    nothing in the *Payphone Orders* suggests other than the ordinary
    meaning of the term \"to certify.\"

17. The Bureau also found Defendants\' arguments supporting a broader
    meaning of the term \"certify\" to be unpersuasive. In particular,
    the Bureau found that MCI's reliance on *Committee to Elect
    LaRouche* to be misplaced. The Bureau stated that unlike the statute
    at issue in *Committee to Elect LaRouche*, section 276 does not
    contain any certification requirements.[^47] Moreover, the Bureau
    stated that the statute at issue in *Committee to Elect LaRouche*
    specifically required review of the certification by a federal
    agency to determine if the candidate was eligible to receive
    funding. There is no parallel requirement in the present case. The
    Bureau further stated that under the defendants' theory that LECs
    are required to prove to the IXC's satisfaction that such LEC had
    complied with the payphone compensation prerequisites, the IXC would
    be the ultimate judge of whether the LEC payphone service provider
    had complied with the Commission\'s rules and orders. The Bureau
    concluded that such outcome would be unacceptable, because it would
    allow the IXC to delay paying compensation indefinitely.
    Additionally, section 276 requires that the Commission \"ensure all
    payphone service providers are fairly compensated for each . . .
    call\" made from a payphone.[^48] The Commission has not---and
    cannot---delegate this statutory requirement to IXCs.[^49]

18. Defendants have not presented any new arguments to support their
    position that "certification" requires proof of compliance with the
    payphone compensation prerequisites. Instead, Defendants reiterate
    the arguments presented in *Bell Atlantic v. Frontier*. We therefore
    conclude that there is no reason to alter the Bureau's determination
    in *Bell Atlantic v. Frontier* that "certification" requires an
    attestation of compliance. Accordingly, we now review each
    complainant's purported certification letters to determine if such
    letters constitute a "certification."

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1.  **U S WEST v. MCI**

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19. We conclude that U S WEST's certification letters satisfy the
    Commission\'s requirement that a LEC \"must be able to certify\" as
    set forth in the *Order on Reconsideration*.

To obtain compensation for calls originated from its payphones,
Complainant U S WEST sent a letter signed by a U S WEST representative
to MCI on May 20, 1997 attesting that U S WEST had satisfied the
payphone compensation prerequisites in 13 of the 14 states in U S WEST
territory.[^50] Specifically, U S WEST states, "\[i\]n response to the
FCC's implementation requirements for Section 276 \[ . . . \] regarding
the new rules and policies governing the payphone industry, U S WEST
Communications hereby certifies that it has met all the requirements of
the FCC to receive payphone compensation from carriers in all of its
states except one."[^51] On November 12, 1997, U S WEST updated its
certification, and stated that it was eligible to receive payphone
compensation in all 14 states in its region.[^52] As detailed above, to
constitute a certification the LEC must assert that it has complied with
the compensation eligibility prerequisites. We find that U S WEST's
letters of certification clearly meet this standard.

20. In addition to stating that it had complied with each prerequisite,
    U S WEST's letters provided a state-by-state status report on the
    removal of payphone subsidies, PAL tariffs, and unbundled features
    available in state tariffs.[^53] We stated above that certification
    requires an attestation that the LEC has complied with each
    compensation eligibility prerequisite. Thus, U S WEST not only
    satisfied its obligation to attest to its compliance, but also
    provided specific information to the IXC concerning compliance. In
    light of such thorough filings, MCI had no basis for refusing to pay
    compensation.

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2.  **SBC v. Frontier**

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21. SBC argues that it has certified its compliance to Frontier, thus
    entitling SBC to receive payphone compensation.[^54] SBC further
    states that its certifications meet and exceed the requirements of
    the *Payphone Orders*, and that SBC "went the second mile to address
    Defendants' concerns and to show compliance with the Commission's
    directives."[^55] In particular, in an effort to obtain per-call
    compensation, in June 1997, SWBT, Nevada Bell, and Pacific Bell,
    each sent a letter to Frontier certifying that the particular LEC
    has satisfied the payphone compensation prerequisites.[^56] In
    response to SWBT's letter, on June 30, 1997, Frontier stated that it
    would not pay compensation until SWBT completed requirements set
    forth by Frontier, specifically, until SBC provided evidence
    demonstrating that SWBT had complied with each payphone compensation
    prerequisite, *inter alia*, the removal of intrastate payphone
    subsidies.[^57] SBC, on behalf of SWBT, subsequently sent a copy of
    its "certification letter and package" to the National Payphone
    Clearinghouse and to Frontier.[^58] SBC, on behalf of Pacific Bell,
    Nevada Bell, and SWBT, also issued a subsequent letter on May 30,
    1998, stating that all of SBC's companies previously had certified
    their compliance to Frontier. In these letters, SBC provided
    additional information, such as statements regarding how the
    intrastate payphone subsidies had been removed where applicable, "to
    foreclose any possible objections that you may have."[^59]

22. As stated above, in June 1997, SWBT, Nevada Bell, and Pacific Bell
    each sent a letter signed by a representative of the LEC to Frontier
    certifying that it had satisfied the payphone compensation
    prerequisites.[^60] In each letter, SBC states, "\[SWBT, Pacific
    Bell, or Nevada Bell\] hereby certifies that it has met the
    requirements established by the \[Commission\] to receive
    compensation from carriers."[^61] SBC proceeds to list each
    requirement and attest that each requirement has been met.
    Certification, in the context of payphone compensation, requires the
    LEC to attest its compliance with each prerequisite. We find that
    each of SBC's June 1997 letters clearly meet this standard.[^62]

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3.  **Ameritech v. Frontier, MCI**

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23. We also find that Ameritech's letters to Defendants constitute an
    adequate certification. In an effort to obtain compensation for its
    payphones, by letter dated April 17, 1997, Ameritech certified to
    each defendant that it had satisfied all of the prerequisites to
    payphone compensation.[^63] Defendants responded similarly to their
    responses to other LEC payphone service providers, each stating that
    it would not pay compensation to Ameritech until Ameritech
    demonstrated that it had complied with the payphone compensation
    prerequisites. For example, in response to Ameritech's April 17,
    1997 letter, on April 18, 1997, MCI requested additional information
    regarding Ameritech's certification of compliance. Specifically, MCI
    stated that it would not pay compensation "until each eligible
    carrier has clearly demonstrated that it has met all criteria
    necessary for the receipt of such compensation."[^64] Ameritech
    responded to MCI's April 18, 1997 letter by listing the applicable
    tariff or order demonstrating that each payphone compensation
    prerequisite had been satisfied. Ameritech did not provide the
    tariffs or orders, stating that such documents were public and could
    be obtained by MCI.[^65]

24. Frontier responded similarly to Ameritech's letters, stating that
    Frontier would not pay compensation until Ameritech provided
    evidence demonstrating that Ameritech had satisfied the payphone
    compensation prerequisites. In particular, Frontier requested copies
    of Ameritech's state tariff and other relevant filings and state
    commission orders related to the removal of intrastate payphone
    subsidies.[^66] Based on the evidence in the record, it does not
    appear that Ameritech responded to Frontier's request for specific
    information.

25. Nonetheless, we find that Ameritech's letters to Defendants
    constitute an adequate certification. As stated above, certification
    requires that Ameritech attest that it has complied with each
    payphone compensation prerequisite. In its April 17, 1997 letters to
    Defendants, Ameritech specifically asserts that it is eligible to
    receive compensation.[^67] We thus find that Ameritech's letters to
    Defendants constitute an adequate certification.

## B. Eligibility Disputes

26. The Bureau has specifically stated that IXCs *must* pay compensation
    upon receipt of the LEC\'s certification.[^68] There is no exception
    to this absolute obligation to pay upon receipt of certification. As
    noted above, the *Payphone Orders* delegated to the Bureau the
    authority to determine whether a LEC had complied with the
    prerequisites to payphone compensation.[^69] IXCs questioning the
    veracity of a LEC\'s certification may challenge the LEC's
    compliance by initiating a proceeding at the Commission.

27. In the instant matters, neither Frontier nor MCI have availed
    themselves of this remedy, but instead have undertaken the remedy of
    self-help by refusing to pay compensation mandated by our rules. As
    we have stated in other contexts, such self-help remedies are
    strongly disfavored by the Commission.[^70] We emphasize that a
    LEC\'s certification letter does not substitute for the LEC\'s
    obligation to comply with the requirements as set forth in the
    *Payphone Orders.* The Commission consistently has stated that LECs
    must satisfy the requirements set forth in the *Payphone Orders*,
    subject to waivers subsequently granted, to be eligible to receive
    compensation. Determination of the sufficiency of the LEC\'s
    compliance, however, is a function solely within the Commission\'s
    and state\'s jurisdiction.

**C. Damages.**

28. We conclude above that Complainants' letters constitute an adequate
    certification, such that these letters triggered Defendants\'
    obligation to pay payphone compensation. The Commission bifurcated
    this proceeding into liability and damages phases. Thus, in
    accordance with section 1.722(b) of the Commission\'s rules, each
    complainant may file a supplemental complaint for damages within
    sixty days of the release of this order.[^71]

IV\. CONCLUSION AND ORDERING CLAUSES

29. In conclusion, we find that Complainants\' letters to Defendants
    satisfy the Commission\'s certification requirement. We also find
    that Defendants' arguments that the LECs were required to
    demonstrate compliance to their satisfaction are without merit for
    the reasons stated above. Under Defendants\' theory, the IXC would
    be the ultimate judge of whether the LEC payphone service provider
    had complied with the Commission\'s rules and orders. This outcome
    is unacceptable. First, such a construct would allow the IXC to
    delay paying compensation indefinitely. Second, the statute requires
    that the Commission \"ensure all payphone service providers are
    fairly compensated for each . . . call\" made from a payphone.[^72]
    The Commission has not---and cannot---delegate this statutory
    requirement to IXCs. Therefore, we conclude that Ameritech, SBC, and
    U S WEST are entitled to receive per-call compensation from Frontier
    and MCI.

30. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 208,
    and 276 of the Communications Act of 1934, as amended, 47 U.S.C. §§
    151, 154(i), 154(j), 208, and 276, that the complaints filed by
    Illinois Bell Telephone Company, Inc., d/b/a Ameritech Illinois,
    Indiana Bell Telephone Company, Inc., d/b/a Ameritech Indiana,
    Michigan Bell Telephone Company, Inc., d/b/a Ameritech Michigan, The
    Ohio Bell Telephone Company, d/b/a Ameritech Ohio, Wisconsin Bell,
    Inc., d/b/a Ameritech Wisconsin; and by Pacific Bell, Nevada Bell,
    and Southwestern Bell Telephone Company against Frontier
    Communications Services Inc., Frontier Communications International
    Inc., Frontier Communications of the West Inc., Frontier
    Communications-North Central Region Inc., Frontier Communications of
    New England Inc., and Frontier Communications of the Mid Atlantic
    Inc. ARE GRANTED TO THE EXTENT INDICATED HEREIN.

31. IT IS FURTHER ORDERED, pursuant to Sections 1, 4(i), 4(j), 208, and
    276 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), 208, and 276, that the complaints filed Illinois
    Bell Telephone Company, Inc., d/b/a Ameritech Illinois, Indiana Bell
    Telephone Company, Inc., d/b/a Ameritech Indiana, Michigan Bell
    Telephone Company, Inc., d/b/a Ameritech Michigan, The Ohio Bell
    Telephone Company, d/b/a Ameritech Ohio, Wisconsin Bell, Inc., d/b/a
    Ameritech Wisconsin; and by U S WEST Communications Corporation
    against MCI Communications Corporation IS GRANTED TO THE EXTENT
    INDICATED HEREIN.

32. IT IS FURTHER ORDERED that Ameritech MAY FILE a supplemental
    complaint for damages within sixty (60) days pursuant to Section
    1.722(b)(2) of the Commission\'s rules, 47 C.F.R. § 1.722(b).

33. IT IS FURTHER ORDERED that U S WEST MAY FILE a supplemental
    complaint for damages within sixty (60) days pursuant to Section
    1.722(b)(2) of the Commission\'s rules, 47 C.F.R. § 1.722(b).

34. IT IS FURTHER ORDERED that SBC MAY FILE a supplemental complaint for
    damages within sixty (60) days pursuant to Section 1.722(b)(2) of
    the Commission\'s rules, 47 C.F.R. § 1.722(b).

FEDERAL COMMUNICATIONS COMMISSION

Lawrence E. Strickling

Chief, Common Carrier Bureau

[^1]: The Complainant LECs are as follows: Illinois Bell Telephone
    Company, Inc., d/b/a Ameritech Illinois, Indiana Bell Telephone
    Company, Inc., d/b/a Ameritech Indiana, Michigan Bell Telephone
    Company, Inc., d/b/a Ameritech Michigan, The Ohio Bell Telephone
    Company, d/b/a Ameritech Ohio, Wisconsin Bell, Inc., d/b/a Ameritech
    Wisconsin (Ameritech); Pacific Bell, Nevada Bell, and Southwestern
    Bell Telephone Company (SBC); and U S WEST Communications
    Corporation (U S WEST).

[^2]: Frontier Communications Services, Inc., Frontier Communications
    International, Inc., Frontier Communications of the West, Inc.,
    Frontier Communications - North Central Region, Inc., Frontier
    Communications of New England, Inc., and Frontier Communications of
    the Mid Atlantic, Inc. (collectively Frontier).

[^3]: Subsequent to the filing of this complaint, Defendant MCI merged
    with WorldCom. This order is binding on all named parties and their
    successors in interest.

[^4]: 47 U.S.C. § 208. Section 208 gives a party the right to file a
    complaint with the Commission if it believes that a common carrier
    acted or failed to act in contravention of the Act or of a
    Commission rule or order. Complainant Ameritech brought formal
    complaints against both Frontier and MCI; Complainant SBC brought a
    formal complaint against Frontier; and Complainant U S WEST brought
    a formal complaint against MCI. We have consolidated these
    proceedings for disposition because of the similarity of the issues
    and arguments raised by the parties. In this order, we will discuss
    the briefs and pleadings individually only where necessary to
    address unique or individual arguments made by a party.

[^5]: *See Order on Reconsideration*, 11 FCC Rcd 21,233 (1997).

[^6]: *See, e.g.,* Frontier Brief (SBC) at 5 (stating that \"an exchange
    carrier must submit credible documentary evidence that it satisfies
    the preconditions contained in section 276 to the receipt of
    payphone compensation.\").

[^7]: *See Bell Atlantic v. Frontier, Memorandum Opinion and Order*, DA
    99-1971 (Sept. 24, 1999) (*Bell Atlantic v. Frontier*).

[^8]: *See id.* at para. 3.

[^9]: *See id.*

[^10]: *Report and Order*, 11 FCC Rcd 20,541; *Order on
    Reconsideration*, 11 FCC Rcd at 21,233. There have been many orders
    in CC Docket No. 96-128, including the *Payphone Orders*, which
    address a variety of payphone-related issues. We will refer to this
    docket as the payphone proceeding.

[^11]: 47 U.S.C. § 276(b). Section 276(b)(1)(B) directed the Commission
    to discontinue the above-mentioned carrier access charge service
    elements and payments in effect on such date of enactment and
    intrastate and interstate payphone subsidies in favor of a
    compensation plan that would ensure fair compensation for each and
    every completed call as set forth in section 276(b)(1)(A). Only
    certain payphone owners were entitled to subsidies.

[^12]: *See* 47 U.S.C. § 276(b)(1)(A) (directing the Commission to
    establish a plan \"to ensure that all payphone service providers are
    fairly compensated for each and every completed intrastate and
    interstate call using their payphone\"); 47 C.F.R. § 64.1300(a)
    (requiring \"every carrier to whom a completed call from a payphone
    is routed \[to\] compensate the payphone service provider for the
    call . . . .\"). *See also Report and Order*, 11 FCC Rcd at 20,566,
    para. 48.

[^13]: For purposes of paying compensation for compensable calls and
    other associated obligations, such as tracking calls, the term
    \"IXC\" includes a LEC when it provides interstate, intraLATA toll
    service. *See Report and Order*, 11 FCC Rcd at 20,584, para. 83
    n.293; *Order on Reconsideration*, 11 FCC Rcd at 21,270, paras.
    74-75 & 21,278, para. 92. Under the *Third Report and Order*, the
    default per-call compensation amount is \$0.24 absent negotiation to
    receive a different amount. *See Third Report and Order*, 14 FCC Rcd
    at 2552, paras. 14, 196 (setting forth the history of Commission
    payphone compensation plans and establishing the compensation amount
    retroactive to October 7, 1997).

[^14]: *Order on Reconsideration*, 11 FCC Rcd at 21,293-94, paras.
    131-32; *see infra* para. 12 (listing specific requirements).

[^15]: *See Second Report and Order*, 13 FCC Rcd at 1780, para. 1 n.9;
    *see also Implementation of the Pay Telephone Reclassification and
    Compensation Provisions of the Telecommunications Act of 1996,
    Memorandum Opinion and Order*, 13 FCC Rcd 4998, 5001-02, para. 4
    (1998) *(Bureau Coding Digit Waiver Order*) (emphasizing that there
    are no state or federal certification requirements).

[^16]: *See Bureau Intrastate Tariffing Waiver Order*, 12 FCC Rcd at
    21,380, para. 22.

[^17]: *Bureau Coding Digit Waiver Order*, 13 FCC Rcd at 5001-02, para.
    4 (emphasis added); *see also infra* para. 27 (discussing the rights
    of a payor to challenge a certification).

[^18]: *See Bell Atlantic v. Frontier* at para. 3.

[^19]: *See* Ameritech Complaint (Frontier) at para. 2 (stating that
    Ameritech provides service in the following states: Illinois,
    Indiana, Michigan, Ohio, and Wisconsin); *see also* SBC Complaint at
    para. 2 (stating that Pacific Bell provides service in California;
    Nevada Bell provides service in Nevada; and SWBT provides service in
    Arkansas, Kansas, Missouri, Oklahoma, and Texas); *see also* U S
    WEST Complaint at para. 2 (stating that U S WEST provides service in
    the following states: Minnesota, Iowa, Nebraska, North Dakota, South
    Dakota, Montana, Idaho, Wyoming, Utah, Colorado, Arizona, New
    Mexico, Washington, and Oregon).

[^20]: *See* Ameritech Complaint (MCI) at para. 3; MCI Answer
    (Ameritech) at para. 3; Frontier Answer (SBC) at para. 3.

[^21]: *See, e.g.,* 47 C.F.R. § 64.1300(a).  Section 64.1300(a)
    provides, \"every carrier to whom a completed call from a payphone
    is routed shall compensate the payphone service provider for the
    call . . . .\" *See also* Ameritech/Frontier Joint Statement at 2;
    Ameritech/MCI Joint Statement at 2 (stating that Defendants are
    subject to section 64.1300 of the Commission's rules).

[^22]: *See, e.g.,* Ameritech/Frontier Joint Statement at 2;
    Ameritech/MCI Joint Statement at 2 (stating that since October 8,
    1997, calls have been carried by MCI. The one day difference between
    the statement in the complaint and the statement in the joint
    statement does not affect our decision regarding the liability for
    the calls at issue. This minor discrepancy goes toward the amount of
    damages due.); *see also* U S WEST Complaint at para. 8; SBC
    Complaint at para. 8.

[^23]: *See, e.g.,* Ameritech Complaint (MCI) at para. 14 (stating that
    by \"letter dated April 17, 1997, Ameritech certified to MCI that it
    had satisfied all of the prerequisites to eligibility for receipt of
    payphone compensation\"). Each LEC's attempts to receive payphone
    compensation will be discussed in the discussion section. *See
    infra* paras. 19-25.

[^24]: *See, e.g.,* Frontier Answer (SBC) at para. 85 (stating that as
    "a precondition of receiving payphone compensation SBC was required
    to demonstrate that it has removed payphone costs and subsidies from
    its interstate and intrastate rates); *see also* SBC Complaint at
    Exhibit D (Letter to Ronald M. Jennings, Vice President, Operator
    Services, Southwestern Bell Telephone from Michael J. Nighan,
    Director-Regulatory Affairs, Frontier Communications (June 30, 1997)
    (stating that "the only procedures under which The Frontier
    Companies will pay such compensation were clearly spelled out in a
    letter mailed to your company on May 13, 1997 by the National
    Payphone Clearinghouse, Frontier's designated agent in this matter.
    . . Frontier requested that you provide copies of specifically cited
    materials rather than merely stipulating that you have complied with
    the \[Commission's\] checklist.")).

[^25]: *See, e.g.,* MCI Brief (U S WEST) at 10 (stating that MCI made
    payments in 6 states where U S WEST provided "documentation which
    proves that it has removed from its rates charges that recover costs
    of payphones and intrastate subsidies). *See also* SBC Complaint at
    para. 21 (stating that Frontier paid partial compensation in Nevada
    and Kansas).

[^26]: *See* SBC Complaint at para. 30; Ameritech Complaint (MCI) at 12;
    U S WEST Complaint at para. 14.

[^27]: *See, e.g.,* Frontier Answer (Ameritech) at para. 24; MCI Answer
    (U S WEST) at para. 17.

[^28]: *See supra* note 25 (stating that MCI paid compensation in some U
    S WEST states). U S WEST limited the scope of its complaint to
    compensation for calls originating from U S WEST payphones in the 9
    states in U S WEST's service area where MCI has refused to pay any
    per-call compensation: Colorado, Idaho, Montana, Nebraska, North
    Dakota, Oregon, South Dakota, Utah, and Washington. *See* U S WEST
    Complaint at para. 1.

[^29]: *See Report and Order*, 11 FCC Rcd at 20,604-34, paras. 127-87
    (establishing eligibility requirements to receive per-call
    compensation); *see also Order on Reconsideration*, 11 FCC Rcd at
    21,299-21,329, paras. 142-220 (further discussing such
    requirements). These orders listed the steps LECs must take to
    satisfy the prerequisites including what tariffs, if any, were
    required to be filed with either the states or the Commission.

[^30]: *See Report and Order*, 11 FCC Rcd at 20,604-34, paras. 127-87
    (establishing eligibility requirements to receive per-call
    compensation); *see also Order on Reconsideration*, 11 FCC Rcd at
    21,299-21,329, paras. 142-220 (further discussing such
    requirements).

[^31]: *Order on Reconsideration*, 11 FCC Rcd at 21,293, para. 131. *See
    also Implementation of the Pay Telephone Reclassification and
    Compensation Provisions of the Telecommunications Act of 1996,
    Order*, 12 FCC Rcd 21,370, 21,374, para. 10 (Com. Car. Bur. Apr. 15,
    1997) (*Bureau Intrastate Tariffing Waiver Order*) (stating that the
    requirements for intrastate tariffs are as follows:

    > that (1) payphone service intrastate tariffs be cost-based,
    > consistent with Section 276, nondiscriminatory and consistent with
    > Computer *III* tariffing guidelines; and (2) that the states
    > ensure that payphone costs for unregulated equipment and subsidies
    > be removed from the intrastate local exchange service and exchange
    > access service rates) (citations omitted).

[^32]: *Order on Reconsideration*, 11 FCC Rcd at 21,294, para. 132. The
    Commission also required payphone service providers to transmit
    payphone-specific coding digits to IXCs before payphone service
    providers would be eligible to receive compensation. Due to
    difficulties implementing coding digits, the Bureau granted limited
    waivers of the payphone service providers\' obligation to provide
    coding digits, but reiterated that these waivers did not negate an
    IXC\'s obligation to pay payphone compensation. *Bureau Coding Digit
    Waiver Order*, 13 FCC Rcd at 4998. The provision of coding digits is
    not part of the Commission\'s certification \"requirement\" and is
    not at issue in this Order.

[^33]: *See, e.g.,* U S WEST Brief at 5 (stating that U S WEST sent a
    comprehensive letter to MCI certifying that U S WEST has satisfied
    the applicable requirements); SBC Brief at 3.

[^34]: *See, e.g.,* MCI Brief (U S WEST) at 4; Frontier Brief (SBC) at
    5.

[^35]: *See, e.g.,* MCI Brief (U S WEST) at 9; Frontier Answer (SBC) at
    para. 85.

[^36]: *See Bell Atlantic v. Frontier* at para. 17. As stated above, the
    *Order on Reconsideration* does not require a LEC to provide any
    form of a certification to the IXC payor (or to any other entity).
    Instead, the *Order on Reconsideration* merely requires that a LEC
    \"must be able to certify.\" The requirement that a LEC \"be able to
    certify\" is triggered by an IXC payor\'s request, as permitted in
    the *Bureau Intrastate Tariffing Waiver Order*, to see such a
    certification.

[^37]: *See, e.g.,* MCI Brief (U S WEST) at 4; Frontier Reply Brief
    (Ameritech) at 6.

[^38]: *See* MCI Brief (U S WEST) at 4; Frontier Brief (SBC) at 7-8.

[^39]: 613 F.2d 834 (D.C. Cir. 1978).

[^40]: *See* MCI Brief (U S WEST) at 4-5 (citing *Committee to Elect
    LaRouche*, 613 F.2d at 834); Frontier Brief (SBC) at 9-10.

[^41]: *See, e.g.,* SBC Brief at 5.

[^42]: *See Bell Atlantic v. Frontier* at para. 17.

[^43]: *See id.* at paras. 18-19.

[^44]: [Black\'s Law Dictionary]{.smallcaps} at 227 (6th ed. 1990).

[^45]: *See id.* at 228 (also defining "certify" as \"\[t\]o
    authenticate or vouch for a thing in writing.\" The Commission also
    stated that Webster's Dictionary defines \"certify\" as \"to attest
    authoritatively\" and \"to attest as being true or as represented or
    as meeting a standard.\" [Webster\'s Ninth New Collegiate
    Dictionary]{.smallcaps} at 223 (1989).

[^46]: For example, the Commission\'s definition of \"certify\" in the
    context of a formal complaint proceeding requires that \"\[t\]he
    signature of an attorney or party shall be a certificate that the
    attorney or party has read the pleading, motion or other paper; that
    to the best of his or her knowledge, . . . it is well grounded in
    fact . . . .\" *See* 47 C.F.R. § 1.734(c). section 1.734(c) states
    in full:

    > The original of all pleadings and other submissions filed by any
    > party shall be signed by that party, or by the party\'s attorney.
    > The signing party shall include in the document his or her
    > address, telephone number, facsimile number and the date on which
    > the document was signed. Copies should be conformed to the
    > original. Unless specifically required by rule or statute,
    > pleadings need not be verified. The signature of an attorney or
    > party shall be a certificate that the attorney or party has read
    > the pleading, motion, or other paper; that to the best of his or
    > her knowledge, information, and belief formed after reasonable
    > inquiry, it is well grounded in fact and is warranted by existing
    > law or a good faith argument for the extension, modification, or
    > reversal of existing law; and that it is not interposed for the
    > purposes of delay or for any other improper purpose.

[^47]: *See Bell Atlantic v. Frontier* at para. 22.

[^48]: 47 U.S.C. § 276.

[^49]: *See Bell Atlantic v. Frontier* at paras. 20, 27; *see also*
    *Order on Reconsideration*, 11 FCC Rcd at 21,294, para. 132
    (delegating the authority to the Bureau to determine whether a LEC
    had complied with the prerequisites to payphone compensation).

[^50]: U S WEST Brief at Attachment (Letter to MCI from Frank H.
    Hatzenbuehler, Vice President Markets Pricing & Regulatory Support,
    U S WEST (May 20, 1997)).

[^51]: *Id.*

[^52]: U S WEST Brief at Attachment (Letter to Bill Wilde, Director,
    Local Financial Systems Management, MCI Telecommunications
    Corporation from Frank H. Hatzenbuehler, Vice President Markets
    Pricing & Strategy, U S WEST (Nov. 20, 1997) (stating "\[t\]his
    serves to inform you that . . . the New Mexico Public Utility
    Commission approved, retroactively to April 15, 1997, U S WEST's
    intrastate tariff for basic payphone services. . . . Accordingly, U
    S WEST is in full compliance with the applicable requirements as set
    forth in the Payphone Orders and is eligible to receive . . .
    compensation . .. for U S WEST-owned payphones in all of its 14
    state telephone service area.")). In response to these letters, U S
    WEST received payment for its payphones in Wyoming, Iowa, New
    Mexico, Arizona, and Minnesota. *See* U S WEST Complaint at Exhibit
    B (letter to Timothy J. Gates, MCI from Larri Menear, Product
    Manager, Per-Call Compensation, U S WEST (Apr. 26, 1998).

[^53]: *See* U S WEST Brief at 5.

[^54]: *See* SBC Brief at 3.

[^55]: *Id.*

[^56]: *See* SBC Complaint at paras. 13-15 (stating that SWBT sent a
    certification letter on June 4, 1997; Nevada Bell sent a
    certification letter on June 5, 1997; and Pacific Bell sent a
    certification letter on June 10, 1997).

[^57]: *See* SBC Complaint at Exhibit D (Letter to Ronald M. Jennings,
    Vice President, Operator Services, Southwestern Bell Telephone from
    Michael J. Nighan, Director-Regulatory Affairs, Frontier
    Communications (June 30, 1997) (stating that "the only procedures
    under which The Frontier Companies will pay such compensation were
    clearly spelled out in a letter mailed to your company on May 13,
    1997 by the National Payphone Clearinghouse, Frontier's designated
    agent in this matter. . . Frontier requested that you provide copies
    of specifically cited materials rather than merely stipulating that
    you have complied with the \[Commission's\] checklist.")). The
    record does not reflect that Frontier sent a similar letter each to
    Nevada Bell and Pacific Bell. The record indicates, however, that
    Nevada Bell and Pacific Bell each corresponded with Frontier
    regarding Frontier's refusal to pay payphone compensation. *See,
    e.g.,* Letter to Michael Nighan, Frontier Communications, Inc. from
    Tom Weber, Vice President-Regulatory Public Communications, SBC
    (Apr. 27, 1998) (stating that Pacific Bell had been advised that
    Frontier did not intend to pay payphone compensation and stating
    that payment was due); Letter to Tom Weber, Vice
    President-Regulatory Public Communications, SBC from Michael J.
    Shortley, Senior Attorney and Director, Regulatory Services,
    Frontier (May 6, 1998) (responding to the April 27, 1998 letter from
    SBC)).

[^58]: *See* SBC Complaint at para. 12; *see also* Letter to Michael J.
    Nighan, Director-Regulatory Affairs, Frontier from Ronald M.
    Jennings, SBC (Aug. 7, 1997) (stating that "SWBT has fully complied
    with certification as noted in the package sent to \[Frontier\].
    That package included all applicable orders and documents to
    substantiate the fact that SBWT met all the necessary certification
    requirements. A copy of the certification letter and package was
    subsequently sent to the \[NPC\].").

[^59]: SBC Complaint at Exhibit L (Letter to Michael J. Shortley, Senior
    Attorney and Director, Regulatory Services, Frontier from Tom Weber,
    Vice President-Regulatory, Public Communications, SBC (May 30,
    1998)).

[^60]: *See* SBC Complaint at paras. 13-15.

[^61]: SBC Complaint at Attachments A-C (Attachment A: Letter to Mike
    Malone, Senior Manager, Cost of Access, Frontier from Ronald M.
    Jennings, Vice President-General Manager, Operator Services, SWBT
    (June 4, 1997); Attachment B: Letter to Jeanne Boccuzi, Frontier
    from M.P. Coffey, CFO and Strategic Planning Vice President, Nevada
    Bell (June 5, 1997); Attachment C: Letter to Michael Nighan,
    Frontier from Laura Murdock, Vice President and General Manager,
    Pacific Bell-Public Communications (June 10, 1997)). The substance
    of each letter is virtually identical.

[^62]: In addition to stating that it complied with each prerequisite,
    SBC also detailed its compliance with the prerequisites.
    Specifically, SBC indicated how each prerequisite had been
    satisfied, for example, by listing a cite to the order approving
    SBC's filing. As stated above, certification does not require this
    additional documentation. In light of this thorough information,
    Defendants had no basis for refusing to pay compensation.

[^63]: *See* Ameritech Complaint (Frontier) at para. 14 (citing Letter
    to Mike Malone, Manager-Cost of Access, Frontier from Vanessa
    Jackson, Marketing Director, Ameritech Pay Phone Services (Apr. 17,
    1997) (Attachment A)); *see also* Ameritech Complaint (MCI) at para.
    14 (citing Letter to Earl Hurter, Senior Manager, MCI from Vanessa
    Jackson, Marketing Director, Ameritech Pay Phone Services (Apr. 17,
    1997) (Attachment A)).

[^64]: Ameritech Complaint (MCI) at Exhibit B (Letter to Ellen Gardner,
    President, Ameritech Payphone Service from Dick Powell, Director,
    MCI (Apr. 18, 1997).

[^65]: *See* Ameritech Complaint (MCI) at Exhibit C (Letter to Bill
    Wilde, Director, Local Financial Systems Management, MCI from Ellen
    Gardner, Pay Phone Services, Ameritech (Apr. 28, 1997)).

[^66]: *See* Frontier Answer (Ameritech) at para. 24.

[^67]: *See* Ameritech Complaint (Frontier & MCI) at Exhibit A (stating
    that the Commission "approved Ameritech's CEI Plan, Cost Allocation
    Manual, and the removal of Ameritech's Set Use Fee Tariff and Tariff
    adjusting the CCL. . . With these approvals, Ameritech is eligible
    for \[. . .\] compensation.").

[^68]: *See Bureau Intrastate Tariffing Waiver Order*, 12 FCC Rcd at
    21,380, para. 22.

[^69]: *See Order on Reconsideration*, 11 FCC Rcd at 21,294, para. 132.

[^70]: *See MCI Telecommunications Corp., Memorandum Opinion and Order*,
    62 FCC 2d 703, 705-06 (1976) (stating that a customer may not
    withhold payment of properly billed tariffed charges for voluntarily
    ordered services).

[^71]: 47 C.F.R. § 1.722(b).

[^72]: 47 U.S.C. § 276.