SBC Issue 12: Effect on Underlying Agreement and Reservation of Rights

Similar to SBC Issue 11, the dispute here involves whether language in the cover amendment should clarify how the amendment replaces the underlying agreement. SBC proposes contract language that it believes gives the amendment complete and proper effect by clarifying the effect of the amendment on conflicting terms in the underlying agreement. In Section 2 of the cover amendment, SBC proposes language stating the TRO amendment governs if the agreement and amendment conflict. In addition, SBC's proposed wording of Section 9 of the cover amendment clarifies that the parties do not waive their rights with respect to "orders, decisions, legislation or proceedings ... which the parties have not yet fully incorporated into this agreement...." SBC contends this language is necessary to properly implement the TRO so that neither party is silently waiving its right to implement any additional TRO requirements in the future.

XO agrees with the principle that the amendment replaces the underlying agreement, and it agrees with the principle of parties reserving their rights regarding future orders, legislation, etc. Nevertheless, XO objects to the examples that SBC builds into its proposed language, which include reference to "lawful" and "declassified" UNEs, and include a list of court cases and FCC orders. XO prefers the cover amendment as adopted in Illinois, which does not address this additional language proposed by SBC.

There is no dispute over the principles of the amendment governing in case of conflict with the underlying agreement, and the reservation of rights. SBC's proposed language provides unnecessary examples that could create ambiguity and a list of cases that is extraneous and will be quickly outdated as new orders or litigation surface. The cover amendment should include the shorter and more succinct language proposed by XO for Sections 2 and 9.