Opinion ID: 1151164
Heading Depth: 1
Heading Rank: 2

Heading: the order to block or compensate

Text: When AT & T was divested of its regional Bell operating telephone companies, those companies were ordered to convert the local exchange networks to be able to provide other common carriers besides AT & T with equal access to those networks. [4] The court stated that disparities in interconnection were to be eliminated so that all interexchange service providers would be able to compete on an equal basis. [5] By September 1, 1986, the Bell operating companies were to have provided access services to the interexchange carriers which were equal in type, quality and price. [6] The problem of the unauthorized intraLATA calls occurs because the interexchange carriers connect with end offices which have not been converted to equal access. The carriers connect to the local network by subscribing to Feature Group A (FGA) and Feature Group B (FGB) access from the local exchange carriers such as South-western Bell. In the non-equal access end offices, AT & T is connected to the local network by Feature Group C (FGC). In the end offices of the local exchange carriers that have converted to equal access, FGA, FGB and Feature Group D (FGD) are available to the interexchange carriers. FGD is the same as FGC. The problem of the FGA and FGB connections is that they cannot automatically divert intraLATA traffic to the local exchange carriers' network. The superior connections available to AT & T allow for such a diversion of telephone traffic. The appellants complain that the intrastate intraLATA calls that are improperly carried through their systems is a problem the appellants did not create. Where equal access is not available, the appellants have no choice but to carry the intraLATA calls even though they have no certification from the Corporation Commission to carry such traffic. They argue that the intraLATA calls they carry are incidental because the problems are caused by inferior services provided to them and by customers who use the system in a way that is unauthorized. Consequently, the appellants state they are without fault and should not be penalized by being forced to block their calls, thereby inconveniencing their customers and making AT & T appear to be a superior carrier, or by compensating through a formula which gives the local exchange carriers their customary rate without a deduction for the costs the local exchange companies incur when those companies do their own billing. Southwestern Bell alleges that the unauthorized intraLATA calls carried by the appellants is substantial, between eleven and fourteen percent of the traffic carried by the appellants. [7] Such substantial unauthorized calling is claimed to be damaging to the local exchange companies who are limited to carrying the intraLATA calls. The local exchange companies claim that this results in loss of revenue to them and increases the burden on these companies and alleges a financial burden on their customers. The essence of the argument between the local exchange carriers and the interexchange carriers appears to be who should get the revenue from the unauthorized intraLATA calls made through the interexchange carriers when each claim that the problem is the fault of the other. To this argument the Corporation Commission answered: The issue of the type of connections the OCCs [Other Common Carriers] should have with the local exchange telephone system in this country was never before this Commission. This Commission is faced with a situation not of its making. Any decision herein will not be based on any equitites grounded in fault or who is responsible for the situation, but upon this Commission's responsibility to provide an environment in which all telephone companies under its jurisdiction shall be encouraged to provide the best telephone and telecommunications service to the greatest number of the citizens of Oklahoma at the most reasonable rates possible. To this end, the Commission has encouraged competition for interLATA services, and, by streamlining regulation of those operations, has allowed market forces to exert their influence for the benefit of the consumers. [8] The Commission stated that its purpose of requiring blocking or compensating was to enforce its allocation of service territories within this state and to allocate revenues for service to the proper certificated carriers. To the argument of the interexchange carriers that the access charges were sufficient to compensate the local exchange carriers, the Commission answered that by merely paying access charges there was no incentive for the interexchange carriers to stop the unauthorized use of their networks, and would be tantamount to authorizing the interexchange carriers to provide intraLATA service. The Commission stated that the compensation method chosen by the Commission provided a reasonable, fair and efficient method of calculating the amount of compensation, was not unreasonably burdensome to the interexchange carriers, and approximated the toll revenues lost to the local exchange carriers by the unauthorized use. The Commission considered this a trial plan to be re-examined from time to time. It stated that if, after the plan was in effect, there appeared to be a substantial distortion, an affected party could present supporting documentation and move to reopen the cause. The appellants have made numerous assignments of error. These may be summarized as follows: blocking and compensating are impermissible burdens on interstate commerce; blocking is unfeasible and discriminatory; compensating is contrary to law because it is beyond the authority of the Corporation Commission; the method of compensation is unfair.
MCI's expert witness testified to five different methods which could be used by an interstate caller that would cause MCI to be unable to discern whether a toll call originated in Oklahoma or out of state. The same set of facts would preclude MCI from knowing whether a call was intraLATA or actually interLATA. MCI accordingly argued that blocking could result in properly placed calls that were interstate or interLATA from being blocked as though they were intraLATA calls. They conclude that blocking is an impermissible burden on interstate commerce. In its order, the Corporation Commission answered these concerns by observing that the orders certifying the interLATA carriers had provided for the exclusion of interstate calls that might appear on the carrier's records as intrastate calls for jurisdictional purposes. The Commission stated that the duty was placed on the carriers to identify this traffic and bring it to the attention of the Commission for exclusion from the carrier's Oklahoma records. It found that to the date of the order, no carrier had identified any such calls and the Commission concluded that the concern was only theoretical. The testimony of MCI's expert supports the Commission's conclusion. Neither of the appellants have asserted a violation of one of their rights under the Constitution of the United States or the Constitution of the State of Oklahoma with regards to blocking being a burden on interstate commerce. Accordingly, our review of this issue will be judicial only and shall not extend further than to determine whether the Commission has regularly pursued its authority, and whether the findings and conclusions of the Commission are sustained by the law and substantial evidence. Okla. Const. art. 9, § 20; In re Valliant Tel. Co., 656 P.2d 273, 275 (Okla. 1982). Because there is no evidence other than speculation that blocking will interfere with interstate commerce, we hold that the findings and conclusions of the Commission with regard to this issue are sustained by the law and substantial evidence.
MCI argues that if its intraLATA calls are blocked while AT & T's calls are diverted, as the result of having the superior FGD connection, to the local exchange carrier's network, MCI will be perceived as being an inferior network. MCI argues that AT & T will be perceived as being capable of completing intraLATA calls even though the calls are actually transferred to the local exchange carrier. Sprint argues that because the necessity for blocking will decrease as equal access is added, costs incurred to install blocking equipment would be inadvisable as the equipment would soon be rendered obsolete. Sprint also argues that blocking would cause confusion to customers who do not readily appreciate the difference between making interLATA long distance calls and intraLATA long distance calls. Finally, Sprint argues that blocking would result in greater costs to the local exchange companies, which would be passed on to customers, because an additional call would have to be made, after the first is blocked. Sprint claims that every party except Southwestern Bell took the position that requiring blocking of intraLATA traffic over FBA or FGB interconnections would not be feasible and should not be adopted by the Commission. The short answer to these concerns is that if the problem is temporary, then the appellants have the alternative choice to compensate the local exchange carriers for the unauthorized intraLATA calls. One of the concerns of the Commission was that the situation may not be as temporary as it was led to believe. Accordingly, many of the arguments against blocking would fail. Again we find that the findings and conclusions of law of the Commission with regard to this issue are sustained by the law and the substantial evidence.
MCI asserts that the Commission exceeded its lawful authority by ordering compensation. MCI regards the compensation order as neither a rate order nor an authorized fine or penalty, but as a form of money judgment granted as an adjudication of a purely private dispute for a claimed loss of profits. We cannot agree with the conclusions of MCI. We are unable to discern how MCI is able to characterize the order as an adjudication of a purely private dispute when the order affects all interexchange carriers, all local exchange carriers, and ultimately impacts the citizens of this state. Whether or not the actions of the appellants in handling intraLATA calls are inadvertent, the appellants are nevertheless carrying calls that they are not authorized to carry. The statutes provide that an extension of telephone service shall be unlawful unless a party first obtain a certificate that the present or future public convenience and necessity require or will require the operation of such an extension. 17 O.S. 1981, § 131. The facts of this case do not fall within an exception to that statute. Providing for charges in the event that interexchange companies carry unauthorized intraLATA calls which exceed one-half percent of their total calls must be inherent in the Commission's authority to enforce its rulings under the state's constitution and statutes. Although the local exchange carriers, private companies, may be the beneficiaries of the order of the Commission, this dispute does not become private as the result of such an order. Those same carriers also benefit from their present certificates to carry intraLATA calls, but an order protecting those certificates does not become a private dispute merely because it benefits private parties. Those certificates were awarded for the ultimate benefit of the public and not for the ultimate benefit of the private parties.
The appellants contend that the Commission's method of determining the compensation formula was unfair because it did not reduce the rate to be paid by the expenses of collection which the local exchange carriers incur in billing their customers. The Commission decided that the interexchange carriers should pay the rate which the local exchange carriers charge for intraLATA calls less the access charges paid by the interexchange companies. The order of the Commission reveals that it considered the argument of the appellees and rejected it. As we have stated in this opinion, article 9, § 20 of our Constitution provides that in a case not involving a constitutional issue, our review shall be judicial only and not extend further than to determine whether the Commission has regularly pursued its authority, and whether the findings and conclusions of the Commission are sustained by the law and substantial evidence. [9] Determining whether the Commission's findings are supported by substantial evidence does not require that the evidence be weighed, but only that the totality of the record be examined and the proof found to be more than mere scintilla. [10] The Commission's findings are presumed correct in matters it frequently adjudicates and in which it possesses expertise. [11] The Commission has wide discretion in the performance of its duties and this Court may not substitute its judgment on disputed questions of fact unless the findings are contrary to law or unsupported by substantial evidence. [12] Upon review of the totality of the record, we find that the compensation formula ordered by the Commission is supported by substantial evidence. We hold that the Commission determined the method of compensation pursuant to its authority and that the order is not contrary to the law or evidence.