Court Opinion

ID: 181260
Source: CourtListenerOpinion
Date Created: 2010-12-16 18:49:04+00
Date Added: 2024-06-11T17:25:54.680579
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 09-1839

VERIZON MARYLAND, INCORPORATED,

                 Plaintiff - Appellee,

           v.

CORE COMMUNICATIONS, INCORPORATED,

                 Defendant – Appellant,

           and

MARYLAND PUBLIC SERVICE COMMISSION; STEVEN B. LARSEN, In
His Official Capacity as Chairman of the Maryland Public
Service Commission; HAROLD D. WILLIAMS, In His Official
Capacity as Commissioner of the Maryland Public Service
Commission; ALLEN M. FREIFELD, In His Official Capacity as
Commissioner of the Maryland Public Service Commission;
SUSANNE BROGAN, In Her Official Capacity as Commissioner of
the Maryland Public Service Commission; LAWRENCE BRENNER,
In His Official Capacity as Commissioner of the Maryland
Public Service Commission,

                 Defendants.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     J. Frederick Motz, District Judge.
(1:08-cv-00503-JFM)

Argued:   September 22, 2010              Decided:   December 16, 2010

Before WILKINSON, KING, and GREGORY, Circuit Judges.
Reversed and remanded by unpublished opinion. Judge Gregory
wrote the opinion, in which Judge Wilkinson and Judge King
joined.

ARGUED: Michael Brian Hazzard, ARENT FOX, LLP, Washington, D.C.,
for Appellant.    Joseph Ruggiero, VERIZON COMMUNICATIONS INC.,
Arlington, Virginia, for Appellee. ON BRIEF: Joseph P. Bowser,
ARENT FOX, LLP, Washington, D.C., for Appellant.         Ann N.
Sagerson, VERIZON, Arlington, Virginia; Scott H. Angstreich,
KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, PLLC, Washington,
D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                2
GREGORY, Circuit Judge:

     The Telecommunications Act of 1996 (hereinafter “the Act”)

was designed to enable new Local Exchange Carriers (hereinafter

“LECs”) to enter local telephone markets with ease and to reduce

monopoly control of these markets and increase competition among

providers.      Verizon Communications Inc v. FCC, 535 U.S. 467, 489

(2002); 47 U.S.C. §§ 251 et seq.                     Here, we must consider two

questions that arise from interpreting the Act and the rules

promulgated          by     the         Federal      Communications           Commission

(hereinafter “FCC”) including (1) what type of connectivity an

InterConnection           Agreement       (hereinafter         “ICA”)       between      an

existing   or    Incumbent        LEC    (hereinafter       “ILEC”)     and    a   new   or

Competitive LEC (hereinafter “CLEC”) required and (2) whether

the district court erred in finding that the loop connection

requested by a CLEC was of a lesser quality than the InterOffice

Facilities      (hereinafter       “IOF”)      interconnection        proposed      by   an

ILEC and therefore not in compliance with the ICA.

     We find that the ILEC, Verizon Maryland, Inc. (hereinafter

“Verizon”), violated the rules as promulgated by the FCC when it

refused    to        provide      the     CLEC,      Core     Communications,         Inc.

(hereinafter          “Core”),          with       the      technically        feasible,

non-discriminatory          interconnection          that     Core    had     requested.

Therefore,      we    reverse     the     district       court’s   grant      of   summary

judgment and find that, as a matter of law, Verizon breached the

                                               3
ICA.    The case is remanded to the district court for proceedings

consistent with our ruling.

                                          I.

       This appeal arises from a decision by the district court

overturning the Maryland Public Service Commission (hereinafter

“the Commission”).            The district court found that Verizon did

not violate its duty under the Act or ICA when it declined to

provide Core with the requested interconnection.

A. The Telecommunications Act of 1996

       Under   the    provisions     of   the      Act,   all     telecommunications

carriers, both ILECs and CLECs, are obligated to interconnect

their networks “directly or indirectly with the facilities and

equipment      of    other    telecommunications          carriers.”        47   U.S.C.

§ 251(a).      In other words, the Act creates a framework for the

development of facilities-based competition in which ILECs are

required to interconnect their networks with the networks of

requesting CLECs.            This interconnection ensures that consumers

of local telephone service may communicate with consumers who

are served by a different LEC.                  The Act also imposes a specific

interconnection        duty    on   ILECs.        ILECs    must    permit    CLECs   to

interconnect        directly   to   their       network   as    long   as   they   meet

certain requirements.          47 U.S.C. § 251(c)(2).

                                            4
B. The Interconnection Agreement

     In 1999, Core was beginning to enter the local Baltimore

telephone market.      By statute, Core was entitled to connectivity

with the existing incumbent network that was (1) “technically

feasible”; (2) at least equal in quality to that provided by the

ILEC to “itself or to any subsidiary, affiliate, or any other

party to which the carrier provides interconnection;” and (3)

“on rates, terms, and conditions that are just, reasonable, and

nondiscriminatory.”      47 U.S.C. § 251(c)(2)(B)-(D).            In order to

expedite    negotiations,     Core   adopted     an   existing    ICA    between

Verizon, the ILEC in the region, and American Communications

Services, Inc. 1 pursuant to 47 U.S.C. § 252(i).               The adoption of

this agreement was approved by the Commission on September 15,

1999.       The   agreement     stated    that     Verizon     would    provide

interconnection    “in   accordance      with   the   performance      standards

set forth in Section 47 U.S.C. § 251 (c) of the Act and the FCC

regulations.”     J.A. 55.

     Under 47 U.S.C. § 252(a)(1), ILECs and CLECs are free to

negotiate    binding     ICAs   “without        regard   to”     the    baseline

interconnection performance standards set forth in the Act and

     1
       American Communications Services, Inc. was another CLEC
who was attempting to enter the telephone market in Baltimore.
They had previously negotiated with Verizon to form the ICA
which Core later adopted.

                                      5
the corresponding FCC regulations.                   See 47 U.S.C. §§ 251(b)-(c);

47 C.F.R. §§ 51.305, 51.311, 51.313; Verizon Md., Inc. v. Global

NAPS,    Inc.,       377   F.3d    355,    390     (4th     Cir.       2004).    In    such

circumstances,        the    generally        applicable     performance        standards

will     only    apply      to    the   extent      that    the       parties   have    not

contracted around them.

       All ICAs must be presented to the Commission for approval

even when they have been negotiated by the parties.                             47 U.S.C.

§ 252(e)(1)-(2).            Commissions have also been vested with the

authority       to   implement      and    enforce     these          agreements.      Core

Commc’n Inc. v. Verizon Pa., Inc., 493 F. 3d 333, 335 (3d Cir.

2007).     According to the Commission, delays in interconnection

are very costly to a new provider because it “cannot operate and

earn revenue while it continues to incur expenses.”                             J.A. 276-

77.     Delays can benefit the ILEC by reducing the chances that

the CLEC is successful.

       In the summer of 1999, Core initiated contact with Verizon

regarding interconnection.              On July 27, 1999, Core sent a letter

to Verizon requesting an activation date of September 10, 1999.

Core calculated this date based on section 4.4.4 of the ICA,

which states that interconnection will not occur earlier than

forty-five       days       after       the       receipt        of     a   request     for

interconnection by Core.                Also, as required by the ICA, Core

provided        Verizon          with     forecasts         of        Core’s    technical

                                              6
requirements.         The letter stated, “[p]lease confirm in writing

if the requested interconnection activation date is acceptable,

or, if it is not acceptable, please propose an alternate date,

together       with    an   explanation            why     such    alternate      date    is

appropriate.”         J.A. 132-33.       Verizon did not respond in writing.

       At a meeting on August 11, 1999, the parties agreed to use

the “entrance facility” method of interconnection.                                J.A. 88.

Entrance facilities are dedicated transmission facilities that

connect ILEC and CLEC locations.                     Verizon describes four major

steps for provisioning initial interconnection with Core using

the entrance facility method:                      (1) constructing the physical

interoffice facility between Verizon’s and Core’s networks; (2)

provisioning transport circuits from Verizon’s to Core’s Wire

Center; (3) provisioning transport circuit; and (4) establishing

interconnection         trunks     between         Verizon’s        switch    and   Core’s

switch.

       Core    requested       interconnection            with    Verizon    at   its    Wire

Center    on    the    tenth     floor    of       the    Court    Square     building    in

Baltimore, Maryland.             That floor of the building was “on-net”

with    Verizon,       meaning    that     it       was    physically        connected    to

Verizon’s central network through fiber feeder cables and an

OC-12 multiplexer (hereinafter “OC-12 MUX”).                         Verizon had turned

on an OC-12 Loop Ring at the building in June 1999, meaning that

physical      construction       was   complete,          the     optical    signals     were

                                               7
transmitting, and the ring was service-ready.                           At some point,

however,      the    OC-12    Mux     was   disconnected        from    the    OC-12     Loop

Ring.

       Verizon claims that on August 11, 1999, it estimated that

connection would take between four to six months.                            In an effort

to    speed    things      along,   Core     asked      that    Verizon      expedite     the

interconnection process by using the existing OC-12 Loop Ring

and OC-12 Mux for interconnection, as this would eliminate the

need for Verizon to build new facilities.                       It also requested an

interconnection activation date of September 18, 1999.                                Verizon

agreed       that    using    the     existing         OC-12    Loop    Ring     would    be

technically feasible, but would not commit to Core’s proposal at

the     August      11    meeting     until       it    first    checked       with    other

departments.         The record indicates that the OC-12 Loop Ring had

the capacity sufficient to support Core’s initial request.

       On August 15, 1999, Verizon informed Core that the OC-12

Mux    had    been       “assigned”    to    some       “customer      of   record,”     the

identity      of    whom    Verizon    would      not    disclose.          Thus,     Verizon

claimed that the OC-12 Mux was unavailable for interconnection.

Later, Verizon admitted that Core was the customer of record for

the OC-12 Mux.            However, Verizon claims that Core was assigned

to the OC-12 Mux in a retail capacity as a “customer” rather

than as a “carrier.”

                                              8
        On August 31, 1999, Verizon informed Core that, as a matter

of   policy,        it     would     not       use        the     OC-12       Loop     Ring         for

interconnection,           whether       or    not    it    was    technically          feasible.

Verizon     further       explained       on    September         7,     1999,       that    it     had

previously classified the existing OC-12 Mux as a “customer”

facility, rather than a “carrier” facility and that the OC-12

Mux would need to be “reinventoried” as a “carrier” facility in

order    to   use    it     for    interconnection.                Instead       of    using        the

existing      facilities,          Verizon      stated          that     it    would        need    to

physically      detach       the    OC-12       Mux       from    the     OC-12       Loop     Ring,

construct a new OC-12 ring interoffice facility ring (“New OC-12

IOF Ring”), and insert the multiplexer into the new ring before

subsequent      steps       in     the    interconnection              process        could        take

place.

      Core     met    with       Verizon       again       on    September       9,     1999,        to

express       its    desire         to        use     the        OC-12        Loop     Ring         for

interconnection.           As a result of the meeting, Verizon informed

Core that it would complete construction of the New OC-12 IOF

Ring and establish connection to the Wire Center by November 16,

1999.     Core responded on September 24, 1999, that the November

16   date     was    not    acceptable,             and    that    Verizon       had        not     yet

articulated a reasonable justification for refusing to use the

existing OC-12 Loop Ring for interconnection.

                                                9
       The       new    OC-12    IOF    Ring     was    completed         sometime     between

November 16, 1999 and November 30, 1999.                           Once the new OC-12 IOF

Ring       was    “turned    up,”       the    parties       were    able    to     coordinate

subsequent steps in the interconnection process by December 23,

1999, just over four months after the initial meeting between

Core and Verizon.

C. The Maryland Public Service Commission

       On        October    9,   1999,        Core   filed     a     complaint       with     the

Commission         alleging      that    Verizon       was    unlawfully          “refusing    to

provide interconnectedness” and demanding that Verizon connect

immediately.            Core amended its complaint on January 18, 2001,

alleging         that    Verizon       (1)    breached       the    ICA     “by    failing     to

provide      interconnection           within     the    requested        45-day     interval,

and by refusing to negotiate an alternative interval,” J.A. 296;

(2) breached its agreement by not providing Core with the same

terms it provides to others, J.A. 298 2; (3) refused to provide

interconnection “at a technically feasible point”, J.A. 302; (4)

“impos[ed] unjust and unreasonable terms and conditions on the

interconnection process” J.A. 304; and (5) “breached its duty of

good faith and fair dealing under the Interconnection Agreement

       2
       At oral argument, counsel for Core represented that loop
connection   is  used   in  ten   percent   of these  types  of
interconnections between Verizon and CLECs.

                                                10
with    Core       by    refusing    to     provide       interconnection            within      a

commercially reasonable time.”                     J.A. 305.       On March 25, 2002,

count one was dismissed by the Commission and is not at issue in

this matter.

       On August 8, 2003, the hearing examiner, assigned by the

Commission, entered a proposed order finding that Verizon had

breached section 27.1 of the ICA and a duty of fair dealing and

good faith under Maryland contract law.                           The hearing examiner

made     a     factual       finding        that     “Verizon         did     not     provide

interconnection to Core in as timely a fashion as it reasonably

would       have        provided    interconnection          to       any     of     its       own

customers.”         J.A. 116.        Specifically, the Commission found that

“it is undisputed that capacity was available and connection

technically feasible” and that Verizon denied access to this

connection in bad faith.             J.A. 124.

       On    February        26,    2004,    the     Commission        issued        an    order

affirming the proposed order of the hearing examiner.                                 On July

9,     2004,    the       Commission       denied     a    motion       by    Verizon          for

reconsideration.

       On    February       25,    2008,    Verizon       filed   a    complaint          in   the

District Court of Maryland seeking review of the Commission’s

finding.           On     March    30,     2009,    the     district         court        granted

Verizon’s motion for summary judgment thereby overturning the

decisions of the Commission.                 The district court concluded that

                                              11
Verizon       had        no     duty        to     provide       the     lesser        quality

interconnection requested by Core since the ICA required Verizon

to provide Core with a connection of equal quality to that which

it    provides      “itself      or    to    any      subsidiary,      affiliate,       or    any

other party to which the carrier provides interconnection.”

        The   district        court     found      as    a   factual     matter       that    the

interconnection requested by Core was of lesser quality than the

connectivity Verizon provided between carrier switching offices.

Furthermore,        the       district      court       concluded      that    in     order   to

determine Verizon’s obligation pursuant to the ICA, one measures

the     quality     of     connection        it       provides    between       the    carrier

switching-offices, not between a carrier switching-office and an

end-user.      Thus, the district court held that Verizon would have

been in violation of the ICA if it provided the interconnection

requested by Core since it was not of equal quality to that

provided      between          carrier       switching-offices,               which    Verizon

asserts would have effectively modified the ICA. 3                              The district

court      also     vacated       the       Commission’s         finding       that    Verizon

breached its duty of good faith and fair dealing.

       3
       It is worth noting that the record does not reflect that
Verizon raised any concern about whether the loop connection
quality would be in violation of the ICA until the litigation
had commenced.

                                                 12
                                             II.

      We review de novo the district court’s grant of summary

judgment.     See Garofolo v. Donald B. Heslep Assocs., Inc., 405

F.3d 194, 198 (4th Cir. 2005).                      Absent a statutory command,

general standards for judicial review of agency action apply.                                 A

“state     agency’s     interpretation             of        federal    statutes      is    not

entitled      to    the     deference          afforded          a      federal       agency’s

interpretation of its own statutes. . .”                             GTE South, Inc. v.

Morrison,     199    F.3d   733,       745    (4th       Cir.     Va.    1999)     (citation

omitted).           Thus,    we       review        de        novo      the    Commission’s

interpretation of the Act.               Nonetheless, “an order of a state

commission    may     deserve     a    measure          of    respect    in    view    of   the

commission’s experience, expertise, and the role that Congress

has   given    it     in    the       Telecommunications               Act.”       BellSouth

Telecomms., Inc. v. Sanford, 494 F.3d 439, 447 (4th Cir. 2007).

      Turning to the standard for our review of the Commission’s

fact-finding, we note first that the Act does not require us to

sit as a “super” public utilities commission.                            Morrison at 745.

Therefore, we review the fact finding of the state agency under

the substantial evidence standard.                           Morrison at 745 (citation

omitted).      In     applying     the       substantial         evidence      standard,      a

“court is not free to substitute its judgment for the agency

. . . it must uphold a decision that has ‘substantial support in

the record as a whole’ even if it might have decided differently

                                             13
as an original matter.”             AT&T Wireless PCS, Inc. v. City Council

of City of Virginia Beach, 155 F.3d 423, 430 (4th Cir. 1998).

There is no meaningful difference between the “arbitrary and

capricious”        standard       and    substantial         evidence    standard      with

respect to fact finding.                Morrison at 745 n.5.

                                              III.

      The    Act    of     1996    was     designed     to     enable    new     telephone

companies to enter into local markets with ease and to reduce

monopoly control.           Verizon Communications Inc v. FCC, 535 U.S.

467, 489 (2002); 47 U.S.C. §§ 251 et seq.                      The Supreme Court has

provided the Circuit Courts with guidance about the purpose of

the   Act:         “The    1996     Act       both    prohibits       state    and     local

regulation    that        impedes       the   provision       of   ‘telecommunications

service,’ § 253(a), and obligates incumbent carriers to allow

competitors to enter their local markets, 47 U.S.C. § 251(c).”

Verizon at 492.           Additionally, the Act is designed to “address[]

the practical difficulties of fostering local competition.”                             Id.

      Core   argues        that    the     district     court’s       order    should    be

overturned for several reasons.                      First, Core asserts that the

district     court        erred     when      it     found     that     the    Commission

misconstrued       federal        law    by    requiring       that    Verizon       provide

interconnection over loop facilities.                    Instead Core argues that

once a CLEC has requested a form of interconnection that is

                                               14
available at any technically feasible point within the ILEC’s

network, then the ILEC must provide that form of interconnection

on a non-discriminatory basis.                       Second, Core argues that the

district court had no factual basis upon which to find that the

requested    interconnection             was    of    lesser        quality.      Furthermore,

Core   maintains         that   if       it    requested        a    specific        method    of

interconnection, then the court is in no position to dictate

which kind of interconnection satisfies Core’s needs.                                   Lastly,

Core contends that the court erred in finding that Verizon had

not breached its duty of good faith and fair dealing.

       Verizon      argues      that          the     Commission’s           opinion     lacked

foundation       since    it    found         that        Verizon    had     an   affirmative

obligation    to     offer      to   amend          the    contract     to    authorize       the

manner of interconnection Core sought.                          In effect, this would

require Verizon to alter its contract.                               Furthermore, Verizon

argues that any amendment to the ICA must be in writing pursuant

to provisions contained in the ICA.                         Therefore, Verizon reasons

that it only had an obligation to provide the same method of

interconnection it provides other CLECs and that the ICA could

not be modified without written notice signed by all parties.

       In   order    to    make      a    determination             about     what     type    of

interconnection Verizon had a duty to provide to Core, it is

necessary to examine the contract between the parties:                                 the ICA.

The ICA provides that the ILEC will provide interconnection

                                                15
       in accordance with the performance standards set forth
       in Section 251(c) of the Act and the FCC Regulations,
       in particular the rules set forth in 47 Code of
       Federal   regulations    §§ 51.305(a)(3)  to   (a)(5),
       51.311(A) to (c), and 51.313(b).

ICA,    J.A.    57.      The     Act    requires        that    interconnection     of

facilities       and    equipment       be    provided     for    “any    requesting

telecommunications           carrier”        so   long     as    it    meets     three

requirements.          47 U.S.C. § 251(c).              It must be (1) “at any

technically feasible point within the carrier’s network,” (2) at

least equal in quality to that provided by the ILEC to itself or

to any subsidiary, affiliate, or any other party to which the

carrier provides interconnection, and (3) “on rates, terms, and

conditions      that   are    just,    reasonable,       and    nondiscriminatory.”

47 U.S.C. § 251(c).          The first and third requirements are not in

dispute.       Thus, this Court’s decision turns on interpreting what

the Act meant when it prescribed interconnections between ILECs

and CLECs “at least equal in quality” to the interconnection

provided by an ILEC to “any subsidiary, affiliate, or any other

party.”     47 U.S.C. § 251(c).

       The FCC rules, as adopted by the ICA, are instructive in

determining      whether      interconnection       through       a   loop    facility

satisfied the ICA.           The rules promulgated by the FCC provide, in

pertinent       parts,       that     Verizon      is     required       to    provide

interconnection at “a level of quality that is equal to that

                                             16
which the ILEC provides itself, a subsidiary, an affiliate, or

any other party.”        47 C.F.R. § 51.305(a)(3).                    Furthermore,

       [t]his obligation is not limited to a consideration of
       service quality as perceived by end users, and
       includes, but is not limited to, service quality as
       perceived   by   the   requesting   telecommunications
       carrier.

Id.    (emphasis      added).           These        rules      reflect          a    clear    and

unequivocal     intention         that       the     requesting        telecommunications

carrier is to play a significant role in determining the type

and quality of interconnection it received from the ILEC.                                      The

Commission,        which         is     responsible             for        overseeing         the

implementation      of     the    Act    throughout          the      state      of    Maryland,

agrees with this interpretation.

       Furthermore,        Verizon           had      provided             this        kind    of

interconnection in the past.                   The Commission’s finding is that

Verizon has provided interconnection to other CLECs, and even

Core, over high-capacity loop facilities just like the existing

OC-12 Loop Ring and OC-12 Mux.                     The hearing examiner found that

“despite having interconnected with Core over the common loop in

other locations, in Baltimore Verizon resisted Core’s requests

on    the   grounds    that      the     parties’         ICA   did        not       permit   loop

interconnection.”           J.A.        114.         He    went       on    to       state    that

“Verizon’s ability to interconnect with Core via the common loop

outside     Maryland,      e.g.,        in     New    Jersey,         Pennsylvania,           West

Virginia, Illinois and Massachusetts, is clear indication that

                                               17
such connection should be possible in Maryland.”                         Id.        Thus,

Core’s request to interconnection through the OC-12 Loop Ring

was not out of the ordinary.

     Moreover,       the    record    contains        the     declaration     of    Todd

Lesser, President of North Country Communications, also a CLEC.

Lesser states that Verizon agreed to provide interconnection to

North Country Communications in Charleston, West Virginia over a

shared    retail     ring    in   July    2001      until     Verizon    completed      a

dedicated ring.       The retail ring is the equivalent to the OC-12

Loop Ring proposed by Core here.                     Even though this incident

occurred after the initial dispute between Core and Verizon, it

demonstrates       that     Verizon      has       provided     other    CLECs      with

interconnection through loop facilities, at least on a temporary

basis.     Clearly,        Verizon   could     have      provided     interconnection

with Core through the OC-12 Loop Ring.

     If    Verizon    had    negotiated        a   separate     ICA   with    Core,    it

might find itself in a more favorable litigating position.                            Its

problem, however, is that it did not do so.                       At no point does

the ICA explicitly foreclose the use of loop interconnection or

override the baseline performance standards governing ICAs.                            To

the contrary, Section 27.1 of the ICA quite plainly states that

Verizon “shall provide the Interconnection and unbundled Network

Elements     contemplated         hereunder         in      accordance       with     the

performance standards set forth in Section 251(c) of the Act and

                                          18
the FCC Regulations.”            Or, as the district court put it, “the

ICA between Verizon and Core expressly incorporates the statute

and regulations.”           Verizon Md. Inc. v. Core Commc’ns, 631 F.

Supp. 2d 690, 699-700 (D. Md. 2009). 4

     These      performance      standards,     by    design,    favor   Core,    not

Verizon.     See AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371

(1999) (“The Telecommunications Act of 1996 . . . fundamentally

restructures local telephone markets. . . . [I]ncumbent LECs are

subject    to    a   host   of    duties    intended     to     facilitate   market

entry.”).        For   example,     Verizon     argues    that     the   “equal   in

quality” requirement set forth in 47 U.S.C. § 251(c)(2) did not

compel Verizon to use loop facilities when interconnecting with

Core.     But the FCC’s order implementing 47 U.S.C. § 251(c)(2)

makes clear that the statute requires Verizon to provide loop

interconnection if Core requests it:                 “[T]o the extent a carrier

     4
       Verizon argues that Section 27.1 does not incorporate all
of the performance standards set forth in the statute and
regulations because it states that Verizon “shall be deemed to
meet such performance standards” if it complies with certain
time intervals for installation and repairs. In Verizon’s view,
those time intervals are the only “performance standards”
contemplated by the contract.    Verizon is incorrect.   However,
the contract makes clear that the term “performance standards”
refers to the requirements of § 251 and the corresponding
regulations.   See Core Commc’ns, 631 F. Supp. 2d at 699-700.
And while the parties determined that compliance with the time
intervals would obviate the need to comply with the statute and
regulations, they just as clearly agreed that the statute and
regulations would apply in the absence of such compliance.

                                           19
requests interconnection of superior or lesser quality than an

incumbent LEC currently provides, the incumbent LEC is obligated

to    provide      the     requested    interconnection        arrangement     if

technically      feasible.”        In   re    Implementation      of   the   Local

Competition Provisions in the Telecommunications Act of 1996, 11

FCC Rcd. 15,499, 15,615 (1996) (emphasis added).                  While Verizon

did   not   need    to    contractually      bind   itself   to    the   baseline

interconnection performance standards, it elected to do so and

must live with the results.

      Therefore, we find that Verizon had a duty to provide Core

with the requested interconnection and therefore breached its

contract.       The district court’s grant of summary judgment is

reversed and this matter is remanded for further proceedings

consistent      with     this   decision     including   a   determination     of

damages.

      Additionally, this Court notes that the district court’s

finding that the loop facility was lesser in quality to the

other potential methods of interconnection (like IOF) was not

based on evidence in the record.              In its opinion, the district

court notes that

      Core asserts that Verizon has not established that it
      provides a lesser quality of service to its retail
      customers . . . No factual findings were made before
      the Commission on this issue.    I note that a letter
      was written by [the Commission] in another proceeding
      accepts Verizon’s assertion that loop facilities are
      of lesser quality than IOF facilities.

                                        20
J.A. 380 n. 5.         We find that this is not sufficient evidence

upon which to base a finding that the loop connection was of a

lesser quality than the IOFs.           The record reveals that this fact

was disputed.        Therefore we find that, construing all facts in

favor    of   the    non-moving   party,     the    district    court   erred   in

finding that the loop connection was of lesser quality than the

other connection proposed by Verizon.

        Finally, since we find that Verizon breached its contract,

we   remand    the   question     of   whether     Verizon    also   breached   an

implied duty of good faith and fair dealing to the district

court for further consideration.

        For the reasons explained above, we

                                                             REVERSE AND REMAND.

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