Opinion ID: 75967
Heading Depth: 3
Heading Rank: 2

Heading: This Dispute

Text: Covad is the CLEC in this case; BellSouth is the ILEC. Covad is in the business of providing DSL service11 – primarily through the use of BellSouth’s physical plant. BellSouth and Covad entered into an interconnection agreement – 9 Section 252(e)(6), governing federal review of PSCs, provides that “any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement . . . meets the requirements of section 251 of this title and this section.” There is no special review statute for the FCC, which is therefore reviewed by the courts of appeals pursuant to 28 U.S.C. § 2344. 10 “RBOC” is an acronym for “Regional Bell Operating Company.” RBOCs were the subdivisions of AT&T that provided local service throughout the nation prior to the MFJ. Under the MFJ, each RHC consisted of several RBOCs. 11 “DSL” stands for “digital subscriber line.” DSL is “a high-speed data service provided over conventional telephone networks. DSL refers to the technology that allows telephone carriers to attach certain electronics to the telephone line that can transform the copper loop that already provides voice service into a conduit for high-speed data traffic.” See Stuart Benjamin, Douglas Lichtman, & Howard Shelanksi, Telecommunications Law and Policy 1048 (2001). 7 ultimately approved by the Georgia PSC – pursuant to 47 U.S.C. § 252. Covad claims that BellSouth has not fulfilled its obligations under the 1996 Act and the BellSouth/Covad interconnection agreement. Specifically, Covad argues the following: BellSouth should have provided UNEs more promptly; BellSouth did not sufficiently provide space so that Covad could “collocate” its equipment on BellSouth’s premises; BellSouth engaged in a “price squeeze” by pricing its UNEs too high while selling its DSL services to consumers at retail prices that are too low;12 and BellSouth understaffed its wholesale division. The basic theory, then, is that Covad needs BellSouth’s local loop to compete, and BellSouth has done a poor job of turning it over. Covad wants access, and it wants access more promptly and on less costly terms than BellSouth presently provides.13 12 A “price squeeze” claim is premised upon an illegal wholesale/retail differential. For example, Covad states in its complaint that BellSouth’s retail prices “are set so low related to its unbundled wholesale loop prices that Covad cannot meet BellSouth’s wholesale or retail prices and still make a reasonable return on investment.” 13 Covad’s complaint contains twenty-three causes of action. Count one seeks relief under section 2 of the Sherman Act pursuant to the “essential facilities doctrine.” Count two seeks the same relief under section 2 of the Sherman Act based upon BellSouth’s alleged “monopolization.” Count three seeks the same relief under section 2 of the Sherman Act based upon BellSouth’s alleged “attempted monopolization.” All of the section 2 allegations are thus folded into count 3. Counts six, seven nine, ten, thirteen, fourteen, sixteen, seventeen, nineteen, twenty, twenty-two, and twenty-three replicate counts two and three under the laws of the following states: Alabama, Florida, Kentucky, Louisiana, North Carolina, and Tennessee. Counts eight, eleven, twelve, fifteen, eighteen, and twenty-one allege that BellSouth interfered with business relations in violation of the laws of the same six states. Count four is a claim for breach of contract. Finally, count five asserts a cause of action directly under the Telecommunications Act of 1996. In the “prayer for relief” at the end of its complaint, Covad asks for treble damages on its antitrust claims, punitive damages on its state law tort claims, 8 The district court granted a dismissal, pursuant to Fed. R. Civ. P. 12(b)(6), based upon the reasoning of the Seventh Circuit in Goldwasser v. Ameritech Corp., 222 F.3d 390 (7th Cir. 2000). A three-judge panel of this Court reversed, concluding that the obligations of ILECs under the 1996 Act and the Sherman Act are essentially coterminous, and therefore Covad’s complaint alleges harms that, if proved, are cognizable under the antitrust laws. See Covad Communications Co. v. BellSouth Corp., 229 F.3d 1271 (11th Cir. 2002). Specifically, the panel found that BellSouth’s alleged failure to promptly turn over its network would, if proved, give rise to liability under the essential facilities doctrine and the refusal-to-deal doctrine. The panel also held that BellSouth’s allegedly high wholesale prices for its DSL UNEs, in conjunction with low retail prices on DSL service, states a “price squeeze” claim under Section 2 of the Sherman Act. This court declined to reconsider the panel’s decision en banc. I dissent because the panel’s holding has troubling implications for telecommunications law and, indeed, antitrust law as a whole. The panel decision took a turn that is bad policy, undermines Congress’s regulatory scheme, and usurps regulatory power that belongs to the FCC under the 1996 Act by placing it in the hands of federal courts. compensatory damages on the remaining claims, and “such other and further relief as the Court deems just and proper.” One must assume that the latter relief would include injunctive orders necessary to ensure BellSouth’s compliance with the antitrust laws, the 1996 Act, and the parties’ interconnection agreement. 9