3. AT&T's Motion to Dismiss
AT&T asserts that the application must be dismissed because the lone issue presented in the application-whether all the applicants can collectively port the Kentucky ICA to California-is not subject to this Commission's jurisdiction. According to AT&T, the Commission's jurisdiction is limited to that which the California Legislature has conferred, and there appears to be no California statute that authorizes the Commission to resolve the issue presented by the application. AT&T notes that the Commission's rules limit it to approving "opt-ins" of ICAs approved by this Commission, not by other states. Sections 251 and 252 of the 1996 Act do not give the Commission jurisdiction to enforce merger commitments.
AT&T states applicants are mistaken when they assert that the Commission has jurisdiction here under § 252 because the FCC "delegated" authority over ICAs to state commissions. The 1996 Act explicitly gave state commissions authority only to arbitrate and approve or reject ICAs, and the courts decided that the jurisdictional grant to state commissions necessarily implied authority to interpret and enforce the ICAs the commissions had arbitrated and approved.2 However, AT&T and BellSouth did not merge under the 1996 Act, and the FCC Merger Order was not an exercise of the FCC's authority under the 1996 Act, but arises out of §§ 214 and 303(r) of the 1934 Act.3 AT&T concludes that allocation of jurisdiction in Section 252 of the 1996 Act over issues that arise under the 1996 Act has nothing to do with the question of jurisdiction to enforce the FCC merger commitments.
AT&T states that under the federal Communications Act of 1934, the FCC has the responsibility for evaluating and approving telecommunication mergers.4 In Appendix F of the Merger Order, the FCC explicitly reserved jurisdiction over the merger commitments. In that appendix, the FCC specifically provided, "For the avoidance of doubt, unless otherwise expressly stated to the contrary, all conditions and commitments proposed in this letter are enforceable by the FCC..." Nowhere in the Merger Order did the FCC contemplate that any forum other than the FCC would interpret, clarify, or enforce the merger commitments.
AT&T states that the FCC's retention of exclusive jurisdiction to interpret and enforce the merger commitments was based on eminently sound policy considerations: It is vital that one body, the FCC, rather than the 22 state commissions in the merged AT&T/BellSouth ILEC region, resolve issues relating to the merger commitments in order to ensure a uniform regulatory framework and to avoid conflicting and diverse interpretations of FCC requirements.
AT&T posits that, if 22 state commissions were to interpret and enforce the FCC merger commitments, conflicting and diverse results would inevitably ensue. AT&T concludes that to avoid such a quagmire, any state commission that concludes it has jurisdiction concurrent with the FCC concerning the interpretation and enforcement of merger commitments should defer to the FCC.
Sprint Nextel responds to AT&T's motion to dismiss saying that AT&T is attempting to rewrite its merger commitment to include terms that it does not contain. The merger commitment at issue states that "[a]ny requesting telecommunications carrier" may "port in" to one state an ICA that has been approved in another state. "Any" means any. Also, the Kentucky ICA does not contain any provision that requires renegotiation of the agreement if the traffic of Sprint CLEC and Sprint PCS suddenly grows into a sharp excess over the traffic of AT&T-the possibility of an "imbalance of traffic" is implicitly assumed within the Kentucky ICA.
Sprint Nextel asserts that the Commission has authority to interpret and apply federal and state law applicable to an interconnection-related dispute. Sprint Nextel cites Pub. Util. Code § 766, saying that that section provides the Commission with authority to order interconnection between carriers on rates, terms and conditions specified by the Commission. Section 766 provides, in part:
Whenever the commission, after a hearing finds that a physical connection can reasonably be made between the lines of two or more telephone corporations or two or more telegraph corporations whose lines can be made to form a continuous line of communication, by the construction and maintenance of suitable connections for the transfer of messages or conversations, and that public convenience and necessity will be served thereby, or finds that two or more telegraph or telephone corporations have failed to establish joint rates, tolls, or charges for service by or over their lines, and that joint rates, tolls, or charges ought to be established, the commission may, by its order, require that such connection be made on the payment of such compensation, if any, as it finds to be just and reasonable, except where the purpose of the connection is primarily to secure the transmission of local messages or conversations between points within the same city, or city and county.
Sprint Nextel states that AT&T focuses on the fact that the merger evaluation was not conducted pursuant to the 1996 Act and then leaps to the unsupported conclusion that resulting obligations affecting interconnection under the Act have somehow become untethered from the Act as well.
AT&T asserts that the FCC explicitly reserved jurisdiction over the merger commitments and then goes on to assert that nowhere in the merger commitments did the FCC contemplate that any forum other than the FCC would interpret, clarify or enforce the merger commitments. According to Sprint Nextel, AT&T's position is directly contradicted by the express terms of Appendix F. Contrary to what AT&T contends, nothing in the language it quotes and relies upon states that the FCC is the exclusive forum for seeking enforcement of the merger commitments. Further, the FCC clearly recognized elsewhere in Appendix F that it has no jurisdiction to alter, nor any intention to alter, the states' concurrent statutory jurisdiction under the Act over interconnection matters addressed in the merger commitments. Sprint Nextel cites the paragraph immediately preceding the language relied upon by AT&T which states:
It is not the intent of these commitments to restrict, supersede, or otherwise alter state or local jurisdiction under the communications Act of 1934, as amended, or over the matters addressed in these commitments, or to limit state authority to adopt rules, regulations, performance monitoring programs, or other policies that are not inconsistent with these commitments.5
Sprint Nextel notes that the above language was not part of the proposed merger commitments as originally filed with the FCC by AT&T. Rather, this language was specifically added by the FCC. According to Sprint Nextel, that language serves the obvious purpose of recognizing that the Act is designed with dual jurisdiction for both and state and the FCC. Indeed, AT&T's apparently contrary view, if taken to its logical extreme, would make the merger commitments completely meaningless. State commissions have been delegated authority under Sections 251 and 252 of the Act to address interconnection matters. There is no dispute that Merger Commitment 7.1 imposes an obligation upon AT&T regarding interconnection. Pursuant to Sections 251 and 252, the only reasonable avenue to enforce this Merger Commitment 7.1 is at the appropriate state commission. Otherwise, the intended beneficiaries of Merger Commitment 7. 1 would have no way to enforce their rights.
The key issue in AT&T's motion to dismiss is whether this Commission has jurisdiction to enforce merger commitments. The section that Sprint Nextel cited above is instructive. From that language, which was specifically added to the merger commitments by the FCC, we conclude that the FCC clarified that the states have concurrent jurisdiction over interconnection matters arising under the merger commitments.
Before setting forth the commitments, the FCC states the following: "For the avoidance of doubt, unless otherwise expressly stated to the contrary, all conditions and commitments proposed in this letter are enforceable by the FCC...." While AT&T sees that as granting the FCC exclusive jurisdiction to enforce merger commitments, we agree with Sprint Nextel that the FCC does not specify that the commitments will be enforceable only by the FCC.
Considering that we are dealing with interconnection issues, it makes sense the states would retain jurisdiction over the process since § 252 grants states the authority under the 1996 Act to approve interconnection arrangements.
As further support for the fact that the FCC did not intend that its jurisdiction over the merger commitments would be exclusive, we note that in Merger Commitment 1, the FCC mandated that ICAs would be subject to state-specific pricing, performance monitoring plans, and technical feasibility. In our minds, the existence of state-specific standards and pricing suggests that the FCC recognizes that the states would be in the best position to determine whether ICAs adhere to unique state standards. We conclude that the FCC has specifically carved out a place for state jurisdiction in the enforcement of the merger commitment relating to interconnection.
While no agreement is currently before us to approve, we rely on the language of § 252(e) which reads as follows:
...nothing in this section shall prohibit a State commission from establishing or enforcing other requirements of State law in its review of an agreement, including requiring compliance with intrastate telecommunications service quality standards or requirements.
This provision allows states to approve and enforce provisions of ICAs, such as the Kentucky ICA, provided the Commission has independent state authority to do so. The State Legislature has granted that authority in Pub. Util. Code § 766.
We concur with Sprint Nextel that the Commission may exercise the authority it holds under Pub. Util. Code § 766 to order interconnection between carriers on such rates, terms and conditions as the Commission deems just and proper. We reject AT&T's narrow interpretation of our authority under § 766 as simply authorizing the Commission to require telephone companies to establish physical connections between their lines. AT&T asserts that § 766 does not authorize the Commission to decide whether the applicants can port the Kentucky ICA that covers unbundled network elements, resale, collocation, and an array of other subjects that go far beyond the establishment of physical connections between lines. On the contrary, we believe that § 766 grants this Commission general authority over all aspects of interconnection between carriers, including the rates and charges that should apply. There is no question that the Kentucky ICA relates to the interconnection rates and charges that apply between the parties, and that issue is at the heart of Sprint Nextel's request.
We conclude that we have jurisdiction under both state and federal law to address the interconnection issue presented in Sprint Nextel's application. AT&T's motion to dismiss Sprint Nextel's application, on the basis that this Commission does not have jurisdiction to act, is hereby denied.
2 See, e.g., Pacific Bell v. PacWest Telecomm, Inc., 325 F.3d 1114, 1124-25 (9th Cir 2003).
3 In the Matter of AT&T Inc. and BellSouth Corp., Application for Transfer of Control, FCC 06-189, 22 FCC Rcd. 5662 (rel. March 26, 2007), ¶ 22 & n.78 (FCC Merger Order).
4 47 U.S.C. §§214(a), 310(d).
5 Merger Order, Appendix F, at 147.
