Background

On August 1, 2008, Qwest Communications Corporation (Qwest) filed this Complaint against seven competitive local exchange carriers, contending that these carriers offered intrastate switched access services to other similarly situated competitive local exchange carriers at lower prices than stated in filed tariffs and charged to Qwest. Qwest's complaint details three causes of action

based on discrimination and tariff violations. On September 22, 2008, the seven original defendants filed answers.

By ruling dated December 18, 2008, the assigned Administrative Law Judge (ALJ) denied the motion of Cox California Telecom II, LLC, dba Cox Communications (Cox), and Level 3 Communications, LLC (Level 3) to quash a subpoena issued to AT&T Corporation (AT&T) by Qwest for information on intrastate switched access services provided by AT&T to any interexchange carrier since January 1, 1998. That ruling also set a prehearing conference for January 13, 2009, which was subsequently continued at the request of the complainant to allow for filing the amended complaint.

Cox and Level 3 also filed motions to dismiss the original complaint on November 12, 2008, and September 23, 2008, respectively. These motions have not been resolved and motions to place portions of them, and ensuing responses, under seal remain outstanding.

On April 15, 2009, the complainant filed its First Amended Complaint against the 24 competitive local exchange carriers listed in the caption to this decision as well as the referenced unnamed carriers ("John Does 1-50"). In the First Amended Complaint, Qwest renewed its claims that the defendants had charged other similarly situated competitive local exchange carriers lower intrastate access charge rates than offered to Qwest, failed to file their agreements with the other interexchange carriers with the Commission, and otherwise illegally kept the agreements from the public eye.

As demonstrated by the procedural history set forth above, it was not possible to resolve this case by August 1, 2009. Because of these circumstances, the Decision (D.) 09-07-045 extended the deadline to August 1, 2010 to allow adequate time for the Commission to resolve this matter.

Eighteen answers to the initial Complaint and First Amended Complaint were filed. On October 26, 2009, Qwest filed a motion for entry of default against

Ernest Communications. Of the now 24 defendants, 23 have filed at least one answer to the Complaint or First Amended Complaint or both.

On July 29, 2009, the assigned ALJ convened a prehearing conference and adopted a schedule for filing dispositive motions.

Parties filed motions to dismiss the First Amended Complaint between July 16 and August 31, 2009. Twenty one defendants submitted motions to dismiss, all of which joined together in the Joint CLEC Motion to Dismiss filed August 14, 2009, except for MCIMetro Access Transmission LLC (MCIMetro) which filed its own Motion to Dismiss January 15, 2009, and followed Qwest's First Amended Complaint with a Second and Alternative Motion to Dismiss Complaint and all Causes of Action filed August 14, 2009. Qwest filed its consolidated response to the motions on September 18, 2009.

Many procedural motions remain outstanding as well as motions for default judgment against Ernest Communications and a motion to stay against Pacific Centrex due to filing for bankruptcy protection in U.S. Bankruptcy Court. On April 28, 2010, the assigned ALJ issued a ruling authorizing the parties to file and serve legal argument addressing the applicability of D.07-12-020 to the issues in this complaint proceeding.

Initial briefs were filed and served by the Joint Carriers¹ and Qwest, with Qwest also submitting a reply brief.

In today's decision, we address the applicability of D.07-12-020 to the conduct alleged by Qwest to have violated California law or Commission regulation. We find that Qwest has failed to state a claim upon which relief can be granted because the Commission authorized these competitive local exchange carriers to voluntarily contract for different intrastate access service rates, so long as a tariffed rate subject to the adopted cap was also in place. Qwest has not alleged any violations of the tariff requirements but only that competitive local exchange carriers have entered into voluntary contractual rates for intrastate access services at rates below the tariffed rates, and have not offered these lower rates to Qwest. As analyzed below, we find that D.07-12-020 authorized such voluntary contracts, so long as a valid tariff with an adopted cap was in place. Therefore, we conclude that Qwest's allegation of contracts between carriers for lower intrastate access rates than in the carriers' tariffs does not constitute a violation of California law or Commission regulations.

Positions of the Parties

The Joint Carriers stated that D.07-12-020 was "fatal" to Qwest's claim that all interexchange carriers are similarly situated and that all defendants must prospectively lower their intrastate switched access rates to Qwest to the lowest rate offered to any other California carrier, and retrospectively refund the difference to Qwest. The Joint Carriers explained that in the 2007 decision, the Commission expressly authorized competitive local carriers to negotiate off-tariff rates with other carriers, and left unsettled whether such contracts had to be filed. The Joint Carriers contended that Qwest's attempts to eliminate the voluntary contract provision of the 2007 decision was an unlawful collateral attack on that decision.

In its opening brief, Qwest explained that the Commission's 2007 decision reinforces the bottleneck nature of access services, and supports Qwest's allegations that offering lower rates to certain carriers is unlawful and discriminatory. Qwest also stated that the "mere existence" of off-tariff contracts did not necessarily violate California law or Commission regulation, but that offering different rates "could only be justified where the provider . . . establishes that the relevant economic cost . . . varies between customers."²

In reply to the Joint Carriers, Qwest argued that off-tariff contracts for access services are not per se discriminatory, but that the carriers' failure to offer the lower rates reflected in those contracts to Qwest was discriminatory. Qwest also contended that the Commission requires all individual case basis service contracts to be filed with the Commission.

¹ MCIMetro; Advanced Telcom Inc.; Arrival Communications, Inc.; Blue Casa Communications, Inc.; Broadwing Communications, LLC; Budget Prepay, Inc.; Bullseye Telecom, Inc.; Cox; Granite Telecommunications LLC; Mpower Communications Corp.; Navigator Telecommunications, LLC; Telscape Communications, Inc.; TW Telecom of California, L.P.; U.S. Telepacific, Corp.; Utility Telephone, Inc.; and
XO Communications Services, Inc.

² Qwest Opening Brief at 6.