ALJ/MCK/jt2 Date of Issuance 1/30/2009
Decision 09-01-024 January 29, 2009
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
O1 Communications, Inc. (U6065C), Complainant, vs. Verizon California, Inc. (U1002C), Defendant. |
Case 08-02-013 (Filed February 15, 2008) |
ORDER EXTENDING STATUTORY DEADLINE
Pub. Util. Code § 1701.2(d) provides that adjudicatory matters such as this complaint case shall be resolved within 12 months after they are initiated, unless the Commission makes findings why that deadline cannot be met and issues an order extending the 12-month deadline. In this proceeding, the 12-month deadline for resolving the case is February 15, 2009. As explained below, the instant matter has been the subject of a complex motion to dismiss, the briefing on which was not concluded until the end of April 2008. Since then, the assigned Administrative Law Judge (ALJ) has had to turn his attention to a succession of more urgent matters.
In view of all these circumstances, we have concluded that it is appropriate to extend the 12-month deadline in this case. Although we hope this case can be resolved sooner, the deadline for resolving this matter will be extended, pursuant to our powers under Pub. Util. Code § 1701.2(d), until February 15, 2010.
1. Background
The complaint herein was filed in mid-February 2008. It alleged that under the interconnection agreement (ICA) in effect between complainant O1 Communications, Inc. (O1) and defendant Verizon California, Inc. (Verizon), Verizon owed O1 approximately $182,500 for terminating calls that were originated by Verizon customers and bound for internet service providers (ISPs) served by O1. More specifically, O1 alleged that it had properly billed Verizon for such calls for the periods August 13-September 30, 2003, January 1-31, 2004, and February 1-29, 2004, but that Verizon had refused to pay the bills.
On March 26, 2008, Verizon filed both an answer and a motion to dismiss the complaint. In its motion to dismiss, Verizon argued that it owed nothing to O1 for the periods indicated, because its obligation to pay termination charges for calls originated by Verizon customers bound for ISPs that are O1 customers was governed by the so-called "ISP Remand Order" issued by the Federal Communications Commission (FCC) in 2001. 1 Under this order, Verizon continued, complainant had effectively agreed (by opting into the 2003 ICA between Verizon and Pac-West Telecomm, Inc.) that O1 would be bound by the "growth caps" in the ISP Remand Order. Verizon described the growth caps and the related "rate caps" as follows:
The FCC Internet Order established a transitional regime to phase out the compensation that previously may have applied to ISP-bound traffic. The FCC Internet Order imposed caps on the per-minute rates payable on such traffic, declining toward zero over a 36-month period. The limitations on the per-minute rate that carriers are allowed to charge for ISP-bound traffic are referred to as "Rate Caps." The FCC also capped the volume of ISP-bound minutes subject to intercarrier compensation in order to ensure that growth in ISP-bound traffic did not undermine the FCC's intent to transition away from such compensation. These limitations on allowable ISP-bound minutes are known as "Growth Caps." (Verizon Motion to Dismiss, p. 5.)
After quoting the FCC formula for computing the growth caps, Verizon's motion continued:
In other words, the Growth Caps under a given ICA are keyed to the number of compensable minutes exchanged under that ICA during the first quarter of 2001 - a number that is sometimes referred to as the "Compensable Base." It is axiomatic that O1 had no Compensable Base under the 2003 ICA: it was not and is not entitled to any compensation for ISP-bound traffic for the first quarter of 2001 under the 2003 ICA, because the 2003 ICA did not become effective until more than two years later. Consequently, because O1 was not and is not entitled to compensation for any minutes of ISP-bound traffic from the first quarter of 2001 under the 2003 ICA . . ., the FCC Internet Order's Growth Caps, which are incorporated into the agreement, dictate that O1 was not and is not entitled to any compensation for ISP-bound traffic until the Growth Caps were lifted on October 8, 2004." (Id. at 6.)2
Based on this analysis, which covers all the billing periods specified in O1's complaint, Verizon argued that the complaint should be dismissed.
On April 17, 2008, complainant filed its response to Verizon's dismissal motion. In this response, O1 did not dispute Verizon's analysis of the ISP Remand Order, but argued that dismissal would be improper because the calls at issue in this case are not governed by the ISP Remand Order. Instead, O1 argued, the traffic at issue in this case consists "almost entirely" of VNXX3 traffic, which several courts have held is not governed by the ISP Remand Order. O1 argued that it should be allowed to file an amended complaint making clear that the vast majority of the traffic at issue in this case is VNXX traffic.
On April 28, 2008, with the permission of the ALJ, Verizon filed a reply to O1's response to the motion to dismiss. In its reply, Verizon argued that none of the invoices O1 submitted to Verizon at the time mentioned VNXX traffic, and that before being allowed to file any amended complaint, O1 should be required to exhaust its remedies under the ICA with Verizon:
To the extent O1 is really seeking compensation for VNXX traffic, then it must identify the traffic as such, and submit invoices for that traffic to Verizon; and if a dispute ensues, it must follow the dispute resolution procedures in the 2003 interconnection agreement between Verizon and O1. Under those procedures, O1 has an obligation to negotiate with Verizon prior to filing a complaint. It has not done so with regard to its claimed VNXX traffic, so the Complaint should be dismissed. (Verizon Reply to O1 Response, pp. 2-3.)
1 The technical citation for the ISP Remand Order is Order on Remand and Report and Order, CC Docket Nos. 96-98 and 99-68 (FCC 01-131), released April 27, 2001, 16 FCC Rcd 9151. After its issuance, the United States Court of Appeals for the District of Columbia Circuit found that the statutory provision relied on by the FCC did not support the ISP Remand Order. However, the D.C. Circuit remanded the order to the FCC without vacating it. Worldcom, Inc. v. FCC, 288 F.3d 429, 434 (D.C. Cir 2002), cert. denied sub nom. Core Communications, Inc. v. FCC, 538 U.S. 1012 (2003). As a result of this unusual procedural posture, several courts including the Ninth Circuit have noted that the provisions of the ISP Remand Order remain in effect despite the D.C. Circuit's conclusions about the deficiencies in its statutory analysis. See, e.g., Pacific Bell v. Pac-West Telecomm, Inc., 325 F.3d 1114, 1122-23 (9th Cir. 2003).
This decision sometimes refers to the ISP Remand Order as the "FCC Internet Order," the term both Verizon and O1 have used for the ISP Remand Order in their pleadings here.
2 As noted on pp. 18 and 24 of Pac-West Telecomm, Inc. v. AT&T of California, Inc. et al., D.06-06-055, the FCC lifted the growth cap in the so-called Core Order, which became effective on October 8, 2004. The formal citation for the Core Order is Petition of Core Communications, Inc. for Forbearance Under 47 U.S.C. § 160(c) from Application of the ISP Remand Order, Order, WC Docket No. 03-171, FCC 04-241, 19 FCC Rcd 20179 (released October 18, 2004).
3 "VNXX" stands for "virtual" NXX traffic. In Verizon California, Inc. v. Peevey, 462 F.3d 1142, 1148 (9th Cir. 2006), which affirmed a decision of this Commission, the court defined VNXX traffic as follows:
VNXX, or "Virtual Local" codes are NPA-NXX codes that correspond to a particular rate center, but which are actually assigned to a customer located in a different rate center. Thus a call to a VNXX number that appears to the calling party to be a local call is in fact routed to a different calling area. The CPUC has determined that VNXX traffic should be rated to consumers as a local call, meaning that the originating LEC cannot charge the calling customer a toll despite the long-distance nature of the call's physical routing.
