F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

N O R T H C O U N T Y C O M M U N I C A T I O N S C O R P O R A T I O N O F A R

I Z O N A , a California corporation,

Plaintiff-Appellant

,

v.

Q W E S T C O R

P O R A T I O N , a Colorado corporation, DB A Century L ink QC; G A R

Y P I E R C E ; B O B S T U

M P ; S A N D R A K E N N E D Y ; P A U L N E W M A N ; B R E N D A B U R N S , in their official capacity

as Commissioners of the Ariz ona Corporation Commission,

D efendants-Appellees. No. 14-15115

D.C. No. 2 :13-cv-00466-DGC

A ppeal from the United States District Court for the District of Ariz o na David G. Campbell, District J udg e, PresidingNCCC V

. Q W E S T 2

N O R T H C O U N T Y C O M M U N I C A T I O N S C O R P O R A T I O N O F O R

E G O N , a California corporation,

Plaintiff-Appellant

,

v.

Q W E S T C O R

P O R A T I O N , DB A Century L ink QC, a Colorado corporation; J O H

N S A V A G E ; S U S A N A C K E R M A N ; S T E P H E

N B L O O M , in their capacity

as Commissioners of the Public Utility Commission of Oreg on, D efendants-Appellees. No. 14-35254

D.C. No. 3:13-cv-00375-B R

OPI NI ON

A ppeal from the United States District Court for the District of Oreg on, Anna B r own, District J udg e , Presiding

Arg u ed and Submitted December 8, 2015 San F rancisco, California

F iled May

31, 2016

B efore: Diarmuid F . O’Scannlain, B arry G. Silverman, and Carlos T. B ea, Circuit J udg es.

Opinion by J udg e O’ScannlainNCCC V

. Q W E S T 3

SUMMARY *

Telecom m unications Act

The panel affirmed two district courts’ summary judg me n t s i n favor of Qwest Corporation and two state reg ulatory comm issions in actions broug ht under the Telecommunications Act of 1996 by local ex chang e carriers that provide telecommunications services to their customers in Ariz ona and Oreg on.

The plaintiffs sued Qwest Corp., a rival local ex chang e carrier, and the c ommissioners of the A r i z ona Corporation Commission and the Public Uti l i ty Commission o f Oreg on, state ag e ncies whose r esponsibilities include reg ulating
contracts between local ex c hang e carrie r s

. Q west is an incumbent local ex chang e carrier (I L EC), whi c h previously enjoy ed a monopoly on local phone service, and N orth County is a competitive local ex chang e carrier (CL EC).

North County requested to interconnect with Q west, a nd the parties entered into interconn e c t ion ag reements in 1997. They subsequently entered into unsuccessful neg otiations for

successor ag reements, and Qwest petition e d f or arbitration before the state Co m m i s sions. The Commissions h eld arbitration hearing s and approved new interconnection
ag reements in 2011.

Qwest argu e d that the Commissions had a uthority to arbitrate the 2011 ag reements because Q west had the power

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.NCCC V

. Q W E S T 4

under 47 U.S.C. § 25 2 t o initiate neg otiations with N orth County to replace their e x isting i nterconnection ag reements and thereafter to force North County into binding arbitration. Qwest relied on the F C C ’ s T r iennial Review Order, which
states that e i ther a CL E C or an I L EC may initiate
neg otiations. Qwest also a r gu e d that the lang uag e of the initial interconnection ag r eements authoriz ed it to initiate
neg otiations. T he p anel held that the state Commissions h ad authority to a r

b itrate the 2011 ag reements because the 1997

a g reements g ave Qwest both the power to init i a t e neg otiations and the power to compel arbitration.

The panel rejected North County ’s challeng es to six

s p ecific p rovisions of the 2011 interconnection ag reement s : (1) the r equirement th at N orth County interconnect with Qwest directly rather than t h roug h a third-party tandem
p r o vider; ( 2) the ag reements’ “Relative Use F actor;” (3) t h e requiremen t t hat North County use dig ital sig naling technolog y known as SS7 sig naling if and when it orig inates calls to Qwest; (4) the r e q uirement tha t N o rth County pay Qwest for certain call detail records; ( 5 ) the cap on the number of minutes for which North County can b il l Qwest; and (6) the ag reements’ f a ilure to allow North County to interconnect using Voice over I nternet Protocol.

COUNSEL

R. Dale Dix on, J r., L aw O ffices of D ale Dix o n, Del Mar, C alifornia, arg ued the cause a nd f iled the briefs for th e plaintiff-appellant.NCCC V

. Q W E S T 5

L awrence H. Reichman, Perkins Coie L L P, Portland, Oreg on, arg ued the cause and filed the brief for the defendant-appellee Qwest Corporation.

Maureen A. Scott, Ariz ona Corporation Commission, Phoenix

, Ariz ona, arg ued the cause and filed the brief for the defendants-appellees G ary Pierce, B ob Stump, Sandra Kennedy

, Paul Newman, and B renda B urns, in their capacity

as Commissioners o f the Ariz ona Corporation Commission. W ith her on the brief were B rian E. Smith a nd Robert W. Geake, Ariz ona Corporation Commission, Phoenix

, Ariz ona.

Ellen F

. Rosenblum, A ttorney General, Salem Oreg on; Anna M. J oy ce, Solicitor G eneral, Sale m Oreg on; and Michael T. W e irich, Senior A ssistant Attorney General, Salem, Oreg on, tog ether filed the brief for the d efendant s -appellees J ohn Savag e, Susan Ackerman, and Stephen B loom, in their capacity as Commissioners of the Public Utility Commission of Oreg on.NCCC V

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OP INION

O’SCANNL AI

N, Circuit J udg e:

This dispute under the Telecommunications Act of 1996 pits one telephone compan y a g a inst another with two state

r eg ulatory Commissions c aug ht in the middle. W e mus t determine whether the matter is subject to binding arbitration, and, if so, what rules apply

.

I

These a ppeals involve two consolidated cases, one from the D istrict of A riz ona, the other from the District of Oreg on. The lawsuits were broug ht by North County Communications Corporation of Ariz ona and N orth County Communications Corporation of Oreg on (collectively referred to as “North County
, ” ex cept when necessary to disting uish one from the other). North County is a local ex chang e carrier that provides telecommunications services to its customers. North County sued Qwest Corporation, a rival local ex chang e carrier, and, in their o fficial capacities, c ommissioners of t w o state Commissions—the Ariz o n a C o r p o r at i o n C o m m ission (“Ariz ona Commission”) a nd the Public Utility Commission of Oreg on (“Oreg o n Commission”)—state ag encies whose responsibilities include reg u lat i ng contracts between such carriers.

A

As many c ourts have ex plained, Cong ress passed the T e lecommunications Act of 1996, Pub. L

. No. 104-10 4
, 110 Stat. 56 (codified as a m e nded in scattered sections o f chapter 47 of the United States Code) (the “Act”), to promoteNCCC V

. Q W E S T 7

competition in the provision of telecommunication services. See, e.g. , A T

& T C o rp. v. Iowa U

tils. Bd.

, 525 U.S. 366, 370–72 ( 1999). As re l e v ant here, the statute classifies local

ex c h a ng e carriers into two categ ories: incumbent l ocal

ex c h a ng e carriers (I L ECs), and competitive local ex chang e carriers (CL ECs). Quick Commc’ns, Inc. v. Mich. B e l l Tel. Co.
, 5 1 5 F. 3 d 581, 583 (6th Cir. 2008). I L ECs a re those entities that enjoy e d a monopoly on local phone service in a particular g eog raphic area prior to the Act. I d. F or both the Ariz ona and Oreg on c ases, Q w e s t is an I L EC, and N orth County is a CL EC.

1

The Act subjects I L ECs “ t o a host o f duties intended to fa c i l i tate market entry

. F oremost among these duties is the [ incumbent local ex chang e carrier’s] o blig ation under 47 U.S.C. § 251(c)

. . . to share its network with competitors.” AT& T Corp.
, 525 U.S. at 371. Doing so ens u r e s that the CL EC’s customers can call the I L EC’s custo m e rs, and vice

versa. U nder the A ct, a CL E C may access an I L EC’s network by requesting to intercon n e c t its facilities with the I L EC’s network. Id. ; see also 47 U.S.C. § 252(a).

2

Section 252(a) of the Act declares that “[ u] pon r eceiving

a r e q u e st for interconnection, services, or network elements pursuant to section 251 of this title, an incumb e n t local

ex c h a ng e carrier may neg otiate and enter i n t o a binding
ag reement w ith the requesti n g telecommunications carrier.” 47 U.S.C. § 252(a)(1). Section 252(b) then provide s t h at “[ d] uring t h e p eriod from the 135th to the 160th day (inclusive) after the date o n which an incum bent localNCCC V

. Q W E S T 8

ex c h a ng e carrier receives a request for neg otiation under this section, the c arrier or any ot h er p arty to the n eg otiation may petition a State commission to arbitrate any open issue s.” 47 U.S.C. § 252(b)(1). Section 252(e) states that “[ a] n y interconnection ag reement [ “I CA”] adopted by neg otiation o r arbitration shall b e submitted for approval to the State

com m i s sion. A State c ommission to w hich an ag reement is submitted shall approve or reject the ag reement, w ith written finding s as to any

deficiencies.” 47 U.S.C. § 252(e)(1).

B

I n 1997, N orth County first requested to interconnect with Qwest in Ariz ona a

n d Oreg on. One p rovision of the resulting
ag reement (“1997 I CA”) between Qwest and North County
, section XXXI V(V), stated:

This Ag reement shall be effective for a period of 2 1 /2 y ears, and the r eafter the Ag reement shall contin u e in force and effect unless a nd until a new ag reement, addressing a l l of the
terms of this Ag reement, b ecomes effective between the Par ties. T he Parties ag ree to

co mmence neg otiations o n a n ew ag reement

no later than two y ears after this Ag reement becomes effective.

Notwit h s t a nding this provision, n o new I CAs had been entered into until the events which g ave rise to this dispute.

1

At the time Qwest and N orth County first interconnected, the telecommunications industry was underg oing a transitionNCCC V

. Q W E S T 9

from analog sig naling technolog y , known as MF sig n aling

, to dig ital sig naling technolog y , known as SS7 sig naling

. These

s i g naling technolog ies are important because they trans m i t information with a call as the call crosses a carrier’s sy stem. Much of this information i s n e cessary for local carriers to know so that they c an properly bill one another for the costs g enerated by transmitting calls betwe e n their networks. Unsurprising ly

, SS7 sig naling has many advantag es over MF sig naling: i t is more efficient, more flex ible, and more reliable, and it has a g reater capacity to track and to record information relevant for billing purposes.

2

Central to the part i es ’ dispute is the fact that N orth County continues to use the increasing ly outdated MF sig naling to ex chang e local traffic with Qwest. (F rom the record, it appears that every other CL EC that i n terconnects with Q west uses SS7 sig n aling to ex cha n ge l o cal traffic.) That choice has important consequences when it comes to billing

. I n particular, North County is entitled to b i l l Qwest for some of the local traffic that Qwest s e nds to it when telephone users on Qw es t’s network call users on N orth County ’ s network, but N orth County ’s reliance on MF technolog y makes it difficult for Qwest to verify the accuracy of t h e bills North County sends over. At the same time, North County does not currently send much traff ic to Qwest—in A riz ona, for instance, North County p rimarily provides telephone services to businesses that take incoming calls, but d o es not transmit o u tbound calls. I f, however, North County were to beg in sending traffic to Qwest via MF sign a l i ng using a third-party service provider, Qwest would be unable to identify a

nd m e a sure the traffic being routed from North County ’s network to Qwest’s.NCCC V

. Q W E S T 10

C

I n 2 008, Qwest suspec t e d that North County was overbilling it. Qwest, spurred on by the billing disp u t e , requested North County to n eg o tiat e successor I CAs in Ariz ona an d Oreg on. North County ag reed to enter into
neg otiations, w hich lasted more than a y ear. I mportantly

, d uring that time North County “ ag reed to a ser i e s o f

ex tensions of t h e a

rbitration window to file a petition for arbitration under 47 U.S.C. § 25 2 (b )

. . . . I n e ach of the

ex tension a g ree m e n t s d ated J anuary 16, 2009, F ebruary 9, 2 0 0 9, April 29, 2009, and May 29, 2009, [ North Count y ] specifically ag reed to ex tend ‘the p eriod during which e ither party may f

ile for a rbitrati on u nder section 252(b)(l) of the Act.’” (emphasis added). The n eg otiations u l t imately were not successful.

1

O n Aug ust 3, 2009, Qwest petitioned for arbitration in both Ariz ona and Oreg on. North County raised a number o f object i o n s

. F irst, North County moved each state Commission to dismiss Qwest’s petition for arbitration,
arg uing that § 252 did not g ive the Commissions authority to arbitrate n ew I CA s b ecause Qwest, not North County
, h ad requested the underly ing neg otiations. B o th state Commissions denied North County ’s motions to dismiss. I n 2011 the Ariz ona Commission and the Oreg o n Commission each approved a new I CA (“2011 I CAs”) based on the r esults of the arbitration hearing s.NCCC V

. Q W E S T 11

2

North County then s o u ght declaratory and injunctive relief in f e deral district court in Ariz ona and Oreg on. North County arg ued that the 2011 I CAs must be declared “void ab initio ” b ecause, North County reiterated, the state Commissions lacked authority to arbitrate them. The district
courts rejected this arg ument, althoug h they accepted N orth County ’ s characteriz ation that the relevant neg otiations h ad been requested and initiated by Qwest. The Ariz ona district
court noted that “[ n] o cour t has directly considered whether the lang uag e of se c tions 252(a)(1) and (b)(1) a pplies to requests to neg otiate made b y I L ECs to CL ECs.” Despite
ag reeing that the t e x t of the A ct supported N orth County

— and only North County —the district courts reasoned that a literal interpretation would be u nacceptable because it would frustrate the A c t ’s two main purposes, which the district courts said were to “encourag e competition in the telecommunications industry b y requiring the g ood faith neg otiation of I CAs by I L ECs and CL ECs,” and to g ive
state Commissions a prominent role in overseeing neg otiated I CAs. N orth County also c h alleng e d a number of t h e 2011 I CAs’ specific provisions, w hich the district courts likewise rejected across the board.

Each d istrict court g ranted summary judg ment to Qwest. North County

timely appealed in both cases.

I I

W e review a district court’s g rant of summary judg ment de n o v o

. Verizon Cal., Inc. v

. Peevey
, 462 F .3d 1142, 1150 (9th Cir. 2006). I n addi t ion, we review de novo whether arbitrated I CAs are in compliance with TelecommunicationsNCCC V

. Q W E S T 12

Act a nd its imple m e n ting r eg ulations. Id. “[ W ] e r eview all other issues under an arbitrary and capricious standard.” U .S. W

. Commc’ns, Inc. v

. W

ash. U tils. & Transp. Comm’n
, 255 F .3d 990, 994 (9th C i r

. 2 0 01). “A state commission’s decision is arbitrary and capr i c i ous if the decision ‘ was not supported by substantial evidence,’ or the commission made

a ‘ clear e rror of j u d gm e nt.’” Peevey
, 462 F .3d at 1150 (quoting Pac. B ell v. Pac W

. Telecomm, Inc.
, 325 F

. 3d 1114, 1131 (9th Cir. 2003)).

I I I

North C o u nty first contends that the state Commissions lacked authority

to arbitrate the 2011 I CAs. Qwest does not dispute N orth County ’s premise that Qwest initiated the relevant neg otiations. H ence, the question is whether Qwest,
upon deciding it wanted to scrap the ex isting I CAs a nd replace them with a pair of new o nes, ha d the power to initiate neg otiations with N orth County and thereafter to force North County into binding arbitration. I f Qwest lacked such
power, North County contends, then the state C ommissions had no authority to resolve the parties’ disag reements.

A

Qwest respon d s to North County ’s arg ument by urg ing that 47 U.S.C. § 252 authoriz e d it to request neg otiations with North County to r eplace their ex isting I CAs and to petition for binding a r

bitration when those neg o tiations hit a snag

. Aside from the district courts here, h o w ever, it a ppears that

no federal court has directly ruled on whether § 252, of its

own force, e mpowers an I L EC like Q w e st to initiate
neg otiations w ith a CL EC and thereafter to force the CL EC into arbitration if the neg otiations fail.NCCC V

. Q W E S T 13

The relevant statuto r y tex t does n ot appear hospitable to the reading Q w est proposes. Specifically

, § 252(a)(1), concerning “[ v] o luntary neg otiations,” states that “ [u] pon

re c e iving a request for interconnection, services or network elements pursuant to section 251 of this title, a n [ I L EC] may neg otiate and enter into a b inding ag reemen t w ith the requesting telecommunications carrier or carrie r s

. ” 47 U .S.C. § 252(a)(l) (emphasis added). Section 2 52(b)(l) then declares that “ [ d] uring the p eriod f r o m t h e 135th to the 1 60th day (inclusive) after the date on which an [ILEC] receives a request for n e

g otiation under this section, the carrier or any other party to the neg otiation may petition a State

c o mmission to arbitrate any open issues.” 4 7 U.S

. C

. § 252(b)(1) (emphasis added).

As all parties acknowledg e, b oth sections refer only to si tuations where an I L EC r e c eives a request for interconnection or neg o tiation. The statute does not mention requests for n eg otiations initiated b y an I L EC or mutually

a gr e e d upon by the two carriers. And as every one a lso
ag rees, in this case, the relevant neg ot iations—the ones that le d t o the 2011 I CAs—were requested b y Qwest, not N orth County

. T hat circumstance, say s North Cou nty , means that the Telecommunications Act could n o t have functioned as the source of any

power in Qwest to compel arbitration.

1

Qwest responds in two b a sic way s. The first—and potentially most devastating —is that the F CC h a s definitively interpreted the r elevant st atutory p rovision a nd that such interpretation g overns the situation here. Qwest’s arg ument depends o n a footnote in a 2 003 F CC order—called the Triennial Review Order (“TRO”)—in which the F CC statedNCCC V

. Q W E S T 14

that “[ a] lthoug h section 252(a)(1) a n d section 252(b)(1) refer
to requests that are made to incumbent L ECs, we find that in the interconnection amendment contex t, either the incumbent

o r t he competitive L EC may make such a request.” I n t h e Matter of Review of the Section 2 51 U nbundling Obligations of Incumbent Local Exchange Carriers , 18 F .C.C.R. 16978, 174 0 5 ¶ 7 0 3 n.2087 ( 2003), vacated in part and remanded

, U.S. Telecom Ass’n v. FCC
, 359 F .3d 554, 5 9 4 ( D

. C

. Cir. 2004). Qwest asserts that the just-quoted lan g uag e establishes that Qwest had the power to compel arbitration in th i s c a s e, after it requested North County to neg otiate

successor I CAs and those neg oti a t i o n s r eached an impasse. F urthermore, Qwest maintains that the H obbs Act, 28 U .S.C. § 2342, forbids us from reviewing the F CC’s interpretation. 1

1 T h e Ho b b s A ct states, i n relev an t p art: “ T h e co u rt o f ap p eals (o th er th an th e Un i ted States C o u rt o f Ap p eals f o r t h e Fed eral Circu i t ) h as

ex clu siv e j u risd ictio n to en j o in

, set asid e, su sp en d (in w h o le o r i n p art), or to d eterm i n e th e v alid ity o f

. . . all f in al o rd ers o f t

h e F e d eral Co m m u n icatio n s Co m

m issio n m ad e rev iew ab le b y sectio n 4 02 (a) o f title 4 7

. . . . Ju risd ictio n is in v o k ed b y f ilin g a p etitio n as p ro v id ed by sectio n 2 3 4 4 o f th is title.” 2 8 U.S.C. § 2 3 4 2

. A s w e h av e ex plain ed

, “ [u ]n d er th e Ho b b s A ct, th is co u rt lack s j u risd ictio n to ru le o n a co llateral attack o f an FCC o rd er.

. . . ‘ P ro p erly p ro m u lg ated FCC reg u latio n s cu rren t ly in ef f ect

m u st b e p resu m ed

v alid f o r th e p u rp o ses of th is ap p eal. T h e Ho b b s A ct, 2 8 U .S.C. § 2 3 4 2
, req u ires th at all ch allen g es to th e v alid i ty of f in al ord ers

o f th e FCC b e bro u g h t b y o rig in al p etitio n in a c o u r t o f ap p eals. T h e d istrict co u rt th u s lack ed j u risd ictio n to pass o n t h e v alid ity o f th e FCC
reg u latio n s, an d n o q u estio n as to th eir v alid ity can b e b ef o re u s i n th is

a p p eal.’ ” Pa c. Bell Tel. Co

. v. Ca l. Pu b

. Utils. Co mm’n
, 6 2 1 F

. 3 d 8 3 6
, 8 4 3 n .1 0 (9 th C ir. 20 1 0 ) (q u o tin g U.S

. W

. Co mmc’n s , In c. v. Jen n in g s , 3 0 4 F.3 d 9 50
, 9 5 8 n .2 (9 th Cir. 2 0 0 2 )). I f t h e H o bb s A ct ap plies h ere, th en ev en if w e w ere to “ do u b t th e s o u n d n ess of th e FCC’ s in t erp retatio n ”

o f § 2 5 2
, w e w ou ld “ n o t [b e] at lib erty t o rev iew t h at i n terp retatio n .” U

.S

. W . Co mmc’n s, In c. v. Ha milto n , 2 2 4 F.3 d 1 0 49 , 1 0 5 5 (9 th Cir. 2 0 0 0 ).NCCC V

. Q W E S T 15

Naturally

, the streng th of Qwest’s H obbs Act arg ument depends on whether the TRO actually addresses the scenario that transpired here; if it does not, we c ould not say that N orth County ’ s attack on Q west is also an attack on the F CC order, because the v alidity of t h e TRO would simply not b e drawn into question at all. Q west’s H o b b s Ac t arg ument would therefore be neu t r a l i z e d. T his question may be c lose, and it is c e rtainly complicated—g i ving footnote number 2,087 its
proper reading in the contex t of the surrounding 6 59-pag e F CC order is no simple task. 2

2

Second, in addition to rely ing on the TRO, Q west defends its pre fe r r e d reading of § 252 on the merits by invoking the traditional tools of statutory cons t r u ction, above all b y emphasiz ing the statute’s supposed p urposes and the need to

a v o i d results Qwest d eems absurd. As noted, Qwest’s position is in some tension with the tex t of § 252, and we a re

aware o f n o federal court to have read the stat u t e in the way Qwest proposes.

2 No party h as cited an y au th o rity co n s tru i n g th e sco p e o f th e FCC’ s

ru lin g in t h e T RO, w

h ich b y its o w

n t erm s p u rp o rted to ap p ly on ly “ in th e in terco n n ectio n am en dm en t co n t e x t.” TRO
, at 19 02 3 n .2 0 8 7

. No n eth eless, w e n eed n ot reso lv e t o day w h eth er t h e statu to ry tex t of sectio n 2 5 2 (b )(1 ), as in terp reted b y th e FCC, au t h o rizes Qw est t o

co m m en ce n eg o tiatio n s f

o r n ew in ter c o n n ectio n ag reem en ts an d th en to

co m pel arb itratio n b ef

o re th e State co m

m issio n s w

h en th o se n eg o tiatio n s stall. S ee Va lle d

el S o l In c. v. W

h itin g , 7 3 2 F

. 3 d 1 0 0 6
, 1 0 30 (9 th Cir. 2 0 1 3 ) (B ea, J., co n cu rrin g in p art an d d i ssen tin g in p art) (“ [T ]h e ‘ card in al
p rin cip le o f j u d icial restrain t’ is th at ‘ if it is n o t n ecessary t o d ecid e m o re, it is n ecessary n o t to decid e m o re. ’” ( q u o t i n g PDK La b s. In c. v. DEA
, 3 6 2 F.3 d 78 6
, 7 9 9 (D.C. Cir. 2 0 0 4 ) (Ro b erts, J
., co n cu rrin g in p a r t a n d

co n cu rrin g in th e j u d g m en t))). Here, an in d ep en d en t so u rce—th e p arties’

o w n co n tract—g iv es Qw est th e au th ority to co m p el arb itratio n

.NCCC V

. Q W E S T 16

B

W e may not need to decide whether § 252(b)(1) on its

own g a ve Qwest the power to commence neg otiations over the 2011 I C As a nd then to force North County into arbitration, because even if the statute did not g rant Qwest such power, that would not inevitably m e an Qwest lacked such power; Qwest would just have to trace such power to a different source.

1

B u t what about the 1997 I CAs themselves, which, a s private ag reements, are capable of defining the parties’ rig hts and o b lig ations like any ot h e r contracts? 3 As we have

ex p lained, “ [ o] nce the terms [of an I CA] are set, e i t h e r b y ag reement or a

rbitration, and the state commission approves the ag r eement, it becomes a binding cont r a c t .” Pac. B ell

, 325 F

. 3d at 1120; see a lso CoreTel Va., LLC v. V erizon Va., L L C
, 752 F .3d 3 6 4, 370 (4th Cir. 2014) (“[ A] n I CA is a private ag reement,” which courts mus t i n t erpret “[ l] ike any other contract.”); TRO at 17404 ¶ 7 01 (“Permitting voluntary

3 Ev en if w e assu m e No rth Co u n ty is rig h t th at § 2 5 2 o n its o w n w ou ld

n o t h av e au th o rized th e state C o m m i s s i o n s to arb itrate th e 2 0 1 1 ICA s, No rth Co u n ty

n o w h ere su g g ests th at th is lim itatio n is “ j u risd ictio n al,” in th e sen se t

h at th e p art i es w o u l d l ack t h e f reed o m to v ary s u ch ru le b y

co n tract. No r w o u ld w e read i ly cred it su ch arg u m en t, h ad it b een m ad e. S ee, e.g

. , S eb eliu s v. Au b urn Reg ’l Med

. Ctr.
, 1 3 3 S. Ct. 8 1 7
, 82 4 (2 0 1 3) (“ T o w ard o f

f p ro f lig ate u se o f th e term ‘ j u risd ictio n ,’ w e h av e ad o p ted a

‘ read i l y ad m in istrab le b rig h t lin e’ f o r determ in in g w

h eth er to classif

y a statu to ry lim itatio n a s j u risd ictio n al. W e i n q u ire w h eth er Co n g ress h as

‘ clearly state[d ]’ th at th e ru le is j u r i s d i c t i o n al; ab sen t su ch a clear
statem en t, w e h av e cau tio n ed

, ‘ co u rts sh o u ld treat th e restric t io n as

n o n j u risd ictio n al in ch aracte r.’ ”) (q u otin g Arb a u g h v. Y & H Co rp

. , 5 4 6 U.S. 5 0 0 , 5 1 6 (2 0 0 6 )) (in tern al citatio n o m itted ).NCCC V

. Q W E S T 17

neg otiations for binding interconnection ag reements is the
very essence of section 2 5 1 a nd section 252.”). As such, we have held that “t h e ag reements themselves and state law principles g overn the questions of interpretation of the [ I CAs] and enforcement of their provisions.” Pac. Bell

, 325 F .3d at 1128 (quoting Sw. Bell Tel. v. Pub. Util. Comm’n
, 20 8 F .3d 475, 485 (5th Cir. 2000)).

Qwest relies heavily on Section XXXI V(V) of the 1997 I CAs. As we noted at the out s e t o f this opinion, Section XXXI V(V) stated:

This Ag reement shall be effective for a period of 2 1 /2 y ears, and thereafter the Ag reement shall continue in forc e a nd effect unless a nd until a new ag reement, address i n g all of the
terms of this Ag reement, b ecomes effect ive between the Parties. The Pa rties ag ree to

commence neg otiations on a n ew ag reement

no lat er than two y ears after this Ag reement becomes effective.

Qwest’s p osition is that Section XXXI V(V) not o nly
g ives each party th e p o w e r to initiate neg otiations, but also
g ives each party

the power to achieve a “new ag reement” b y compelling arbitration before the state Commissions if those
neg otiations fail to resolve all of the parties’ disp u t e s

. I n effect, Qw e s t interprets Section XXXI V (V) to make reciprocal what would otherwise be a unilateral power to invoke th e § 252 neg otiation-and-arbitration process. B othNCCC V

. Q W E S T 18

state Commissions ag reed with Qwest’s interpretation of the 1997 I CAs. 4

W e ag ree as well, a

nd we therefo re conclude for the following reasons that the state Commissions had authority to

a r b i t rate the 2011 I CAs because the 1997 I CAs themselves
g ave Qwest both the power to initiate n eg otiations a nd the power to compel arbitration.

2

I n the f i r st place, North County ’s briefing before this
court d oes not a ddress the arg ument that the 1997 I CAs authoriz ed Qwest to compel a rbitr a t ion. Given that N orth County is a party

to the contract, its silence is damning

. So, too, is the course of conduct North County eng ag ed in during the period before Qwest petitioned for arbitration. As the parties ex p lained in the J oint Statement of Ag reed F acts, filed with the district court in the Oreg on proceeding below, “[ North County ] and [ Qwest] a g reed to a series of ex tensions of the arbitration window to file a p e t i tion for arbitration under 47 U.S.C. § 252(b)

. . . . I n each o f the ex tension
ag reements

. . . [ North County ] specifically ag reed to ex tend ‘the p eriod during which either p arty m ay file for arbitration

4 T h e Oreg o n Co m

m issio n h eld th at “ [b ]y th e term s o f th e p arties’

ex istin g ICA
, eith er Qw est o r No rth C o u n ty m ay co m m en ce n eg o tiatio n s

u n d er Sectio n 2 5 2 (a)(l) of th e A ct, an d if n eg o t i a tio n s f ail, eith er p arty

m ay th en p etitio n th is Co m m issio n to arb itrate an y o p en issu es u n der Sectio n 2 5 2 (b )(1 ) o f t

h e A ct.” L ik ew ise, th e A rizo n a Co m m i s sio n h eld th at “ th e Co m

m issio n clearly h as th e au th ority t o arb itrate d isp u t es arisin g d u rin g th e ren eg otiatio n

o f an ICA b etw een

Qw est an d a CL EC,” b ased

, i n p a r t, o n “ th e f

act th at u n d er th e ICA
, b o th p arties h av e th e rig ht t o

co m m en ce n eg o tiatio n o f a n ew ag reem en t,” an d th e f act “ th at Qw est m et th e p ro ced u ral req u irem en t s u n d er th e ICA .”NCCC V

. Q W E S T 19

under section 2 52(

b) ( 1) of the Act.’” I n addition, in J anuary 2010 North County ag reed to set a date for arbitration. N orth County does not arg ue that it took any of these actions under a reservation of rig

hts or the like.

North County ’s behavior under the 1997 I CAs i s hig hly probative of those I CAs’ meaning

. Se e , e.g. , Abrams v

. Horizon Corp.
, 669 P.2d 5 1
, 57 (Ariz

. 1983) (“W here an ag reement involves repeated o ccasions for performance b y either party with knowledg e of the nature of the performance and opportunity for objection to it by the other, any course o f performance accepted or acquiesced in without o b jection is gi v e n g reat weig ht in the interpretation of the ag reement.” (quoting Restatement (Second) of Contracts § 202(4) (1979) (emphasis deleted)); Tarlow v. Arntson
, 505 P.2d 338, 341–42 (Or. 1 973) (en banc) (“How the orig inal parties a nd their successors conducted themse l ves in r elation to the
ag reement is instructive in o ur determin a t ion of w hat must have been intended.”). To b e sure, North Count y later objected to the state Commissions’ a uthority to arbitrate. B ut its failure to d o so at any point during the l e n g t h y period o f time leading up to litig ation casts doubt on whether its current position reflects the proper reading of the 1997 I CAs. F urther, one mig ht be able to arg ue that the 1997 I CAs, read

as a whole, g ive Qwest only the power to request neg otiations, but not the additional power to force arbitration. B ut Nor th County has not attempted to advance such
arg ument here.

3

I n sum, g iven (1) the lang uag e of the 1997 I CAs’
neg otiation clause and the w ay it was interpreted by both state Commissions below; (2) North County ’s conduct in the timeNCCC V

. Q W E S T 20

leading up to the arbitration proceeding s ; a n d ( 3) N orth County ’ s lack of any rebuttal arg ument before this court; we

are satisfied that the s t a te Commissions h ad authority to

a rbitrate the 2011 I CAs because the 1997 I CAs them s el v e s g ave Qwest the power to invoke the neg otiatio n-andarbitration mechanism set forth in 47 U.S.C. § 252.

I V

North County nex t challeng es six specific provisions o f the 2011 I CAs t h e m s e lves: (1) the requirement that N orth County interconnect w ith Qwest directly rather than throug h

a third-party tandem provider; (2) the I CAs’ Relative Use F actor; (3) the requirement that North County employ SS7 sig naling if and when it o rig inates calls to Qwest; (4 ) the requirement that North County p ay Qwest for certain c all detail records; (5) the cap on the number of minutes for which North County can bill Qwest; and (6) t h e I C A s’ f ailure to allow North County to interconnect using Voice over I nternet Protocol.

The operative terms of the Oreg on and Ariz ona I CAs a re similar or identical, ex cept as indicated herein. W e ex amine each of North County ’ s objections in turn.

A

North County ’s principal claim is that sections 7.1.1 a nd 7.2.1.1 of the I CAs, w hich require No r t h County to interconnect with Q west directly rather than indirectly

, as in,NCCC V

. Q W E S T 21

throug h a third-party tandem p r o vider, are illeg al a nd unenforceable ag ainst it. 5

1

Section 7.2.1.1 of the 2011 I CAs provides that, “[ u ] nless otherwise ag reed to by

the Parties, via an amendment to this Ag reement, the Parties will directly ex c h ang e traffic b etween their respective networks without the use of third party transit providers.” North County claims this provision is unlawful. North C o u n t y ’ s position appears to be rather strang e, g iven that the 1997 I CAs contained n early identical lang uag e, 6 a nd
y et North County has repeatedly stressed that the 1997 I CAs are fully lawful.

Equally troubling is the n e a r total lack of support for North County ’s arg ument. N orth Coun t y c i t e s only o ne authority for the prop o s i t i o n that federal law requires that it be able to force Qwest to interconnect via third-party tandem provider. That authority is a 1 996 F C C order in w hich the F CC stated that “competitive telecommunicatio n s c arriers that have the oblig ation to interconnect w ith requesting carriers may choose, b ased u pon the i r own c haracteristics, whether to allow di r ec t o r indirect interconnection.” In the Matter o f Implementation of the Local Competition

5 No rth Co u n ty ’ s d irect- v s .- i n d irect ch allen g e is w aiv ed w ith resp ect to th e Oreg o n

- af

f ected ICA b ecau se No rth C o u n ty o f Oreg o n n e ve r raised it b ef ore th e Ore g o n C o m

m i ssio n

. S

ee W

. Ra d io S ervs. Co

. v. Qwest Co rp

. , 6 7 8 F.3 d 9 7 0 , 9 7 9 (9 th Cir. 2 0 1 2 ).

6 Sectio n V.A

. o f th e 1 9 9 7 ICA s d eclared t h a t , “[ a ] b sen t a s ep arately

n eg o tiated ag reem en t to th e co n trary , t h e P arties w ill d irectly ex ch a n g e traf f i c b etw een th eir r e s p ectiv e n etw o rk s , w ith o u t t h e u se o f th ird p arty tran sit p ro v id ers.”NCCC V

. Q W E S T 22

Provisions in the Telecommunications Act o f 1 996
, 11 F .C.C.R. 15499, 16171 ¶ 1408 (1996) (hereinafter “ F irst Report a nd Order ”). F rom this, N orth County concludes that Qwest had a “ clear oblig ation to allow [ North Coun t y ] to select indirect intercon n e ction with [ Qwest] when [ Qwest] submitted its I CA neg otiation requests.”

W e are n ot p ersuaded that the First Report and Order renders section 7 .2.1.1 unlawful b ecause the F CC r u l i n g is not on point.

I n particular, when the a b o ve-qu o t e d F CC lang uag e hig hlig hts a CL EC’s leeway to c hoose d irect vs. indirect, it does so for the limited purpose of illustrat i n g t h at CL ECs have different statutory oblig a tions from I L ECs. Speci f ically

, the order ex plains, 47 U.S.C. § 251 ( c ) r e quires I L ECs—but
not CL ECs—to interconnect directly with requesting carriers. First Report and Order a t 15991 ¶ 997 (“Section 251 is clear in imposing different oblig ations on carriers depending upon their classification

. . . . F or ex ample, s e c t ion 251(c)

s p ecifically imposes oblig ations u pon incumbent L ECs t o interconnect, upon request, a t all technically feasible p o ints. This direct interconnection, h o w ever, is not required under section 251(a) of all telecommunications carriers.”). CL ECs, by contrast, are not subject to § 2 51(c); CL ECs are g overned by §§ 251(a) a

nd (b), which do not require t h e m to interco n n e ct directly if d irect interconnection would be uneconomical or technically infeasible for them. I n deed, the major conclusion reached by the F CC order was that “indirect connection

. . . satisfies a telecommunication carrier’s duty to interconnect pursuant to section 251(a).” First Report and Order ¶ 9 97

. The F CC emphasiz e d that “ telecommunic a t i o n s carriers should be permitted to provide interconnection pursuant to section 251(a) either directly or indirectly

, basedNCCC V

. Q W E S T 23

u p o n their most efficient technical and economic c hoices. ” Id.

I n other words, the First Report and Order m e r el y clarified that CL ECs are p er m itted to use indirect interconnection in order to meet the statutory interconnection oblig ations imposed on them by § 251(a). B u t just because the statute permits CL ECs t o interconnect indirectly with other L ECs, does not mean that each CL EC has the absolute rig ht to d emand indirect interconnection of other L ECs under
any and all circumstances. W h a tever else it say s, the F irst Report a nd Order d oes not condemn the default rule the 2011 I CAs establish.

Hence, the First R e

p ort and Order does not g ive N orth County the unilateral rig ht t o d e mand indirect interconnection from Qwest. N or does the tex t of the Telecommunications Act itself g ive North County that rig ht. F or those r e a sons, North County cannot establish that the 2011 I CAs violate the Act simply b ecause they require North C o u n ty to use direct interconnection f

or the time b eing

. I f North County is to succeed in establishing that it was entitled to i n d i r ect interconnection, it must show that the Ari z ona Commission acted arbitrarily and capriciously in a p proving the 2011 I CA provisions that set direct interc o n n ec tion as the parties’ default.

2

The Ariz ona Commission’s decision to approve the 2011 I CA’s d i r e c t interconnection provisions may be set aside a s arbitrary and capricious o nly if North County demonstrates that such d e c ision “was not supported by substantial evidence,” or r epresents a “clear e rror o f judg ment” on t heNCCC V

. Q W E S T 24

Commiss i o n ’ s part. W

. Radio Servs. Co. v. Qwest Corp.
, 678 F .3d 970, 976 (9th Cir. 2 0 12) (quoting Verizon Cal., Inc. v. Peevey , 462 F .3d 1142, 1150 (9th Cir. 2006)).

North County makes a sing le arg ument: that if N o r th County were allowed to interconnect indirectly with Qwest,
spe c i fically “ throug h a third-party tandem provider that utiliz es SS7 sig n aling

, ” then North County ’ s “ u se of MF sig naling ” would become “irrele v a n t.” Recall that the impetus for Q west’s r equest to neg otiate the 2011 I CAs was Qwest’s claim that North County h ad been overbilling it a nd obsc u ring the inclusion of inflated costs by u sing the more

o p aque MF sig naling d ata. North County arg u es t h at interconnection throug h a third-party tandem p r ovider would render Qwest’s “reasons for wantin g n ew I CAs

. . . moot,” and the “direct interconnec t i o n I CAs forced on [ N orth County ] . . . unnecessary .”

North County ’s arg u ment d oes n ot establish that the Ariz ona Commission committed a clear error of j u d gment. I n the f irst place, North County has offered n o e v idence whatsoever to substantiate i ts assertion that Qwest’s leg itimate concerns would evaporate if only North C o u n ty

were p ermitted to connect throug h a third-party tandem provider. On the contrary , North County ’s President testified before the Commission that he had “‘no clue’ wh a t k i nd o f call information its third-party tandem provid e r g ives to Qwest w hen i t p asses a call f rom [ North County ]

. ” Moreover, in testimony before the Commission, Qwest

ex p lained that t he parties would n eed to answer numerous questions about the terms and condition s of indirect interconnection, which wer e n ot raised during the parties’ pre-arbitration neg o tiations, before t h ey could interconnect throug h a third-party tandem p r o v ider. F inally

, sectionNCCC V

. Q W E S T 25

7.2.1.1 of the 2 011 I CAs ex pressly allows North County to reneg otiate this issue in the future. The Ariz ona Commission

was well within its discretion to approve the p r o v i s ions requiring direct interconnection for the time being

.

B

North County nex t objects to the 2011 I CAs’ Re l a t i v e Use F actor.

I n simplified terms, when someone from Qwest’ s n e t w o r k

c a l ls someone in North County ’s network—or vice v ers a— t h e traffic must be transmitted throug h certain f a cilities, called trunk f

acilities. B u t transmitting local traffic b etween t h e two networks g enerates c o sts to the party operatin g t h e trunk facilities, and those c osts must be divided b etween Qwest and North County

. Under F CC reg ulations, an I L EC like Q west may c harg e a CL EC like No rth County
, but only i n proportion to the amount of traffic that o r ig inates o n t h e CL EC’s network and terminates on the I L EC’s network. 47 C.F .R. § 51.703. I n an effort to charg e North County for the proportion of Qwest–North County t r a f fic that orig inates with North County
, the 2011 I CAs employ a so-called “ rel at ive

use factor” that assig ns 99 percent of the costs to Qwest and 1 percent of the costs to North County
, alth o u gh the I CAs permit this fig ure to be adjusted after one calendar q uarter to reflect actual usag e data.

North County o bjects to the 99:1 ratio; it contends that the 2011 I CAs should assig n Q west 100% of these costs to Qwest because the 2 0 11 I CAs speci f i c al l y state that North CountyNCCC V

. Q W E S T 26

does not send any traffic to Qwest. 7 I n l i gh t o f that

s tipulation, N orth County arg ues that it was arbitrary a n d capricious for the state Commissions to approve a r elative use factor of 99:1.

W e are not persuaded. Despite the lang uag e in the 2011 I CAs declaring that North C o u n ty sends no calls to Qwest, there was unrebutted record evidence that North County does orig inate a t l east some calls to Q west. Moreover, Qwest testified that it is unable to determine how much traffic N orth County orig inates to it, and neither party suppli ed the state Comm i s sions with any actual data q uantify ing their relative

use of the trunk facilities. Given that North County orig inates

some small but unknown amount of traffic, and g iven that the I CAs a llow the Relative Use F a c tor to be revised after a short period of time, we c o n clude that it was not arbitrary a nd capricious for the state Commissions to approve a provisional relative use factor of 99:1. 8

C

North County also contends that the 2011 I CAs violate the Telecommunications Act b y requiring North County to

7 In p articu lar, sectio n

7 .1 .1 o f th e 2 01 1 ICA s states th at “ [t]h e P arties

u n d erstan d an d ag ree th at CL EC cu rren tly s en d s n o traf f ic to Qw est an d in stead term in ates traf

f ic eith er orig in ated b y Qw est o r o rig in ated b y o th er carriers an d p assed

th ro u g h Qw est to CL EC.”

8 T o t h e ex ten t No rth Co u

n t y ch allen g es th e ICA p ro v isio n s reg ard in g Mu ltip lex in g an d in stallatio n ch arg es, N o rth Co u n ty w aiv ed su ch ch allen g es w ith

resp ect to th e Oreg o n

- af

f ected ICA . W ith

resp ect to th e A rizo n a- af

f ected ICA
, su ch ch allen g es f ail b ecau se th e f

actu al p rem ise of No rth Co u n ty ’ s arg u m en t is in c o r r e ct: Mu ltip lex in g an d in stallatio n ch arg es are n o t su

b j ect to th e Relativ e Use Facto r.NCCC V

. Q W E S T 27

use SS7 technolog y

if and when it orig inates calls to Qwest. North County relies o n 47 U.S.C. § 252(i), which provides that “[ a] local ex c han ge c a r rier shall make available any interconnection, service, or network element provided under

an ag reement approved u n d e r t h is section to which it is a party to any other requesting telecommunications carrier
upon the same terms and conditions as those provided in the
ag reement.”

As its tex t makes clear, § 25 2 (i) is a non-discrimination provision. North County ’s attempt to invoke it fails because nothing in the record sug g ests that Qwest allows oth er

ex c h an ge c arriers to do what North County wants to do, namely

, to transmit local traffic using only M F sig naling

. I ndeed, the parties’ joint statement of undisputed facts filed in the Oreg on proceeding s indicates that “[ N orth Co u n t y ] is the only CL E C in Oreg o n that int e rconnects with [ Qwest] using ex clusively MF sig naling .” 9 North County provides no evidence to substantiate any discrimination theory

.
Moreover, it was not a

r bitrary a nd capricious or otherwise unlawful f

or Q west to insist that North County use SS7 sig naling if it wants to orig i n a t e c alls to Qwest. Substantial

9 A n d w h ile Qw est h as o f

f ered ev id en ce th at at least o n e o th er CL EC in Oreg o n “c u r r e n tly in terco n n ects w ith [Qw est] u sin g t h e sam e 19 9 7 ICA th at [Qw est] h ad w ith [No rth Co u n ty ],” th e 1 9 9 7 ICA req u ires th e CL EC
to “ m ak e a g o od f

aith ef f o rt” to tran s itio n to SS7 sig n alin g tech n o lo g y

w ith in “ 4 m o n t

h s” o f th e ex ecu t i o n o f th at ICA

. A n d

, as alread y

ex p lain ed ab ov e, it is u n d i sp u t ed th at ev en th e CL EC o p eratin g u n d er th e 1 9 9 7 ICA d o es n o t n o w co n n ect w ith Qw est u s i n g MF sig n alin g tech n o lo g y

. Becau se th ere is sim p l y n o ev id en ce th at Qw est is p erm ittin g

an y o th er carrier to d o w

h at No rth Co u n ty w an ts to d o

— n am ely

, t ran sm i t lo cal t raf f ic u sin g o n ly MF s ig n alin g

— th ere is n o b asis u

p o n w h ich to f in d th at sectio n

7 .2 .1 .1 v io lates th e A ct’ s n o n

- d iscrim in atio n p ro v isio n

.NCCC V

. Q W E S T 28

evidence supports Qwest’s contention that SS7 sig naling has sig nificant benefits when compared to MF sig n a ling ; that MF sig naling is essentially obsolete; and that North County ’s use of MF sig n aling created serious p roblems for Q west, in particular by impeding Q w e s t’s ability to bill North County for traffic ex chang ed b etween their n etworks. W e therefore conclude that sub stantial evidence supported the state Commis s i ons’ decisions to approve the I CAs’ requirements that N orth County u se SS7 sig naling if and when it decides to orig inate traffic to Qwest.

D

North County nex t arg ues that the 2 011 I CAs a re unlawful because section 7.6 requi res North County to pay Qwest for certain call detail records. W e reject this challeng e because both N orth County entities failed to raise it bef o re their respective state Commissions, and both d istric t c o urts b e l o w p roperly refused to e ntertain it. North County therefore may n ot assert it h ere. W

. R adio Servs.
, 6 78 F .3d at 979.

E

I n i t s penultimate challeng e, North County a sks us to invalidate section 7.8 of the I CAs, which impose a cap on the number of minutes for which North County may bill Qwest.

Recall that Q west is oblig a ted to com p e n s a te N orth County for some portion of t h e t ra f f ic that Qwest sends to North C o unty

. Recall, a lso, that Qwest had claimed that it had been o verbilled by North County
, an d that N orth C o unty ’s continued u se of MF sig naling to terminate c a l l s had mad e i t d i f

ficult for Qwest to verify the number o fNCCC V

. Q W E S T 29

minutes f or which Qwest may lawfully b e made to pay N orth County

. Given those circumstances, Q west insisted that the 2011 I CAs impose a cap on the number of minutes for which North County is authoriz ed to bill it. I n Ariz ona, the c ap is 400,000 minutes; in Oreg on, i t i s 240,000 minutes. The Ariz ona-affected I CA a lso provides that “[ e] ither party may request a modifi c a t ion of the cap, including its elimination, based o n verifiably a ccurate records that the traffic is appropriately subject to reciprocal compensation.” Similarly

, with respect to the Oreg on-affected I CA, Qwest testified that it is “ willing t o n e g otiate to a mend [ the cap] if [ N orth Coun ty ] can show that it is receiving more minutes over the
t r u n k s that are truly local and compensable.” North County objects that these caps are arbitrary and capricious.

W e have no trouble concluding that substantial evidence supports the state Commissions’ d e c i sions to approve the
caps. F irst, the record contains ample evidence of the b illing disputes that led Qwest to insist on the caps. Moreover, a s the Ariz ona Commission ex plained, “[ t] he proposed c ap of an averag e of 400,000 m i n u t e s o f use per month

. . . was calculated based on [ North County ]’s current usag e pattern and Qwest’s best effo rt s t o analy z e that data based on information received from [ North County ]

. [ N o rth County ] did not provide e v i d ence in this proceeding about its actual

use of its in-service circuits, nor did it contest Qwest’s calculations.” L ikewise, Qwest selected the Oreg on-affected I CA’s 2 40,000-minute cap based on evid e nce of N orth County ’ s actual u s a ge p atterns, and in fact, the cap deliberately allows 40% m ore minutes than Qwest currently sends to North County on averag e. N orth County h a s not presented any e vidence to undermine the numbers Qwest has proposed.NCCC V

. Q W E S T 30

I n short, we conclude that th e c a p s respond to a welldocumented, leg itimat e billing dispute that is the direct
consequence of North Count y ’s continued use of MF sig naling technolog y

. The caps are based on substantial a nd

u n controverted evidence, and are subject to reneg otiation i n lig ht of future data. North County has not shown them to be arbitrary and capricious.

F

F i n a l l y , N o r t h C o u n t y a r g u e s t h a t t h e Telecommunications A ct requires Qwest t o allow N orth County to interconnec t w ith it using Voice over I nternet Protocol (“VoI P”) technolog y

. North County does not claim that it has an absolut e ri gh t to demand interconnection throug h VoI P; instead, North County invokes the Act’s nondiscrimination provisions, §§ 251(c) ( 2 ) ( D) and 252(i), to assert that Qwest must offer it VoIP interconnection.

As we discussed above, § 252(i) declares t h a t “[ a] local

ex c h a ng e carrier shall make available a ny interconnection,

se r v i ce, or network element provided under an ag reement approved under this section to which it is a party to any other requesting telecommunications c arrier upon t h e same terms

a n d conditions as those provided in the ag reement. ” 47 U.S.C. § 252(i). Similarly

, § 251(c)(2)(D) requires I L ECs
to provide interconnection “on rates, terms, and conditions that a r e just, reasonable, and nondiscriminatory

, in accordance with the terms and conditions of the a greement and the requirements of this section and section 252 o f t h is title.” 47 U.S.C. § 251(c)(2)(D).

North County ’s a

rg ument fails for several reasons. F irst, with respect to the Oreg on-affected I CA, North County neverNCCC V

. Q W E S T 31

raised it before the O reg on Commission, and therefore the district court properly

concluded that it is waived.

W ith respect to the Ariz ona-affected I CA, North County
cannot successfully invoke t h e Act’s non-discrimination provisions because it h a s p o i nted to no evidence that Qwest provides service using VoI P technolog y to any one. To the contrary , Qwest testified below that it does not provide V oI P service; only a separate cor p orate affiliate does. N orth County cites n othing to r ebut such testimony

. The n o n

di s crimination provisions of §§ 251(c)(2)(D) and 252(i) therefore have no application.

V

I n conclusion, we are satisfied that the Commissions h ad authority to arbitrate the 2011 I CAs. W e are also satisf i ed that none of the provisions subject to our review v iolates the T e lecommunications Act or its implementing r e g u l a t i o n s , a n d that none of the state Commissions’ actions were a rbitrary o r capricious.

The judg ments of the district courts are AF F IRMED.