Case Title: Enhanced Communications of Northern New England, Inc. v. Public Utilities Commission

Citation: 

Docket Number: 2017 ME 178

State: maine

Court: Maine Supreme Court

Date: 2017-08-15T00:00:00Z

Document:
MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2017 ME 178 
Docket: 
PUC-16-398 
Argued: 
April 11, 2017 
Decided: 
August 15, 2017 
 
Panel: 
SAUFLEY, C.J., and MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ. 
 
 
ENHANCED COMMUNICATIONS OF NORTHERN NEW ENGLAND, INC. 
 
v. 
 
PUBLIC UTILITIES COMMISSION et al. 
 
 
HUMPHREY, J. 
[¶1]  Enhanced Communications of Northern New England, Inc., appeals 
from an order of the Public Utilities Commission granting in part and denying 
in part a petition for a certificate of public convenience and necessity to 
operate as a competitive local exchange carrier.  See 35-A M.R.S. §§ 2102, 2105 
(2016).  Enhanced contends that the Commission’s partial denial is unlawful 
and unsupported by substantial evidence.  We affirm the order. 
I.  BACKGROUND 
 
[¶2]  Enhanced is a Delaware corporation that sells communications 
services, including long distance telephone and data services, and is a 
wholly-owned direct subsidiary of FairPoint Communications, Inc.  FairPoint 
is an incumbent local exchange carrier (ILEC).  On June 23, 2015, Enhanced 
 
2 
filed a petition with the Commission pursuant to 35-A M.R.S. § 2102 to obtain 
a 
certificate 
of 
public 
convenience 
and 
necessity 
to 
furnish 
telecommunications service as a competitive local exchange carrier (CLEC).1  
Because an application by a CLEC to operate in the same regional service 
territory as an affiliated ILEC presented a novel issue, on August 13, 2015, the 
Commission held an informal technical conference to gather information 
about intended service plans and the relationship between Enhanced and 
FairPoint.2  Several parties and stakeholders attended the informal technical 
conference, including representatives from FairPoint, the Office of the Public 
Advocate (OPA), Time Warner Cable (TWC), and the CLEC Association of 
Northern New England (CANNE).  OPA, TWC, and CANNE all submitted 
comments to the Commission regarding Enhanced’s petition.  
                                               
 
1  A local exchange carrier (LEC) is “any person that is engaged in the provision of telephone 
exchange service or exchange access.”  35-A M.R.S. § 102(9-E) (2016).  ILECs are entities (or 
successors to those entities) that held regional monopolies over local telephone service prior to 
deregulation, when the federal Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 
(codified as amended in scattered sections of 47 U.S.C.S.), required ILECs to unbundle parts of their 
telecommunications networks to allow CLECs to enter the market.  See 35-A M.R.S. § 102(9-B) 
(2016); Verizon New Eng., Inc. v. Pub. Utils. Comm’n, 2005 ME 64, ¶ 2, 875 A.2d 118.  CLECs utilize 
ILEC infrastructure.   
 
A number of FairPoint subsidiaries operate in Maine as affiliated ILECs, including China 
Telephone Company, Standish Telephone Company, Community Service Telephone Co., Maine 
Telephone Company, Sidney Telephone Company, Northland Telephone Company of Maine, Inc., 
and Northern New England Telephone Operations, LLC.  
 
2  FairPoint and its affiliated ILECs are, unless otherwise noted, referred to collectively in this 
opinion as FairPoint. 
 
3 
 
[¶3]  On March 21, 2016, the Commission staff recommended that the 
Commission grant Enhanced’s petition to the extent that Enhanced would be 
allowed to operate as a CLEC in all Maine exchanges except for those in which 
FairPoint, or an affiliate or subsidiary, already provided service as an ILEC.  On 
June 20, 2016, the Commission issued an order largely adopting the 
recommended decision, granting Enhanced’s petition in part, but denying it to 
the extent that Enhanced sought to provide service as a CLEC in service areas 
where FairPoint, or an affiliate or subsidiary, already provided service as an 
ILEC.  
 
[¶4]  The Commission found that Enhanced (1) satisfied the definition 
of a local exchange carrier because it will provide local exchange service in 
Maine, (2) possessed the financial and technical capabilities to provide local 
exchange service in the state, and (3) satisfied the definition of a CLEC 
because it is not an ILEC.  The Commission noted, however, that whether the 
public convenience and necessity required that Enhanced provide service as a 
CLEC throughout Maine “present[ed] a complicated question” because an 
entity wholly-owned by an ILEC seeking to provide service in the same service 
territory as that ILEC was a matter of first impression.  
 
4 
[¶5]  The Commission observed that if Enhanced provided service in the 
same service territories as FairPoint, it was not clear that a benefit would be 
realized in the form of increased competition.  The Commission articulated 
several concerns raised by the parties, including that, because of its corporate 
relationship with FairPoint, Enhanced could gain favorable access and use of 
common facilities and resources, customer data, pricing, prioritization of 
service calls, and other competitive advantages over other CLECs.  The 
Commission found, according to Enhanced’s representations at the 
conference, that Enhanced’s petition to obtain CLEC authorization was not 
motivated by a desire to provide new or additional service to customers—
“Enhanced identified only a single activity that its current lack of CLEC 
authorization prohibits: the ability to requisition local telephone numbering 
resources,” in particular “thousand-number blocks of consecutive telephone 
numbers.”3 The Commission acknowledged that “[a]ccess to numbering 
resources by LECs is subject to [Federal Communication Commission] rules 
and the guidelines established by [the North American Numbering Plan 
Administrator], which are designed to preserve limited numbering resources,” 
                                               
 
3  The Commission noted that ILECs such as FairPoint are sometimes unable to acquire large 
sequential number blocks because they already have a supply of unused, nonconsecutive numbers 
and Federal Communication Commission (FCC) rules limit access to additional numbers until those 
numbers are sufficiently exhausted.  Large blocks of consecutive numbers are valuable because 
they are sought by business customers.   
 
5 
but concluded, citing a longstanding Commission policy to use number 
resources efficiently to preserve the single 207 area code in Maine, that it was 
not in the public convenience and necessity to grant Enhanced’s petition to 
operate throughout the entire state.  The Commission therefore partially 
denied the petition insofar as Enhanced sought to operate in the same 
territory as FairPoint, and emphasized that the partial denial alleviated the 
competition concerns raised by parties in the informal technical conference.  
The Commission concluded by stating: 
The Commission’s partial dismissal of Enhanced’s petition is 
without prejudice to file, in a separate Docket, another petition 
specifically requesting authority to operate within the service 
territories of the FairPoint ILECs.  Any such petition should 
address the anti-competitive and numbering concerns raised by 
the Commission and the parties to this proceeding. 
 
[¶6]  Enhanced filed a petition to reconsider the decision on July 11, 
2016.  The Commission did not act upon the petition and thus it was denied by 
operation of law on August 1, 2016.  See 9 C.M.R. 65 407 110-12 § 11(D) 
(2013).  Enhanced timely appealed. See 35-A M.R.S. § 1320 (2016); M.R. 
App. P. 2. 
 
6 
II.  DISCUSSION 
A. 
Standard of Review 
 
[¶7]  Our review of a Commission decision is deferential and limited “to 
determining whether the agency’s conclusions are unreasonable, unjust, or 
unlawful in light of the record.”  Pine Tree Tel. & Tel. Co. v. Pub. Utils. Comm’n, 
634 A.2d 1302, 1304 (Me. 1993).  “This court generally refuses to 
second-guess agencies on matters within their expertise.”  Id.  “In reviewing 
an agency’s interpretation of its own rules, regulations, or procedures, we give 
considerable deference to the agency . . . .”  Forest Ecology Network v. Land Use 
Regulation Comm’n, 2012 ME 36, ¶ 28, 39 A.3d 74 (quotation marks omitted).  
When reviewing an agency’s interpretation of its own regulation, we begin by 
“determin[ing] de novo whether the [regulation] is reasonably susceptible of 
different interpretations and therefore ambiguous.”  See Cent. Me. Power Co. v. 
Pub. Utils. Comm’n, 2014 ME 56, ¶¶ 18-19, 90 A.3d 451 (quotation marks 
omitted).  “[I]f the language is unambiguous, we interpret the [regulation] 
according to its plain language.”  Arsenault v. Sec’y of State, 2006 ME 111, ¶ 11, 
905 A.2d 285.  
 
7 
B. 
Certificate of Public Convenience and Necessity 
 
[¶8]  A CLEC may not provide service in a municipality where another 
utility is furnishing or authorized to furnish service unless it obtains 
Commission approval pursuant to 35-A M.R.S. §§ 2102 and 2105.  Section 
2105 requires that to approve an additional utility where a utility already 
provides service, the Commission must make “a declaration, after public 
hearing of all parties interested, that public convenience and necessity require 
a 2nd public utility.”  35-A M.R.S. § 2105(1).  Section 4(A) of Chapter 280 of 
the Commission’s regulations similarly provides for approval “by making a 
declaration that the public convenience and necessity require an additional 
public utility.”  9 C.M.R. 65 407 280-4 § 4(A) (2003).  The regulation sets forth 
three specific findings that are required before a declaration can be made.  See 
id. 
Approval to provide any service shall not be issued unless the 
applicant has presented sufficient evidence for the Commission to 
make the following findings: 
 
 
(1)  The applicant has adequate financial ability and willingness to 
cover any customer advances and deposits; and to pay intrastate 
access charges and interconnection charges on all intrastate 
telecommunications services; 
 
 
(2)  The applicant (other than a[n] interexchange carrier that is a 
reseller or [a] local exchange carrier that provides service solely 
through resale of local service purchased from a wholesale 
 
8 
schedule of another LEC) has the technical ability to measure and 
record intrastate traffic information and billing amounts that may 
be necessary for the calculation of access and interconnection 
charges; and 
 
 
(3)  The applicant is willing and able to comply with State law and 
Public Utilities Commission rules, including, but not limited to, 
this Chapter. 
 
Id.  
[¶9]  There is no dispute that Enhanced met all three criteria set forth in 
section 4(A)(1)-(3)—the Commission found that Enhanced had the financial 
and technical capability to provide service and did not find that Enhanced was 
unwilling or unable to comply with the law.  The central issue presented in 
this appeal is whether the Commission could, after making those findings, 
nonetheless deny Enhanced’s petition for a certificate of public convenience 
and necessity (CPCN) to provide service in the same service territory as 
FairPoint on public interest grounds because of concerns about number 
resources and anti-competitive behavior.   
[¶10]  The Commission reads section 4(A) to require not only that a 
utility meet the three criteria specified in that provision, but also that the 
Commission determine that the petition is in the public necessity and 
convenience, which the Commission interprets as the public interest.  
Enhanced argues that an additional public interest requirement does not 
 
9 
appear in the statutes or regulations, and that it is beyond the Commission’s 
power to impose here absent rulemaking.   
[¶11]  Although section 4(A) does not list a “public interest” or “public 
benefit” factor among the three listed criteria, the unambiguous language of 
the regulation provides that, before granting a CPCN, the Commission must 
make a “declaration that the public convenience and necessity require an 
additional public utility.”  9 C.M.R. 65 407 280-4 § 4(A).  Contrary to 
Enhanced’s contention, the regulation does not compel the Commission to 
grant the petition if only the three criteria set forth in 9 C.M.R. 65 407 280-4 
§ 4(A) are met.  Instead, the three criteria set forth in section 4(A) are 
threshold or predicate considerations that are necessary, but not, standing 
alone, sufficient to grant a petition.  The Commission must further declare that 
an additional utility is in the public interest.4  The regulation does not, for 
example, state that if the Commission makes the three enumerated findings 
that it must grant the petition.  Rather, section 4(A) permits the Commission, 
after considering the evidence, to ultimately conclude that an additional utility 
is not in the public interest, and to deny a petition on that basis. 
                                               
 
4  We construe “public convenience and necessity” as synonymous with “public benefit” or 
“public interest.”  See Zachs v. Dep’t of Pub. Utils., 547 N.E.2d 28, 32 (Mass. 1989) (“[T]he phrase 
‘public convenience and necessity’ is a term of art that stands for the general notion of ‘public 
interest.’  Other courts have agreed that the phrase is simply a conclusory symbol for public benefit, 
good, or interest.” (citations omitted) (quotation marks omitted)); see also In re Chapman, 151 Me. 
68, 71, 116 A.2d 130, 132 (1955). 
 
10 
[¶12]  Construing the plain language of 9 C.M.R. 65 407 280-4 § 4(A), we 
conclude that an applicant must demonstrate that the public convenience and 
necessity require an additional utility and thus that the Commission did not 
err in considering the public interest. 
C. 
Whether the Commission Lawfully Denied Enhanced’s Petition on 
Public Interest Grounds. 
 
 
[¶13]  Enhanced further argues that even assuming 9 C.M.R. 65 407 
280-4 § 4(A) contains a public interest criterion, the Commission’s decision is 
unlawful and unsupported by substantial evidence.  Specifically, Enhanced 
contends that (1) nothing prohibits Enhanced from seeking a CPCN in part to 
acquire numbers and, in any event, number conservation is exclusively the 
realm of federal regulatory control; (2) the Commission’s concerns about 
Enhanced engaging in anti-competitive behavior were speculative and 
unsupported by substantial evidence; and (3) the decision does not articulate 
a clear standard as to what Enhanced must establish to alleviate the 
Commission’s concerns about number resources and competition.   
[¶14]  Before addressing the merits of Enhanced’s arguments, we 
reiterate several relevant findings for context.  According to the Commission, 
Enhanced’s petition for a CPCN to operate as a CLEC in the same service 
territories as affiliated FairPoint ILECs presented an issue of first impression.  
 
11 
For that reason, the Commission held an informal technical conference to 
gather further information and to solicit comments from interested parties.  
The Commission found, based on Enhanced’s representations at the 
conference, that (1) Enhanced sought authorization as a CLEC in order to 
acquire local telephone number resources; (2) Enhanced did not intend to 
offer any service that is not already offered to customers in those service 
territories; and (3) there was no service that, without authorization for 
Enhanced to provide service as a CLEC, Enhanced or FairPoint would be 
unable to offer.  The Commission concluded that the public necessity and 
convenience would not be furthered by granting Enhanced’s petition to 
provide service as a CLEC solely for the purpose of acquiring blocks of 
sequential numbers.  
[¶15]  It is undisputed that Enhanced had the burden of proof to 
establish that it met all applicable criteria to obtain approval for a CPCN, and 
further, as the party seeking to vacate the agency’s decision, that it has the 
burden of persuasion on appeal.  See Kelley v. Me. Pub. Emps. Ret. Sys., 2009 ME 
27, ¶ 16, 967 A.2d 676.  “When an agency concludes that the party with the 
burden of proof failed to meet that burden, we will reverse that determination 
only if the record compels a contrary conclusion to the exclusion of any other 
 
12 
inference.”  Id.  For the reasons set forth above, Enhanced’s burden included 
establishing that the public interest required an additional utility.  See 9 C.M.R. 
65 407 280-4 § 4(A).  Enhanced does not challenge the Commission’s factual 
findings regarding Enhanced’s service plans and motivation to obtain 
numbers.  Notably, and more importantly, Enhanced fails to articulate or point 
to any evidence showing why the Commission was compelled to find that 
granting the petition was in the public interest.  Instead, Enhanced asserts 
that because the three criteria set forth in 9 C.M.R. 65 407 280-4 § 4(A)(1)-(3) 
were satisfied, it was entitled to a CPCN, and the reasons that the Commission 
cited in denying the petition—number resource conservation and anti-
competitive concerns—cannot sustain the decision.  We disagree.   
[¶16]  Enhanced is correct that number resource conservation is a 
subject committed to federal regulatory control.5  The Commission’s stated 
concerns about the depletion of numbers within the 207 area code did not, 
however, amount to an unlawful encroachment upon federal regulatory 
power.  Rather, the Commission’s stated concern addressed the undisputed 
                                               
 
5  The FCC has “exclusive jurisdiction over those portions of the North American Numbering Plan 
that pertain to the United States.”  47 U.S.C.S. § 251(e)(1) (LEXIS through Pub. L. No. 115-45).  The 
North American Numbering Plan (NANP) is administered by the North American Numbering Plan 
Administrator (NANPA).  See 47 C.F.R. § 52.13(a) (2017).  The FCC has implemented number 
conservation policies designed to “prolong the life of the [NANP].”  See Sprint Corp. v. FCC, 331 F.3d 
952, 955 (D.C. Cir. 2003) (quotation marks omitted).  The FCC’s regulatory authority to manage 
number resources is exclusive, except where the FCC has delegated authority to state and local 
governments.  See id. at 960. 
 
13 
motivation for Enhanced’s petition and constituted a valid exercise of the 
Commission’s power to determine whether granting the petition was in the 
public interest.  See 35-A M.R.S. § 2105(1); 9 C.M.R. 65 407 280-4 § 4(A).  
Similarly, the Commission did not affirmatively find that Enhanced would 
engage in anti-competitive behavior, but concluded, in light of the undisputed 
relationship between Enhanced and FairPoint and the comments submitted as 
part of the technical conference proceeding, that the petition warranted 
additional investigation before the Commission could declare that granting 
the CPCN was in the public interest.   
[¶17]  Contrary to Enhanced’s contentions, the Commission did not 
contravene federal law.  The federal Telecommunications Act (the TelAct) 
governs state regulatory power in the area of telecommunications service: 
(a)  In general. No State or local statute or regulation, or other 
State or local legal requirement, may prohibit or have the effect of 
prohibiting the ability of any entity to provide any interstate or 
intrastate telecommunications service. 
 
(b)  State regulatory authority. Nothing in this section shall affect 
the ability of a State to impose, on a competitively neutral basis 
and consistent with section 254 [47 USCS § 254], requirements 
necessary to preserve and advance universal service, protect the 
public safety and welfare, ensure the continued quality of 
telecommunications services, and safeguard the rights of 
consumers. 
 
47 U.S.C.S. § 253(a)-(b) (LEXIS through Pub. L. No. 115-45). 
 
14 
[¶18]  Although state commissions have limited power to prohibit 
entities from entering the market to provide telecommunications service, the 
power to impose requirements necessary to protect the public interest is 
explicitly conferred upon state commissions by section 253(b).  See 47 U.S.C.S. 
§ 253(b) (LEXIS) (“Nothing in this section shall affect the ability of a State to 
impose, on a competitively neutral basis . . . requirements necessary to . . . 
protect the public safety and welfare . . . .”); see also Verizon New Eng., Inc. v. 
Pub. Utils. Comm’n, 2005 ME 64, ¶ 22, 875 A.2d 118.  We are also unpersuaded 
that the Commission’s decision is not “competitively neutral” because it treats 
Enhanced differently due to its affiliation with FairPoint.  47 U.S.C.S. § 253(b) 
(LEXIS).  That affiliation is certainly relevant to whether granting Enhanced a 
CPCN is in the public convenience and necessity, particularly given 
Enhanced’s service plans and apparent motivation to obtain numbers.  Any 
disparate treatment was not unlawful because, as the Commission found, 
there is no comparable entity with the same affiliate relationship seeking the 
authorization that Enhanced sought for the purpose of obtaining numbers, 
and it was not clear that a benefit would be realized in the form of increased 
competition.  Although federal law promotes active competition in 
telecommunications markets, the entry of an additional CLEC into the same 
 
15 
market as its affiliated ILEC is not necessarily in the public interest.  See Appeal 
of Bretton Woods Tel. Co., 56 A.3d 1266, 1275 (N.H. 2012) (“[Section 253(a) of 
the TelAct] does not evince Congress’s determination that competition in a 
single service territory always is in the public good.  The [Commission] must 
still make this determination.”).  The Commission did not contravene federal 
law by imposing a requirement upon Enhanced due to its unique status.   
[¶19]  In light of the Commission’s findings that Enhanced will not 
provide any new or additional service, and the purpose of the application was 
to acquire sequential number blocks, the record does not compel a conclusion 
that granting the petition is in the public interest.  Enhanced points to no 
evidence in the record that compels a conclusion contrary to that reached by 
the Commission and thus has failed in its burden.  We defer to the 
Commission’s expertise in this matter and to its findings supporting the 
conclusion that granting the petition would not further the public convenience 
and necessity.  See Office of the Pub. Advocate v. Pub. Utils. Comm’n, 2015 ME 
113, ¶ 15, 122 A.3d 959 (stating that Commission decisions are reviewed 
deferentially with due recognition for the agency’s technical expertise); Pine 
Tree Tel. & Tel. Co. v. Pub. Utils. Comm’n, 631 A.2d 57, 61 (Me. 1993) (“We are 
particularly reluctant to substitute our judgment for that of the [C]ommission 
 
16 
because of the institutional deference we pay to its expertise; we are not a 
super-commission.”). 
[¶20]  Lastly, we reject Enhanced’s argument that a public interest 
criterion is a “rudderless” standard that is unreasonably difficult to 
understand.  A petitioner has the burden of proof to establish that granting 
the CPCN is in the public convenience and necessity, i.e., has some benefit to 
the public and not merely its own business interest.  See In re Chapman, 
151 Me. 68, 71, 116 A.2d 130, 132 (1955) (“[T]he convenience and necessity, 
proof of which the statute requires, is the convenience and necessity of the 
public, as distinguished from that of any individual, or group of individuals.” 
(quoting In re Stanley, 133 Me. 91, 93, 174 A. 93, 94-95 (1934)).  Such a 
standard is a lawful requirement that comports with the statute, regulation, 
and federal law.  See Level 3 Commc’ns of Va. v. State Corp. Comm’n, 604 S.E.2d 
71, 75 (Va. 2004) (rejecting argument that a broad public interest standard 
gave the Commission “unfettered discretion” to deny a CPCN petition and 
concluding that such a broad standard did not amount to an unlawful barrier 
pursuant to 47 U.S.C.S. § 253(a) (LEXIS)).  
[¶21]  The Commission, based on Enhanced’s own representations 
about its motivations to seek a CPCN, concluded that granting the petition was 
 
17 
not in the public convenience and necessity.  Because the decision comported 
with the applicable regulation, federal law, and the evidence presented to the 
Commission, we affirm the Commission’s order. 
The entry is: 
Order of the Public Utilities Commission 
affirmed.  
 
 
 
 
 
 
 
 
Sean M. Galvin, Esq., FairPoint Communications, Manchester, New Hampshire, 
and Catherine R. Connors, Esq. (orally), Pierce Atwood LLP, Portland, for 
appellant Enhanced Communications of Northern New England, Inc. 
 
Jordan D. McColman, Esq. (orally), and Mitchell M. Tannenbaum, Esq., Public 
Utilities Commission, Augusta, for appellee Public Utilities Commission 
 
Robin A. Casey, Esq., Enoch Kever PLLC, Harpswell, for appellee Time Warner 
Cable Information Systems, LLC 
 
Elizabeth J. Wyman, Esq. (orally), and Robert A. Creamer, Esq., Office of the 
Public Advocate, Augusta, for appellee Office of the Public Advocate 
 
 
Public Utilities Commission docket number 2015-00185 
FOR CLERK REFERENCE ONLY