Opinion ID: 3021849
Heading Depth: 3
Heading Rank: 3

Heading: “Local Telephone Services Under Section

Text: 4252(a) 20 Finally, the Government urges this Court to conclude that the Reese Services are “local telephone services” under the definition provided in § 4252(a). That section defines the phrase to mean:
privilege of telephonic quality with substantially all persons having telephone or radio telephone stations constituting a part of such local telephone system, and (2) any facility or service provided in connection with a service described in paragraph (1). The term “local telephone service” does not include any service which is a “toll telephone service” or a “private communication service” as defined in subsection (b) and (d). 26 U.S.C. § 4252(a). The Government contends that Congress intended to tax all telephone services other than private communications services, and as such, if the Reese Services are not considered “toll telephone services,” they must, by default, be considered “local telephone services.” The “local telephone service” designation, in other words, is a residual category, intended to capture all telephonic communications that are not “toll telephone services” or “private communications services.” Local networks are indeed used to some extent to carry long-distance call traffic and, in connection with its longdistance services, Reese Brothers had “access” to various local telephone services. However, as the Sixth Circuit pointed out, “the definition of local-telephone service requires ‘access to a’ local telephone system, not ‘access to every’ local telephone system included within the boundaries of a long-distance plan.” OfficeMax, 428 F.3d at 600. The Court concluded: “Not 21 surprisingly, given its application to ‘local’ telephone service, the definition contemplates a service with limited geographic reach, not a plan that makes use of an untold number of local services.” Id. We agree. We note also that, rather than creating a residual category, the final sentence in § 4252(a)(2) is more appropriately viewed as an effort to avoid double taxation of communications that are taxed under a different provision.4 Once again, the Government is arguing that because Congress intended to tax all types of telephonic communications to be taxed, Reese Services must fit within one of the definitions in § 4252. Our reading of Iselin suggests that the opposite is true: we should not enlarge the statute by including within its scope that which was omitted. Iselin, 270 U.S. at 251. Accordingly, we conclude that the Reese Services are not “local telephone services” as defined by § 4252(a).