3. Total Element Long Run Incremental Cost (TELRIC) Pricing for Transit Service
Sprint PCS insists that the transiting rates that AT&T is billing Sprint PCS do not comply with federal law that requires transiting to be billed in compliance with the TELRIC standard. Sprint PCS points to Decision (D.) 06-08-029, in which the Commission held that transit traffic is a method of indirect interconnection and, as such, an obligation under § 251(c).2 The Commission further recognized that the applicable pricing standard for the provision of transit service is TELRIC.3
AT&T rebuts Sprint PCS' claim that it is entitled to TELRIC pricing for transiting. AT&T points out that Sprint misstates the Commission's holding in D.06-08-029; in that case, the Commission arbitrated an ICA between SBC and MCI. AT&T states that the outcome ordered by the Commission does not apply in this case because the agreement between AT&T and Sprint PCS was negotiated, rather than arbitrated. Section 252(a)(1) of the Act provides that:
[u]pon receiving a request for interconnection, services, or network elements pursuant to section 251 of this title, an incumbent local exchange carrier may negotiate and enter into a binding agreement with the requesting telecommunications carrier or carriers without regard to the standards set forth in subsections (b) and (c) of
section 251 of this title."
Thus, states AT&T § 252(a)(1) gives carriers a choice: negotiate a private arrangement based on individual preferences and business needs, or go to the state commission for arbitration based on the pricing standards of the 1996 Act.
We note that Sprint PCS does not dispute that its ICA with AT&T is a negotiated, rather than an arbitrated, agreement. Section 252(c) of the Act clearly states that TELRIC pricing is only required for arbitrated ICAs. The pertinent portions of § 252(c) read as follows:
(c ) STANDARDS FOR ARBITRATION-In resolving by arbitration under subsection (b) any open issues and imposing conditions upon the parties to the agreement, a State commission shall-
....
(2) establish any rates for interconnection, services, or network elements according to subsection (d)....
Subsection (d) includes the pricing standards for ICAs decided by arbitration, which was the basis for the Federal Communications Commission's TELRIC standard. This provision applies only to arbitrated ICAs, not to negotiated agreements. Under a negotiated agreement, parties are free to negotiate any rates for services, and those rates do not have to be based on TELRIC. We concur with AT&T that the outcome in the SBC/MCI case does not apply, since that rate was arbitrated by the Commission, not negotiated by the parties. Therefore, we find that Sprint PCS is not entitled to TELRIC pricing for transiting service.
2 D.06-08-029, § 5.1.2 Transit Traffic, mimeo. at 9.
3 D.06-08-029, § 5.1.3 Transiting Price, at 10-11.
