Opinion ID: 165625
Heading Depth: 2
Heading Rank: 3

Heading: FCC Implementation

Text: 17 In its First Report and Order, the FCC made several determinations that bear directly on these consolidated cases. While declining to treat CMRS providers as LECs, and thus subject to the obligations imposed under §§ 251(b)-(c), the FCC expressly determined that LECs are obligated under § 251(b)(5) to enter into reciprocal compensation arrangements with CMRS providers. First Report and Order ¶ 1006, 1008. Furthermore, the Commission determined that [i]ncumbent LECs are required to provide interconnection to CMRS providers who request it for the transmission and routing of telephone exchange service or exchange access, under the plain language of section 251(c)(2). Id. ¶ 1015. 18 In determining the scope of the § 251(b)(5) obligation, the FCC concluded that reciprocal compensation obligations should apply only to traffic that originates and terminates within a local area. Id. ¶ 1034. With respect to LEC-LEC communication, the FCC determined that state commissions retained the authority to define local area for the purpose of applying the § 251(b)(5) obligation. Id. ¶ 1035. However, the Commission defined the local area for LEC-CMRS communication as coterminous with the MTA, the largest Commission-authorized wireless territory. Id. ¶ 1036. The FCC explained that traffic to or from a CMRS network that originates and terminates within the same MTA is subject to transport and termination rates under section 251(b)(5), rather than interstate and intrastate access charges.  Id. (emphasis added). 19 These FCC determinations have since been codified as regulations binding on the industry and state commissions. Relevant here, 47 C.F.R. § 51.305 details an ILEC's obligation under § 251(c)(2) of the Act to provide for interconnection with requesting carriers and identifies technically feasible points of interconnection on the ILEC's network. With respect to reciprocal compensation requirements, the regulations further provide that [e]ach LEC shall establish reciprocal compensation arrangements for transport and termination of telecommunications traffic with any requesting telecommunications carrier. 47 C.F.R. § 51.703(a). For purposes of applying the requirement in section 51.703, telecommunications traffic is defined in relevant part as that exchanged between a LEC and a CMRS provider that, at the beginning of the call, originates and terminates within the same Major Trading Area. Id. § 51.701(b)(2). Finally, transport in the context of reciprocal compensation obligations is defined as the transmission and any necessary tandem switching of telecommunications traffic subject to section 251(b)(5) of the Act from the interconnection point between the two carriers to the terminating carrier's end office switch that directly serves the called party, or equivalent facility provided by a carrier other than an [ILEC]. Id. § 51.701(c). 20 IV. Appellants' Common Issue — Inconsistency Between the Agreements and the Act and Federal Regulations 21 We construe the RTCs' briefs in these consolidated cases as raising a single common issue alleging inconsistency between the interconnection agreements and the plain language of the Act, the First Report and Order, and the relevant regulations. 6 This issue roughly corresponds to that treated by the district court in part II.B of its order and judgment in Atlas I. 309 F.Supp.2d at 1309-10. We treat the issue unique to No. 04-6100, the Western Wireless Issue, separately below. 22 We begin, as we must, with the plain language of 47 U.S.C. § 251(b)(5) 7 and its regulatory counterpart 47 C.F.R. § 51.703(a). 8 In no uncertain terms, both provisions impose a duty on LECs to establish reciprocal compensation arrangements with requesting carriers. We next turn to 47 C.F.R. § 51.701(b)(2), a regulatory provision that both gives effect to and narrows the LECs' obligation. Regulation 51.701(b)(2) defines telecommunications traffic subject to reciprocal compensation as, in relevant part, that exchanged between a LEC and a CMRS provider that, at the beginning of the call, originates and terminates within the same [MTA]. 47 C.F.R. § 51.701(b)(2). 23 We hold that the mandate expressed in these provisions is clear, unambiguous, and on its face admits of no exceptions. The RTCs in the instant case have a mandatory duty to establish reciprocal compensation agreements with the CMRS providers, see Qwest Corp. v. FCC, 258 F.3d 1191, 1200 (10th Cir.2001) (noting that the term shall connotes a mandatory, as opposed to permissive, requirement), for calls originating and terminating within the same MTA. Where the regulations at issue are unambiguous, our review is controlled by their plain meaning. In re Sealed Case, 237 F.3d 657, 667 (D.C.Cir.2001). Nothing in the text of these provisions provides support for the RTC's contention that reciprocal compensation requirements do not apply when traffic is transported on an IXC network. 24 Our reading of the plain language of the relevant statutory and regulatory provisions is further supported by the FCC's definition of telecommunications traffic in the context of landline-to-landline exchange in the same regulations. See 47 C.F.R. § 51.703(b)(1). Regulation 51.701(b)(1) specifically excludes from reciprocal compensation requirements landline traffic exchanged between a LEC and a non-CMRS carrier that is interstate or intrastate exchange access in nature. Id. § 51.701(b)(1) (emphasis added). Significantly, the Commission did not carry forward that same exception into regulation 51.701(b)(2), the operative definition in this case. We agree with the district court's conclusion that the FCC was undoubtedly aware of issues arising when access calls are exchanged, yet chose not to extend a similar exception to LEC-CMRS traffic. Atlas I, 309 F.Supp.2d at 1310. When in exercising its quasi-legislative authority an agency includes a specific term or exception in one provision of a regulation, but excludes it in another, we will not presume that such term or exception applies to provisions from which it is omitted. Cf. Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983) (noting that when Congress so acts, courts will presume that the exclusion was intentional). 25 We are not persuaded by the RTCs' arguments that our interpretation creates tension or is inconsistent with other FCC regulations and provisions of the Act. The RTCs first contend that 47 U.S.C. § 251(c)(2) mandates that the exchange of local traffic occur at specific, technically feasible points within an RTC's network, 9 and that this duty is separate and distinct, though no less binding on interconnecting carriers, from the reciprocal compensation arrangements mandated by § 251(b)(5). We simply find no support for this argument in the text of the statute or the FCC's treatment of the statutory provisions. Section 251(c)(2) imposes a duty on the ILECs to provide physical interconnection with requesting carriers at technically feasible points within the RTCs' networks. By its terms, this duty only extends to ILECs and is only triggered on request. 10 26 The fallacy of the RTCs' argument is demonstrated in a number of ways. The RTCs contend that the general requirement imposed on all carriers to interconnect directly or indirectly,  47 U.S.C. § 251(a) (emphasis added), is superceded by the more specific obligations under § 251(c)(2). Yet, as noted above, the obligation under § 251(c)(2) applies only to the far more limited class of ILECs, as opposed to the obligation imposed on all telecommunications carriers under § 251(a). The RTCs' interpretation would impose concomitant duties on both the ILEC and a requesting carrier. This contravenes the express terms of the statute, identifying only ILECs as entities bearing additional burdens under § 251(c). We cannot conclude that such a provision, embracing only a limited class of obligees, can provide the governing framework for the exchange of local traffic. 27 We also find that the RTCs' interpretation of § 251(c)(2) would operate to thwart the pro-competitive principles underlying the Act. Although § 251(c)(2) interconnection is only triggered by request, the RTCs would make such interconnection obligatory to all carriers seeking to exchange local traffic. At the same time, however, the Act exempts RTCs from the application of § 251(c) until a request is made and the appropriate State commission determines ... that such request is not unduly economically burdensome, is technically feasible, and is consistent [with other provisions of the Act]. Id. § 251(f)(1)(A). If Congress had intended § 251(c)(2) to provide the sole governing means for the exchange of local traffic, it seems inconceivable that the drafters would have simultaneously incorporated a rural exemption functioning as a significant barrier to the advent of competition. In sum, accepting the RTCs' interpretation of § 251(c) would compel us to assume too much and ignore altogether the express language of the statute. 11 28 The RTCs' next argument, in various permutations, is that the local traffic at issue here qualifies as exchange access traffic because it transits the IXC network. In that historical exchange access requirements continue in force even after passage of the Telecommunications Act, 47 U.S.C. § 251(g), the RTCs argue that such requirements yet apply when calls are transported across the IXC network. In support, the RTCs point to various statements by the FCC in its First Report and Order limiting the scope of reciprocal compensation requirements under the Act. 29 In the First Report and Order, the FCC limited application of reciprocal compensation requirements to traffic originating and terminating within a local area. First Report and Order ¶ 1034. In so doing, the Commission determined that reciprocal compensation obligations do not apply to the transport or termination of interstate or intrastate interexchange traffic. Id. While this statement might be read to preclude reciprocal compensation in the instant case, we conclude that the FCC did not intend such a bar to apply in the context of LEC-CMRS traffic. First, in describing the interexchange traffic at issue, it is clear that the FCC had in mind the traditional setting of landline-to-landline calls. The Commission illustrated the traffic at issue by pointing to an LEC-IXC-LEC exchange, this after previously declining to treat CMRS providers as LECs. While this distinction is not dispositive, we note it as relevant. Second, and most significant, the FCC subsequently determined that traffic to or from a CMRS network that originates and terminates within the same MTA is subject to transport and termination rates under section 251(b)(5), rather than interstate and intrastate access charges.  Id. § 1036. Although in a preceding paragraph, Id. ¶ 1035, the FCC noted the continuing application of interstate and intrastate access charges in the context of landline communications, it omitted such language when referring to the CMRS communications. We will not ignore the clear distinction drawn by the agency. 30 We also agree with the CMRS providers that the RTCs' argument finds no support in paragraph 1043 of the First Report and Order. The sweep of this paragraph is limited to a narrow range of interstate interexchange traffic and is silent on the issue of reciprocal compensation owed CMRS providers. As such, we find it neither persuasive nor controlling. 31 Having carefully reviewed the FCC's decision in TSR Wireless, LLC v. U.S. West Communications, Inc., we find nothing in that decision sounding as contrary to our holding. 15 F.C.C.R. 11,166 (2000), aff'd sum nom Qwest Corp. v. FCC, 252 F.3d 462 (D.C.Cir.2001). TSR Wireless, LLC is factually dissimilar to the instant dispute. The relevant issue, the analysis and answer to which the RTCs cite, was whether section 51.703(b)'s prohibition against charges for LEC-originated traffic prohibit[s] LECs from charging paging carriers for wide area calling services? TSR Wireless, LLC, 15 F.C.C.R. at 11,183 (emphasis added). Section 51.703(b) prohibits LECs from charging other carriers for traffic originating on the LECs' networks. 47 C.F.R. § 51.703(b). In resolving this issue, the FCC reiterated that LECs may not charge CMRS providers for facilities used to deliver local traffic. TSR Wireless, LLC, 15 F.C.C.R. at 11,184. The Commission then noted that [s]uch traffic falls under our reciprocal compensation rules if carried by the incumbent LEC, and under our access charge rules if carried by an [IXC]. Id. The FCC then stated that [t]his may result in the same call being viewed as a local call by the carriers and a toll call by the end-user. Id. It is clear to us that the FCC made this seemingly incongruous comment in the context of discussing the effect on LEC customers. After making this comment, the Commission unequivocally stated that the LEC was required to deliver relevant calls free of charge to the CMRS provider, but was not precluded from charging its own customers for toll calls. Id. This simply does not address the LEC's duty to compensate the CMRS provider for call termination. Rather, it reflects the logical end result of the application of the FCC's regulations. It certainly does not relieve the originating carrier of its obligation to compensate the terminating carrier under the reciprocal compensation regime. 12 32 Finally, we find no merit in the RTCs' argument that the provisions in the instant agreements contravene the statutory scheme. The RTCs' assertion that the FCC expected reciprocal compensation arrangements to be contained in agreements under section 251(c) is unsupported by the footnote to which they cite in TSR Wireless, LLC, 15 F.C.C.R. at 11,183 n. 97, and undermined by language in the decision indicating that certain duties imposed under reciprocal compensation were operative regardless of the existence of an agreement. Id. at 11,182-83. The RTCs further argue that the indirect connection at issue in the instant agreements would render their rural exemption nugatory because carriers like the CMRS providers would not be required to request interconnection under 47 U.S.C. § 251(c). As we explained above, no such requirement applies to the CMRS providers, and the rural exemption remains available when the RTCs are confronted with requests for direct connection under § 251(c). 33 Accordingly, we hold that the OCC-approved agreements are not inconsistent with or in violation of the federal regulatory and statutory schemes.