TRP/sid 12/1/2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking on the Commission's Own Motion into Competition for Local Exchange Service. |
Rulemaking 95-04-043 (Filed April 26, 1995) |
Order Instituting Investigation on the Commission's Own Motion into Competition for Local Exchange Service. |
Investigation 95-04-044 (Filed April 26, 1995) |
ADMINISTRATIVE LAW JUDGE'S RULING
DENYING MOTION FOR DISPUTE RESOLUTION
PURSUANT TO DECISION 95-12-056 PROCESS
Background
On April 15, 2005, 01 Communications, Inc. (01) filed a motion for expedited resolution of its dispute with Verizon California Inc. (Verizon) pursuant to the process set forth in Decision (D). 95-12-056, Section III(D). 01 and Verizon are telecommunications carriers operating in California that have interconnected their networks since 1999, allowing either carrier to pass telecommunications traffic from one carrier to the other. The dispute at issue concerns the amount of compensation that Verizon is obligated to pay to 01 for transporting and terminating "dial-up" Internet calls under the terms of an interconnection agreement that was executed in 1999 (the 1999 Agreement). The 1999 Agreement remained in effect until a new agreement became effective on August 15, 2003.1 The amount in dispute includes approximately $2.2 million in charges for traffic transported and terminated by 01 since July 2002, plus approximately $1.1 million in charges for traffic transported and terminated by 01 during the four-quarter period prior to July 2002. 01 filed its motion for dispute resolution in this docket because it is the same docket in which D.95-12-056 was issued. 01 accordingly asks that the Commission appoint an administrative law judge to conduct the dispute resolution process outlined in D.95-12-056, and to reach substantive findings in its favor. In D.95-12-056, the Commission provided for an expedited dispute resolution process to address disputes over breach of contract or interpretation of parties' rights and obligations.
Verizon filed a response in opposition to the motion on May 2, 2005. In its response, Verizon does not address the substantive merits of 01's claims, but reserves the right to respond to the substantive arguments made in the Motion until further briefing, either in this proceeding or in a private arbitration. Verizon limits its remarks to the issue of whether the dispute resolution process described in D.95-12-056 is the proper procedural vehicle. Verizon argues that use of the process described in D.95-12-056 to resolve the parties' disputes would be improper because the parties previously agreed to use a different dispute resolution mechanism under the 1999 Agreement. Section 42.1 of the 1999 Agreement provides that the procedures in Section 42 constitute the parties sole remedy for the resolution of disputes arising under the agreement. Under Section 42.2 of the 1999 Agreement, parties first negotiate in an attempt to resolve any disputes that arise under the Agreement. Under Section 42.3, if parties fail to resolve a dispute within 60 days after either of them requests negotiation of the dispute, the dispute is to be submitted to binding arbitration in accordance with the Commercial Arbitration rules of the American Arbitration Association. Based on its belief that Section 42 prohibits the use of any procedure other than negotiation or arbitration in accordance with Sections 42.2 and 42.3 of the 1999 Agreement, Verizon argues that 01 had no right to invoke the dispute resolution procedures prescribed in D.95-12-056, Section III(D).
Verizon argues that a party that has agreed to private arbitration as the exclusive remedy for dispute resolution may not later resist private arbitration merely because the party does not wish a particular dispute to be arbitrated. Verizon further argues that the practical effect of granting 01's request would be to reform the parties' express agreement to privately arbitrate unresolved disputes by substituting a mechanism that calls for Commission involvement.
01 acknowledges that Section 42 of the 1999 Agreement includes a procedure for resolving "any controversy or claim arising out of or relating to" the 1999 Agreement. 01 claims, however, that in bringing this motion, it expressly does not invoke the dispute resolution procedure described in Article III, Section 42. 01 argues that the issue of compensation for the delivery and receipt of ISP-bound local calls cannot be resolved simply by referring to the terms of the 1999 Agreement, but will require interpretation and implementation of the Federal Communications Commission (FCC) Internet Service Provider (ISP) Remand Order,2 as well as requirements of this Commission. 01 therefore argues that private arbitration is not well suited for resolving the disputes at issue.
1 In 2003, as part of an arbitration over a new interconnection agreement, the parties agreed by stipulation that Verizon's liability under the 1999 Agreement, for reciprocal compensation for ISP-bound traffic would end no later than June 22, 2003.
2 In the Matter of Intercarrier Compensation for ISP-Bound Traffic (2001) 16 FCC Rcd 9191 (ISP Remand Order).
