Opinion ID: 3064756
Heading Depth: 3
Heading Rank: 1

Heading: State Authority Under Section 271

Text: [1] We join the First, Seventh, Eighth, and Eleventh Circuits in holding that the Act does not authorize state commissions to implement Section 271 terms and rates in interconnection agreements.9 See Verizon New England, 509 F.3d at 7 (concluding the authority to determine which elements BOCs are required to provide under Section 271 and the rates for those elements “is granted exclusively to the FCC”); Illinois Bell Tel. Co., Inc. v. Box, 548 F.3d 607, 613 (7th Cir. 2008) (“[T]he state commission’s power over [an interconnection] agreement is limited to the terms in the agreement relating to access under section 251.”); Southwest- 9 Numerous federal district courts in other circuits have similarly decided that state commissions do not possess power to determine or enforce Section 271 requirements. See, e.g., Michigan Bell Tel. Co. v. Lark, No. 06-11982, 2007 WL 2868633, at  (E.D. Mich. Sept. 26, 2007); BellSouth Telecomms., Inc. v. Kentucky Public Serv. Comm’n, No. 06-65-KKC, 2007 WL 2736544, at - (E.D. Ky. Sept. 18, 2007); BellSouth Telecomms., Inc. v. Mississippi Public Serv. Comm’n, 368 F. Supp. 2d 557, 565-66 (S.D. Miss. 2005). In fact, the only federal court to reach a contrary conclusion was promptly reversed. Verizon New England, Inc. v. Maine Public Utils. Comm’n, 441 F. Supp. 2d 147, 156-58 (D. Me. 2006), vacated, 509 F.3d 1 (1st Cir. 2007). QWEST v. ARIZONA CORPORATION COMMISSION 6791 ern Bell Tel., L.P. v. Missouri Public Serv. Comm’n, 530 F.3d 676, 682-83 (8th Cir. 2008) (rejecting the claim that “states have implied authority to ensure ILECs comply with § 271” in interconnection agreement arbitration proceedings); BellSouth Telecomms., Inc. v. Georgia Public Serv. Comm’n, ___ F.3d ___, 2009 WL 368527 (11th Cir. Jan. 26, 2009) (per curiam) (deciding state commissions are not authorized to implement Section 271). As the First Circuit explained in addressing an analogous claim, the contrary position the ACC and Covad have taken “is at odds with the statutory language, history and policy of section 271 and most relevant precedent.”10 Verizon New England, 509 F.3d at 7. [2] The structure of Section 271 confirms that the FCC possesses sole authority to determine the access and pricing preconditions BOCs must satisfy to enter the long-distance services market. BOCs submit their application to provide interLATA services directly to the FCC. 47 U.S.C. § 271(d)(1). The FCC then consults with the Attorney General, whose evaluation of the application must be given “substantial weight.” 47 U.S.C. § 271(d)(2)(A). The FCC must also “consult” with the state commission “to verify” that the BOC has complied with the requirements of Section 271(c). 47 U.S.C. § 271(d)(2)(B); see also SBC Commc’ns, 138 F.3d at 416 (“Although the Commission must consult with the State commissions, the statute does not require the FCC to give the State commissions’ views any particular weight.”). Finally, the FCC decides whether the BOC meets Section 271(c)’s terms and issues a written determination approving 10 Our decision coincides with the FCC’s own articulation of its absolute power under Section 271 as well as the stance taken by a majority of state commissions. See InterLATA Boundary Order ¶ 18, 14 F.C.C.R. 14392, 14401 (1999) (alluding to “the exclusive authority that Congress intended that the [FCC] exercise over the section 271 process” (emphasis added)). Verizon New England, 509 F.3d at 8 (“Most of the state commissions that have spoken appear to disclaim power to determine section 271 elements or fix pricing principles.”). 6792 QWEST v. ARIZONA CORPORATION COMMISSION or rejecting the interLATA application. 47 U.S.C. § 271(d)(3). Once an interLATA application is approved, enforcement responsibilities rest exclusively with the FCC. It is the FCC that determines whether a BOC “has ceased to meet any of the conditions required for [interLATA service] approval,” and it “may” issue orders, impose penalties, or retract its approval in response. 47 U.S.C. § 271(d)(6)(A). The FCC also “establish[es] procedures for the review of complaints” of BOC noncompliance with Section 271(c)’s approval conditions. 47 U.S.C. § 271(d)(6)(B). And the FCC is the one obligated to “act on such complaint within 90 days.” Id. [3] The ACC’s limited Section 271 consultation role cuts against holding that it may impose Section 271 terms based on its authority under Section 252. See Russello v. United States, 464 U.S. 16, 23 (1983) (“Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” (internal quotation marks and alterations omitted)); Verizon New England, 509 F.3d at 7 (“That the states have an explicit consultative role under section 271 works against, rather than for, their claim of other powers.”). The fact that the FCC is expressly prohibited from extending or limiting Section 271’s competitive checklist terms “by rule or otherwise” likewise presupposes the FCC alone has the power to administer Section 271. 47 U.S.C. § 271(d)(4). [4] Section 252’s framework also undermines the ACC’s claim of power to impose Section 271 requirements. A state commission may only arbitrate issues after an ILEC receives a request for negotiation “pursuant to section 251.” See 47 U.S.C. § 252(a)(1), (b)(1); see also Qwest Corp. v. Public Utils. Comm’n of Colorado, 479 F.3d 1184, 1197 (10th Cir. 2007) (“[A] CLEC may only compel arbitration of issues that the ILEC is under a duty to negotiate pursuant to QWEST v. ARIZONA CORPORATION COMMISSION 6793 § 251(c)(1).”); MCI Telecomms. Corp. v. BellSouth Telecomms., Inc., 298 F.3d 1269, 1274 (11th Cir. 2002) (per curiam) (concluding that a state commission’s arbitration authority is coextensive with the ILEC’s duty to negotiate the terms and conditions necessary to fulfill Section 251 duties). Section 252(c), defining the “standards for arbitration,” explicitly requires state commissions to ensure Section 251 requirements are met, without mentioning Section 271. The state commission must also “establish any rates for interconnection, services, or network elements according to [Section 252](d) . . . .” 47 U.S.C. § 252(c)(2). Section 252(d), meanwhile, only authorizes the setting of “just and reasonable rate- [s]” for facilities and services offered pursuant to Section 251. Section 252(e)(2)(B) allows a state commission to reject an arbitrated agreement only if the agreement does not meet the requirements of Section 251. In short, all state commission arbitration authority under Section 252 is inextricably tied to the duties imposed under Section 251. [5] Implementing other federal law requirements is beyond the scope of Section 252’s authority savings clause, which states that “nothing in this section shall prohibit a State commission from establishing or enforcing other requirements of State law in its review of an agreement, including requiring compliance with intrastate telecommunications service quality standards or requirements.” 47 U.S.C. § 252(e)(3) (emphasis added); see also 47 U.S.C. § 252(f)(2) (providing a nearly identical savings clause for state commissions reviewing statements of generally available terms); accord SBC Commc’ns, 138 F.3d at 417 (“[I]nterLATA service is typically interstate.”). Perhaps most tellingly, Section 271 contains no similar state commission authority savings clause. See Verizon New England, 509 F.3d at 7 (“Section 271 has no such clause reserving state power, again underscoring intended federal supremacy and the absence of state power under section 271.”). [6] Nor is there any historical support for the ACC’s interpretation of its power to implement Section 271. Suits chal6794 QWEST v. ARIZONA CORPORATION COMMISSION lenging the authority of state commissions to impose Section 271 access and pricing terms did not arise until 2005 because the FCC’s previous expansive interpretation of Section 251(c)(3)’s UNE requirements coincided with Section 271(c)’s requirements. See Southwestern Bell Tel., 530 F.3d at 681. Moreover, the 1996 Act was passed, in part, to address the concern that “the huge telecommunications industry should no longer be governed by an antitrust consent decree administered by a single federal district judge.” SBC Commc’ns, 138 F.3d at 412-13. “When the 1996 Act replaced the decree, Congress aimed to transfer this authority to the FCC — not the states[.]” Verizon New England, 509 F.3d at 8.