Opinion ID: 2622745
Heading Depth: 1
Heading Rank: 5

Heading: EUCL Charge/Access Service

Text: [¶ 11] Many important aspects of modern telecommunications law developed in the wake of the breakup of the AT & T monopoly. In 1982, a Modified Final Judgment (MFJ) entered in the case United States v. AT & T, 552 F.Supp. 131 (D.D.C.1982), aff'd sub nom., 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983) changed the telecommunications industry by requiring the breakup of telephone companies so that no one company can provide both interstate and intrastate services. In compliance with the MFJ, the United States was divided into 161 `local access and transport areas' (LATAs) which are geographic zones drawn around major metropolitan areas for the provision and administration of telecommunication services. [4] AT & T Com. v. Dept. of Revenue, 778 P.2d 677, 678 (Colo.1989). Consequently, under the MFJ, a single company can no longer provide telephone services both within LATAs and between LATAs. [5] Qwest is a local exchange carrier that is restricted to providing telephone service only within a LATA. [6] As such, it is not permitted to sell interstate long distance telephone services. Id. [¶ 12] However, Qwest does play a role in interstate long distance calls. An interstate long distance call involves three discrete steps in the transmission from caller to receiver: The originating call begins at the caller's telephone and is carried over transmission and switching facilities to the entry point of a long-distance network. This is known as the originating link. The long-distance carrier then transmits the call over its facilities to the exit point of the network in the area where the call is to be received. This is the intermediate link. Finally, the call is transmitted over the facilities of a local telephone company to the receiving telephone. This is known as the terminating link. GTE Sprint Com. v. Dept. of Treasury, 179 Mich.App. 276, 445 N.W.2d 476, 477 (1989). Long-distance telephone communications companies must contract with local telephone companies, such as Qwest, to provide the originating or terminating links in order to complete the interstate call. Id. [¶ 13] Qwest maintains a local loop which is the connection or circuit between the consumer and its central office, or switching point. By connection with Qwest's local loop, customers simultaneously have: (1) access for intrastate local services; (2) access for intrastate long distance services; and (3) access for interstate long distance services. Thus, Qwest provides the integral link needed to complete an interstate call. See, e.g., AT & T Com., 778 P.2d 677 passim. Stated another way, Qwest connects its individual customers to its local exchange system. Qwest's central office then connects calls from the local exchange to an interexchange network. The use of the facilities and equipment of a local telephone company to establish the integral link to local customers is known as access service. GTE Sprint Com., 445 N.W.2d at 477. Access service is defined by the Federal Communications Commission (FCC) as including services and facilities provided for the origination or termination of any interstate or foreign telecommunication. FCC Access Charges, 47 C.F.R. § 69.2(b) (1990). [¶ 14] The costs Qwest incurs in maintaining the local loop are not readily attributable to either intrastate or interstate activity because the loop is involved in local, intrastate long distance, and interstate long distance telephone communications. However, the FCC requires that twenty-five percent of the cost of maintaining the local loop be subject to federal jurisdiction and that reimbursement for this cost be recovered from interstate rates. [7] Historically, this cost was collected from the long distance carriers. As explained by an expert witness who testified, on behalf of Qwest, at the hearing: Q. Why doesn't Qwest recover the costs of providing the interstate calls from the long distance providers? A. Actually, they did at one time. The FCC chose to move from a charge assessed to long distance carriers to recovering the cost of providing that service in two ways: There is a flat rate and a usage rate, much like the Wyoming Commission has chosen to recover the cost of the access to the intrastate Wyoming long distance network on a flat rate in the local charges and the usage rate in the usage long distance charges. Presently, Qwest charges a flat fee established by the FCC that represents the cost of providing access service for interstate long distance. This flat fee is the EUCL charge. The amount of the EUCL charge is determined by the FCC based on the amount of interstate telephone traffic that flows through Qwest's facilities. The amount of interstate traffic is determined by information contained in the tariffs that Qwest files with the FCC for the interstate telephone services it provides. At all pertinent times, Qwest filed tariffs with the FCC regarding the EUCL charge. Prior to the audit, Qwest did not remit sales tax to the State of Wyoming on the amounts it billed or received as EUCL charges.