Opinion ID: 77289
Heading Depth: 4
Heading Rank: 2

Heading: Each Scenario Must Comply with TELRIC.

Text: 47 Although TELRIC allows the use of multiple scenarios, that conclusion does not end our inquiry. MCI and Florida Digital Network argue that, even if multiple scenarios are permissible, the scenarios in the model approved by the Florida Commission nevertheless violate TELRIC. Although the district court did not address this issue, we may consider it to determine whether the judgment of the district court may be affirmed on this alternative ground. See Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 778 (11th Cir. 2002) ([W]e may affirm for any reason supported by the record.). 48 Because TELRIC permits a pricing model to use multiple scenarios when each scenario represents its own network element, it follows that each scenario must itself comply with the requirements of TELRIC. See 47 C.F.R. § 51.503(b) (An incumbent LEC's rates for each element it offers ... shall be established ... —(1) Pursuant to the forward-looking economic cost-based pricing methodology set forth in §§ 51.505 and 51.511[.] (emphases added)). In other words, the incumbent local carrier must compute for each scenario the forward-looking cost over the long run of the total quantity of the facilities and functions that are directly attributable to, or reasonably identifiable as incremental to, such element, calculated taking as a given the incumbent LEC's provision of other elements. Id. § 51.505(b). The design of each scenario must be based on the use of the most efficient telecommunications technology currently available and the lowest cost network configuration, given the existing location of the incumbent LEC's wire centers. Id. § 51.505(b)(1). 49 Although enormous flexibility is built into TELRIC, AT&T Corp., 220 F.3d at 616, it is not possible to reconcile the most efficient ... lowest cost network configuration requirement of section 51.505 with a network that contains loops with costs that vastly outstrip their utility. 47 C.F.R. § 51.505(b)(1). A scenario, for example, that is included in a pricing model specifically for DSL providers, cannot be the most efficient ... lowest cost network configuration, Id., if it contains wire loops that are so long that DSL cannot be provided over those loops. The touchstone — as with any efficiency-based model — is whether a rational local carrier would likely use each loop modeled by the scenario. 50 Other language in the FCC regulations supports this interpretation. See id. § 51.511(a). To determine the per-unit cost of a network element, the TELRIC for the element is divided by the sum of the total number of units of the element that the incumbent LEC is likely to provide to requesting telecommunications carriers and the total number of units of the element that the incumbent LEC is likely to use in offering its own services. Id. (emphasis added). A scenario that contains loops that an incumbent local carrier is neither likely to provide to competitive local carriers nor likely to use in offering its own service artificially inflates this average cost by including units for which there is no demand. That result would run counter to the pro-competitive purpose of the Telecommunications Act. See AT&T Corp., 525 U.S. at 366, 119 S.Ct. at 724. In sum, so long as a rational local carrier would choose to substitute another technology or forgo the use of the wire loop altogether instead of paying the inflated cost for the wire loop, the scenario containing that wire loop must be considered inefficient and in violation of TELRIC. 51 After thorough review, we cannot say whether MCI and Florida Digital Network can satisfy their burden of proving that the pricing plan adopted by the Florida Commission violates TELRIC. We cannot determine from the record on appeal whether each scenario satisfies the standard of efficiency defined by TELRIC, and the arguments of the parties are not sufficiently developed for us to conduct a meaningful analysis of that issue. The resolution of this issue is best left, in the first instance, to the district court where the parties may more fully develop their arguments. We remand this issue to the district court.