PENNSYLVANIA PUBLIC UTILITY COMMISSION Harrisburg, PA 17105-3265 Public Meeting held April 15, 2004 Commissioners Present: Terrance J. Fitzpatrick, Chairman Robert K. Bloom, Vice Chairman Glen R. Thomas Kim Pizzingrilli Wendell F. Holland, Statement attached
Joint Petition of Verizon Pennsylvania Inc. and MCI WorldCom Communications, Inc. f/k/a MFS Intelenet of Pennsylvania, Inc., for Approval of Amendment No. 1 to an Interconnection Agreement Under Section 252(e) of the Telecommunications Act of 1996
A-310580F7000
OPINION AND ORDER
BY THE COMMISSION:
Before the Commission for consideration is the Joint Petition for approval of Amendment No. 1 to the existing Interconnection Agreement (Agreement) between Verizon Pennsylvania Inc. (Verizon PA), and MCI Worldcom Communications Inc. f/k a MFS Intelenet of Pennsylvania, Inc (MCI). Amendment No. 1 was filed pursuant to the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (codified as amended in scattered sections of Title 47, United States Code) (TA-96), including 47 U.S.C. §§ 251, 252, and 271, and the Commission's Orders in In Re: Implementation of the Telecommunications Act of 1996, Docket No. M-00960799 (Order entered June 3,
1996; Order on Reconsideration entered September 9, 1996) (Implementation Orders). Also before the Commission for consideration are Comments filed by Level 3 Communications, LLC (Level 3) in response to Amendment No. 1 to the Agreement.
History of the Proceeding
On January 27, 2004, Verizon PA and MCI filed the Joint Petition for approval of Amendment No. 1 to the existing Interconnection Agreement. The underlying Agreement was entered into by Verizon PA1 and MCI with an effective date of September 28, 1999. Amendment No. 1 was filed to address matters associated with the establishment of a unitary intercarrier compensation rate, Voice over Internet Protocol (VOIP) traffic; and points of interconnection.
The Commission published notice of the Joint Petition and Amendment No. 1 to the Agreement in the Pennsylvania Bulletin on March 20, 2004, advising that any interested parties could file comments within ten days. Comments were filed on March 30, 2004, by Level 3 Communications with regard to Amendment No. 1. Verizon PA and MCI filed Reply comments on April 5 and 6, 2004, respectively.
Discussion
A.
Standard of Review
The standard for review of a negotiated interconnection agreement is set out in Section 252(e)(2) of TA-96, 47 U.S.C. § 252(e)(2). Section 252(e)(2) provides in pertinent part that: As of the effective date of the Agreement Verizon PA was known as Bell Atlantic-Pennsylvania Inc.
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(2)
Grounds for rejection. The state commission may only reject – (A) an agreement (or any portion thereof) adopted by negotiation under subsection (a) if it finds that – (i) the agreement (or portion thereof) discriminates against a telecommunications carrier not a party to the agreement; or the implementation of such agreement or portion is not consistent with the public interest, convenience, and necessity. . .
(ii)
With these criteria in mind, we shall review Amendment No. 1 submitted by Verizon PA and MCI.
B.
Timeliness of Filing
Amendment No. 1 to the Interconnection Agreement between Verizon PA and MCI became effective on December 1, 2003. A period of approximately sixty days elapsed from the time the Agreement was executed until it was submitted to the Commission for review. Neither TA-96 nor the Federal Communications Commission (FCC) rules, interpreting TA-96, provide for the specific time in which the negotiated agreement is to be filed with the state commission. However, we have addressed our
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expectations regarding the proper time considerations to be observed with regard to negotiated agreements. (See Implementation Order, June 3, 1996 Order, slip op., p. 33).2
We remind the Parties that failure to comply with our Implementation Orders, as well as this Order, could subject the Parties to civil penalties for violations pursuant to Section 3301 of the Public Utility Code, 66 Pa. C.S. § 3301.
C.
Summary of Terms
Under Amendment No. 1, the Parties first agree to establish a new unitary intercarrier compensation rate that is derived from a blending of the existing reciprocal compensation rates and the FCC’s interim rate structure for ISP-bound traffic as set forth in the FCC’s ISP Order on Remand.3 Amendment No. 1 at 2-6. Secondly, the Parties agree that VOIP traffic shall be considered to be telecommunications traffic, and not information services traffic. The Amendment also establishes conditions for when access charges or the unitary intercarrier compensation rate will apply to VOIP traffic. Amendment No. 1 at 7-8. Finally, Amendment No. 1 establishes mutual points of interconnection in each LATA in which one (or both) of the Parties originates Applicable Traffic for delivery to the other Party. (Amendment No. 1 at 7-10).
“The Act [TA-96] does not give any express guidance as to when agreements must be filed with the state commission. However, since the period for negotiations concludes on day 160, we conclude that an executed, negotiated interconnection agreement accompanied by a joint petition for adoption of the agreement shall be filed no later than thirty (30) days following the close of the negotiations phase or by day 190 following the request for interconnection.” (Id.). 3 See Implementation of the Local Competition Provisions of the Telecommunications Act of 1996; Intercarrier Compensation for ISP-Bound Traffic, Order on Remand and Report and Order, 16 FCC Rcd 9151 (2001) (ISP Order on Remand), remanded, WorldCom V. FCC, 288 F.3d 429 (D.C. Cir. 2002).
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D.
Comments to Amendment No. 1
As noted, on March 30, 2004, Level 3 filed Comments with regard to Amendment No. 1 to the Interconnection Agreement. In its Comments, Level 3 explains that unlike most other interconnection agreements, the instant Amendment is not a standalone document, but is only part of a broader settlement of disputes between the respective parent companies of Verizon PA and MCI in the context of the MCI bankruptcy reorganization. (Comments at 2).
Level 3 does not suggest that the Amendment should be rejected but is concerned that if the Commission approves the Amendment that it should make clear that its approval is limited to the unique circumstances relating to the negotiated settlement between Verizon PA and MCI, and does not create a precedent for any other carriers.
More specifically, Level 3 submits that several of the amended terms are inconsistent with the regulations adopted by the FCC in implementing 47 USC § 251(b)(5) and other statutory provisions. Level 3 first explains that the unitary compensation rate for dial-up Internet traffic under the Amendment may be different than the FCC’s rules under the ISP Order on Remand, which have capped dial-up internet traffic at $0.0007 per minute since June 2003. Level 3 does not object to the Commission’s approval of the unitary compensation rate, as it pertains to Verizon PA and MCI, as long as it does not serve as a precedent to bind any other party under the same obligations. (Comments at 4-5).
Level 3 also notes that the Amendment provides that all VOIP traffic will be defined as “Telecommunications Services” for purposes of the Amendment, and treated as telecommunications traffic for inter-carrier compensation (including access charge) purposes. Level 3 explains that although the regulatory status of VOIP is presently
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unclear, the FCC has expressly stated that at least some forms of VOIP do not appear to be telecommunications services.4 Level 3 states that this may be contradictory with existing FCC rules because the Amendment would allow Verizon PA to collect switched access charges on some traffic that is not subject those charges under FCC rules. Again, Level 3requests that the Commission declare expressly that this private agreement will not serve as a precedent to bind any other party if the Commission approves the terms of the Amendment between Verizon PA and MCI. (Comments at 5-6).
In their responses, both Verizon PA and MCI note that federal law permits carriers to negotiate without regard to the Section 251 standards and that Carriers are free to enter voluntary, negotiated agreements as long as the two-pronged standard for approving negotiated agreements under TA-96 are not violated.5 Verizon PA and MCI assert that the Commission should approve the proposed amendment to the Interconnection Agreement pursuant to Section 251 of TA-96. Verizon PA and MCI also assert that nothing in the FCC’s rules on reciprocal compensation purports to prevent carriers from agreeing voluntarily to a reciprocal compensation rate and nothing precludes Verizon PA from agreeing to pay reciprocal compensation for ISP-bound traffic. Verizon PA notes that the amendment is not inconsistent with the FCC’s rules because it actually serves to reach the ultimate goal of implementing the FCC’s rate structure set forth in the ISP Order on Remand. Finally, with regard to the Interconnection Agreement’s classification of VOIP Service as a telecommunications service, Verizon PA and MCI comment that the Commission does not have to determine the level of consistency See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report to Congress, FCC 98-67, at 44-45 (rel. April 10, 1998). 5 As noted, the two-pronged standard set forth at 47 U.S.C. § 252(e)(2), permits the state Commission to reject an interconnection only if it finds “(i) the agreement (or portion thereof) discriminates against a telecommunications carrier not a party to the agreement; or (ii) the implementation of such agreement or portion is not consistent with the public interest, convenience and necessity . . . .”
4
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between the negotiated amendment and Federal/state law because it would be irrelevant and outside of the statutorily set standard of review. Verizon PA asserts that the proposed amendment is consistent with the regulatory status of VOIP traffic because page 7 of the Amendment specifically states that the Parties will adhere to any regulatory requirements as soon as it becomes legally effective “if, after the effective date of the Agreement, the FCC or Congress promulgates an effective and unstayed law, rule or regulation, or a court of competent jurisdiction issues an effective and unstayed nationally-effective order, decision, ruling, or the like regarding VOIP traffic.”
We agree with Level 3 that our approval of any of the terms and conditions contained in Amendment No. 1 as they pertain to the unitary compensation rate, VOIP traffic, or any other terms and conditions that may be inconsistent with federal law should not serve as a precedent to bind any other party under the same obligations. We also find that even though several terms of Amendment No. 1 may not be consistent with the provisions of TA-96 or the FCC’s regulations, such inconsistencies are not discriminatory or contrary to the public interest, pursuant to Section 252(e)(2)(A).6 Therefore, as explained more fully below, we shall approve the Interconnection Agreement and its related Amendment No. 1, with the caveat that approval of this Agreement shall not serve as precedent for future agreements negotiated or arbitrated by any other parties.
E.
Disposition
We shall approve Amendment No. 1 finding that it satisfies the twopronged criteria of Section 252(e) of TA-96. We note that in approving these privately Section 252(a)(1) of TA-96, provides, in pertinent part “Upon 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.”
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negotiated agreements, including any provisions limiting unbundled access to Verizon PA’s network, we express no opinion regarding the enforceability of our independent state authority preserved by 47 USC. § 251(d) (3) and any other applicable law. Furthermore, we note that our approval of these private agreements should not be construed to be the Commission’s opinion regarding the appropriateness of the agreement’s classification of VoIP or other matters concerning VoIP, including but not limited to, intercarrier compensation.
We shall minimize the potential for discrimination against other carriers not a party to Amendment No. 1 by providing here that our conditional approval of Amendment No. 1 shall not serve as precedent for agreements to be negotiated or arbitrated by other parties. This is consistent with our policy of encouraging settlements. (52 Pa. Code § 5.231; see also, 52 Pa. Code § 69.401, et seq., relating to settlement guidelines, and our Statement of Policy relating to the Alternative Dispute Resolution Process, 52 Pa. Code § 69.391, et seq.). On the basis of the foregoing, we find that Amendment No. 1 does not discriminate against any telecommunications carrier not a party to the negotiations.
TA-96 requires that the terms of Amendment No. 1 be made available for other parties to review (§252(h)). However, this availability is only for purposes of full disclosure of the terms and arrangements contained therein. The accessibility of Amendment No. 1 to the prior Agreement and the terms to other parties connotes no intent that our approval will affect the status of negotiations between other parties. In this context, we will not require the Parties to embody the terms of Amendment No. 1 to the Agreement in a filed tariff, but we will require that the Parties file Amendment No. 1 to the Agreement with this Commission. Amendment No. 1 shall be retained in the public file for inspection and copying consistent with the procedures relating to public access to documents.
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Conclusion
Based on the foregoing and pursuant to Section 252 of TA-96, supra, and our Implementation Orders, we will approve Amendment No. 1 to the Interconnection Agreement between Verizon PA and MCI filed on January 27, 2004; THEREFORE,
IT IS ORDERED:
1.
That the Joint Petition of Verizon Pennsylvania, Inc., f/k/a Bell
Atlantic-Pennsylvania and MCI WorldCom Communications Inc., filed on January 27, 2004, seeking approval of Amendment No. 1 to the existing Interconnection Agreement, pursuant to the Telecommunication Act of 1996 and the Commission’s Orders in In Re: Implementation of the Telecommunications Act of 1996, Docket No. M-00960799 (Order entered June 3, 1996; Order on Reconsideration entered September 9, 1996), is hereby granted consistent with this Opinion and Order.
2.
That approval of Amendment No. 1 to the Agreement shall not serve
as binding precedent for negotiated or arbitrated agreements between non-parties to the instant agreement.
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3.
That the Parties shall file a true and correct copy of Amendment
No. 1 to the Agreement with this Commission within thirty (30) days of the entry of this Opinion and Order. BY THE COMMISSION,
James J. McNulty Secretary (SEAL) ORDER ADOPTED: April 15, 2004 ORDER ENTERED: April 19, 2004
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