Opinion ID: 794949
Heading Depth: 2
Heading Rank: 1

Heading: Local Calling Areas

Text: 18 The first issue for determination is whether the Board overstepped its authority in concluding that Board-determined calling areas govern whether traffic is subject to reciprocal compensation or access charges. Global contends that access charges are appropriate only in circumstances where a carrier imposes separate charges for long-distance calls. Since it does not impose such a separate charge, Global argues, access fees are inappropriate. The determining point here is whether Global's treatment of all calls within Vermont as local for billing purposes affects reliance on the Board-determined local-calling areas traditionally used to determine whether traffic is local or long-distance for the purpose of intercarrier compensation. 19 The parties here dispute only which calling area (Board-determined or local-carrier-determined) provides the relevant framework for ascertaining compensation. The answer might lead to a further question: whether ISP-bound traffic is subject to access charges. But we are limited here to the questions actually presented: how are the boundaries of local calling areas to be determined for purposes of intercarrier compensation, and what agency is to make that determination? 6 20 Prior to 1996, the state public service commissions defined the boundaries of all local calling areas. See In the Matter of Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, 11 F.C.C. Rcd. 15,499, 16,013-14, ¶ 1035 (1996) [hereinafter  Local Competition Order ]. With the introduction of competition, however, the state boards were required to consider how to realign the local market to govern competitive entry. The FCC, in its voluminous Local Competition Order, explicitly declined to address the issue of carrier-determined local calling areas, noting that the state commissions have the authority to determine what geographic areas should be considered `local areas' for the purpose of applying reciprocal compensation ... consistent with state commissions' historical practice of defining local service areas for wireline LECs. Id. Importantly, the FCC concluded that it lacked sufficient information to address the issue of expanded local calling area plans but expect[ed] that this issue [would] be considered, in the first instance, by the state commissions. Id. Thus, despite the monumental changes Congress had made in telecommunications law, the FCC early indicated that it intended to leave authority over defining local calling areas where it always had been-squarely within the jurisdiction of the state commissions. 21 Consistent with this jurisdictional finding, the Vermont Legislature has made it clear that it envisions the Board as having a key role in planning telecommunications for the state. Vt. Stat. Ann. tit. 30 § 202c(b)(1) (2006). In 1999, the Board ruled that its CLECs were free to define their own local calling areas for purposes of billing their retail customers. Investigation into New England Telephone & Telegraph Company's Tariff Filing re: Open Network Architecture, Including the Unbundling ofNET's Network, Expanded Interconnection, and Intelligent Networks in re: Phase II, Module One, Docket 5713, 192 P.U.R.4th 1, 52-54 (Vt.P.S.B. Feb.4, 1999), available at 10 http://w ww.state.vt.us/psb/orders/document/5713finalph2modl.pdf. The Board explicitly stated, however, that the Board-determined boundaries, which it last established in 1997, would continue to govern intercarrier compensation. Id. at 53-54. 22 Global argues that the 1996 Act does not permit the Board to reserve the authority to define local calling areas for intercarrier compensation purposes. It centers its argument on the separate charge language in the statutory definition of telephone toll services (which in turn defines exchange access, which in turn determines whether access charges apply). Global reasons that, since the regulations prescribe that a charge separate from the applicable service contracts is necessary to make a call a toll call and since Global imposes no separate toll charges, its traffic is not subject to access fees, regardless of how the Board defines local calling areas. This argument attributes far too much significance to the term separate charge. 23 The underlying statute (which we must remember was originally drafted in 1934) draws sharp distinctions between services known popularly as local and long-distance. See, e.g., 47 U.S.C. § 153(47)-(48). It seems likely that the separate charge language in the statute was written to underscore that tolls applied exclusively to long-distance service and were charged separately. But what really mattered in determining whether an access charge was appropriate was whether a call traversed local exchanges, not how a carrier chose to bill its customers. Thus, Global's argument that since it imposes no separate fee, its traffic cannot be considered toll traffic, is beside the point. 24 Accordingly, we decline to challenge the Board's conclusion that the calling areas it has established are determinative for the purposes of intercarrier compensation. In fact, the FCC has stated that state commissions have authority to determine whether calls passing between LECs should be subject to access charges or reciprocal compensation for those areas where the LECs' service areas do not overlap. See In the Matter of Petition of Worldcom, Inc. Pursuant to Section 252(e)(5) of the Communications Act for Preemption of the Jurisdiction of the Virginia State Corporation Commission Regarding Interconnection Disputes, 17 F.C.C. Rcd. 27,039, 27,307, ¶ 549 & n. 1824 (2002). Although much of the Local Competition Order has been superseded, we find nothing in the thousands of pages the FCC has issued on topics relating to local calling areas that clearly and consistently indicates that it intended to preempt the state commissions' authority to define local calling areas for the purposes of intercarrier compensation. Our understanding, which is consistent with conclusions that other courts have reached, is that the FCC has not disturbed the states' traditional authority to define local calling areas. See, e.g., Iowa Network Servs. v. Qwest Corp., 385 F.Supp.2d 850, 858-59 (S.D.Iowa 2005); Sprint-Fla, Inc. v. Jaber, 885 So.2d 286, 293-94 (Fla.2004). This understanding also appears to be consistent with Congress's intent in the 1996 Act. See, e.g., 47 U.S.C. § 261(b)-(c) ([n]othing in this part shall be construed to prohibit any State commission from enforcing regulations prescribed prior to February 8, 1996, or from prescribing regulations after February 8, 1996, in fulfilling the requirements of this part, if such regulations are not inconsistent with the provisions of this part and [n]othing in this part precludes a State from imposing requirements on a telecommunications carrier for intrastate services that are necessary to further competition in the provision of telephone exchange service or exchange access, as long as the State's requirements are not inconsistent with this part or the Commission's regulations to implement this part). 25 Allowing the state-commission-determined local calling areas to govern intercarrier compensation also makes good practical sense. Carriers may prescribe markedly different local calling areas in accordance with marketing considerations. This diversity may promote consumer choice and ultimately be beneficial to consumers. But, if carriers were free to define local calling areas for the purposes of intercarrier compensation, the door would be open to overweening conduct by the CLECs. ILECs are currently fixed in state-commission-imposed regimes and, in that framework, provide the infrastructure for CLECs. Local calling areas defined by CLECs would permit such areas to be so broad as to eliminate all intercarrier compensation for ILECs. Permitting CLECs to define local service areas and thereby set the rules for the sharing of infrastructure would eventually require ILECs to absorb all the costs and allow CLECs to reap all the profits. 26 The significant factor added to the considerations under discussion — namely the ISP-bound nature of the traffic — requires attention to the 2001 Remand Order. The ultimate conclusion of the 2001 Remand Order was that ISP-bound traffic within a single calling area is not subject to reciprocal compensation. See Brief for FCC as Amicus Curiae, Global Naps, Inc. v. Verizon New England, Inc., 444 F.3d 59 (1st Cir.2006), at 10-11 (March 14, 2006) ([T]he [2001 Remand Order] also indicates that, in establishing the new compensation scheme for ISP-bound calls, the [FCC] was considering only calls placed to ISPs in the same local calling area as the caller. The [FCC] itself has not addressed the application of the [2001] Remand Order to ISP-bound calls outside a local calling area.). Although the 2001 Remand Order states explicitly that ISPs are exempt from reciprocal compensation for intra-local calling area calls, it sheds little light on inter-local calling area calls or access fees. 27 We can find no authority to clarify this issue, and we are accordingly unable to conclude that the 2001 Remand Order strips state boards of their jurisdiction over ISP-bound traffic. As has been demonstrated, state boards have authority to define local calling areas with respect to intercarrier compensation. Whether they have authority to impose access fees on ISP-bound traffic is for another day and for clarification by the FCC.