RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 06a0256p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

BELLSOUTH TELECOMMUNICATIONS, INC.,

Plaintiff-Appellant,

v.

UNIVERSAL TELECOM, INC.; PUBLIC SERVICE

COMMISSION OF KENTUCKY; MARK DAVID GOSS,

Chairman of the Public Service Commission of

Kentucky; TERESA J. HILL, Vice-Chairman of the

Public Service Commission of Kentucky; W.

GREGORY COKER, Commissioner for the Public

Service Commission of Kentucky,

Defendants-Appellees.

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No. 05-5674

Appeal from the United States District Court

for the Eastern District of Kentucky at Frankfort.

No. 04-00035—Joseph M. Hood, Chief District Judge.

Argued: June 1, 2006

Decided and Filed: July 21, 2006 

Before: BOGGS, Chief Judge; KEITH and SUTTON, Circuit Judges.

_________________

COUNSEL

ARGUED: Mark R. Overstreet, STITES & HARBISON, Frankfort, Kentucky, for Appellant.

Holly C. Wallace, DINSMORE & SHOHL, Louisville, Kentucky, John E.B. Pinney, PUBLIC

SERVICE COMMISSION OF KENTUCKY, Frankfort, Kentucky, for Appellees. ON BRIEF:

Mark R. Overstreet, STITES & HARBISON, Frankfort, Kentucky, Dorothy J. Chambers,

BELLSOUTH TELECOMMUNICATIONS, INC., Louisville, Kentucky, for Appellant. Holly C.

Wallace, John E. Selent, DINSMORE & SHOHL, Louisville, Kentucky, John E.B. Pinney, Amy E.

Dougherty, PUBLIC SERVICE COMMISSION OF KENTUCKY, Frankfort, Kentucky, for

Appellees.

1
No. 05-5674 BellSouth Telecommunications v. Universal Telecom, et al. Page 2

_________________

OPINION _________________

SUTTON, Circuit Judge. BellSouth Telecommunications challenges the district court’s

affirmance of an order of the Kentucky Public Service Commission allowing Universal Telecom to

adopt an existing interconnection agreement between BellSouth and MCI. See 47 U.S.C. § 252(i).

Finding no error by the Commission, we affirm.

I.

In enacting the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (codified

at 47 U.S.C. § 151 et seq.), Congress sought to enhance competition in the telecommunications

industry. To that end, the Act requires incumbent providers of local phone service to offer

“interconnection” services—to share their network, in other words—with other telecommunications

companies, 47 U.S.C. § 251(a)(1), and provides three mechanisms for doing so: The incumbent and

the competitor may negotiate the terms of an interconnection agreement, § 252(a); they may go

through arbitration to establish the terms of an interconnection agreement, § 252(b); or a carrier may

adopt an existing interconnection agreement between the incumbent and another

telecommunications company, § 252(i). Once the parties have reached an agreement via one of

these paths, the Act “entrusts state commissions with the job of approving interconnection

agreements.” AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 385 (1999); see 47 U.S.C. § 252(e)(1).

At issue here is the adoption provision, § 252(i), which permits an entrant to a local

telephone market (like Universal) to forgo negotiation or arbitration with an incumbent (like

BellSouth) by adopting a previously negotiated or arbitrated interconnection agreement between the

incumbent and another carrier, see id. (“A local exchange carrier shall make available any

interconnection, service, or network element provided under an agreement approved under this

section to which it is a party to any other requesting telecommunications carrier upon the same terms

and conditions as those provided in the agreement.”).

The right to adopt an existing interconnection agreement contains several limitations, one

of which is time. Under a regulation promulgated by the Federal Communications Commission

(FCC), an entrant seeking to adopt an approved agreement must do so within “a reasonable period

of time after the approved agreement is available for public inspection,” 47 C.F.R. § 51.809(c),

which is to say a reasonable time after the state commission has approved the underlying agreement,

47 U.S.C. § 252(e)(1), (h). 

On July 29, 2002, BellSouth and MCI completed the negotiation of an interconnection

agreement, and on August 28, 2002, the Kentucky Public Service Commission approved the

agreement. On March 12, 2004, and again on April 12, Universal communicated with BellSouth

that it wished to adopt the MCI agreement. BellSouth responded on May 3 with roughly 200 pages

of changes that the company believed had to be made to the existing agreement in order to bring it

into compliance with federal law. On May 11, apparently disagreeing with BellSouth’s position,

Universal filed a notice with the Commission conveying its intent to adopt the BellSouth-MCI

agreement. On May 19, the Commission granted Universal’s request. 

On May 24, BellSouth filed a motion for reconsideration with the Commission. It noted that

intervening FCC orders had invalidated provisions of the MCI agreement and argued that, as a

result, the “reasonable period of time” in which Universal could adopt that agreement had expired.

JA 45. On June 14, the Commission again approved Universal’s adoption of the agreement, noting

that Universal was “not seeking to adopt” the provisions affected by one of the orders, id. at 58, and

that the orders in question at any rate did not prohibit adoption of existing agreements.
No. 05-5674 BellSouth Telecommunications v. Universal Telecom, et al. Page 3

On July 2, 2004, BellSouth filed a complaint in federal court against Universal, the

Commission and the individual commissioners (in their official capacities), challenging the

Commission’s decision. See 47 U.S.C. § 252(e)(6). On March 28, 2005, the district court affirmed

the Commission’s adoption order. In addressing BellSouth’s argument that the reasonable period

of time to adopt the MCI agreement had lapsed due to changes in telecommunications law, the court

noted that BellSouth “fails to state how and in what regard the [intervening FCC] orders affect the

Agreement,” D. Ct. Op. at 6, and that “[i]f the law has changed, the adopted BellSouth-MCI

Agreement may be modified via the change of law provision located therein,” id. at 9. 

II.

“We review the Commission’s interpretation of the Act de novo” but will uphold its decision

approving the adoption of the MCI agreement “if it is the result of a deliberate principled reasoning

process, and if it is supported by substantial evidence.” Mich. Bell Tel. Co. v. MCIMetro Access

Transmission Servs., Inc., 323 F.3d 348, 354 (6th Cir. 2003) (internal quotation marks omitted). Put

another way, we will not “reverse the Commission’s decision absent a clear error of judgment or the

Commission’s failure to consider relevant factors or aspects of the problem.” Id.

The three parties to this appeal share considerable common ground. All agree that § 252(i)

required BellSouth to make the MCI interconnection agreement available for adoption. All agree

that the FCC required Universal to make that adoption within a reasonable period of time. All agree

that the reasonable-period standard is a flexible one. See BellSouth Br. at 24 (“[T]he

FCC . . . explained the necessity for employing a flexible standard . . . .”). And all agree that

intervening changes in federal law made certain provisions of the MCI agreement unadoptable under

47 C.F.R. § 51.809. See Comm’n Br. at 8 (“Neither the [Commission] nor Universal Telecom

disputes” that “portions of [the] agreement with MCI conflicted with federal law.”) (internal

quotation marks omitted). 

That leaves us with two points of contention—one procedural, one substantive.

Procedurally, BellSouth argues that the Commission and the district court failed to consider whether

a “reasonable period [of time] had lapsed since the Commission approved the MCI Agreement.”

BellSouth Br. at 14. Substantively, BellSouth suggests that a reasonable period of time necessarily

expires when intervening regulatory developments establish that portions of an interconnection

agreement no longer comport with federal law.

The procedural argument lacks merit because the Commission and the district court each

addressed BellSouth’s objection. Soon after Universal moved the Commission to approve its

adoption of the BellSouth-MCI agreement, the Commission did so. After receiving the

Commission’s order, BellSouth filed a motion for reconsideration arguing that intervening legal

changes made the agreement unfit for adoption: “BellSouth has no objection to the Commission

allowing Universal Telecom to adopt an agreement after it is conformed to the requirements of the

ISP Remand Order and [Triennial Review Order].” JA 47. In its reconsideration order, the

Commission characterized BellSouth’s argument as being that “the MCI agreement is not

appropriate [for adoption] because that agreement does not comply with the [FCC] determinations

made in the Triennial Review Order or the ISP compensation order.” Id. at 58 (footnotes omitted).

Then, in response, it reasoned (1) that “Universal Telecom . . . does not provide ISP service and so

is not seeking to adopt that particular provision,” id., and (2) that “the FCC did not indicate in its

Triennial Review Order that all existing agreements were no longer valid,” which stands in contrast

with the ISP order, which affirmatively precluded the adoption of terms affected by the order. Id. at 59. 

It is true, as BellSouth points out, that the Commission did not describe its ruling in

“reasonable time” terms. But the Commission plainly addressed, and rejected, the premises of
No. 05-5674 BellSouth Telecommunications v. Universal Telecom, et al. Page 4

BellSouth’s “reasonable time” argument. BellSouth had “no objection,” it told the Commission, to

the adoption of the MCI agreement so long as the agreement was made to “conform[] to the

requirements” of two intervening orders. Id. at 47. And in response, the Commission, quite

understandably, explained why neither regulation precluded adoption of the MCI agreement.

BellSouth, in short, cannot claim that the Commission failed to address its argument.

The district court likewise addressed this argument. In its brief to the district court,

BellSouth stated that the “issue in this action is whether the reasonable period for adopting an

approved interconnection agreement expires when subsequent significant regulatory developments

render the agreement, or portions of it, contrary to federal law.” Id. at 64. Based on this argument,

the district court characterized BellSouth’s position to be “that the ‘reasonable period of time’ for

adopting a previously approved agreement expires upon subsequent regulatory developments that

render the agreement, or portions thereof, contrary to federal law.” D. Ct. Op. at 6. The court also

noted that “BellSouth’s brief . . . fails to state how and in what regard the orders affect the

Agreement.” Id. The court then considered the intervening orders and determined either that they

did not apply to Universal’s business or that, “[i]f the law has changed, the adopted BellSouth-MCI

Agreement may be modified via the change of law provision located therein.” Id. at 9. 

BellSouth’s substantive argument fares no better. The question, BellSouth submits, is

whether the Commission erred in determining that Universal adopted the MCI agreement within “a

reasonable period of time.” 47 C.F.R. § 51.809(c). In claiming error, BellSouth initially argues (as

it did before the Commission and district court) that two intervening FCC orders—the ISP Remand

Order, see In re Implementation of Local Competition Provisions in the Telecommunications Act of

1996 (Order on Remand), 16 F.C.C.R. 9151 (2001), and the Triennial Review Order, see In the

Matter of Review of the § 251 Unbundling Obligations of Incumbent Local Exchange Carriers, 18

F.C.C.R. 16978 (2003)—show that a reasonable period of time lapsed before Universal sought to

adopt the BellSouth-MCI agreement. But in making this contention, BellSouth fails to explain how

or why these orders affect the agreement. It does not complain that the costs of providing this

agreement to Universal exceed the costs of providing it to MCI, see 47 C.F.R. § 51.809(b)(1), and

it does not complain that Universal’s adoption of the MCI agreement “is not technically feasible,”

id. § 51.809(b)(2).

The ISP order “govern[s] telecommunications traffic bound for Internet service providers

[ISPs],” see In re Core Commc’ns, Inc., --- F.3d ----, 2006 WL 1789003, at *1 (D.C. Cir. June 30,

2006), and Universal is not an internet service provider. It thus was in no position to adopt that

component of the MCI-BellSouth agreement. To be sure, in issuing the ISP order, the FCC provided

“that any ‘reasonable period of time’ for making available rates applicable to the exchange of

[certain] traffic expires upon the Commission’s adoption [of] this Order.” ISP Remand Order, 16

F.C.C.R. at 9189 n.155. Even assuming for the sake of argument that the FCC properly construed

§ 51.809(c) in issuing this order, it shows only that some orders so change the regulatory landscape

that the agency feels compelled to prohibit other carriers from adopting agreements after the order.

But the reasonable-period-of-time component of the ISP order does not bear the weight BellSouth

places on it because Universal does not offer internet services and thus is not seeking to adopt that

portion of the MCI-BellSouth agreement.

More pertinently, the ISP order shows that the FCC well knows how to issue an order

providing that a significant change in the regulatory landscape runs out the clock on the “reasonable

period of time.” Yet it included no such proviso with respect to the other intervening order invoked

by BellSouth—the Triennial Review Order. Nor has BellSouth explained what it is about the

Triennial Review Order that makes adoption of the BellSouth-MCI agreement infeasible, unduly

costly, or otherwise indicative that an unreasonable time for adopting the agreement has run. The

company also has failed to explain why the MCI agreement’s change-of-law provision does not
No. 05-5674 BellSouth Telecommunications v. Universal Telecom, et al. Page 5

solve this problem and indeed acknowledged at oral argument that it has not yet sought relief under

this provision.

In addition to arguing that these intervening orders establish that a “reasonable period of

time” has run, BellSouth seems to suggest that any change in law causes this period to lapse—no

matter how soon it occurs after the state agency approves the underlying agreement, no matter how

material (or immaterial) the change and no matter whether the adoption agreement contains a

change-in-law provision that allows for the parties to account for regulatory changes. As an initial

response, it bears emphasizing that the regulation by its terms links the reasonableness of an

adoption to the passage of time, not to the passage of new laws. See 47 C.F.R. § 51.809(c)

(“Individual agreements shall remain available for use by telecommunications carriers pursuant to

this section for a reasonable period of time after the approved agreement is available for public

inspection . . . .”) (emphasis added). We have no doubt that intervening changes in the law are one

of the reasons for the “reasonable period of time” limitation, and it may well be that the FCC has

authority in construing its own regulation to say that certain significant orders necessarily run out

the reasonable-period clock. But that hardly proves that any change in law, no matter how soon after

approval of the underlying agreement and no matter how irrelevant to that agreement, necessarily

establishes that a “reasonable period of time” has run. Were that the FCC’s objective, one would

not expect the agency to promulgate a regulation using time and time alone as its measure. 

Not just the word “time” but the word “reasonable” also undermines BellSouth’s categorical

argument. The FCC, to our knowledge, has yet to construe “reasonable” period of time under

§ 51.809(c), but as BellSouth acknowledges elsewhere in its brief, “a flexible standard is implicit

in the FCC’s use of the term ‘reasonable.’” BellSouth Br. at 24. “Reasonable” plainly is a relative

term, dependent on context and circumstances, and the FCC’s invocation of that term here casts

considerable doubt on the contention that a change in law necessarily establishes that a reasonable

period of time has lapsed.

In the final analysis, the FCC established a “time” limit of “reasonable” length for carriers

to adopt existing interconnection agreements. BellSouth does not complain about the “time”

between the approval of the underlying MCI agreement and Universal’s adoption of it or about the

“reasonable[ness]” of that interval. It instead says that two intervening FCC orders necessarily

establish that Universal has exceeded this time limit, even though one order does not apply to

Universal’s adoption request and even though BellSouth has yet to explain how the other order

applies to the agreement or prejudices it. While we do not doubt that the FCC promulgated the time

limitation in part to account for intervening changes in law, BellSouth errs in contending that any

change in law or that these particular changes establish that a “reasonable period of time” has come

and gone. 

III.

For these reasons, we affirm.