2. Background
The instant application of North County Communications Corporation of California ("North County")1 comes before this Commission after 3.5 years of proceedings before the Federal Communications Commission ("FCC").
Since the nature of this dispute is complex and shaped by federal telecommunications policies, a brief review is in order before detailing the complex procedural background that has brought us to this point.
In 2005, the FCC pre-empted state Commissions from pricing interconnection services between a wireless carrier and a local exchange carrier ("LEC") through tariffs, stating:
Going forward [from February 17, 2005], however, we amend our rules to make clear our preference for contractual arrangements by prohibiting LECs from imposing compensation obligations for non-access CMRS traffic pursuant to tariff. In addition, we amend our rules to clarify that an incumbent LEC may request interconnection from a CMRS provider and invoke the negotiation and arbitration procedures set forth in section 252 of the Act.2
In the T-Mobile Order, the FCC set firm procedures for resolving disputes between wireless carriers and incumbent LECs concerning compensation for interconnection services:
In light of our decision to prohibit the use of tariffs to impose termination charges on non-access traffic, we find it necessary to ensure that LECs have the ability to compel negotiations and arbitrations, as CMRS providers may do today. Accordingly, we amend section 20.11 of our rules to clarify that an incumbent LEC may request interconnection from a CMRS provider and invoke the negotiation and arbitration procedures set forth in section 252 of the Act. A CMRS provider receiving such a request must negotiate in good faith and must, if requested, submit to arbitration by the state commission. In recognition that the establishment of interconnection arrangements may take more than 160 days, we also establish interim compensation requirements under section 20.11 consistent with those already provided in section 51.715 of the Commission's rules. Interim compensation requirements are necessary for all the reasons the Commission articulated in Local Competition First Report and Order.3
Under the FCC's nomenclature, North County is not an incumbent LEC; rather, it is a non-incumbent or competitive local exchange company. As the emphasis in the above quotation makes clear, the FCC has only set a procedure for resolving interconnection disputes between wireless carriers and incumbent LECs. The FCC has not taken action concerning disputes between wireless carriers and non-incumbent LECs, which is the very situation that confronts us in this proceeding.
In summary, the regulatory issues concerning the interconnection of wireless carriers and LECs are shaped by FCC action that has pre-empted the states from setting tariffs on interconnection services, but the FCC has not set a clear path for resolving interconnection disputes between wireless carriers and non-incumbent LECs like North County.
2.1. Procedural History in the Federal Jurisdiction
The facts leading to the dispute are fairly simple. As part of its business, North County terminates calls to "chat rooms," where callers can talk to one another. Some of this traffic comes from MetroPCS California, LLC ("MetroPCS"). North County desires compensation from MetroPCS for handling this traffic.
In a typical situation between a wireless carrier and a LEC, an interconnection agreement determines what is owed. In the situation before us, however, there is no interconnection agreement between MetroPCS and North County.
Despite the absence of an interconnection agreement, North County began billing MetroPCS for the termination of calls sometime in 2003. MetroPCS has not paid North County any money. MetroPCS claims that a "bill and keep" arrangement exists by default, whereby neither party pays the other for traffic termination. Between August 2005 and June 2006, MetroPCS and North County attempted unsuccessfully to negotiate an interconnection agreement 4
On August 24, 2006, North County filed a complaint against MetroPCS before the FCC pursuant to section 208 of the Communications Act of 1934.5
On March 30, 2009, the FCC's Enforcement Bureau released the Bureau Merits Order that, among other things, directed North County to come to this Commission for the determination of a reasonable rate as compensation for the termination of calls received from MetroPCS.
The Bureau Merits Order, however, did not commit the FCC to finding that MetroPCS had any liability to pay anything to North County. Specifically, the Bureau Merits Order states:
We make no determinations at this time as to whether rule 20.11 imposes obligations to pay compensation in the absence of an agreement, and if so, on what terms, or alternatively, whether the obligation under rule 20.11 is a mandate that the parties must enter into an agreement to a reasonable rate of mutual compensation. In either case, we find that resolution of the rule 20.11 claim depends first on the establishment of a reasonable rate. We note, however, that due to the language of rule 20.11, claims regarding the non-payment of an established interconnection rate would not run afoul of our "collection action" prohibition.6
North County filed an Application for Review of the Bureau Merits Order before the full FCC, which resulted in North County Communications Corp. v. MetroPCS California, LLC, Order on Review, 24 FCC Rcd 14036 (2009) ("MetroPCS Review Order"), which was issued by the FCC on November 19, 2009. This order left unchanged the referral of North County to this Commission for a determination of a "reasonable rate" for call termination. The FCC also placed the complaint of North County in abeyance "pending the California PUC's determination of a reasonable rate for North County's termination of MetroPCS's intrastate traffic."7
Although the MetroPCS Review Order did not address the issue of whether MetroPCS was liable to North County for any payment, it stated that:
We note that the purpose of converting North County's claim back into a formal complaint would not be to review the propriety of the termination rate prescribed by the California PUC. Such a review, if any, of the California PUC's rate prescription would proceed according to whatever mechanism is provided by applicable California law. The purpose of any conversion of North County's claim back into a formal complaint would, instead, be limited to determining whether, despite the application of the termination rate prescribed by California law, MetroPCS has still failed to pay North County "reasonable compensation" under rule 20.11. Such a dispute could arise from a myriad of factors, including but not limited to a continuing disagreement between the parties about whether and to what extent (i) North County's recovery should be limited by the statute of limitations, or
(ii) North County is entitled to an award of prejudgment interest.8
The MetroPCS Review Order also makes clear that the FCC continues to maintain that it has jurisdiction in this policy area:
Contrary to the parties' contention, the Enforcement Bureau did not hold that only a state commission has jurisdiction to determine what constitutes "reasonable compensation" under section 20.11 of the Commission's rules. See, e.g., North County AFR at 1, 6, MetroPCS AFR at 3, 5. Thus, by affirming the Bureau Merits Order, we do not hold that the Commission lacks such jurisdiction. Rather, we merely affirm the Bureau's finding that the state commission, in this instance, is the more appropriate forum.9
Read in its entirety, the MetroPCS Review Order indicates that the FCC will not review any "reasonable rate" determination reached by this Commission, but leaves unchanged the Bureau Merits Order's reservation to the FCC of the right to determine whether MetroPCS has any liability at all towards North County for call termination, or whether the FCC will use the rate set by this Commission in any way.
On January 7, 2010, MetroPCS applied for judicial review of the MetroPCS Review Order before the D.C. Circuit.10 Final Briefs are due July 1, 2010.11
2.2. Procedural Background before the California Commission
On January 6, 2010, the day before the filing of the appeal of the MetroPCS Review Order by MetroPCS in the D.C. Circuit, North County filed the instant application before this Commission.
In response, on February 8, 2010 MetroPCS filed a motion to dismiss North County's Application or, in the alternative, to hold the proceeding in abeyance.12 In addition, MetroPCS also filed a protest of North County's Application.13
On February 8, 2010, AT&T,14 Cricket Communications, Inc. (U3076C), CTIA - The Wireless Association®, Sprint Spectrum L.P. (as agent for Wireless Co, L.P. (U3062C) and Sprint Telephony PCS, L.P. (U3064C), and for Nextel of California, Inc. (U3066C)), T-Mobile West Corporation d/b/a T-Mobile, and Verizon Wireless15 (collectively, the "Wireless Coalition") filed a motion to dismiss the Application.16 The Wireless Coalition also simultaneously filed a motion to hold the proceeding in abeyance17and a protest to the Application.18
On February 18, 2010, North County filed a reply to the protests.19
On February 23, North County filed a single response to all the motions.20
On March 5, 2010, MetroPCS21 and the Wireless Coalition22 each replied to the North County Response.
On March 24, 2010, MetroPCS filed a Motion for Official Notice of Facts requesting that the Commission take official notice of an Order of the United States Court of Appeals for the District of Columbia Circuit23 setting forth a briefing schedule for MetroPCS' Petition for Review in MetroPCS California v. FCC.24
1 Application of North County Communications Corporation of California (U5631) for Approval of Default for Termination of Intrastate, IntraMTA Traffic Originated by CMRS [Commercial Mobile Radio Service, i.e. wireless service] Carriers ("Application").
2 T-Mobile et al, Petition for Declaratory Ruling Regarding Incumbent LEC Wireless Termination Tariffs, Declaratory Ruling and Report and Order (T-Mobile Order), 20 FCC Rcd. 4855 (2005) at ¶9.
3 Id. at ¶16, emphasis added, footnote omitted.
4 North County Communications Corp. v. MetroPCS California, LLC, Memorandum Opinion and Order, 24 FCC Rcd 3807 (Enf. Bur. rel. Mar. 30, 2009) ("Bureau Merits Order") at ¶6.
5 Second Amended Complaint, File No. EB-06-MD-007 (filed August 24, 2006) ("Complaint").
6 Bureau Merits Order, ¶15, note 55.
7 Id. at ¶30.
8 Id. at ¶24.
9 Id. at ¶12 note 46, footnotes omitted.
10 MetroPCS Cal., LLC v. Federal Commc'ns Comm'n and United States of America, Case No. 10-1003, D.C. Cir., filed January 7, 2010 ("MetroPCS v. FCC"); North County Communications Corp. v. MetroPCS California, LLC, Order on Review, File No.
EB-06-MD-008, 09-100 (2009) ("Order on Review").
11 See Motion of MetroPCS California, LLC's (U3079C) Motion for Official Notice of Facts, March 24, 2010, Attachment 1.
12 Motion to Dismiss North County's Application or in the Alternative Motion to Hold the Proceeding in Abeyance ("MetroPCS Motion").
13 Protest of North County Communications Corporation Application ("MetroPCS Protest").
14 Here, AT&T collectively means New Cingular Wireless PCS, LLC (U3060C), Cagal Cellular Communications Corporation (U3021C), Santa Barbara Cellular Systems, Ltd. (U3015C), and Visalia Cellular Telephone Company (U3014C).
15 The following entities are doing business as Verizon Wireless in California: Cellco Partnership (U3001C), California RSA No. 4 Limited Partnership (U3038C), Fresno MSA Limited Partnership (U3005C), GTE Mobilnet of California Limited Partnership (U3002C), GTE Mobilnet of Santa Barbara Limited Partnership (U3011C), Los Angeles SMSA Limited Partnership (U3003C), Modoc RSA Limited Partnership (U3032C), Sacramento Valley Limited Partnership (U3004C), and Verizon Wireless (VAW) LLC (U3029C).
16 Motion to Dismiss North County Communications Corp.'s Application ("Wireless Coalition's Motion to Dismiss").
17 Motion to Hold North County Communication Corp.'s Application in Abeyance Pending Final Resolution of the Complaint Proceeding at the Federal Communications Commission ("Wireless Coalition's Motion to Hold in Abeyance").
18 Protest to North County Communications Corp.'s Application ("Wireless Coalition's Protest").
19 Reply to Protests.
20 Response to Protestants' Motions to Dismiss and Hold Proceedings in Abeyance ("North County Response").
21 Reply to the Response of North County Communications Corporation to Protestants' Motions to Dismiss and Hold Proceedings in Abeyance ("MetroPCS Reply to North County Response").
22 The Wireless Coalition filed two replies to the North County Response. One reply was titled Reply to North County Communications Corp.'s Response to Motion to Hold Application in Abeyance Pending Final Resolution of the Complaint Proceeding at the Federal Communications Commission ("Wireless Reply to North County's Argument Against Abeyance"). The second reply was titled Reply to Response of North County Communications Corp. to Protestants' Motion to Dismiss ("Wireless Reply to North County Argument Against Dismissal").
23 MetroPCS California, LLC v FCC, et al., Order, No 10-1003, filed March 15, 2010
(D.C. Circuit).
24 MetroPCS v. FCC, MetroPCS Petition for Review, filed January 7, 2010.
