IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-50088

F. CARY FITCH, doing business as Affordable Telecom,

Plaintiff-Appellant,

v.

PUBLIC UTILITY COMMISSION OF TEXAS; SOUTHWESTERN BELL

TELEPHONE COMPANY, doing business as AT&T Texas,

Defendants-Appellees.

F. CARY FITCH, doing business as Affordable Telecom,

Plaintiff-Appellant,

v.

PAUL HUDSON, in his individual and official capacity; JULIE

CARRUTHERS PARSLEY, in her individual and official capacity; BARRY

SMITHERMAN, in his individual and official capacity; TEXAS PUBLIC

UTILITY COMMISSION,

Defendants-Appellees.

Appeal from the United States District Court 

for the Western District of Texas 

USDC No. 1:06-CV-176

Before REAVLEY, STEWART, and OWEN, Circuit Judges.

United States Court of Appeals

Fifth Circuit

F I L E D

January 16, 2008

Charles R. Fulbruge III

Clerk
No. 07-50088

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

2

PER CURIAM:*

Affordable Telecom (“Affordable”) appeals from the district court’s order

affirming the Texas Public Utility Commission’s (“PUCT”) approval of an

arbitrated interconnection agreement between Affordable and Southwestern Bell

Telephone Company (hereinafter “AT&T Texas”). We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2002, Affordable, a small telecommunications company that provides

paging service and Internet access, received commercial mobile radio service

(“CMRS”) licenses from the Federal Communications Commission (“FCC”) to

provide interconnected common carrier paging services to the public in Corpus

Christi and Victoria, Texas. In order to effectuate the services provided by the

licenses, Affordable had to enter into an interconnection agreement with AT&T

Texas. The Telecommunications Act of 1996 (“FTA”), Pub. L. No. 104-104, 110

Stat. 56 (1996), codified at 47 U.S.C. § 151 et seq., which was adopted to

encourage the entry of new telecommunications carriers into local service

markets, allows competing local exchange carriers (“CLECs”) to negotiate

interconnection agreements with incumbent local exchange carriers (“ILECs”).

However, the FCC has also stipulated that ILECs cannot charge for the use of

interconnection facilities for services that do not originate traffic, such as oneway paging. Since Affordable’s licenses were for paging services which do not

originate any traffic, it was not obligated to provide AT&T Texas any

compensation under the terms of the licenses.

The case below began in 2004 as a compulsory arbitration before the

PUCT, see 47 U.S.C. § 252, when Affordable and AT&T failed to reach a

voluntary agreement on all terms. The central issue in contention before the
No. 07-50088

1 Superpaging employs the paging spectrum to transmit“pages”to subscribers’ wireless

receivers. The page can consist of any type of data that can be sent to a computer (not just

phone numbers as with traditional paging). Additionally, the calling party can, if it subscribes

to such function, use the Internet to gather information for transmission in the Superpage.

In fact, the PUCT arbitrators found that Affordable’s dial-up Internet access service

subscribers could access the Internet by calling the same platform used to initiate Superpages.

2 According to AT&T Texas, 99% of Affordable’s traffic was dial-up ISP traffic.

3 47 C.F.R. § 51.100(b) states:

A telecommunications carrier that has interconnected or gained

access under Sections 251(a)(1), 251(c)(2), 251(c)(3) of the Act,

may offer information services throughthe same arrangement, so

long as it is offering telecommunications services through the

same arrangement as well.

Telecommunications service means “the offering oftelecommunications for a fee directly to the

public, or to such classes of users as to be effectively available directly to the public, regardless

of the facilities used.” 47 U.S.C. § 153(46). Telecommunications is defined as “the

transmission, between or among points specified by the user, of information of the user’s

choosing, without change in the form or content of the information as sent and received.” 47

U.S.C. § 153(43). An information service offers the capability for “generating, acquiring,

storing, transforming, processing, retrieving, utilizing, or making available information via

telecommunications,” but does not include providing telecommunications itself. 47 U.S.C. §

153(20). 

3

PUCT arbitrators was whether Affordable was legally authorized to avoid

payment for the business lines and equipment it had access to through its

interconnection agreement with AT&T Texas even though Affordable had used

its interconnection agreementto provide dial-up Internet access to its customers.

In rendering their decision, the PUCT arbitrators made a number of

factual findings. The PUCT arbitrators determined that Affordable had

approximately 5,000 dial-up Internet access customers (through the trade name

USAWIDE.net), 200-300 resold numeric paging customers, and 15 Superpaging1

customers, and they concluded that although Affordable’s licenses only allowed

it to provide paging services, the majority of the traffic carried over its existing

interconnection arrangements was dial-up internet service provider (“ISP”)

traffic.2 Relying on the FCC rule laid out in 47 C.F.R. § 51.100(b),3the PUCT
No. 07-50088

4 The arbitrators, in their award, also restricted the services Affordable could provide

under its Superpaging services. Additionally, they made findings regarding the compensation

rates between Affordable and AT&T Texas under the interconnection agreement.

5 The PUCT decided that long-distance calls (calls routed through an interexchange

carrier) were not subject to the same reciprocal compensation rates as calls not routed through

third party interexchange carriers. 

6 Affordable also challenged the PUCT’s imposition of sanctions arising out of a

discovery dispute. Affordable initially sued the individual PUCT Commissioners for imposing

sanctions, but amended its complaint to target the PUCT and the Commissioners in their

official capacities.

4

arbitrators held that Affordable could not use the interconnection facilities to

carry Internet access traffic because Affordable does not offer

telecommunications service “through” interconnection facilities; rather, it merely

transmits radio signals to activate its pagers. The PUCT arbitrators explained

that “47 C.F.R. § 51.100(b) allows the offering of information service through an

interconnection facility, but only as an incident to the telecommunications

service for which the carrier obtained the interconnection facility.” The PUCT

arbitrators concluded that Affordable is only authorized to provide paging

services, and “consequently [it] may not receive any traffic other than paging

traffic through the interconnection facility.”4

On June 29, 2005, the parties filed exceptions to the PUCT arbitrators’

award proposal. The PUCT approved the arbitration award, making only one

modification.5

Affordable filed suit in state court, challenging the PUCT’s award and its

conclusion that Affordable is not entitled to continue providing internet services

through its interconnection agreement with AT&T.6 The case was removed to

federal district court by the PUCT Defendants and AT&T Texas (collectively

“Defendants”), on the grounds that the case involved federal questions. The

district court denied Affordable’s motion to remand and ordered Affordable to
No. 07-50088

7 Affordable initially filed two suits in state court—the first one after the PUCT order

approving the award with changes and again after the interconnection agreement was filed.

The two cases were consolidated and certain state law issues were remanded to state court.

5

amend its complaints to address the claims under the FTA.7 The parties briefed

all issues, except Affordable’s damages claims against AT&T Texas. On

December 12, 2006,the district court entered an order affirming the PUCT order

in all respects and ordered that Affordable’s damages claim against AT&T be

dismissed with prejudice. Affordable timely filed its notice of appeal.

II. STANDARD OF REVIEW

We review state commission rulings that interpret federal law de novo.

Southwestern Bell Tel. Co. v. Pub. Util. Comm’n, 208 F.3d 475, 482 (5th Cir.

2000). Factual findings and state law determinations by state commissions are

reviewed “under the more deferential arbitrary and capricious standard.” Id.

We have previously recognized that there is no meaningful difference between

the arbitrary and capricious standard and the “substantial evidence” standard.

Id. at 482 n.8 (citing GTE South Inc. v. Morrison, 199 F.3d 733, 745 n.5 (4th Cir.

1999)).

III. DISCUSSION

First, Affordable contends that the PUCT erred when it refused to

arbitrate Affordable’s claims under 47 U.S.C. §§ 201, 332(c)(1)(B) and 47 C.F.R.

§ 20.11. It also asserts that the district court erroneously concluded that § 332

is “outside the scope of an arbitration under § 252.” In making this claim,

Affordable recognizes that the FCC prefers that LEC-CMRS disputes are

handled through the negotiation/arbitration process that was adopted in §§

251/252 of the 1996 amendments, but Affordable nevertheless asserts that the

FCC has also “taken great care to ensure that where § 332 or FCC wireless

precedent requires a different substantive result than would the 1996

amendments standing alone, then its CMRS rules prevail.” 
No. 07-50088

6

Affordable’s argument must fail. The FCC has clearly directed state

commissions to arbitrate LEC-CMRS interconnection agreements under §§ 251

and 252, concluding that state commission arbitration proceedings would

achieve “just, reasonable, and fair” agreements, which is the “common goal” of

§§ 201, 332, 251, and 252. In the Matter of Implementation of the Local

Competition Provisions of the Telecommunications Act of 1996, Interconnection

Between Local Exchange Carriers and Commercial Mobile Radio Service

Providers, First Report and Order, 11 F.C.C.R. 15499, 16005 ¶ 1023 (Aug. 8,

1996).

Second, Affordable argues that the PUCT erroneously held that paging

carriers (as contrasted with LECs and cellular carriers) are not allowed to

provide both telecommunications and information services under their

interconnection agreements with ILECs. Affordable asserts that the FCC has

recognized that paging carriers can provide information services, and that the

PUCT interpreted 47 C.F.R. § 51.100(b) too narrowly. According to Affordable,

the PUCT interpreted the word “through” to mean “in one side and out the

opposite,” when in the context of § 51.100(b) the word actually means “by the

means and agency of.” When the proper definition of through is applied,

Affordable contends that § 51.100(b) allows it to offer information services

through the interconnection agreement it has with AT&T Texas for one-way

paging. On the other hand, AT&T Texas and the PUCT Defendants urge this

Court to affirm the PUCT award and the district court’s determination. They

argue that under the proper reading of § 51.100(b), Affordable’s licenses permit

it to interconnect with AT&T and use AT&T facilities for a limited purpose—to

provide one-way paging service—and since § 51.100(b) only permits

telecommunications carriers to offer information services “through the same

arrangement,” Affordable cannot, under its existing one-way paging
No. 07-50088

7

interconnection agreement (which just involves receiving information) provide

information services (which involves sending and receiving information). 

This issue is the heart of this dispute. Affordable believes that the rights

it has under its licenses should be interpreted broadly so it can offer a wide

range of services via its interconnection agreement with AT&T Texas. AT&T, the

PUCT, and the district court all believe that Affordable’s licenses only permit it

to provide one-way paging. For the following reasons, we hold that the

interpretation suggested by Affordable is incorrect.

As the district court recognized, one-way paging is not a service provided

“through” an interconnection facility, because the facility is merely relaying a

call from the person initiating a page to the paging service provider. The district

court cites from the PUCT arbitrators award, where they explain: 

[§ 51.100(b)] does not just require that communications occur

through the arrangement. If this were the standard, then all

carriers would be able to offer information services through

interconnection agreements, since the very purpose of an

interconnection agreement is to transit communications. Rather,

the carrier must offer telecommunication services through the

arrangement.

Affordable argues that the PUCT and the district court unreasonably

discriminated by acknowledging differences between CMRS providers (i.e., those

that provide telephone exchange service versus those that provide

telecommunications services), but Affordable is unable to establish how the

PUCT or the district court’s interpretations are inconsistent with any FCC

decisions or orders issued since the 1996 amendments. Not only is Affordable’s

argument at odds with the plain language of § 251, but it also goes against the

FCC precedent that has recognized the distinctions between different CMRS

providers.
No. 07-50088

8 Specifically, the PUCT arbitrators found that: “Superpaging only qualifies as CMRS

to the extent that it meets the previously outlined definition of paging. Accordingly, the

arbitrators conclude that Superpaging qualifies as CMRS only when the end user’s wireless

receiver meets the FCC’s definition of a pager. Among the possible applications cited by Fitch

Affordable Telecom, only the Pocket PC fits the definition of pager.”

9 When a call originating from one carrier’s customer is made to a customer of another

interconnected carrier, the originating carrier must pay the terminating carrier for the costs

of transporting and terminating the call. 47 U.S.C. § 251; 47 C.F.R. § 51.701(e). The FCC has

establishedrules that govern these “reciprocal compensation” payments. 47 C.F.R. § 51.701(e);

see also 47 C.F.R. § 51.701-.717. In pertinent part, these rules state that CMRS providers may

8

Further, common sense demands that we reject Affordable’s argument.

If its interpretation of § 51.100(b) is correct, it would be able to provide

information services without having to pay AT&T Texas anything for using its

facilities. This is clearly contrary to FCC precedent, as the FCC has recognized

that ISPs are end users of telecommunications services that are required to

purchase LEC business lines. In the Matter of Implementation of the Local

Competition Provisions in theTelecommunications Act of 1996, 14 F.C.C.R. 3689,

3690 ¶ 4 (1999), vacated on other grounds, Bell Atl. Tel. Co. v. FCC, 204 F.3d 1

(D.C. Cir. 2000).

Third, Affordable asserts that the PUCT erroneously concluded that it was

not authorized to provide services to laptop computers and mobile signs through

its Superpaging service.8 The PUCT’s determination about which Superpaging

services are permitted under Affordable’s interconnection agreementis a factual

finding. We agree with the PUCT that many of the services Affordable provided

under the umbrella of Superpaging, such as information storage and retrieval

and access to the Internet, are not CMRS services, and therefore Affordable is

not permitted, under § 51.100(b), to provide those services through its

interconnection with AT&T Texas. Accordingly, we cannot hold that the PUCT’s

determination was arbitrary and capricious.

Fourth, Affordable Telecom challenges two ofthe PUCT rulings regarding

intercarrier compensation.9 First, it asserts that the PUCT violated the FTA
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be compensated for terminating calls that originate from customers of the interconnected

telecommunications carriers. 47 C.F.R. § 51.701(c) & (e); 47 C.F.R. § 51.701(e). The rules also

stipulate that carriers that only provide one-way paging service do not owe reciprocal

compensation to LECs. 

9

and FCC rules by failing to establish a rate to be paid for termination of AT&T

originated calls. Affordable asserts that under § 251(b)(5), it is entitled to

reciprocal compensation for paging, citing to FCC decisions that held that ILECs

are required to at least offer to exchange both § 251(b)(5) traffic and ISP-bound

traffic at the rate of $0.0007 per minute of use. See Petition of Core

Communications, Inc. for Forbearance Under 47 U.S.C. § 160(C) from

Application of the ISP Remand Order, 19 F.C.C.R. 20179, 20181 ¶ 6 (2004); see

also T-Mobile Order, 20 F.C.C.R. at 4862 ¶ 12; see generally In the Matter of

Implementation of the Local Competition Provisions in the Telecommunications

Act of 1996: Intercarrier compensation for ISP-Bound Traffic, 16 F.C.C.R. 9151

(1999). Affordable argues that since AT&T failed to offer a rate during the

arbitration before the PUCT, the arbitrators should have prescribed the FCC’s

$0.0007 compensation rate. However, a review of the record indicates that

AT&T Texas inadvertently omitted its pricing index during the PUCT

arbitration. When AT&T attempted, by motion, to correct its omission and to

provide a reciprocal compensation rate of $0.0013 per minute, Affordable

objected, and as a result, AT&T withdrew its motion. AT&T Texas now argues

that this classifies as invited error, and assert that because of that, this Court

should not reverse the PUCT’s determination. See Hidden Oaks Ltd. v. City of

Austin, 138 F.3d 1036, 1051 (5th Cir. 1998) (“Having made such a choice at trial,

Hidden Oakes hardly can request now that we reverse and remand in order for

it to reassess its earlier strategy.”). We agree, and as a result, this issue cannot
No. 07-50088

10 Even if we were to refrain from classifying it as invited error, we need not reverse

the PUCT order on this ground because the PUCT included language in the interconnection

agreement that will allow the parties to prospectively include a rate which could be

retroactively implemented. And because AT&T’s rate in its withdrawn filing ($0.0013) is

higher than the rate Affordable Telecom alleges should have been adopted ($0.0007), the

parties should be able to reach an agreement on a appropriate rate for reciprocal compensation

without intervention from this Court or the PUCT.

11 47 U.S.C. § 206 provides that if common carriers violate any provisions of the TCA

they shall be liable for damages sustained in consequences of that violation, along with

reasonable attorney’s fees. 47 U.S.C. § 207 similarly authorizes any person who claims to be

damaged by a common carrier to either file a complaint with the FCC or to bring a lawsuit in

federal district court to recover damages.

10

be raised on appeal. See Flores v. Cameron County, 92 F.3d 258, 270 (5th Cir.

1996) (explaining that “the invited error doctrine . . . preclude[s] our review”).10

Affordable next argues that the PUCT order adopting the award

erroneously concluded that any reciprocal compensation paid by AT&T Texas to

Affordable should be limited to those calls originating within AT&T and

terminating directly with Affordable, and in which (i) the originating caller and

the recipient are in the same Metropolitan Traffic Area (“MTA”) and (ii) no

intervening interexchange carrier is involved (i.e., the call is not a long-distance

call requiring “1+” dialing.) Affordable Telecom argues that the PUCT’s holding

in this regard is at odds with the manner in which federal courts have

interpreted this issue. See e.g., Iowa Network Servs. v. Qwest Corp., 466 F.3d

1091 (8th Cir. 2006); Atlas Tel. Co. v. Oklahoma Corp. Comm’n, 400 F.3d 1256

(10th Cir. 2005). However, this argument is flawed as well. As the PUCT

Defendants observe in their brief: “It would be entirely incongruous to require

AT&T to pay Affordable for a long-distance page originated by a customer using

interexchange service, especially considering that AT&T had nothing to do with

the termination of the call.” We agree, and the case law cited by Affordable is

inapplicable to this case. 

Finally, Affordable sued AT&T Texas for damages under 47 U.S.C. §§ 206

& 207,11 arguing that AT&T violated the FTA by refusing to interconnect with
No. 07-50088

11

Affordable and for refusing to negotiate in good faith. Affordable argues that the

district court’s dismissal of these claims was in err, especially since the court

never specifically addressed all of Affordable’s allegations. Affordable’s

argument is without merit. There is no evidence that AT&T Texas violated any

provision ofthe TCA, damaged Affordable in any way, or even acted in bad faith.

Therefore, Affordable is not entitled to damages under §§ 206 or 207. 

IV. CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court.