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 Federal  Communications  Commission  FCC  04-  106 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 CoreComm  Communications,  Inc.,  and  Z-  Tel  Communications,  Inc., 


 Complainants, 
 v. 
 SBC  Communications  Inc.,  Southwestern  Bell  Telephone  Company, 
 Pacific  Bell  Telephone  Company,  Nevada  Bell  Telephone  Company, 
 The  Southern  New  England  Telephone  Company, 
 Illinois  Bell  Telephone  Company,  Indiana  Bell  Telephone  Company, 
 Michigan  Bell  Telephone  Company,  The  Ohio  Bell  Telephone  Company,  and 
 Wisconsin  Bell,  Inc., 
 Defendants. 


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 File  No.  EB-  01-  MD-  017 


 ORDER  ON  RECONSIDERATION 
 Adopted:  April  28,  2004  Released:  May  4,  2004 
 By  the  Commission: 
 I.  INTRODUCTION 
 1.  In  this  Order,  we  deny  the  Petition  for  Reconsideration  1  filed  by  Z-  Tel  Communications,  Inc.  (  Z-  Tel)  pursuant  to  section  405  of  the  Communications  Act  of  1934,  as 


 amended  (  Act).  2  Z-  Tel  seeks  reconsideration  of  the  Commissions  Liability  Order  3  insofar  as 


 1  Petition  for  Reconsideration,  File  No.  EB-  01-  MD-  017  (filed  May  19,  2003)  (  Petition). 
 2  47  U.  S.  C.    405. 
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 it  denies  Z-  Tels  claim,  made  in  a  section  208  formal  complaint,  that  defendant  Pacific  Bell  Telephone  Company  (  Pacific)  violated  sections  201(  b),  251(  c)(  1)  and  (c)(  3)  of  the  Act,  and 
 Commission  rules  51.309  and  51.313.  4  For  the  following  reasons,  we  conclude  that  Z-  Tels  Petition  lacks  merit. 


 II.  BACKGROUND 
 2.  Z-  Tel  is  a  competitive  local  exchange  carrier  (  CLEC),  and  Pacific  is  an  incumbent  local  exchange  carrier  (  ILEC).  5  Pursuant  to  section  252(  i)  of  the  Act,  6  Z-  Tel  opted 


 into  an  existing  section  252  interconnection  agreement  between  Pacific  and  another  CLEC  (the  Pacific  Agreement).  The  Pacific  Agreement  granted  Z-  Tel  access  to  the  shared  transport 
 unbundled  network  element  (  UNE),  but  Pacific  refused  to  allow  Z-  Tel  to  use  the  shared  transport  UNE  to  transport  Z-  Tels  customers  intraLATA  toll  calls.  Z-  Tel  sought  to  amend  the 
 Pacific  Agreement  by  asking  Pacific  to  execute  a  Memorandum  of  Understanding  that  would  have  allowed  Z-  Tel  to  use  the  shared  transport  UNE  for  intraLATA  toll.  Pacific  refused  Z-  Tels 
 request.  7 
 3.  In  its  Complaint  filed  in  this  proceeding,  Z-  Tel  alleged  that  Pacifics  refusal  to  allow  Z-  Tel  to  use  the  shared  transport  UNE  for  intraLATA  toll,  and  its  refusal  to  execute  the 


 Memorandum  of  Understanding,  violated,  inter  alia,  sections  201(  b),  251(  c)(  1),  and  251(  c)(  3)  of 
 (Continued  from  previous  page)  3  CoreComm  Communications,  Inc.  and  Z-  Tel  Communications,  Inc.  v.  SBC  Communications  Inc.  et  al., 
 Memorandum  Opinion  and  Order,  18  FCC  Rcd  7568  (2003),  petition  for  review  pending  release  of  the  instant  order,  sub  nom.  SBC  Communications  Inc.  v.  FCC,  No.  03-  1147  (D.  C.  Cir.  2003)  (  Liability  Order). 


 4  47  U.  S.  C.    201(  b),  251(  c)(  1)  and  (c)(  3);  47  C.  F.  R.    51.309(  a),  51.309(  b),  51.313(  b).  Z-  Tel  does  not  seek 
 reconsideration  of  the  Commissions  denial  of  its  section  202(  a)  claims.  The  Commission  granted  Z-  Tels  claim  that  defendants  Illinois  Bell  Telephone  Company,  Indiana  Bell  Telephone  Company,  Michigan  Bell  Telephone 


 Company,  and  Wisconsin  Bell  Telephone,  Inc.  (collectively,  Ameritech)  violated  paragraph  56  of  the  SBC/  Ameritech  Merger  Order  Conditions.  Liability  Order,  18  FCC  Rcd  at  7576-  78,    20-  25  (citing  Applications 
 of  Ameritech  Corp.,  Transferor,  and  SBC  Communications  Inc.,  Transferee,  for  Consent  to  Transfer  Control  of  Corporations  Holding  Commission  Licenses  and  Lines  Pursuant  to  Sections  214  and  310(  d)  of  the 
 Communications  Act  and  Parts  5,  22,  24,  25,  63,  90,  95,  and  101  of  the  Commissions  Rules,  Memorandum  Opinion  and  Order,  14  FCC  Rcd  14712,  15023-  24  (1999),  (subsequent  history  omitted)  (  SBC/  Ameritech  Merger 
 Order  Conditions).  Specifically,  the  Liability  Order  noted  that  Z-  Tel  purchased  the  shared  transport  UNE  from  Ameritech,  that  Z-  Tel  requested  permission  to  use  the  UNE  for  intraLATA  toll,  and  that  Ameritech  refused  Z-Tels 
 request.  Ameritechs  refusal  violated  the  SBC/  Ameritech  Merger  Order  Conditions,  because  those  conditions  require  Ameritech  to  offer  shared  transport  for  intraLATA  toll.  Liability  Order  at  18  FCC  Rcd  at 
 7576-  77,    20-  21.  The  Commission  has  issued  a  forfeiture  order  against  Ameritech  for  violation  of  the  Merger  Order  Conditions.  See  SBC  Communications,  Inc.,  Apparent  Liability  for  Forfeiture,  Forfeiture  Order,  17  FCC 
 Rcd  19923  (2002),  appeal  pending. 
 5  Liability  Order,  18  FCC  Rcd  at  7571,    8. 


 6  47  U.  S.  C.    252(  i). 
 7  Liability  Order,  18  FCC  Rcd  at  7579-  81,    29. 
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 the  Act  and  Commission  rules  51.309  and  51.313.  8  The  Complaint  did  not  include  a  copy  of  the  Pacific  Agreement.  Nor  did  the  Complaint  discuss  or  direct  the  Commissions  attention  to  any 
 of  the  language  found  in  the  Pacific  Agreement.  9 
 4.  Pacific  asserted  in  its  Answer  that  it  was  not  obligated  by  the  Pacific  Agreement  to  provide  Z-  Tel  shared  transport  for  intraLATA  toll  or  to  execute  the  Memorandum  of 


 Understanding.  10  Pacific  also  stated  that,  in  conference  calls  with  Commission  staff    counsel  for  [Z-  Tel]  specifically  disavowed  any  claim  that  [Pacific]  had  violated  their  interconnection 
 agreement[]  .  11  Pacific  asserted  as  an  affirmative  defense  that  Z-  Tel  failed  to  state  a  claim  and  had  waived  any  claim  because  Z-  Tel  specifically  disavowed  any  claim  that  [Pacific]  ha[  s] 
 violated  [the  Pacific  Agreement]  and  had  voluntarily  entered  into  an  agreement  that  do[  es]  not  make  available  the  intraLATA  interexchange  transmission  [Z-  Tel]  seek[  s].  12  Pacific  also  stated, 
 The  reason  [Z-  Tel]  attempt[  s]  to  base  [its]  claims  on  the  Act  and  the  Commissions  rules  and  orders  rather  than  the  governing  agreements  is  simple:  [Z-  Tel]  ha[  s]  opted  into  agreements  that 
 do  not  make  available  the  intraLATA  interexchange  transmission  capability  [Z-  Tel]  seek[  s].  13 
 5.  Z-  Tels  Reply  to  the  Answer  did  not  dispute  Pacifics  allegations  about  the  requirements  of  the  Pacific  Agreement  or  about  Z-  Tels  disavowal  of  any  claim  of  breach.  Z-Tel 


 subsequently  informed  the  Commission  that  two  key  legal  issues  to  be  decided  by  the  Commission  were  whether  [Z-  Tel]  ha[  s]  waived  any  claim  that  [Pacifics]  conduct  is 
 inconsistent  with  the  Act,  and  the  Commissions  rules  and  orders,  because  [Z-  Tel]    voluntarily    adopted  existing,  approved  interconnection  agreements  that  do  not  make  available 
 the  intraLATA  interexchange  transmission  capability  [Z-  Tel]  seek[  s]  and  whether  [Z-Tel]  failed  to  state  a  claim  upon  which  relief  can  be  granted  given  that  [Z-  Tel]    ha[  s] 
 disavowed  any  claim  that  [Pacific]  ha[  s]  violated  the  terms  of  [the  Pacific  Agreement]  .  14 
 6.  In  the  Liability  Order,  after  granting  Z-  Tels  complaint  against  Ameritech  for  violating  the  SBC/  Ameritech  Merger  Order  Conditions,  the  Commission  denied  Z-  Tels  claims 


 against  Pacific.  The  Commission  found  that  Z-  Tel  had  effectively  admitted  that  the  Pacific  Agreement  does  not  require  Pacific  to  provide  use  of  the  shared  transport  UNE  for  intraLATA 


 8  Liability  Order,  18  FCC  Rcd  at  7569,    2. 
 9  Liability  Order,  18  FCC  Rcd  at  7580,    29  n.  67. 
 10  Liability  Order,  18  FCC  Rcd  at  7572,    11,  7579-  81,    29. 
 11  Defendants  Answer,  File  No.  EB-  01-  MD-  017  (filed  Oct.  10,  2001)  (  Answer),  Ex.  B  (Defendants  Legal 
 Analysis)  at  11. 
 12  Liability  Order,  18  FCC  Rcd  at  7580,    29  n.  67;  Answer  at  4-  5. 


 13  Answer  Ex.  B  (Defendants  Legal  Analysis)  at  14. 
 14  Liability  Order,  18  FCC  Rcd  at  7580,    29  n.  67;  Revised  Joint  Statement,  File  No.  EB-  01-  MD-  017  (filed  Nov. 
 23,  2001)  at  Statement  of  Key  Legal  Issues,  11-  12,    6-  7. 
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 toll.  15  The  Commission  reasoned  that,  although  Commission  rules    plainly  require  unbundling  of  shared  transport  for  use  with  intraLATA  toll  traffic,    16  the  obligations  created  by  section  251 
 and  Commission  implementing  rules  are  effectuated  through  the  section  252  processes  of  negotiation,  arbitration,  or  opt-  in.  17  Therefore,  because  Z-  Tel  had  voluntarily  opted  into  an 
 agreement  that  did  not  provide  use  of  the  shared  transport  UNE  for  intraLATA  toll,  Z-  Tel  had  waived  its  claims  pursuant  to  section  251(  c)(  3)  and  Commission  rules.  18 


 7.  The  Commission  also  denied  Z-  Tels  claim  that  Pacifics  refusal  to  adopt  Z-Tels  Memorandum  of  Understanding  violated  section  251(  c)(  1).  The  Commission  reasoned 
 that  Z-  Tel  could  not  voluntarily  opt  into  the  Pacific  Agreement,  and  then  invoke  section  251(  c)(  1)  to  require  Pacific  to  amend  the  agreement,  unless  the  Pacific  Agreement  obligated 
 Pacific  so  to  do.  Yet  Z-  Tel  had  not  asserted  that  Pacifics  refusal  to  adopt  the  Memorandum  of  Understanding  violated  the  Pacific  Agreements  amendment  or  change  of  law  provisions,  and, 
 indeed,  had  disavowed  any  claim  that  Pacific  had  breached  the  Pacific  Agreement.  Accordingly,  the  Commission  found  that  Z-  Tel  had  not  met  its  burden  of  proving  that  Pacific  was  obligated  to 
 adopt  Z-  Tels  Memorandum  of  Understanding.  19 
 8.  Finally,  the  Commission  denied  Z-  Tels  section  201(  b)  claims  because  Z-  Tel  had  advanced  no  reason,  other  than  Pacifics  alleged  violation  of  its  obligations  under  section 


 251(  c),  why  Pacifics  conduct  was  unjust  and  unreasonable  within  the  meaning  of  section  201(  b).  Therefore,  because  Z-  Tels  section  251(  c)  claims  failed,  its  section  201(  b)  claims  also 
 failed.  20 
 III.  DISCUSSION 
 A.  The  Liability  Order  is  Consistent  with  Commission  Precedent. 
 9.  Z-  Tel  argues  that,  in  denying  Z-  Tels  claims  against  Pacific,  the  Commission  abandon[  ed]  prior  Commission  precedent  establishing  that  the  terms  of  any  interconnection 


 agreement  between  a  CLEC  and  an  ILEC  are  irrelevant  to  the  issue  of  whether  the  CLEC  may  prevail  on  a  claim  that  the  ILEC  has  violated  section  251.  21  Z-  Tel  argues  further  that  the 


 15  Liability  Order,  18  FCC  Rcd  at  7579-  81    29. 
 16  Liability  Order,  18  FCC  Rcd  at  7581,    30  (citing  SBC  Communications,  Inc.,  Apparent  Liability  for  Forfeiture, 
 Forfeiture  Order,  17  FCC  Rcd  19923,  19932,    18  (2002)). 
 17  Liability  Order,  18  FCC  Rcd  at  7581,    30. 


 18  Liability  Order,  18  FCC  Rcd  at  7579-  81,    29-  30. 
 19  Liability  Order,  18  FCC  Rcd  at  7581-  82,    30-  32. 
 20  Liability  Order,  18  FCC  Rcd  at  7582,    33. 
 21  Petition  at  3.  Accord  Petition  at  6-  12. 
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 Commissions  failure  to  follow  this  alleged  precedent  violated  principles  of  administrative  law.  According  to  Z-  Tel,  where  the  Commission  departs  from  its  prior  precedent,  it  is  required  to 
 provide  a  reasoned  explanation  for  its  change  of  mind,  22  and  also  to  give  the  parties  notice  of  the  change  and  an  opportunity  to  provide  evidence  bearing  on  the  new  standard.  23 


 10.  We  find,  however,  that  the  Liability  Order  is  fully  consistent  with  Commission  precedent.  Specifically,  the  Commission  has  never  held  that  a  requesting  carrier  may 
 successfully  charge  an  ILEC  with  violating  its  section  251(  c)  obligations  when  the  requesting  carrier  has,  pursuant  to  section  252(  i),  opted  into  an  interconnection  agreement  that  excludes  the 
 very  section  251(  c)  obligations  at  issue.  24  As  discussed  below,  the  Liability  Order  is  not  inconsistent  with  any  of  the  Commission  precedent  cited  by  Z-  Tel  in  its  Petition,  provides  a 
 reasoned  explanation  for  the  Commissions  finding,  25  and  thus  fully  complies  with  the  requirements  of  administrative  law. 


 i.  The  Liability  Order  is  Consistent  with  Commission  Rulemakings. 
 11.  Z-  Tel  argues  that  the  Commissions  denial  of  Z-  Tels  claim  against  Pacific  is  inconsistent  with  the  Commissions  statement,  in  the  Local  Competition  Report  and  Order,  26  that 


 a  party  may  file  a  section  208  complaint  alleging  violations  of  section  251  or  Commission  implementing  rules  even  if  the  [defendant  carrier]  is  in  compliance  with  an  agreement  approved 
 by  the  state  commission.  27  Z-  Tel  misconstrues  the  Commissions  statement.  The  cited 


 22  Petition  at  13. 
 23  Petition  at  3,  12-  14. 
 24  Indeed,  to  so  hold  under  these  specific  circumstances  would  undermine  the  point  of  these  interconnection 
 agreements,  which  Congress  established  as  the  mechanism  to  implement  the  duties  arising  section  251(  c).  In  the  present  case,  Z-  Tel  opted  into  a  pre-  existing  Pacific  interconnection  agreement  without  first  negotiating  or 


 arbitrating  an  amendment  to  the  agreement  regarding  shared  transport.  Z-  Tel  is  bound  by  the  Pacific  Agreement,  and  may  not  now  require  Pacific  to  amend  its  terms.  See  Liability  Order,  18  FCC  Rcd  at  7581-  82,    30  (stressing 
 that  any  request  by  Z-  Tel  to  change  the  Pacific  Agreements  terms  would  have  to  comply  with  the  agreements  modification  or  change  of  law  provisions).  We  note  that  Z-  Tel  had  ample  notice  that  it  was  taking  a  risk  in  failing 
 to  allege  that  the  Pacific  Agreement  provided  shared  transport  for  intraLATA  toll,  because  Pacific  repeatedly  argued  that  Z-  Tels  claims  were  precluded  by  the  terms  of  the  Pacific  Agreement.  For  example,  Pacific  alleged 
 that  Z-  Tel  had  waived  its  claims  because  Z-  Tel  had  specifically  disavowed  any  claim  that  [Pacific]  ha[  s]  violated  [the  Pacific  Agreement].  Liability  Order,  18  FCC  Rcd  at  7580,    29  n.  67.  Nevertheless,  far  from  contesting 
 Pacifics  allegations,  Z-  Tel  affirmatively  adopted  them.  See  discussion  at    5,  supra  (discussing  Z-  Tels  key  legal  issues).  Moreover,  as  discussed  below,  Z-  Tel  would  not  have  prevailed  even  if  it  had  asserted  that  Pacific 
 breached  the  Pacific  Agreement,  because  there  was  no  such  breach. 
 25  Liability  Order,  18  FCC  Rcd  at  7581-  82,    30-  32. 


 26  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  First  Report  and 
 Order,  11  FCC  Rcd  15499  (1996)  (subsequent  history  omitted)  (  Local  Competition  Report  and  Order). 
 27  Petition  at  6  (citing  Local  Competition  Report  and  Order,  11  FCC  Rcd  at  15565,    127). 
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 language  cannot  reasonably  be  read  to  suggest  that  section  251  is  violated  when  a  carrier  voluntarily  enters  into  an  agreement,  as  Z-  Tel  did,  that  does  not  afford  the  full  range  of  rights 
 available  under  section  251,  and  later  demands  to  change  its  terms.  Such  a  construction  would  be  fundamentally  inconsistent  with  the  statutory  scheme,  which  permits  carriers  to  enter  into 
 binding  agreements  without  regard  to  the  standards  set  forth  in  subsections  (b)  and  (c)  of  section  251.  28  The  Commissions  discussion  in  the  Local  Competition  Report  and  Order  simply 
 does  not  address  the  situation  where,  as  here,  the  complainant  voluntarily  opted  into  an  interconnection  agreement  pursuant  to  section  252(  i).  As  we  explained  in  the  Liability  Order,  Z-Tel 
 may  not  rely  upon  the  general  section  251  duties  to  circumvent  the  more  specific  terms  of  an  agreement  that  it  has  voluntarily  chosen  to  adopt. 


 ii.  The  Liability  Order  is  Consistent  with  Commission  Adjudications. 
 12.  Z-  Tel  also  argues  that  the  Liability  Order  is  inconsistent  with  several  Commission  orders  resolving  section  208  formal  complaints.  Again,  Z-  Tel  is  incorrect.  The 


 cases  upon  which  Z-  Tel  relies  have  no  bearing  on  the  instant  matter. 
 13.  First,  Z-  Tel  cites  Net2000  Communications,  29  in  which  the  complainant  CLEC  alleged  that  the  defendant  ILECs  had  violated  sections  201(  b)  and  251(  c)(  3)  of  the  Act,  as  well 


 as  Commission  rules  requiring  that,  upon  request,  ILECs  convert  tariffed  special  access  circuits  into  enhanced  extended  loops.  30  Net2000  does  not  stand  for  the  proposition  that  an  ILEC  may  be 
 found  to  have  violated  section  251(  c)  even  though  the  parties  interconnection  agreement  excludes  the  very  section  251(  c)  obligations  at  issue.  The  Commission  found  it  unnecessary  to 
 inquire  into  the  terms  of  the  special  access  tariff  or  the  parties  interconnection  agreement  because  the  Commission  denied  complainants  claims  on  other  grounds.  Specifically,  the 
 Commission  found  that  the  complainants  factual  allegations  were  unsubstantiated.  31 
 14.  Z-  Tel  argues  that  the  fact  that  Net2000s  claims  were  not  dismissed  on  jurisdictional  grounds  makes  the  case  inconsistent  with  the  Liability  Order:  If  the  Commission 


 lacked  the  appropriate  authority  to  address  section  251  claims,  and  if  a  violation  of  section  251  could  not  amount  to  a  section  201(  b)  violation,  then  the  Commission  presumably  would  have 
 dismissed  Net2000s  claims  on  jurisdictional  grounds    which  is  exactly  what  the  Commission 


 28  47  U.  S.  C.    252(  a)(  1). 
 29  Net2000  Communications,  Inc.  v.  Verizon-  Washington,  D.  C.,  Inc.,  Memorandum  Opinion  and  Order,  17  FCC 
 Rcd  1150  (2002). 
 30  See  47  C.  F.  R.    51.305  -  .321. 


 31  The  Commission  found  that  the  circuits  at  issue  did  not  meet  the  criteria  for  conversion  prescribed  by 
 Commission  rules.  Net2000  Communications,  Inc.,  17  FCC  Rcd  at  1157,    23,  1160,    33. 
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 did  with  regard  to  Z-  Tels  claims  against  Pacific.  32  With  this  argument,  Z-  Tel  fundamentally  misconstrues  the  Liability  Order. 
 15.  First,  the  Liability  Order  does  not  stand  for  the  proposition  that  the  Commission  lack[  s]  the  appropriate  authority  to  address  section  251  claims.  In  the  Liability  Order,  the 
 Commission  did  address  Z-  Tels  section  251  claims.  The  Commission  asserted  jurisdiction  over  Z-  Tels  section  251(  c)  claims  against  Pacific,  and  then  denied  those  claims  on  the  merits.  33  The 
 Commission  did  not,  as  Z-  Tel  seems  to  believe,  deny  Z-  Tels  claims  on  jurisdictional  grounds.  Neither  does  the  Liability  Order  stand  for  the  proposition  that  a  violation  of  Section  251  could 
 not  amount  to  a  Section  201(  b)  violation.  No  such  statement  can  be  found  in  the  Liability  Order.  The  Commission  denied  Z-  Tels  section  201(  b)  claims  because  Z-  Tel  advanced  no 
 reason  why  Pacifics  conduct  was  unjust  and  unreasonable  other  than  that  Pacific  had  allegedly  violated  section  251(  c),  which  the  Commission  found  it  had  not.  Because  its  section 
 251(  c)  claims  failed,  Z-  Tels  section  201(  b)  claims  also  failed.  Nothing  in  this  reasoning,  however,  supports  Z-  Tels  cited  assertion.  Thus,  the  conflict  that  Z-  Tel  finds  between  the 
 Liability  Order  and  Net2000  comes  entirely  from  misconstruing  the  Commissions  decision  in  the  Liability  Order. 


 16.  Z-  Tel  also  cites  TSR  Wireless,  34  in  which  the  Commission  found  that  the  defendant  LECs  had  violated  Commission  rule  51.703(  b)  35  by  charging  the  complainants, 
 commercial  mobile  radio  service  (  CMRS)  providers,  for  facilities  used  to  deliver  LEC-originated  traffic.  Z-  Tel  argues  that  TSR  Wireless  establishes  that  the  terms  of  the  Pacific 
 Agreement  were  irrelevant  to  an  analysis  of  Z-  Tels  claims  against  Pacific.  36  As  with  Net2000,  Z-  Tel  again  focuses  on  the  jurisdictional  issue  that  it  has  misunderstood.  Z-  Tel  argues  that  in 
 TSR  Wireless,  the  Commission  again  unequivocally  stated  that  carriers  could  plead  violations  of  its  local  competition  implementing  rules  as  part  of  a  section  208  complaint  arising  under  section 
 251.  37  Nothing  in  the  Commissions  statement  of  jurisdiction  in  TSR  Wireless  conflicts  with  the  Liability  Order. 


 17.  Nothing  in  the  substantive  portion  of  the  TSR  Wireless  decision  conflicts  with  the  Liability  Order,  either.  We  recognize  that,  in  TSR  Wireless,  the  Commission  found  the 
 defendants  bound  by  rule  51.703(  b)  even  though  the  obligation  created  by  that  rule  had  not  been 
 32  Petition  at  9. 
 33  See  Liability  Order,  18  FCC  Rcd  at  7572-  73,    12-  13. 
 34  TSR  Wireless,  LLC  v.  U.  S.  West  Communications,  Inc.,  15  FCC  Rcd  11166  (2000),  petition  for  review  denied 
 sub  nom.  Qwest  Corporation  v.  FCC,  252  F.  3d  462  (D.  C.  Cir.  2001). 
 35  47  U.  S.  C.    51.703(  b)  (  A  LEC  may  not  assess  charges  on  any  other  telecommunications  carrier  for 
 telecommunications  traffic  that  originates  on  the  LECs  network.) 
 36  Petition  at  9-  10. 


 37  Petition  at  9. 
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 incorporated  into  an  interconnection  agreement.  The  TSR  Wireless  defendants  were  bound  by  rule  51.703(  b)  for  reasons  not  applicable  to  Pacifics  obligations  at  issue  here.  First,  the 
 Commissions  authority  to  issue  rule  51.703(  b),  as  applied  to  CMRS  providers,  arises  under  section  332  of  the  Act.  38  Accordingly,  rule  51.703(  b)  may  apply,  in  circumstances  such  as  those 
 present  in  TSR  Wireless,  regardless  of  the  existence  or  terms  of  a  section  252  interconnection  agreement.  Further,  in  adopting  rule  51.703(  b),  the  Commission  stated  that  [  a]  s  of  the  effective 
 date  of  [the  Local  Competition  Report  and  Order],  a  LEC  must  cease  charging  a  CMRS  provider    for  terminating  LEC-  originated  traffic  .  39  Thus,  as  the  Commission  stressed  in  TSR 
 Wireless,  rule  51.703(  b)  clearly  calls  for  LECs  immediately  to  cease  charging  CMRS  providers  for  terminating  LEC-  originated  traffic;  the  [rule]  does  not  require  a  section  252  agreement  before 
 imposing  such  an  obligation  on  the  LEC.  40  The  Commission  has  imposed  no  such  immediate  obligation  with  respect  to  shared  transport.  Indeed,  the  Commission  stressed  in  TSR  Wireless 
 that,  to  the  extent  that  other  Commission  rules  promulgated  under  the  Local  Competition  [Report  and]  Order  were  not  made  effective  immediately,    we  would  expect  that  requesting 
 carriers  would  utilize  the  interconnection  agreement  process  of  sections  251  and  252  to  obtain  services  under  section  251.  41  Thus,  TSR  Wireless  is  not  relevant  to  Z-  Tels  claims  against 
 Pacific,  and  does  not  stand  for  the  proposition  that  a  CLEC  may  successfully  charge  an  ILEC  with  violating  section  251(  c)  even  though  the  parties  interconnection  agreement  excludes  the 
 very  section  251(  c)  obligations  at  issue. 
 18.  Z-  Tel  also  relies  upon  the  Commissions  statement  in  Cellexis  42  that  Defendants  statutory  interconnection  obligations,  whatever  they  may  be,  exist  independently  of 


 the  [interconnection]  Agreements  terms.    43  Z-  Tel  reads  the  Commissions  statement  out  of  context.  The  Cellexis  case  involved  entirely  different  facts  and  statutory  provisions  than  the 
 instant  matter.  The  complainant  in  that  proceeding  was  a  reseller  of  CMRS  services  who  alleged  that  the  defendant  CMRS  providers  had  violated  sections  201(  b),  202(  a),  251(  a),  and 
 332(  c)(  1)(  B)  of  the  Act  by  refusing  to  continue  to  interconnect  their  cellular  networks  with  complainants  after  the  parties  interconnection  agreement  had  expired.  The  interconnection 
 obligations  at  issue  in  Cellexis  arose  under  sections  251(  a)  and  332  of  the  Act,  not  under  section 
 38  47  U.  S.  C.    332.  See  Iowa  Utilities  Brd  .v.  FCC,  120  F.  3d  753,  800  n.  21  (8  th  Cir.  1997)  (subsequent  history 
 omitted);  Qwest  Corp.  v.  FCC,  252  F.  3d  462,  465-  67  (D.  C.  Cir.  2001)  (confirming  that  section  332(  c)(  1)(  B)  gives  the  Commission  authority  to  require  that  LECs  interconnect  with  CMRS  providers). 


 39  TSR  Wireless,  15  FCC  Rcd  at  11167,    3. 
 40  TSR  Wireless,  15  FCC  Rcd  at  11183,    29  (emphasis  added). 
 41  TSR  Wireless,  15  FCC  Rcd  at  11182,    29  n.  97.  Similarly,  the  Liability  Order  emphasized  that  the  obligations 
 created  by  section  251  and  our  rules  are  effectuated  through  the  process  established  in  section  252    that  is,  by  reaching  agreement  through  negotiation,  arbitration,  or  opt-  in.  Liability  Order,  18  FCC  Rcd  at  7581,    30. 


 42  Cellexis  Intl,  Inc.  v.  Bell  Atlantic  NYNEX  Mobile  Systems,  Inc.,  et  al.,  Memorandum  Opinion  and  Order,  16 
 FCC  Rcd  22887  (2001)  (  Cellexis). 
 43  Petition  at  10  (citing  Cellexis,  16  FCC  Rcd  at  22891,    9,  but  omitting  the  word  Defendants). 
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 251(  c),  as  in  this  case.  Neither  the  general  interconnection  obligation  of  section  251(  a)  nor  the  interconnection  obligation  arising  under  section  332  is  implemented  through  the  negotiation  and 
 arbitration  scheme  of  section  252.  44  Thus,  the  significance  of  the  terms  of  any  agreement  in  Cellexis  has  no  bearing  on  the  significance  of  the  terms  of  the  agreement  in  this  case,  and 
 nothing  in  the  Liability  Order  is  inconsistent  with  Cellexis. 
 19.  Finally,  Z-  Tel  argues  that,  In  the  context  of  pole  attachment  agreements  entered  into  pursuant  to  section  224  of  the  Act,  the  Commission  routinely  has  concluded  that  the 


 existence  of  such  agreements  does  not  constitute  a  waiver  of  a  carriers  ability  to  file  a  formal  complaint  under  the  Commissions  pole  attachment  rules.  45  Z-  Tels  analogy  is  unavailing. 
 Section  252(  a)(  1)  provides  that  an  incumbent  LEC  may  negotiate  and  enter  into  a  binding  agreement    without  regard  to  the  standards  set  forth  in  subsections  (b)  and  (c)  of  section 
 251.  46  In  contrast,  nothing  in  section  224  provides  that  parties  may  negotiate  without  regard  to  the  requirements  of  the  Act.  Finally,  the  Commissions  pole  attachment  rules  specifically 
 contemplate  that  the  Commission  will  rule  on  the  reasonableness  of  the  rates,  terms,  and  conditions  contained  in  pole  attachment  agreements  before  the  Commission.  47 


 B.  The  Commission  Correctly  Concluded  that  Z-  Tel  Waived  Its  Section  251(  c)  Claims. 
 20.  Z-  Tel  argues  that  the  Liability  Order  incorrectly  concludes  that  carriers,  such  as  Z-  Tel,  implicitly  waive  their  rights  under  section  251  of  the  Act  and  the  Commissions  rules 
 by  merely  signing  an  interconnection  agreement    regardless  of  the  language  of  the  interconnection  agreement.  48  The  Liability  Order  draws  no  such  conclusion.  Rather,  the 


 44  Section  251(  c)  obligates  incumbent  LECs  to  negotiate  in  good  faith  in  accordance  with  section  252  the 
 particular  terms  and  conditions  of  agreements  to  fulfill  the  duties  described  in  paragraphs  (1)  through  (5)  of  subsection  (b)  and  this  subsection  [i.  e.,  subsection  (c)].  47  U.  S.  C.    251(  c)(  1).  It  does  not  require  such 


 negotiation  with  respect  to  section  251(  a).  Similarly,  section  252(  a)(  1),  47  U.  S.  C.    252(  a)(  1),  permits  ILECs  to  negotiate  agreements  without  regard  to  the  standards  set  forth  in  subsections  (b)  and  (c)  of  section  251,  but  does 
 not  mention  subsection  251(  a).  Section  332(  c)(  1)(  B)  requires  interconnection  when  the  Commissionfinds  such  action  necessary  or  desirable  in  the  public  interest.  See  47  U.  S.  C.    332(  c)(  1)(  B)  (providing  that,  upon  reasonable 
 request  of  a  CMRS  provider,  the  Commission  shall  order  interconnection  pursuant  to  section  201.)  There  is,  again,  no  mention  of  the  section  251/  252  negotiation  process. 


 45  Petition  at  10. 
 46  47  U.  S.  C.    252(  a)(  1). 
 47  See  Commission  rule  1.1410  (  If  the  Commission  determines  that  the  rate,  term,  or  condition  complained  of  is  not 
 just  and  reasonable,  it  may  prescribe  a  just  and  reasonable  rate,  term,  or  condition  and[  s]  ubstitute  in  the  pole  attachment  agreement  the  just  and  reasonable  rate,  term,  or  condition  established  by  the  Commission.)  47  C.  F.  R.   


 1.1410.  See  also  Southern  Co.  Servs.  Inc.  v.  FCC,  313  F.  3d  574  (D.  C.  Cir.  2002)  (concluding  that  the  Commission  has  authority  to  review  the  reasonableness  of  the  terms  of  a  pole  attachment  agreement).  Accord  Pub.  Service  Co. 
 of  Colorado  v.  FCC,  328  F.  3d  675,  677-  678  (D.  C.  Cir.  2003). 
 48  Petition  at  3. 
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 Commission  in  the  Liability  Order  found  that  Z-  Tel  waived  its  claims  because  Z-  Tel  effectively  admitted  that  the  Pacific  Agreement  did  not  obligate  Pacific  either  to  provide  shared  transport  for 
 intraLATA  toll  or  to  execute  a  Memorandum  of  Understanding  to  do  so.  49 
 21.  Z-  Tel  argues  that  it  made  no  admissions  regarding  the  terms  of  the  Pacific  Agreement,  but  only  denied  any  need  (under  the  Act,  the  Commissions  rules,  or  the  [Pacific 


 Agreement])  to  plead  a  section  208  complaint  under  the  interconnection  agreement  itself.  50  Z-Tel  ignores  the  record  in  this  proceeding.  For  example,  as  stated  above,  Z-  Tel  informed  the 
 Commission  that  the  Pacific  Agreement  do[  es]  not  make  available  the  [use  of  the  shared  transport  UNE]  capability  [Z-  Tel]  seeks,  and  that  Z-  Tel  disavowed  any  claim  that  [Pacific] 
 ha[  s]  violated  the  terms  of  [the  Pacific  Agreement].  51  Thus,  we  stand  by  our  earlier  conclusion  that  Z-  Tel  admitted  that  the  agreement  Z-  Tel  chose  to  adopt  did  not  require  Pacific  to  provide 
 shared  transport  for  intraLATA  toll  traffic,  and  that  Z-  Tel  accordingly  waived  its  right  to  demand  such  terms.  Z-  Tel  opted  into  the  Pacific  Agreement  without  first  negotiating  or 
 arbitrating  an  amendment  to  its  terms  regarding  shared  transport,  and  may  not  complain  now. 
 C.  The  Pacific  Agreement  Excludes  Shared  Transport  for  IntraLATA  Toll  Unless  Z-  Tel  Requests  Such  Use  in  Accordance  with  the  Terms  of  the 


 Agreement,  and  Z-  Tel  Has  Not  Done  So. 
 22.  Z-  Tel  argues  that  the  Commission  should  have  reviewed  the  Pacific  Agreement  to  determine  whether  it  in  fact  obligated  Pacific  to  provide  shared  transport  for  intraLATA  toll  or 


 to  execute  the  Memorandum  of  Understanding.  52  As  discussed  above,  Z-  Tels  statements  and  omissions  in  this  proceeding  meant  that  the  Commission  was  under  no  such  obligation.  In  any 
 event,  however,  any  such  review  would  have  been  unavailing.  The  Pacific  Agreement  provides 


 49  Z-  Tel  argues  that  the  Commission  in  Cellexis  confirmed  that  a  carrier  does  not  waive  its  statutory  right  merely 
 by  signing  an  interconnection  agreement.  Petition  at  10  (citing  Cellexis,  16  FCC  Rcd  at  22891,    9).  What  the  Commission  said,  however,  was  that  the  interconnection  agreement  at  issue  in  that  case,  which  had  expired,  does 


 not  alter  whatever  right  to  interconnection  Cellexis  may  have  under  the  Act.  Cellexis,  16  FCC  Rcd  at  22891,    9.  The  Commissions  statement  is  not  inconsistent  with  the  Liability  Order  because,  as  discussed,  the  duty  of  CMRS 
 providers  to  interconnect  can  be  imposed  pursuant  to  section  332  independently  of  an  interconnection  agreement. 
 50  Petition  at  16. 


 51  Z-  Tel  argues  that  its  disavowal  of  any  claim  that  Pacific  breached  the  Pacific  Agreement,  see  Liability  Order, 
 18  FCC  Rcd  at  7580,    29  n.  67,  merely  meant  that  Z-  Tel  denied  that  it  was  obligated  so  to  allege.  Petition  at  16.  We  disagree.  As  Z-  Tel  notes,  disavow  means,  among  other  things,    to  disclaim  knowledge  of  .  Petition  at 


 16  (citing  Websters  II  New  College  Dictionary  323  (2001)).  If  Pacific  were  in  breach  of  the  Pacific  Agreements  terms  governing  shared  transport,  Z-  Tel  would  have  had  knowledge  of  that  breach.  Hence,  when  Z-  Tel 
 disavowed  any  claim  that  Pacific  had  breached  the  Pacific  Agreement,  it  effectively  admitted  that  there  was  no  breach.  In  any  event,  the  Commissions  conclusion,  that  Z-  Tel  effectively  admitted  that  the  Pacific  Agreement 
 had  not  been  breached,  was  not  based  solely  upon  Z-  Tels  disavowal,  but  upon  the  totality  of  Z-  Tels  statements  and  omissions  during  the  proceeding.  See  Liability  Order,  18  FCC  Rcd  at  7580,    29  n.  67. 


 52  Petition  at  4-  5,  17-  20. 
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 use  of  the  shared  transport  UNE  for  intraLATA  toll  calls  only  if  Z-  Tel  complies  with  the  Pacific  Agreements  Bona  Fide  Request  process  or  requests  Customized  Routing,  Option  C.  Z-  Tel 
 has  not  demonstrated  that  it  did  either. 
 23.  The  Pacific  Agreement  provides  at  Attachment  6,  section  2: 
 General:  Unbundled  Network  Elements  and  Combinations:  Access  to  [UNEs]  shall  be  specified  herein  and  not  presumed.  The  Network  Elements  offered  under  this  Agreement 


 shall  be  clearly  specified  in  this  Agreement  or  the  attachments  hereto.  In  no  event  will  it  be  presumed  that  access  to  a  [UNE]  is  offered  unless  so  specified.  Pacific  will  make 
 available  any  other  form  of  access  requested  by  [Z-  Tel]  that  is  required  by  the  Act  and  the  regulations  thereunder.  Requests  for  Network  Elements  not  specified  in  this 
 Attachment  shall  be  processed  according  to  the  process  described  in  Section  22  (Bona  Fide  Request)    of  this  Agreement.  53 


 Thus,  section  2  provides  initially  that  Z-  Tel  may  not  have  access  to  shared  transport  unless  the  Pacific  Agreement  expressly  so  states.  Yet  section  2  further  provides  that  Z-  Tel  may  obtain  such 
 access  if  it  complies  with  the  Bona  Fide  Request  provisions  of  the  Agreement:  Pacific  will  make  available  any  other  form  of  access  if  that  access  is  required  by  [Commission] 
 regulations.  In  short,  Pacific  was  obligated  to  provide  access  to  shared  transport  only  to  the  extent  provided  in  the  Pacific  Agreement  unless  Z-  Tel  complied  with  the  Bona  Fide  Request 
 process.  The  only  section  of  the  Pacific  Agreement  expressly  granting  access  to  the  shared  transport  UNE  provides  that  the  UNE  may  be  used  for  intraLATA  toll  only  if  Z-  Tel  exercises 
 Option  C.  54  Option  C  is  found  in  an  earlier  section  of  the  Pacific  Agreement.  That  section  is  headed  Option  C:  Customized  Routing-  Complex  for  [Z-  Tel]  Using  Routes  Designated  by  [Z-Tel]. 
 This  section  provides  that,  if  Z-  Tel  exercises  Option  C,  Pacific  shall  route  [Z-  Tels]  intraLATA  traffic  over  Pacifics  Shared  Transport  facilities...  .  55 


 24.  Z-  Tel  argues  that  the  Pacific  Agreement  expressly  provides  that  Z-  Tel  may  request  use  of  the  shared  transport  UNE  for  intraLATA  toll  service,  and  that  Z-  Tel 
 made  such  a  request  through  its  Memorandum  of  Understanding.  56  Consistent  with  our  analysis  above,  however,  the  language  upon  which  Z-  Tel  relies  provides  shared  transport  for  intraLATA 
 toll  only  if  Z-  Tel  requests  Option  C,  or  makes  a  request  that  complies  with  the  Bona  Fide 


 53  Letter  dated  December  7,  2001  from  Christopher  M.  Heimann,  counsel  to  Pacific,  to  Magalie  R.  Salas, 
 Secretary,  FCC,  File  No.  EB-  01-  MD-  017  (  Heimann  Letter)  Ex.  1  (Pacific  Agreement)  at  Attachment  6,    2.1. 
 54  Heimann  Letter  Ex.  1  (Pacific  Agreement)  at  Attachment  6,    7.4.1  (providing  that  the  shared  transport  UNE 
 may  be  used  for  intraLATA  toll  if  requested  by  [Z-  Tel]  in  connection  with  LSNE  option  C  under  Section  6.5.3  above.) 


 55  Heimann  Letter  Ex.  1  (Pacific  Agreement)  at  Attachment  6,    6.5.3. 
 56  Petition  at  5.  Accord  Petition  at  17-  20. 
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 Request  process.  57  Yet  Z-  Tel  has  not  shown  that  its  Memorandum  of  Understanding  complied  with  the  Bona  Fide  Request  process,  or  that  it  constituted  a  request  to  exercise  Option  C.  58  Thus, 
 as  the  Liability  Order  correctly  concluded,  59  Pacific  did  not  violate  section  251(  c)(  1)  by  failing  to  negotiate  in  good  faith. 


 25.  Z-  Tels  additional  arguments  regarding  construction  of  the  Pacific  Agreement  also  fail.  Z-  Tel  asserts  that  the  agreement  permits  either  party  to  file  a  complaint  at  the  FCC 
 .  60  Yet  the  Pacific  Agreement  does  not  state  that  any  such  complaint  will  succeed.  Z-  Tel  argues  that  the  Pacific  Agreement  is  expressly  designed  to  encompass  the  UNEs  required  by  the 
 Act....  61  The  language  cited  by  Z-  Tel,  however,  does  not  state  that  Pacific  is  offering  all  UNE  access  available  under  the  Act  and  Commission  rules.  The  section  is  entitled  Introduction,  and 
 merely  explains  that  the  purpose  of  Attachment  6  is  to  enumerate  the  specific  UNEs  provided.  Indeed,  Z-  Tel  omits  the  final  sentence  of  this  section:  The  specific  terms  and  conditions  that 


 57  With  regard  to  Option  C,  Z-  Tel  relies  upon  two  sections  of  the  Pacific  Agreement  providing  shared  transport  for 
 intraLATA  toll  only  if  Z-  Tel  exercises  Option  C.  See  Petition  at  19  (citing  Pacific  Agreement,  Attachment  6,    6.5.3,  which,  as  discussed  above  at  paragraphs  25-  26,  provides  shared  transport  for  intraLATA  toll  only  if  Z-  Tel 


 exercises  Option  C).  See  also  Petition  at  19,  n.  45  (citing  Pacific  Agreement,  Attachment  6,    7.  4.  1,  which  provides,    Pacific  shall  route  [Z-  Tel]  s  intraLATA  traffic  over  Pacifics  Shared  Transport  facilities  if  requested 
 by  [Z-  Tel]  in  connection  with  LSNE  option  C  under  section  6.5.3  above.)  (emphasis  added).  Finally,  with  regard  to  the  Bona  Fide  Request  process,  Z-  Tel  quotes  a  single  sentence  from  Attachment  6,  section  2.  Petition  at  18, 
 n.  42.  As  discussed  above,  however,  when  read  in  its  entirety,  this  section  requires  compliance  with  the  Bona  Fide  Request  process. 


 58  Z-  Tel  did  not  place  the  Memorandum  of  Understanding  in  the  record,  and  it  does  not  allege  that  the  Memorandum 
 was  a  Bona  Fide  Request  or  the  exercise  of  Option  C.  On  the  contrary,  Z-  Tel  admits  that  the  Memorandum  was  an  amend[  ment]  to  the  Pacific  Agreement.  See  Formal  Complaint,  File  No.  EB-  01-  MD-  017  (filed  Aug.  28,  2001) 


 (  Complaint)  at  8,    18.  Further,  Z-  Tel  used  the  Memorandum  of  Understanding  as  a  proposed  amendment  to  a  number  of  interconnection  agreements,  not  just  the  Pacific  Agreement.  Id.  Thus,  the  Memorandum  of 
 Understanding  was  not  tailored  specifically  to  comply  with  the  requirements  of  the  Pacific  Agreement.  See  also  Complaint  Ex.  7  (Letter  dated  Jan.  19,  2001  from  Michael  Hazzard,  counsel  to  Z-  Tel,  to  Adam  McKinney,  counsel 
 to  Pacific)  (describing  the  Memorandum  of  Understanding  as  based  on  the  MOU  drafted  by  SBC  and  executed  by  Z-  Tel  in  Texas);  Petition  at  5  (same).  Z-  Tel  argues  that  Pacific  was  obligated  to  suggest  that  Z-  Tel  modify  or 
 otherwise  reformulate  its  request.  Petition  at  5.  Z-  Tel  made  no  such  claim  in  the  liability  phase  of  this  proceeding,  and  therefore  may  make  no  such  claim  now.  In  any  event,  Z-  Tel  has  advanced  no  reason  why  section  251(  c)(  1) 
 imposes  an  obligation  upon  Pacific  to  explain  to  Z-  Tel  why  Z-  Tels  Memorandum  did  not  comply  with  the  Pacific  Agreement. 


 59  Liability  Order,  18  FCC  Rcd  at  7579-  82,    29-  32. 
 60  Petition  at  17-  18  (citing  Pacific  Agreement  at  Attachment  3,  2.  1). 
 61  Petition  at  18  (citing  Pacific  Agreement  at  Attachment  6,    1.  1) 
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 apply  to  the  [UNEs]  and  Combinations  are  described  below.  62  Thus,  the  terms  pertaining  to  UNEs  are  described  below  --  in  the  sections  of  the  Pacific  Agreement  that  follow.  63 
 62  Heimann  Letter  Ex.  1  (Pacific  Agreement)  at  Attachment  6,    1.1. 
 63  Because  we  affirm  our  denial  of  Z-  Tels  section  251(  c)  claims,  we  also  affirm  our  denial  of  Z-  Tels  section 
 201(  b)  claims.  Z-  Tels  Petition  provides  no  reason,  independent  of  its  claim  that  Pacific  violated  section  251(  c),  why  Pacific  violated  section  201(  b).  See  Liability  Order,  18  FCC  Rcd  at  7582,    33. 
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 IV.  ORDERING  CLAUSE 
 26.  Accordingly,  IT  IS  ORDERED,  pursuant  to  sections  201,  208,  251,  and  405  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    201,  208,  251,  and  405,  and 


 sections  51.309  and  51.313  of  the  Commissions  rules,  47  C.  F.  R.    51.309  and  51.313,  that  the  instant  petition  for  reconsideration  IS  DENIED. 


 FEDERAL  COMMUNICATIONS  COMMISSION 


 Marlene  H.  Dortch  Secretary 
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