Amicus Curiae Brief — American Telephone & Telegraph Co. v. Central Office Telephone, Inc.

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No. 914679 |

Iu the Supreme Court of the United aca

reg

OCTOBER TERM, 1997 Supre

CENTRAL OFFICE TELEPHONE

Res

On Writ of Certioraritothe —~

United States Court of Appeals

c > the Ninth Circuit

BRIEF OF THE AD HOC TELECOMMUNICATIONS

USERS COMMITTEE, THE BANKERS CLEARING

HOUSE, THE NEW YORK CLEARING HOUSE

ASSOCIATION, ALLIED SIGNAL, INC., AMERICAN

INTERNATIONAL GROUP, INC., THE BANK OF

NEW YORK, BANKAMERICA CORPORATION,

CITIBANK, N.A. FIRST DATA CORPORATION,

FORD MOTOR COMPANY, HONEYWELL INC.,

HYATT CORPORATION, MARINE MIDLAND BANK,

MICROSOFT CORPORATION, THE ONLINE

COMPUTER LIBRARY CENTER (OCLC), THE

SABRE GROUP, INC. THOMPSON & COMPANY,

UNITED PARCEL SERVICE (UPS), UNITED

SERVICES AUTOMOBILE ASSOCIATION (USAA),

VISA INTERNATIONAL SERVICE ASSOCIATION, INC.,

WAL-MART STORES, INC. AND

WORLDSPAN SERVICES LIMITED

AS AMICI CURIAE IN SUPPORT OF RESPONDENT

HENRY D. LEVINE

ELLEN G. BLOocK *

JAMEs S. BLASZAK

JUSTIN G. CASTILLO

LEVINE, BLASZAK, BLOCK

& Boorusy, LLP

2001 L Streeet, N.W.

Suite 900

Washington, D.C. 20036

February 20, 1998 (202) 857-2550

* Counsel of Record Counsel for Amici Curiae

WItson - Eres Printrine Co., Inc. - 769-0096 - WASHINGTON, D.C. 20001

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ....... peat eae ae EYP TN iii

INTEREST OF AMICI CURIAB ................---<.<-0--<«.--...-. |

STATEMENT OF THE CASE .............. iil ee ee 5

SUMMARY OF ARGUMENT ........................................ 7

PS), ESR MEE Cece AO SEE PREY See NT St SR eh s

I. The Filed Rate Doctrine Should Be Construed

In Accordance With The Text Of The Communi-

TERRIER Mare ee Erk SEAS TER x

A. The Filed Rate Doctrine Pertains Only To

Rates And Rate-Affecting Terms ................. 8

B. Congress Has Determined That Tariffs Are

Not The Linchpin Of The Regulatory Regime

el ER eee 13

II. AT&T’s View Of The Filed Rate Doctrine Is At

Odds With The Manner In Which It Conducts

Its Business And Its Positions Before The Fed-

eral Communications Commission ..................... 16

A. The Major Carriers Negotiate Non-Rate-

Affecting Contract Terms That Address Im-

portant Issues And Are (Correctly) Not

. § b. 2 eee. PRE e 16

B. AT&T Negotiates Contract Terms That Im-

plement Its Tariffed Services And Repre-

sents To Its Customers That Such Terms

Are Fully Enforceable .................................0-+. 19

C. The Broad View Of The Filed Rate Doctrine

Advocated By AT&T Here Contradicts

AT&T’s Prior Statements To The Federal

Communications Commission .......................... 21

III. The Court Should Not Expand The Filed Rate

Doctrine Beyond What The Statute Requires.... 24

TABLE OF CONTENTS—Continued

A. The Doctrine Should Not Be Broadened In

Light Of The Harsh Effects Acknowledged

By The Federal Communications Commission

And The Courts That Have Applied It.......

B. The Filed Rate Doctrine Should Not Be

Broadened In Light Of The History Of Com-

munications Carriers Abusing Their Per-

esived Rights Under Ft ..................cccceccceeee-ss

APPENDIX A

Letter from Judith D. Argentieri, Government

Affairs Director, AT&T Corp. to W. F. Caton, Act-

ing Secretary, FCC, dated July 17, 1996, Re: Ex

Parte Presentation CC Docket No. 96-61 _..... rita

APPENDIX B

Page

iif

TABLE OF AUTHORITIES

CASES

Access Charge Reform, First Report and Order,

FCC 87-158 (1997), appeal docketed sub nom.

Southwestern Bell Tel. Co. v. FCC, No. 97-2618

fs RRR oer A art a A

AT&T Communications, Apparent Liability for

Forfeiture & Order To Show Cause, Notice of

Apparent Liability for Forfeiture & Order To

Show Cause, 10 F.C.C.R. 1664 (1995) 0000...

AT&T Communications, 6 F.C.C.R. 7039 (1991),

aff'd sub nom. Competitive Telecom. Ass'n v.

FCC, 998 F.2d 1058 (D.C. Cir. 1993) 000000.

Aveo Corp. v. Aero Lodge No. 735, 390 U.S. 557

Eee! CREA ease’ fet

Babbitt v. Sweet Home Chapter of Communities

for a Great Oregon, 515 U.S. 687 (1995)...

Boston & Maine R.R. v. Hooker, 233 U.S. 97

RRS a ee APN TE eT

Central Office Tel., Inc. v. AT&T Corp., 108 F.3d

981 (9th Cir. 1997) ........ PA A a RN RE Pe:

Chicago & Alton R.R. v. Kirby, 225 U.S. 155

Baa NL ORR a es pe LE aaa a eM,

Competition in the Interstate, Interexchange Mar-

ketplace, Notice of Proposed Rulemaking, 5

Pe Se I ciiedi ciesecterennnibscmrbiaiteebiaetende ie

Competition in the Interstate, Interexchange Mar-

ketplace, Report and Order, 6 F.C.C.R. 5880

GEE .nnstip nienestennestcnnnsininameaiientaaesiemmenatemniaiubbiinie 5, 6,

Competitive Telecom. Ass'n v. FCC, 998 F.2d 1058

NRE re

Computer and Communications Indus. Ass'n v.

FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. de-

i ee es

Ex parte McCardle, 7 Wall (74 U.S.) 506 (1868).

Fax Telecommunicaciones v. AT&T, 952 F. Supp.

RF 1 +s & — FRRae Pet Ble eee

Federal-State Joint Board on Universal Service,

Report and Order 12 F.C.C.R. 8776 (1997)...

ICC v. Transcon Lines, 513 U.S. 138 (1995)

Page

15, 22

TABLE OF AUTHORITIES—Continued

Page

Implementation of the Pay Telephone Reclassifica-

tion And Compensation Provisions of the Tele-

communications Act of 1996, recon., 11 F.C.C.R.

21233 (199%), aff'd in part, vacated in part,

Illinois Pu. Telecom. Ass’n v. FCC, 117 F.3d

555, clarified, 123 F.3d 693 (D.C. Cir. 1997)... 29

International Telecom. Exchange Corp. v. MCI

Telecom. Corp., 892 F. Supp. 1520 (N.D. Ga.

RR, ee aes ae Be SR OE 12

Keogh v. Chicago & N.W. Ry, 260 U.S. 156

RCE SC Ae ae Se eS 12

Louisville & Nashville R.R. Co. v. Maxwell, 237

a I a 25

Maislin Indus. v. Primary Steel, Inc., 497 U.S. 116

TS AES PR RAN Cn 25

Marco Supply Co. v. AT&T Communications, Inc.,

875 F.2d 434 (4th Cir. 1989) 0 25

MCI Telecom. Corp. v. American Tel. and Tel. Co.,

4b |, ge NE Ree 5, 13, 14

MCI Telecom. Corp. v. FCC, 917 F.2d 30 (D.C.

URE Ee Ely RS ak RS SY 17

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58

ESE SEE eR eden Pe ALS OUR 21

Motion of AT&T Corp. to be Reclassified as a Non-

Dominant Carrier, Order, 11 F.C.C.R. 3271

EP EAL ee Oe ee ae ete AS els Cri 15, 22

Pay Phone Concepts, Inc. v. MCI Telecom. Corp.,

904 F. Supp. 1202 (D. Kan. 1995)... 26

The People’s Network, Inc. v. American Tel. and

Tel. Co., FCC LEXIS 1928 (rel. Apr. 10, 1997). 23, 24

Policy and Rules Concerning the Interstate, Inter-

exchange Marketplace, Second Report and Order,

11 F.C.C.R. 20730 (1996); recon., 1997 FCC

LEXIS 4453, stay issued and appeal docketed

sub nom. MCI Telecom. Corp. v. FCC, No. 96-

tS RES RES CIEE ere Lt oF i2 6, 14, 22, 25

Policy and Rules Concerning Rates for Competi-

tive Common Carrier Services and Facilities

Therefor, Fourth Report and Order, 95 F.C.C.

Gee Se CED * Wirtecinnicthectentinneetiinmamacdinbeet ce 5

TABLE OF AUTHORITIES—Continued

Page

Policy and Rules Concerning Rates and Facilities

Authorizations for Competitive Common Carrier

Services, First Report and Order, 85 F.C.C. 2d

0 eR ee es Ral oe 15

Price Cap Performance Review for Local Exr-

change Carriers, Order, 12 F.C.C.R. 10175

(1997), appeal docketed sub nom. United States

Tel. Ass'n v. FCC, No. 97-1469 (D.C. Cir.) 29

Reiter v. Cooper, 507 U.S. 258 (1993) . 25

Sea-Land Sve. Inc. v. ICC, 783 F.2d 1811 (D.C.

Re SR ices bee ae een 2

Security Services, Inc. v. Kmart Corp., 511 U.S.

MIR 5 A a a AS Ea A er ea 16

Southern Ry. v. Prescott, 240 U.S. 632 (1916)... 10, 11

Transcontinental Bus System, Inc. v. Civil Aero-

nautics Bd., 383 F.2d 466 (5th Cir. 1967) sei 11

STATUTES AND REGULATIONS

8 ARE Sai Viena ene ee 20

nr Ae ee 20

I a 19

gg SRE ES ae Ao be aA eR 14

NL ES eer en es en 22

ESE Pe Aree se 27

47 U.S.C. § 201(b) 0... paiiies SONS a were AT 9

47 U.S.C. § 202(a) ...... piniaticipptattiiatntieensitiaia wichita ih te 9,17

IE er EEN el Se Pa TN 5 passim

RRC Ra STE SI EH Bee 20

SR a a ee RE a A HS aN ae 15

SA CEES 9

Interstate Commerce Act et PRS 10, 11, 18, 19

MISCELLANEOUS

AT&T Comments on AT&T Tariff 12 Issues on

Remand, AT&T Communications; Revisions to

Tariff F.C.C. No. 12, CC Docket No. 87-568, Affi-

davit of Dennis Lewis (filed Mar. 4, 1991). 17

TABLE OF AUTHORITIES—Continued

AT&T Corp. Petition for Limited Reconsideration

and Clarification, Policy and Rules Concerning

the Interstate, Interexchange Marketplace, CC

Docket No. 96-61 (filed Dec. 23, 1996) _.............

American Tel. and Tel. Co. Comments, Competition

in the Interstate Interexchange Marketplace, 6

F.C.C.R. 5880 (filed Jul. 3, 1990) —...................

Letter from J. Argentieri, Government Affairs

Director, AT&T Corp. to W.F. Caton, Acting

Secretary, FCC (Dec. 19, 1996) (ex parte fil-

ing) .. r ;

McI Telecom. Corp. v. . Metrie ‘Communications

Corp., Civ. No. 86-11975-EFH (D. Mass.) .......

Petition of Frontier Communications for Recon-

sideration, Policy and Rules Concerning the In-

terstate, Interexchange Marketplace, CC Docket

No. 96-61 (filed Dec. 23, 1997) ~..........................

Petition for Further Reconsideration by Telecom-

munications Research and Action Center and

Consumer Federation of America, Policy and

Rules Concerning the Interstate, Interexchange

Marketplace, CC Docket 96-61 (filed Dec. 4,

STITT cicenesmsiieedecerninaictiictenciimeeenidabuahashin maapidathciatiaiiniainateiai as,

Page

_—_

INTEREST OF AMICI CURIAE *

This case raises several issues of critical importance to

large customers in the enormous and rapidly growing

market for interstate telecommunications services. First,

what is the scope of the statutory requirement that carriers

tariff the “classification, practices, and regulations affecting

[their] charges”? Second, how are the courts and regu-

lators to deal with efforts by carriers and their customers

to address service-related matters that fall outside the

scope of the tariffing requirement? Third, does the filed

rate doctrine as embodied in Section 203(c) of the Com-

munications Act of 1934 (the “Act”) preclude a carrier’s

customers from availing themselves of state law remedies

with respect to such non-rate-affecting terms?

For over a decade, agreements between the major

providers of interstate and international interexchange

services and their large customers have had three com-

ponents: (a) the general terms of the applicable carrier

tariffs; (b) customer-specific tariff “options”; and (c) con-

tracts, which may vary from a two-page order form to

50-100 pages of text and lengthy technical appendices.

The rate-related terms of these arrangements are filed

with the Federal Communications Commission (the “Com-

mission” or “FCC”). either in the carrier’s general tariffs

or in customer-specific tariff “options,” which are available

to similarly situated customers. The carriers uniformly

resist including non-rate-related terms in their tariffs, and

these are therefore found principally in the contracts. The

Commission has found that customer-specific arrangements

structured in this manner are consistent with the purposes

of the Communications Act and are not unlawfully dis-

* Pursuant to Supreme Court Rule 387.6, amici state that no

counsel for a party has authored this brief in whole or in part,

and that no person or entity, other than amici, their members, or

their counsel, has made a monetary contribution to the preparation

or submission of this brief.

criminatory. That determination has been upheld by the

courts.’

By urging a broad reading of the phrase “affecting

charges” as it is used in Section 203(c) of the Act,

Petitioner AT&T Corp. (“AT&T”) seeks to re-write the

statute’s tariffing provisions to cover things that Congress

expressly chose not to cover. If AT&T’s reading is adopted

by this Court, many of the untariffed provisions of its own

(and its competitors’) contracts could be nullified, releas-

ing the carriers from obligations that they freely assumed

and depriving their customers of significant benefits attained

through competitive bidding and hard-fought negotiation.

Amici are large users of the telecommunications services

of the major interexchange carriers (AT&T, MCI and

Sprint) and organizations of such users. The Ad Hoc

Telecommunications Users Committee is an unincorporated

association whose members include the nation’s largest

business users of telecommunications services and products;

the organization represents its members’ interests in tcle-

communications matters before the Commission and in

the federal courts. The Bankers Clearing House and the

New York Clearing House Association are associations of

leading banks in California and New York, respectively.

They serve as clearinghouses through which their mem-

bers settle accounts and present checks and other payment

instruments; they also represent their members on issues

of common concern before the Commission and in the

courts. Allied Signal, Inc. is an advanced technology and

manufacturing company serving customers worldwide with

aerospace and automotive products, chemicals, fibers,

plastics and other advanced materials. American Inter-

national Group, Inc. is a U.S.-based international insur-

ance organization and among the largest underwriters of

commercial and industrial coverages in the United States.

The Bank of New York is one of the oldest banks in the

1 Competitive Telecom. Ass'n v. FCC, 998 F.2d 1058, 1064 (D.C.

Cir. 1993) (“{Slo far as ‘unreasonable discrimination’ is concerned,

an apple does not have to be priced the same as an orange.”). See

Sea-Land Svc. Inc, v. ICC, 783 F.2d 1311, 1317 (D.C. Cir. 1984).

nation, offering banking and other financial services to

corporations, businesses and individuals worldwide. Bank-

America Corporation provides financial products and

services to individuals, corporations, small- and mid-sized

businesses, government agencies and financial institutions

throughout the world; it is the nation’s second largest

banking company based upon market capitalization at the

close of 1997, Citibank, N.A. offers personal, corporate,

business, professional and international banking and credit

card services to millions of consumers throughout the

world. First Data Corporation is a provider of credit card

processing, payment systems, electronic commerce and in-

formation-based services to businesses and consumers in

over 140 countries. Ford Motor Company is a global

automotive manufacturing concern with customers in 200

countries and territories, 370,000 employees and annual

sales in excess of $150 billion; subsidiaries include finan-

cial services and car rental operations. Honeywell Inc.

supplies security, safety, energy efficiency and environ-

mental control technology for home, building and indus-

trial use and for the aviation and space markets; it employs

57,500 people in 95 countries and had sales of $8 billion

in 1997. Hyatt Corporation manages, operates, leases and

franchises hotels and resorts in the United States, Canada

and the Caribbean. Marine Midland Bank, a subsidiary

of HSBC Americas, Inc., is a New York State regional

banking institution that serves individuals and business

customers. Microsoft Corporation is engaged in the devel-

opment and marketing of software products and services;

it employs an array of telecommunications services to sup-

port its corporate communications worldwide. The Online

Computer Library Center (OCLC) is a nonprofit, mem-

bership library, computer service and research organization

whose networks and services link more than 25,000 li-

braries in the U.S. and 63 countries and territories. The

SABRE Group, Inc. is a leader in the electronic distribu-

tion of travel-related products and services and a provider

of information technology solutions for the travel and

transportation industry. Thompson & Company is a na-

tionwide mail order catalog company specializing in cigar

products; its affiliates specialize in catalog sales of gifts

and linens. United Parcel Service (UPS) is the world’s

largest package distribution company, providing delivery

and information-based services in more than 200 countries

and territories; UPS and its technology and logistics sub-

sidiaries employ more than 338,000 people and have reve-

nues in excess of $22 billion. United Services Automobile

Association (USAA) is a worldwide insurance and diver-

sified financial services company serving more than three

million customers, primarily members of the U.S. military

and their families. VISA International Service Associa-

tion, Inc. is an association of financial institutions that use

the VISA service mark in connection with payment systems

(including debit and credit cards), check authorizations,

automated teller machines and related services. Wal-Mart

Stores, Inc. employs more than 720,000 associates at its

more than 2,300 stores and 440 Sam’s Club membership

warehouses within the United States; over 105,000 people

are also employed in Argentina, Brazil, Canada, China,

Germany, Indonesia, Mexico and Puerto Rico. WorldSpan

Services Limited operates a computer reservations system

that provides travel information to airlines, hotels, car

rental companies and travel agents, servicing over 18,000

subscribers worldwide.

Amici (and their members, in the case of associations)

have entered into multi-year, multi-million-dollar service

agreements with one or more interexchange carriers. They

have a keen interest in the enforceability of these agree-

ments, including the terms that do not affect rates but are

nevertheless an integral part of their service arrangements.

Amici fear that a broad reading of Section 203(c) of the

Act could nullify many of the untariffed provisions of

customer/carrier contracts, calling into question one of

the principal benefits of competition in the interexchange

market. Amici submit this brief in order to discuss the

scope of the filed rate doctrine as applied to such agree-

ments from a perspective shared by neither Petitioner nor

Respondent.’

STATEMENT OF THE CASE

“Until the mid-1980’s, even the largest corporations met

their telecommunications needs by purchasing services at

the prices (and on the terms) contained in “standard”

tariffs filed by carriers with the Commission. Prompted

by a series of FCC rulings relieving them of the burden of

filing tariffs, newly emergent interexchange carriers (nota-

bly MCI and Sprint) began to offer service to large busi-

ness users pursuant to individually negotiated contracts.’

In 1987, AT&T began to negotiate customized service

arrangements with its customers in order to meet this

competitive challenge. Because the Commission’s policies

required AT&T to tariff its interstate telecommunications

services, AT&T incorporated the rates and rate-affecting

provisions of these arrangements into customer-specific

tariffs, initially filed as “options” under its Tariff F.C.C.

No. 12 (which was designed for this purpose), and later

in “contract tariffs.” * When the Commission’s detariffing

2 Amici have secured the consent of both Petitioner and Respond-

ent to the filing of this brief. Copies of letters granting consent are

being filed herewith.

8 See Policies and Rules Concerning Rates for Competitive Com-

mon Carrier Services and Facilities Therefor, Fourth Report and

Order, 95 F.C.C.2d 554 (1983) (relieving “non-dominant” carriers

of the obligation to file tariffs). The courts’ doubts concerning the

Commission's authority to waive the Act’s filing requirement culmi-

nated in MCI Telecom. Corp. v. American Tel. & Tel. Co., 512 U.S.

218 (1994).

*The Commission rejected legal challenges to AT&T’s Tariff 12,

holding that it did not violate the Act’s prohibition on unreasonable

discrimination so long as each offering was made available to simi-

larly situated customers. AT&T Communications, 6 F.C.C.R. 7039

(1991), aff'd sub nom. Competitive Telecom, Ass'n v. FCC, supra

note 1. The Commission later authorized AT&T and other inter-

exchange carriers to file so-called “contract tariffs.” Competition in

the Interstate, Interexchange Marketplace, Report and Order, 6

F.C.C.R. 5880, 5911 (1991) (“Interexchange Competition Order’).

policies for AT&T’s competitors were struck down by

the courts,® those carriers also began filing customer-

specific tariffs.

Today, most large users solicit bids from one or more

carriers (either informally or by means of a detailed

“request for proposals”), work with the bidders to improve

their offers, and award the business based upon an analysis

of the “best and final” offer of each and only after exten-

sive negotiations. The competition is often heated, yield-

ing competitive prices and hitherto unavailable features

designed to meet the needs of individual customers. By the

end of 1997, AT&T had nearly 9,000 customized tariff

arrangements on file with the Commission; MCI and

Sprint had 9,000 more between them. Negotiated service

arrangements are the most competitive segment of the

interstate interexchange market.°

The Commission has adapted its regulatory policies to

these market realities, streamlining the tariff process and

ruling that customized arrangements do not offend the

Act’s prohibition on unjust or unreasonable discrimi-

nation so long as they are made generally available to simi-

larly situated customers. The agency took these steps to

encourage carriers to meet the needs of business customers

“competing actively in the increasingly globalized and

increasingly information-based world economy.”* Most

recently the Commission, acting on authority granted by

Congress in its 1996 amendments to the Act, eliminated

the tariff filing requirement for domestic interexchange

services.®

5 See note 3, supra.

® See Interexchange Competition Order at 5887; Competition in

the Interstate, Interexchange Marketplace, Notice of Proposed Rule-

making, 5 F.C.C.R. 2627, 2634-35 (1990) (“Intererchange Com-

petition NPRM”).

7 Intererchange Competition NPRM, at 2641.

8 Policy and Rules Concerning the Interstate, Interexchange Mar-

ketplace, Second Report and Order, 11 F.C.C.R. 20730 (1996)

SUMMARY OF ARGUMENT

The Court should decline the invitation to expand

the filed rate doctrine beyond the limits set by Con-

gress in the Communications Act. The Act requires

AT&T to tariff its rates and rate-affecting terms for in-

terstate and international telecommunications service, and

requires AT&T to adhere to those terms. But the Act

does not require AT&T to tariff terms that are not

rate-affecting, even if they are material to a carrier’s

relationship with a customer. Indeed, Congress made clear

in recent amendments to the Act that it does not view as

central to the purposes of the Act the filing of tariffs for

rates or rate-related terms, let alone the tariffing of all

manner of non-rate-affecting terms.

AT&T's statements to the Commission and its busi-

ness practices are inconsistent with the position that

it advocates in this case. In 1990, AT&T successfully

argued to the Commission that the Act does not require it

to tariff contractual provisions that do not affect its rates.

It cited as examples of such provisions implementation

plans and billing requirements, the very matters at the

heart of its dispute with Respondent. (The Commission

agreed, and limited its new rules for customer-specific

tariffs to volume, term and discount requirements and other

More recently, AT&T has told the Commission that provi-

sions that are not required to be tariffed are not subject

to the filed rate doctrine.

Over the years, the Commission has given AT&T and

its competitors the flexibility to offer attractive rates,

terms and conditions to business users in return for

significant volume and term commitments and costly pen-

alties for early termination. The rates and rate-affecting

terms are tariffed, but many non-rate-affecting terms that

(“Detaviffing Order’’) ; recon., 1997 FCC LEXIS 4453 (“Detariffing

Reconsideration Order’’), stay issucd and appeal docketed sub nom.

MCI Telecom. Corp. v. FCC, Case No. 96-1459 (D.C. Cir.).

are integral to implementing and maintaining the services

described in the tariff are not. These provisions are of

value to the customer and often impose costs on the carrier

but, because the market for business services is highly

competive, increases in vendor costs do not necessarily

translate into increases in customer charges. In other

words, a feature or term that is valuable and/or cost-

affecting is not always rate-affecting.

AT&T’s practice of not tariffing many negotiated terms

is fully consistent with the Act, which requires the filing

of only rates and rate-affecting provisions. AT&T’s argu-

ment in this case—that the Act requires it to tariff any

term that imparts value to customers and imposes costs on

AT&T—is not consistent with the Act and, if adopted by

the Court, could substantially disrupt the telecommunica-

tions marketplace.

ARGUMENT

I. The Filea Rate Doctrine Should Be Construed In Ac-

cordance With The Text Of The Communications Act.

The filed rate doctrine spelled out in Section 203(c) of

the Communications Act is a corollary of the tariff-filing

requirement of Section 203(a). Both provisions are limited

to a carrier’s charges and the terms and conditions “affect-

ing such charges.” To apply these requirements to all

terms and conditions of service would be to read the

limiting phrase out of the statute, in contravention of this

Court’s articulated approach to statutory interpretation.’

A. The Filed Rate Doctrine Pertains Only To Rates

And Rate-Affecting Terms.

AT&T’s Brief (at p. 4) sets out the relevant statutory

provisions, but glosses over a critical difference between

Sections 201 and 202 of the Act on the one hand and

* Statutory language is not to be presumed to be meaningless

“surplusage.” Babbitt v. Sweet Home Chapter of Communities for

a Great Oregon, 515 U.S. 687, 698 (1995). Thus, where Congress

has designated certain items as the subject of a statute, the infer-

ence to be drawn is that items not so designated were intended to

be excluded. Ex parte McCardle, 7 Wall (74 U.S.) 506 (1868).

Section 203 on the other. Section 201(b) requires a

carrier’s “charges, practices, classifications, and regula-

tions” to be “just and reasonable.” There is no limitation

on the practices, classifications or regulations that are

subject to this standard. 47 U.S.C. § 201(b). Section

202(a) prohibits carriers from unjustly or unreasonably

discriminating in connection with “charges, practices,

classifications, regulations, facilities, or services” for “like”

communications services. 47 U.S.C. § 202(a). Again,

there are no limitations on the practices, classifications,

regulations, facilities, or services that are subject to this

prohibition.

In contrast, Section 203(a) requires carriers to file

tariffs showing only their “charges [and the] . . . classifi-

cations, practices, and regulations affecting such charges.”

Similarly, Section 203(c) makes it unlawful for a carrier

to “charge, demand, collect, or receive a greater or less or

different compensation . . . than the charges specified in”

its tariffs, or to “employ or enforce any classifications,

regulations, or practices affecting such charges, except as

specified in its tariffs. 47 U.S.C. §§ 203(a), (c).

In short, the Act imposes the just and reasonable stand-

ard and the anti-discrimination obligation on all classifica-

tions, practices and regulations, but Section 203’s tariff-

filing requirement and the filed rate doctrine apply only to

those charges and classifications, practices, and regulations

that affect a carrier’s charges. The Commission has imple-

mented Section 203 by adopting rules that require inter-

exchange carriers to include the following in their tariffs

for customer-specific offerings: the term of the contract

(including any renewal options), a brief description of

services provided, minimum volume requirements, the con-

tract price for each service, a geenral description of any

volume requirements, the contract price for each service,

a general description of any volume discounts built into

the contract rate structure, and “a general description of

other classifications, practices and regulations affecting the

contract rate.” 47 C.F.R. § 61.55(c).

AT&T's argument is fundamentally flawed in that it

erroneously assumes that all tariff-based statutes are iden-

tical, and that the filed rate doctrine must therefore be

applied in the same manner in all regimes. Most of the

cases cited by AT&T concern statutes (notably the Inter-

state Commerce Act or “ICA”) whose language was sig-

nificantly broader than Section 203(c) of the Act when the

cases relied upon by AT&T were decided.” Compare 47

U.S.C. § 203(a) (carriers shall file “schedules showing

all charges... and . . . the classifications, practices, and

regulations affecting such charges”) with § 6 of the ICA:

[tariffs] shall show[] all the rates, fares, and charges

for transportation'''’. . . . and all other charges which

the Comm'ssion may require, all privileges or facili-

ties granted or allowed and any rules or regulations

which in any wise change, affect, or determine any

part of the aggregate of such aforesaid rates, fares,

and charges, or the value of the service rendered to

the passenger, shipper, or consignee.

634 Stat. 584 (1914) (repealed 1997), quoted in South-

ern Ry. v. Prescott, 240 U.S. 632, 637 (emphasis added):

Boston and Maine R.R. v. Hooker, 233 U.S. 97, 114-15

(1916). The ICA’s tariffing requirement for common

carrier regulations and practices—and its corollary, the

filed rate doctrine—were obviously broader than those in

the Communications Act. In particular, they were not

10 AT&T asserts that case law applying the ICA is applicable

because the legislative history of the Communications Act states

that §203 was “copied” from the earlier statute. Pet’r Br. at

p. 23 n.18. The argument goes too far if it asks the Court to ignore

unambiguous differences in the language of the two statutes.

“Transportation” was a term of art under the ICA, and

included “all services in connection with the receipt, delivery, eleva-

tion, and transfer in transit, ventilation, refrigeration or icing,

storage, and handling of property trasported.” Southern Ry. v.

Prescott, 240 U.S. 632, 637 (1916). “Communications” has not been

given so expansive an interpretation under the Communications Act.

See note 30, infra.

limited to rate-affecting provisions. Petitioner's heavy re-

liance on cases interpreting the ICA is misplaced.’

AT&T's argument loses much of its force once it is

stripped of inappesite authority. For example, AT&T

cites Prescott, 240 U.S. at 638, for the proposition that

the filed rate doctrine applies not only to rates, but to

any of the services within the purview of the relevant

statute. Pet’r Br. at p. 27. But Prescott, which involved

Sections | and 6 of the ICA, sheds no light on the scope

of the Communications Act, because, as discussed above,

the tariffing requirements of the two statutes are differ-

ent.” See also Boston & Maine R.R. v. Hooker, 233

U.S. at 114-15 (addressing scope of tariffing provision of

§ 6 of the ICA).

AT&T concedes that the filed rate doctrine applies only

to charges and terms “affecting . . . charges.” Pet'r Br. at

p. 26. But Amici and AT&T disagree over the meaning of

the phrase “affecting such charges.” To Amici, a term or

condition affects charges if it establishes what charge will

be applied, under what circumstances a charge will be ap-

plied or waived, or how a charge will be calculated." A

12 See also Transeontinental Bua System, Inc. v. Civil Aeronautica

Be., 382 F.2d 466, 476 (5th Cir. 1967) (Federal Aviation Act (based

or the ICA) requires air carriers’ tariffs to show “all rates, fares,

and charges for air transportation ... and showing to the extent

required Ly regulations of the Board, all ciassifications, rules, regu-

lations, practices, and services in connection with such air trans-

portation.” ).

‘*The ICA differed from the Communications Act in that “the

entire body of ... services should be included under the single

[statutorily-defined] term -transportation’ and subjected to the

provisions of the Act respecting reasonable rates and the like.”

240 U.S. at 638. That is not the case under the Communications

Act's more limited requirements.

4 The first category might include provisions making the customer

eligible for a discount from, or waiver of, certain charges. An

example of the second would be a provision establishing an early

termination charge and setting out the grounds on which a customer

may terminate early without liability for that charge. The third

category would include a provision stating that all calls will be

practice, classification or regulation does not affect charges

unless it determines what (or under what circumstances )

the customer must pay.

AT&T appears to advocate a much broader interpreta-

tion.” Under this view, tariffs are seen as the “core”

or “heart” of the statutory scheme enacted by Congress

to prevent discrimination. In order to prevent circumven-

tion of that scheme, the rights of the parties “as defined

by the tariff cannot be varied or enlarged by either con-

tract or tort of the carrier.”"* Although AT&T suggests

that the filed rate doctrine does not encompass all aspects

of the carrier/customer relationship, Pet’r Br. at p. 35, it

also states that the doctrine applies to any provision that

affects the value received by the customer and the costs

incurred by the carrier. Pet’r. Br. at p. 28." As the

rounded up to the next full minute for purposes of applying per-

minute charges.

* For example, Petitioner asserts that the filed rate doctrine

“operates as a strict rule against the use of ‘parol evidence’ and

alleged side agreements,” Pet’r Br. at 25. This misstates the parol

evidence rule and would read into tariffs a merger clause that would

bar agreements on non-rate-related matters, which do not have to

be tariffed in the first place. The applicabiilty of the parol evidenc-

rule to agreements about non-tariff issues depends on whether the

agreement is a total integration and whether it includes a merger

clause. See, e.g., International Telecom. Exchange Corp. v. MCI

Telecom. Corp., 892 F. Supp. 1520, 1537 (N.D. Ga. 1995) (merger

clause barred parol evidence of communications contract incorporat-

ing a tariff).

260 U.S. 156 (1922) and Chicago & Altoa R.R. v. Kirby, 225 U.S.

155 (1912).

"7 AT&T's Petition for Certiorari (at p. 13) stated that “the

tariff describes the entirety of the legal relationship between the

carrier and customer, and its terms ‘are conclusive as to the rights

of the parties."” The United States Telephone Association and

others, filing as amici curiae in support of AT&T, endorse that view,

stating that “a carrier’s obligations to its customers are governed

exclusively by the terms of its filed tariffs.” Brief Amici Curiae of

the United States Telephone Association et al. at p. 8 (emphasis

added) (“USTA Br.”).

foregoing discussion demonstrates, this formulation of the

doctrine is at odds with the text of Section 203(c) and

rests upon case law interpreting the ICA’s different (and

markedly broader) regulatory regime.

B. Congress Has Determined That Tariffs Are Not

The Linchpin Of The Regulatory Regime Estab-

lished By The Act.

In MCI Telecom. Corp. v. American Tel. & Tel. Co.,

512 U.S. 218 (1994), the Court voided the FCC’s effort

to eliminate tariff filings, finding that it

greatly undervalues the importance of the [tariff]

filing requirement itself... The tariff filing require-

ment is .. . the heart of the common-carrier section

of the Communications Act. In the context of the

Interstate Commerce Act, which served as its model

. . . this Court has repeatedly stressed that rate filing

was Congress’s chosen means of preventing unreason-

ableness and discrimination in charges. . . As the

Maislin court concluded, compliance with these pro-

visions is ‘utterly central’ to the administration of the

Act. . . . What we have here, in reality, is a funda-

mental revision of the statute, changing it from a

scheme of rate regulation in long-distance common-

carrier communications to a scheme of rate regula-

tion only where effective competition does not exist.

That may be a good idea. but it was not the idea

Congress enacted into law in 1934."*

The broad definition of “rate affecting” endorsed by

Judge Brunetti’s dissent below and advanced by AT&T

here flows directly from that view of the “scheme of rate

regulation.” The Court advised those (including the Com-

mission) who wished to modify or eliminate the Act's

tariff-filing requirements to address their concerns to Con-

512 U.S. at 229-232. The Court expressed the view tha‘, while

eliminating the tariff filing requirement would not necessarily

frustrate the ultimate purposes of the Act, “we (ond the FCC)

are bound, not only by the ultimate purposes Coneress has selected,

but by the means it has deemed appropriate, and prescribed for the

pursuit of those purposes.” 512 U.S. at 231 n.4.

gress.” They did, and Congress responded in 1996 by

directing the FCC to forbear from applying any provision

of the Communications Act, including the tariff-filing re-

quirement of Section 203(a), if certain conditions are

met.” In granting the FCC forbearance authority, Con-

gress necessarily concluded that the tariff-filing require-

ment is not “essential to the ultimate purposes of the Act.”

The Commission promptly sought to exercise its new

authority by taking steps to eliminate tariffs—in no small

part to end carrier abuse of the filed rate doctrine.” In

its order requiring non-dominant carriers to withdraw

their tariffs for domestic services, the Commission spelled

out the ways in which regulators and aggrieved parties

can determine whether a carrier has engaged in unreason-

able discrimination or unjust and unreasonable conduct

without consulting the carrier's filed tariff.”

Although the Commission's efforts to eliminate tariffs

in competitive telecommunications markets have not yet

taken effect,” it can no longer be argued that the filed

19 512 U.S. at 232-34.

* Telecommunications Act of 1996, § 401, codified at 47 U.S.C.

§ 160. Although the forbearance authority granted to the Com-

mission under the Telecommunications Act of 1996 is not limited

to the Act’s tariff-filing requirement, no one disputes that this was

its intended target. See Pet’r Br. at p. 24 n.20; USTA Br. at p. 10.

2! See Section III.A, below.

= The Commission found that market forces will likely deter

unreasonable discrimination and unjust or unreasonable practices.

It also noted that carriers must provide detailed price and service

information to the Commission on request, and that private par-

ties who believe they are the victims of discrimination may seek

redress under the agency’s complaint process (which makes provi-

sion for discovery). Detariffing Reconsideration Order at 968 &

n.210.

23 The major interexchange carriers believe that Section 401 of

the Telecommunications Act of 1996 requires the Commission to

allow them to file tariffs if they wish to do so, and have appealed

the Detariffing Order. See note 8, supra.

rate d»trine is an essential component—much less the

“heart” —of the telecommunications regulatory regime.

Whether or not the 1996 amendments to the Act author-

ized the Commission to require carriers to withdraw their

tariffs, it cannot be denied that Congress has authorized

the Commission to permit carriers to do so. And as

AT&T told the Commission, once the tariff-filing require-

ment is eliminated, “[vJalid and enforceable rates can be

established through mechanisms other than filed tariffs,

such as through unfiled contracts.” According to AT&T,

“(t]he sole purpose of the filed rate doctrine is to enforce

a regime in which tariff filings are mandatory,” and where

tariff filings are not mandatory, “the filed rate doctrine

does not apply.” *

It is worth noting that Congress’s grant of forbearance

authority and the FCC’s efforts to act on that authority do

not represent a radical break from prior policy trends but

rather an extension of them.” New interexchange tariffs

and tariff modifications may now be filed at 5:30 p.m. to

take effect six-and-a-half hours later, with no advance

review by the agency and no opportunity for a private

party to seek an order that would prevent the tariff from

taking effect. 47 C.F.R. §61.23(c). The summary na-

ture of the process reflects the conclusion reached by the

* Letter from J. Argentieri, Government Affairs Director, AT&T

Corp. to W.F. Caton, Acting Secretary, FCC (Dec. 19, 1996) (ex

parte f'.ag). A copy of that letter is attached to this brief as

Appendix A.

*5 Nearly 20 years ago, the Commission began to eliminate or

streamline tariff-filing requirements for “non-dominant” carriers

(i.e., those that lack market power) otherwise subject to the Act.

See Policy and Rules Concerning Rates and Facilities Authoriza-

tions for Competitive Common Carrier Services, First Report and

Order, 85 F.C.C.2d 1 (1980). It streamlined AT&T’s tariff-filing

obligations in 1991. Imtererchange Competition Order, 6 F.C.C.R.

at 5895 (shortening the public notice period and eliminating lenethy

cost support). The Commission later declared AT&T non-dominant,

thus making its filings presumptively lawful. Motion of AT&T

Corp. to be Reclassified as a Non-Dominant Carrier, Order, 11

F.C.C.R, 3271 (1995).

Commission long ago that tariffs are not essential to the

operation of the regulatory regime in competitive segments

of the telecommunications industry.

Il. AT&T’s View Of The Filed Rate Doctrine Is At Odds

With The Manner In Which It Conducts Its Business

And Its Positions Before The Federal Communications

Commission.

As noted above, AT&T argues that any contract clause

that provides value to the customer or imposes a cost on

the carrier “affects” charges for service and is therefore

not enforceable unless filed in the carrier’s tariff. Pet’r

Br. at p. 28. But AT&T's conduct in the marketplace and

its positions before the Commission are at odds with the

broad view of the filed rate doctrine that it espouses here.

Like the carrier in Security Services, Inc. v. Kmart Corp.,

511 U.S. 431, 442 (1994), AT&T “cannot have it both

ways.”

A. The Major Carriers Negotiate Non-Rate-Affecting

Contract Terms That Address Important Issues

And Are (Correctly) Not Filed In Their Tariffs.

The business relationships between a carrier and _ its

large customers are highly complex. Marketed by the car-

riers as “strategic partnerships,” network service agree-

ments involve substantial undertakings by both parties in

a variety of areas over long periods of time.** Managers

responsible for the procurement, installation, maintenance

and operation of business networks know that tariffs can-

not exclusively govern the relationship between the carrier

and the customer. because tariffs simply do not address

non-rate-affecting but nonetheless crucial operational, tech-

nical and legal issues. Congress wrote a regulatory statute

for telecommunications, not a manual for installing and

maintaining high-volume call centers and sophisticated

data networks, and carriers and their customers need to

26 Although most contracts have terms of 3-5 years, they are

periodically renegotiated and extended. Some of the Amici are

taking service under terms and conditions (but not prices) negoti-

ated nearly a decade ago.

make agreements about details that have nothing to do

with the rate-affecting terms contained in the tariffs.

AT&T implicitly concedes that carrier undertakings for

which no separate charge is imposed do not have to be

tariffed—i.e., do not “affect[] . . . charges” for purposes

of Section 203.*° That concession is consistent with, but

only begins to describe, how AT&T and other carriers

actually operate in the market.

AT&T's Tariff F.C.C. No. 12 is one of several vehicles

under which it provides comprehensive service arrange-

ments to its largest customers. When its competitors

challenged the lawfulness of the offering several years ago,

AT&T submitted an affidavit from Dennis Lewis, AT&T's

Director of Marketing for Business Communications Serv-

ices, concerning the competitive environment facing his

employer. Mr. Lewis described the kinds of assistance

that large corporate users require of their carriers: *

**? AT&T makes this concession in connection with the billing

options available to SDN customers. If a customer chooses “network

billing,” AT&T renders a single bill for the service and the customer

must allocate charges among its business units (or, in the case of

a reseller, among its own customers) and “re-bill” the charges.

Under the “multi-location billing” option, AT&T performs this func-

tion. Pet’r Br. at p. 8 nn. 10-11. Multi-location billing is of con-

siderable value to the customer and imposes significant costs on the

carrier, Yet AT&T explains that “Neither of these options is de-

seribed in the tariff, for no separate charge is imposed for either

option.” Pet’r Br. at p. 8 (emphasis added).

*8 AT&T’s Comments on AT&T Tariff 12 Issues on Remand.

AT&T Communications; Revisions to Tariff F.C.C. No. 12, CC

Docket No. 87-568, Affidavit of Dennis Lewis at "76, 18 (filed

Mar. 4, 1991) (“Lewis Affidavit”). AT&T’s Tariff 12 was challenged

by competing carriers as unlawfully discriminatory in violation of

Section 202(a) of the Communications Act. After its initial order

upholding Tariff 12 was reversed on appeal, MCI Telecom. Corp. v.

FCC, 917 F.2d 30 (D.C. Cir. 1990), the Commission opened a

proceeding on remand. Mr. Lewis’ affidavit, which was filed in that

proceeding, was intended to demonstrate that AT&T’s Tariff 12

offering was a response to unique customer demands. The Com-

mission’s subsequent order again rejected challenges to Tariff 12,

and was affirmed on appeal. See note 4, supra.

Ne nen nN Ny Rene SRE R Fer NA LR ARE Oe eR ee

measurement of network availability and other

performance standards on a network-wide basis

* management through a single point of contact for

the entire customer organization

* certain levels of staffing support

customized billing formats

periodic network management reports

* procedures relating to opening and closing “trouble

tickets” (i.e., reports of service outages or other

problems )

the development and implementation of disaster

recovery procedures

procedures for “escalating” disputes up each

party’s management chain of command

flexibility in responding to changes in the cus-

tomer’s business communications requirements

Mr. Lewis explained that AT&T took these customer re-

quirements seriously, noting that “[T]hese customers were

always very explicit that if AT&T was unable to provide

the customized service they demanded, AT&T would lose

the customer business to one of AT&T’s competitors.” ”

Attached to this Brief as Appendix B are tables of

contents from three contracts for interstate network serv-

ices between large business users and leading interex-

change carriers, edited only to remove all identifying in-

formation so as to comply with contractual confidentiality

requirements. These documents demonstrate that the car-

riers do, in fact, seek to meet the customer requirements

described in Mr. Lewis’s affidavit. The Appendix con-

tains a chart that correlates each of these customer re-

quirements with provisions of the sample contracts. Be-

cause they do not affect the charges paid by the customers

* Lewis Affidavit, { 8.

for service, these terms and conditions are not included in

the carriers’ tariffs.”

B. AT&T Negotiates Contract Terms That Implement

Its Tariffed Services and Represents To Its Cus-

tomers That Such Terms Are Fully Enforceable.

The major interexchange carriers (including AT&T)

enter into contracts that address matters that, while not

rate-affecting, are nonetheless crucial to the execution of

the tariffed obligations of both carrier and customer.

AT&T’s F.C.C. Tariff No. 12 illustrates the point. The

tariff describes im detail the “virtual telecommunications

network service” provided and sets out what charges

will apply and under what circumstances. It does not

address many matters that are crucial to the carrier/

customer relationship but do not affect those charges.

Section 7.2.10.A, for example, states that “Payment for

[service] is due upon presentation of the bill. [Service]

may be denied for nonpayment of a bill .. . .” Another

section permits AT&T to deny service for nonpayment

of charges due, requires AT&T to give at least five days’

2° Judge Brunetti, dissenting in the case below, agreed with the

majority that the “services” at issue in this case were not reflected

in the applicable AT&T tariff, but concluded that the customer’s

claims could not be sustained because “AT&T is simply barred from

contracting for non-tariffed services.” Central Office Tel., Inc. v.

AT&T Corp., 108 F.3d 981, 994 (9th Cir. 1997) (Brunetti, J.,

dissenting). Judge Brunetti reached this (erroneous) conclusion

based upon a case interpreting the ICA, which allowed transpor-

tation companies operating as common carriers to provide only

those services for which rates had been tariffed. 108 F.3d at

995; see note 13, supra. Communications carriers are not simi-

larly restricted. For example, all of the major interexchange

carriers offer untariffed “enhanced” transmission services. See

Computer and Communications Indus. Ass'n v. FCC, 693 F.2d 198,

204 (D.C. Cir. 1982) cert. denied, 461 U.S. 938 (1983) (Title II of

the Act inapplicable to such services) ; 47 U.S.C. § 153(43) (defining

“telecommunications” to exclude services classified as “enhanced” ).

AT&T (and its competitors) also manage communications networks

for large customers. See www.att.com/solution and www.system-

house.mci.com (information about AT&T’s and MCI unregulated

consulting and “outsourcing” services).

notice prior to denying service, and states that service

will be restored upon payment of the charges. The tariff

does not, however, explain when “presentation” occurs

(when a bill is sent? upon the customer’s receipt?), what

constitutes a “bill” (how much detail? what format?) or

what constitutes nonpayment of charges (may amounts

disputed in good faith be withheld?). None of these

items concerns the carrier’s charges for service, although

all are of importance to the parties. Under Section 203(a)

of the Act, all of them may be addressed outside the

tariff. And the enforcement of any off-tariff arrangement

on these matters is not barred by Section 203(c).

AT&T argues that any aspect of the carrier/customer

relationship that the tariff fails to address may be “filled

in” only by “that which could be ‘implied in the tariff’ as

a matter of federal law under principles of tariff interpre-

tation: that is, to ‘use diligence’ and to act reasonably.”

Pet’r Br. at p. 34 (citations omitted). But “federal law”

offers no meaningful guidance regarding the format or con-

tent of carrier invoices, appropriate procedures for their

distribution to a customer’s business units (or a reseller’s

customers), or other non-rate-affecting matters. The in-

terpretation of Section 203(c) that AT&T urges here—

that the carrier and the customer may not agree upon

what constitutes “due diligence” or what it means for

the carrier to “act reasonably”—contradicts AT&T’s own

practices.”

Decisions regarding which provisions of complex and

comprehensive service agreements must be included in the

carriers’ tariffs are ultimately made by the carriers. When

5! AT&T’s argument also suggests that the Communications Act

preempts state law claims, a proposition that is doubly unfounded.

First, this Court has found complete preemption of state claims

under only two federal statutes—Section 301 of the Labor Man-

agement Relations Act, see Aveo Corp. v. Aero Lodge No. 735,

390 U.S. 557 (1968), and Section 502(a) of ERISA, Metropolitan

Life Ins. Co. v. Taylor, 481 U.S. 58 (1987). Second, such a reading

would nullify the savings clause that Congress inserted in the Com-

munications Act. 47 U.S.C. § 414.

pressed by their large customers to include more contract

terms in the customized tariffs, the carriers often refuse on

the grounds that the terms are not rate-affecting and that

they want to minimize the amount of information disclosed

to competitors. But all of the major interexchange carriers

—including AT&T—have responded to customer concerns

about the enforceability of non-tariffed terms by represent-

ing that the contracts are valid and binding as written, that

the non-tariffed terms are fully enforceable by both parties,

and promising to revise applicable portions of their tariffs

in order to eliminate any conflict that may arise between

a tariff provision and the contract.”

Insofar as the carriers negotiate provisions that offer

“value” to the customer and impose some “cost” on the

carrier, AT&T’s arguments would effectively render them

unenforceable. If the Court now adopts AT&T's view of

the law, large customers will be in the position of having

committed to purchase tens or hundreds of millions of

dollars of telecommunications services based upon recip-

rocal commitments that the carriers will (arguably) no

longer be required to meet.

C. The Broad View Of The Filed Rate Doctrine Advo-

cated By AT&T Here Contradicts AT&T’s Prior

Statements To The Federal Communications Com-

mission.

AT&T has, on several occasions, addressed the scope

of the filed rate doctrine (and/or the companion tariff-

filing requirement) before the FCC. In each instance

described below, it has urged the agency to adopt a con-

struction that is narrower than it now advocates to this

Court.

In 1990, the Commission opened a proceeding to ex-

amine whether changes in its rules were appropriate in

light of the burgeoning competition in the interstate inter-

exchange marketplace. One of the issues addressed was

® See Sections entitled “Valid, Binding, Enforceable” and “Con-

struction” in the tables of contents contained in Appendix B.

whether to permit AT&T and other interexchange carriers

to offer services by means of individually negotiated ar-

rangements, so long as the rates and rate-related terms

thereof were filed in tariffs as required by Section 203(a)

of the Act.” Although AT&T supported the “contract

tariff” proposal, it opposed the Commission’s initial pian

to require carrier/customer contracts to be filed with the

agency. AT&T argued that such a requirement would

be “an . . . unwarranted departure from current practice”

and unnecessary in light of the fact that such contracts

may contain provisions that “do not relate to rates for

telecommunications services or classifications and prac-

tices affecting such rates [including] provisions addressed

to collocation . . . implementation plans and billing

procedures.” ™*

In response to the inclusion of forbearance authority in

the newly-enacted Telecommunications Act of 1996,”

the Commission proposed to require all providers of inter-

exchange services who lack “market power” to withdraw

their tariffs for domestic services.” AT&T urged the

agency to adopt a “permissive” approach instead, under

which carriers could choose whether or not to file tariffs.

In response to concerns about the operation of the filed

rate doctrine under such a regime, AT&T told the Com-

83 Interexchange Competition Order, 6 F.C.C.R. at 5897-5903.

% Comments of American Telephone and Telegraph Co. at pp.

64-65 & n.*, Competition Rulemaking, 6 F.C.C.R. 5880 (filed Jul. 3,

1990). Collocation refers to the placement of customer equipment

in carrier switching facilities. Needless to say, it is of considerable

value to customers and imposes costs on carriers.

%° 47 U.S.C. §160(a) (“[T]he Commission shall forbear from

applying any regulation or any provision of this Act to a tele-

communications carrier or telecommunications service, or class of

telecommunications carriers or telecommunications services, if the

Commission determines that [three enumerated conditions are

met ].”’)

%6 See Detariffing Order, 11 F.C.C.R. at 20732. AT&T falls within

this category. See Motion of AT&T Corp. to be Classified as a

Von-Dominant Carrier, note 25, supra.

—

mission that the doctrine is “not a talisman that trumps

all contractual agreements” and that it would not apply

to any matters that are lawfully addressed in off-tariff

arrangements.*’ By that test, matters that are lawfully

addressed in contracts—implementation plans, billing pro-

cedures, and the many other matters described in Section

Il.A above—would not fall within the scope of the filed

rate doctrine.

In The People’s Network, Inc., v. American Tel. &

Tel. Co.,* the FCC’s Common Carrier Bureau ruled on

a formal complaint brought by a reseller of AT&T’s SDN

and other services. The customer claimed, inter alia, that

AT&T had violated Section 203(a) of the Act by failing

to reflect tariff limitations on the number of orders that it

would process each month for an SDN customer or

each week for a Distributed Network Services customer.

According to the Bureau, “AT&T responded to this claim

by arguing that its order limits do not affect the charges

applicable for its services and that Section 203(a) there-

fore does not require their inclusion in the tariff.” * The

number of orders that a carrier will agree to process in

any single month or week from a customer is a matter

of great value to the customer and, most likely, a cost item

to the carrier. Indeed, it is of a piece with assurances

concerning the timeliness of installations once a carrier has

87 Letter from J. Argentieri, note 24, supra and Appendix A. See

also AT&T Corp. Petition for Limited Reconsideration and Clarifica-

tion, Policies and Rules Concerning the Interstate, Interexchange

Marketplace, CC Docket No. 96-61 at p. 16 (filed Dec. 23, 1996)

(urging extension of permissive detariffing to the international

portions of integrated customer-specific offerings so as to avoid the

confusion that would result if part of the agreement was subject to

the filed rate doctrine and part was not).

881997 FCC LEXIS 1928 (Common Carrier Bur. rel. Apr. 10,

1997).

8 Jd, at 1 33. The Bureau agreed with AT&T’s reading of Section

203(a) and rejected the customer’s claim.

accepted an order. Yet, in The People’s Network, AT&T

successfully argued that such matters are not rate-affecting.

Ill. The Court Should Not Expand The Filed Rate Doc-

trine Beyond What The Statute Requires.

The language of Section 203(c) of the Communica-

tions Act, as well as the crucial distinction between it and

the tariff provisions of the ICA, offer ample grounds on

which to decline AT&T’s invitation to adopt an expansive

view of the file rate doctrine as it applies to interstate

telecommunications. Important considerations of policy

and recent developments in the way in which communica-

tions are marketed offer additional support for a narrow

reading of the doctrine.

A. The Doctrine Should Not Be Broadened In Light

Of The Harsh Effects Acknowledged By The Fed-

eral Communications Commission And The Courts

That Have Applied It.

Regulated carriers often claim that the filed rate doc-

trine is beneficial for customers and for that reason (and

others) should be nurtured by the Commission and the

courts and broadly construed.“ Customers, however, have

found that the doctrine is most commonly invoked to their

detriment, and the Commission has emphatically agreed:

[W]e reject carriers’ arguments that the “filed-rate”

doctrine benefits customers by creating certainty in

the carrier-customer relationship. In fact, the “filed

rate” doctrine creates uncertainty in the carrier-

customer relationship. Invocation of the “filed rate”

doctrine can be especially harmful to consumers who

have signed long-term service contracts with inter-

exchange carriers .... [T]he doctrine permits inter-

exchange carriers to subsequently file a tariff that

differs from the long-term contract, and if justified

#° See, e.g., USTA Br. at pp. 5-7; Petition of Frontier Communi-

cations for Reconsideration, Policy and Rules Concerning the Inter-

state, Interexchange Marketplace, CC Docket No. 96-61 at p. 5

(filed Dec. 23, 1996) (“The filed rate doctrine is beneficial to

consumers.” ).

by substantial cause, unilaterally to alter or abro-

gate their contractual obligations in a manner that

is not available in most commercial relationships

and that undermines consumers’ legitimate business

expectations. The “filed-rate” doctrine also harms

residential and small business consumers who utilize

mass market services and do not enter into long-term

service arrangements. Such customers may purchase

these mass market services in response to represen-

tations made by sales agents of the interexchange

carrier or advertisements. In addition, such cus-

tomers may assume the interexchange carrier will not

modify its rates without actual notice to the customer.

In the event of a dispute about the representations

made by a sales agent, or a subsequent modification

to an interexchange carrier’s rates, terms, or condi-

tions without actual notice to customers, a customer

would be bound by the tariffed rates, terms, and

conditions.“

Several courts, and the dissent below, have acknowledged

that the doctrine frequently works a fundamental unfair-

ness on customers. See 108 F.3d at 999 (Brunetti, J., dis-

senting); see also Louisville & Nashville R. R. Co. v. Max-

well, 237 U.S. 94, 97 (1915) (filed rate doctrine “may

work hardship in some cases .. . .”); Marco Supply Co.

v. AT&T Communications, Inc., 875 F.2d 434, 435-36

(4th Cir. 1989). This argues against an interpretation of

the doctrine that encompasses all aspects of the legal rela-

tionship between carrier and customer.

As the Court is aware, its decision several years ago in

Maislin Indus. v. Primary Steel, Inc., 497 US. 116

(1990) and subsequent developments in the trucking

industry have spawned a series of cases applying the

filed rate doctrine under the Motor Carrier Act. See, €.2.,

ICC v. Transcom Line, 513 U.S. 138 (1995); Reiter v.

Cooper, 507 U.S. 258 (1993). Some lower Federal

courts, with a nod to Maislin and other ICA cases, have

been deciding Communications Act cases in a manner

*! Detariffing Reconsideration Order at {13 (footnotes omitted).

that is not only harsh for customers but, more importantly,

unwarranted under Section 203(c) of the Communications

Act. These decisions adopt sweeping formulations of the

filed rate doctrine that shield carriers from liability for

arguably actionable conduct on non-rate-affecting matters

with no analysis of whether the subject provisions are

rate-affecting. See, e.g., Pay Phone Concepts, Inc. v. MCI

Telecom. Corp., 904 F. Supp. 1202, 1207 (D. Kan.

1995) (a billing dispute is subject to the mandatory arbi-

tration clause in the carrier’s tariff, which “exclusively

controls the rights and liability” between carrier and cus-

tomer); Fax Telecommunicaciones v. AT&T, 952 F. Supp.

946, 954 (E.D.N.Y. 1996) (no liability can arise from a

carrier’s failure to file a contract tariff as promised and that

the customer victimized by the carrier’s failure to file must

pay standard rates). By adopting a view of the filed rate

doctrine that is grounded firmly on the text of the Commu-

nications Act, as opposed to some other statute, this Court

could (and should) clarify the role and operation of the

filed rate doctrine and give appropriate direction to lower

courts called upon to adjudicate carrier ‘customer disputes.

B. The Filed Rate Doctrine Should Not Be Broadened

In Light Of The History Of Communications Car-

riers Abusing Their Perceived Rights Under It.

Among the important public benefits allegedly served

by the filed rate doctrine is that it “enable[s] the existence

of reasonable and non-discriminatory rates and services,

avoid[s] situations of unequal bargaining power between

carriers and consumers [and] minimize[s] unnecessary

confusion on the part of both carriers and consumers.”

USTA Br. at pp. 5-6. In truth, the doctrine gives carriers

the upper hand, for it effectively permits a carrier to make

whatever promises it considers necessary to secure a cus-

tomer’s commitment and then file tariffs that fail to reflect

those promises—all with the assurance that the tariffed

terms will prevail in any dispute.“® Nor does the doctrine

«2 See 952 F. Supp. at 954.

ensure that customers understand and agree to be bound

by filed rates and terms. The record in the Commission's

recent Detariffing proceeding is replete with tales of mis-

leading representations by carrier personnel.” Several

examples of the carriers’ willingness to take unfair advan-

tage of the filed rate doctrine illustrate the scope of poten-

tial abuse.

In August 1993, AT&T filed Contract Tariff No. 383

for an individual customer. The following month, AT&T

filed an amendment significantly limiting the application

of certain usage credits under the Contract Tariff. Three

new customers had submitted orders for the offering prior

to the effective date of the tariff amendment and protested

to the Commission, citing AT&T's failure to seek their

approval before making material adverse tariff changes.

They withdrew their protests only after AT&T agreed to

permit them to take service under the tariff as it had existed

at the time their orders were placed.“

In 1994-95, MCI filed several modifications to its tariff

that were adverse to customers with long-term service

arrangements; those changes were made without the con-

sent (or even the knowledge) of MCI’s customers. The

first modification doubled the charge for early termination

of certain contracts.“ The second modification involved

the addition of a provision that automatically renews certain

43 Petition for Further Reconsideration by Telecommunications

Research and Action Center and Consumer Federation of America,

Policy and Rules Concerning the Interstate, Intererchange Market-

place, CC Docket 96-61 at p. 3 (filed Dec. 4, 1997).

These events are recounted in AT&T Communications, Appar-

ent Liability for Forfeiture & Order to Show Cause, Notice of

Apparent Liability for Forfeiture & Order to Show Cause, 10

F.C.C.R. 1664 (1995).

45 Prior to the amendment, a customer was liable for any commit-

ment applicable to the year in which the termination occurred, plus

an amount equal to 35% of the commitments for the remaining

years of the term. The amendment required the customer to also

repay any promotional credits previously received. MCI Telecom-

munications Corp., Tariff F.C.C. No. 1, § C.183752.

multi-year service arrangements unless the customer “pro-

vides written notification to cancel the [plan], which must

be received by MCI not less than 30 days prior to the

expiration of the term.” ** Customers who negotiated

such arrangements with MCI that neither stated nor im-

plied that a customer was required to give notice of its

intent not to renew now face the threat of substantial

penalties if they want to exercise their bargained-for

right to change carriers at the end of the service term.

At about the same time, MCI also added rules for arbitrat-

ing payment disputes that expressly deny customers the

right to a copy of their bills, deprive arbitrators of authority

to prevent MCI from suspending service while the arbitra-

tion is pending, and require customers, as a condition of

taking service, to waive their statutory right to a Commis-

sion or court determination of the lawfulness of MCI’s

charges.” In yet another filing, MCI modified its tariff

provisions relating to toll fraud so as to make its customers

strictly liable for all unauthorized use occurring after either

the customer notifies MCI or MCI notifies the customer of

suspected fraud.“ This shift of all liability to the customer

would abrogate any commitment previously made by MCI

to carry out customer-requested call blocking to minimize

fraud.

Recently, carriers have cited the filed rate doctrine

in defense of their efforts to unilaterally raise the rates

payable under negotiated, fixed-fee service arrangements.

** MCI Telecommunications Corp., Tariff F.C.C. No. 1, § C.3.18372.

*7 MCI Telecommunications Corp., Tariff F.C.C. No. 1, §§ B.7.1353,

B.7.13811-13812. The tariff allows MCI to compel arbitration of

all disputes in excess of $10,000 under the auspices of J.A.M.S./

ENDISPUTE. MCI Telecommunications Corp. Tariff F.C.C. No. 1,

§ B.7.13. Last year, pre-trial discovery in MCI Telecom. Corp. v.

Matriz Communications Corp., Civ. No. 96-11975-EFH (D. Mass.)

disclosed that MCI has a contract with that organization for the

provision of litigation support services in connection with arbitra-

tions involving MCI and its customers. That fact is not disclosed

to customers in the MCI tariff.

** MCI Telecommunications Corp., Tariff F.C.C. No. 1, § B.4.102.

——- * ae

A series of Commission rulings has imposed certain

new costs on interexchange carriers, at the same time

that it has mandated decreases in other costs.“ The

major carriers have sought to pass the cost increases (but

not the cost decreases) on to their customers despite agree-

ments contained in tariffs and contracts capping the appli-

cable rates at the negotiated levels. Some carriers have

taken this stance even in connection with agreements signed

after the Commission adopted the orders that gave rise to

the cost changes. In other words, each such carrier has pro-

posed more favorable rates than its competitors, won the

customer’s business, bound the customer to a multi-year

multi-million-dollar commitment, and then raised those

rates based upon factors that were known to the carrier

when it made its bid and signed the contract. When chal-

lenged by irate customers, the carriers reply that the tiled

rate doctrine requires the customer to pay the new tariffed

rate!

Effectively free from regulatory oversight, yet assured

that whatever clauses they put in tariffs will “trump” their

contracts even if users are not told of (and do not consent

to) the new provisions, interexchange carriers have become

increasingly willing to insert one-sided terms in their

tariffs. The filed rate doctrine shields such behavior when

—

#? For example, the Commission has ordered carriers to com-

pensate operators for each call for toll-free long distance call made

from a payphone. Implementation of the Pay Telephone Reclassifi-

cation and Compensation Provision of the Telecommunications Act

of 1996, Report and Order, 11 F.C.C.R. 20541 (1996), recon., 11

F.C.C.R. 21233 (1996), aff'd in part, vacated in part sub nom.

Illinois Pub. Telecom. Ass’n v. FCC, 117 F.3d 555, clarified, 123

F.3d 698 (D.C. Cir. 1997). See also, Federal-State Joint Board on

Universal Service, Report and Order 12 F.C.C.R. 8776 (1997) (car-

rier contributions to a Universal Service Fund); Access Charge

Reform, First Report and Order, FCC 97-158, (1997), appeal

docketed sub nom. Southwestern Bell Tel. Co. v. FCC, No. 97-2618

(8th Cir.) (increasing per-line charges for connection to local er-

change networks); and Price Cap Performance Review for Local

Exchange Carriers, Order, 12 F.C.C.R. 10175 (1997), appeal

docketed sub nom. United States Tel. Ass'n v. FCC, No. 97-1469

(D.C. Cir.) (reducing usage-based access charges).

it involves rates or rate-affecting terms, but this Court

should not needlessly extend that shield to a broader

range of carrier behavior.

CONCLUSION

For the foregoing reasons, Amici respectfully request

that the Court interpret the Communications Act’s tariffing

provisions as they are written.

Respectfully submitted,

HENRY D. LEVINE

ELLEN G. BLOCK *

JAMES S. BLASZAK

JUSTIN G. CASTILLO

LEVINE, BLASZAK, BLOCK

& Bootusy, LLP

2001 L Streeet, N.W.

Suite 900

Washington, D.C. 20036

(202) 857-2550

Counsel for Amici Curiae

February 20, 1998 * Counsel of Record

APPENDIX A

[AT&T Logo]

Judith D. Argentieri Suite 1000

Government Affairs Director 1120 20th Street, NW

Washington, DC 20036

202 457-3851

July 17, 1996

Mr. William F. Caton

Acting Secretary

Federal Communications Commission

1919 M Street, N.W.

Room 222

Washington, D.C. 20554

Re: Ex Parte Presentation—CC Docket No. 96-61

Dear Mr. Caton:

Today AT&T provided copies of the attached docu-

ment to Richard Welch, Chief, Policy Division, Common

Carrier Bureau, and to Melissa Waksman, Christopher

Heimann, Jordan Goldstein, and Patrick DeGraba, also of

the Policy Division of the Common Carrier Bureau.

Two copies of this Notice, along with the attached let-

ter, are being submitted to the Secretary of the FCC in

accordance with Section 1.1206(a)(1) of the Commis-

sion’s rules.

Sincerely,

/s/ Judy Argentieri

Attachment

cc: R. Welch

M. Waksman -

C. Heimann

J. Goldstein

P. DeGraba

AT&T Ex Parte Presentation—CC Docket No. 96-61

Permissive Detariffing And The Filed Rate Doctrine

Although a majority of commenters in CC Docket No.

96-61 support permissive detariffing, a few commenters

continue to support mandatory detariffing,’ at least for

negotiated service arrangements, based on the purported

concern that unless detariffing were mandatory, carriers

could continue to file tariffs and invoke the filed rate

doctrine to make unilateral changes to carrier-customer

deals. A brief analysis of the filed rate doctrine, however,

makes plain that this “problem” is chimerical. The filed

rate doctrine is a product of a specific legal regime—a

regime of mandatory tariffs—not a talisman that trumps

all contractual agreements. As explained below, under a

permissive detariffing regime, a written contract could

specify that it is controlling over subsequent tariff filings,

and the customer could then assert the contract as a de-

fense to any claim based on such filed tariffs.

The filed rate doctrine was the product of two interre-

lated subsections of the Interstate Commerce Act (ICA).

First, the ICA required that carriers make public filings

disclosing their rates. Second, and correlatively, carriers

were prohibited from charging or collecting any rates

other than filed rates. These two requirements served as

the model for Sections 203(a) and (c) of the Communi-

1 As explained in its comments in this docket, and in its July 10,

1996 ex parte, AT&T does not believe that the Commission may

lawfully order mandatory detariffing, for two reasons. First, the

Commission’s authority under Section 10 permits it to refrain from

requiring tariffs, but does not extend to prohibiting the filing of

tariffs. Second, because the record establishes that mandatory de-

tariffing would impose enormous costs on carriers and customers,

particularly with respect to casual calling and services provided to

residential and small business customers, with no countervailing

benefits that could not be achieved through permissive detariffing,

a mandatory detariffing rule would not be “in the public interest.”

cations Act.* The purposes of the tariff requirements of

both the ICA and the Communications Act were “to ren-

der rates definite and certain, and to prevent discrimina-

tion and other abuses”* by ensuring that all customers

paid the same charges—the filed rate—for the same serv-

ice. In numerous decisions, the Supreme Court construed

these requirements to mean that “the rate of the carrier

duly filed is the only lawful rate.” *

The Supreme Court’s decisions make clear that that

the filed rate doctrine necessarily derives from the require-

ment that all rates be filed. The sole purpose of the filed

rate doctrine is to enforce a regime in which tariff filings

are mandatory. As the Supreme Court explained in Mais-

lin, allowing a carrier to charge other than filed rates

would “render nugatory” the statutory requirement that all

rates be filed.° The filed rate doctrine thus reduces to a

syllogism: If a rate must be filed in order to be valid,

then unfiled rates cannot be valid.

By exercising its statutory forbearance authority to

adopt permissive detariffing, the Commission would elim-

inate the major premise of the syllogism—the requirement

that all rates be filed. Valid and enforceable rates can be

established through mechanisms other than filed tariffs,

such as through unfiled contracts. There is simply no

basis for the assertion that the filed rate doctrine would

vitiate contract rates in a permissive detariffing scheme.

A carrier that had agreed to rates in an unfiled contract

could no longer claim that the filed rate was the “only

lawful rate.”

2 MCI v. AT&T, 114 S. Ct. 2223, 2231 (1994).

® Maislin Indus. v. Primary Steel, Inc., 497 U.S. 116, 126 (1990)

(citing Arizona Grocery Co. v. Atchison, T. & S.F.R.R

370, 384 (1932) ). - Co., 284 U.S.

*E.g., id. at 127, quoting Louisville & Nashville RR

well, 237 U.S. 94, 97 (1915). ects 2°

5 Maislin, 497 U.S. at 182.

Indeed, the courts have recognized that where the stat-

ute at issue, or the agency acting within its statutory au-

thority, permits rates and other terms of service to be

established other than through filings with the agency, the

filed rate doctrine does not apply.” Thus, in Maislin, the

Supreme Court invalidated the Interstate Commerce Com-

mission’s (ICC) “Negotiated Rates” policy based on its

conclusion that the ICC had no authority to abrogate the

ICA’s requirement that all rates be filed. Conversely, the

court’s opinion makes clear that the Negotiated Rates

policy could have been sustained had the ICA given to the

ICC the forbearance authority which Congress has now

given to the Commission in Section 10.’

It has nevertheless been suggested that in a permissive

detariffing regime, a carrier could “voluntarily” file and

attempt to enforce a tariff against a customer with which

the carrier had previously entered into a written agreement

providing that the contractual terms would control over

any inconsistent tariff provisions. This argument, which

is based on the language in Section 203(c) requiring that

a carrier charge and collect its filed rates, ignores the fact

that the Commission's Section 10 forbearance authority

extends to Section 203(c) no less than to Section 203(a).

Indeed, Section 203(c) itself provides that its requirement

that carriers collect their filed rates is inapplicable where

“otherwise provided by or under the authority of this Act.”

®See Arkansas Louisiana Gas Company v. Hall, 453 U.S. 571

(1981) (recognizing that carrier must charge and collect the filed

rate, “[e]xcept when the Commission [validly] permits a waiver”).

In a later proceeding in Arkansas Louisiana, the Fifth Circuit ob-

served that the Supreme Court's decision in that case “clearly recog-

nized that the waiver provisions of [15 U.S.C. § 717(d) authorized)

the Commission to waive the usual requirements of timely filing of

an alteration in a rate.” Hall v. FERC, 691 F.2d 1184, 1189 (5th

Cir. 1982) (quotation omitted). Accordingly, Hall v. FERC ex-

pressly noted that the filed rate doctrine would not bar exercise of

FERC’s waiver authority. Jd.

7 Maislin, 497 U.S. at 133-35.

If the Commission were to exercise its authority under new

Section 10 to forbear from enforcing Sections 203(a) and

203(c) when a carrier and a customer have entered into

an unfiled written agreement, and thereby adopt permis-

sive detariffing, a carrier could not invoke the filed rate

doctrine to make unilateral changes to the terms of their

deal.*

—

* Permissive detariffing would operate in a manner analogous to

the role of the Uniform Commercial Code in contracts for the sale

of goods. Parties to such contracts may specify that the “defau!t”’

provisions in the UCC do not govern their relationship, and instead

may specify alternative terms. Similarly, carriers and customers

may provide that any or all of the terms in the contract apply in lieu

of otherwise applicable tariff provisions.

Page

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5.3

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6.1

6.2

6.3

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7.1

7.2

7.3

7.4

7.5

7.6

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8.1

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9.1

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Rates and Charges for Additional Serv-

a a ee Se ae eo

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Installation Delays and Service Inter-

eae

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CERTAIN RIGHTS AND OBLIGA-

TIONS OF [VENDOR] AND —

RPI ae le aria i a A nd ER

Obligations To Maintain Insurance _.....

Mechanics’ Liens ................................ tides

Access to [Customer] Premises...

CONFIDENTIAL INFORMATION ...

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Disclosure to Employees; Others .

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TABLE OF CONTENTS—Continued

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ARTICLE 10 LIMITATION OF LIABILITY, INDEM-

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ARTICLE 13 TERM AND TERMINATION ........ 48

13.1 Term of Agreement (EARNED, eee. 48

13.2 Extensions of Initial Term .............. 48

13.3. Transitional Support 49

13.4 Removal of Property 49

ARTICLE 14 TERMINATION AND REMEDIES... 49

14.1. Termination by [Customer] susiieee 49

14.2. Termination by [Vendor] 51

14.3. Partial Discontinuance By [Customer]... 51

14.4 Notice of Threatened Non-Performance. 52

14.5 Performance Pending Outcome of Dis-

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ATTACHMENTS

Attachment ED Engineering and Design

Attachment IP

Attachment IS

Attachment ND

Attachment NM

Attachment RC

Implementation Plan

Installation Sites

Form of Non-Disclosure Agreement

Network Management

Rates and Charges

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4.5

4.6

12a

TABLE OF CONTENTS—Continued

RIO TAI icsecitristennseccecesciesitpranntniinsnsions

Amendments to the Performance re

IN i 0c indi cnsenernicistnsibiedapiiientammiplapaiaiiemiaiaantn

ARTICLE 5—CHARGES AND PAYMENTS ......

5.1

5.2

5.3

5.4

5.5

5.6

ia iasehicteeniiesinens

Review of Rates and Charges ......................

Rates and Terms for Additional Services...

Credits for Delays and Interruptions ........

FETE IIL ay Ce: ENE CRI

TRE ITI A es EHS Se De Tee wen any nee

ARTICLE 6—CERTAIN RIGHTS AND OBLIGA-

TIONS OF [VENDOR] AND [CUS-

SEE seccveniscennianeemncabicanhitriiaaginsipgmativemminnicns

6.1 Mechanics’ Liens and Subcontractor Pay-

PEN sn: dcatacehsitedaleitiaitdihiteentinninbiation ee ee ee

6.2 BE GI TID eicnciteetectinthetteinnitbicinnces

6.3 Notification of Pending or Threatened Non-

RAE RR PRRs APRS Pio, Sal

ARTICLE 7—CONFIDENTIAL INFORMATION ......

7.1 Use and Protection of Confidential Infor-

RINE IE aR ge WT, BR Ea Re 9

7.2 Disclosure of Confidential Information to

Employees and Others ..............................

7.3 Return or Destruction of Confidential In-

SRNR SA SS aR Ree On ee

7.4 RES A eee 26S ALPE PL See wet

7.5 SEED SUUIIIUD ccccicaiiinactmnebtiedibbigitdicladaamsine

7.6 IID siscriniaiiditeietncteeneaiei ti alan Ta

ARTICLE 8—REPRESENTATIONS, WARRANTIES

8.1

8.2

8.3

8.4

Pp Be 5), SE ener

Compliance with Laws ..................................

REGRET sa SLE NE ary aatr Ra

Page

- 36

l3a

TABLE OF CONTENTS—Continued

Page

8.5 All Reasonable Efforts and Good Faith

RSE TREES REE Scere ee a 42

8.6 Personnel Qualifications and Training........ 42

8.7 EEE Ne aa 42

8.8 II 5. ccockcitiansibacntiniienttiamennatiinss 42

8.9 Authority and Geod Standing —.................... 43

8 RM TEAS rar SIP EN oes Se ee 43

8 RES A on 48

8.12 Valid, Binding and Enforceable ................. 44

8.18 Warranty and Liability ............................... 44

8.14 Access to [Vendor] Tariffs/Prior Approval

yg RREREEESRIEEET TREES SRO a nORN 44

8.15 Standards for Year 2000 .............................. 44

ARTICLE 9—INTELLECTUAL PROPERTY

RIGHTS AND INDEMNIFICATION;

SOFTWARE LICENSE .......................... 45

9.1 IID ccisnicstiiibitinsstiniipassntliitbentiiesdiaasiiiiainaiindiicnpenmnimai 45

9.2 ERE ET RAIS EE te Ree NEN 46

9.3 a a a 46

9.4 a a a 47

9.5 SIS GUD cccchintsncitientiienaiinhdieitbiiiidabeangeied 47

ARTICLE 10—LIMITATION OF LIABILITY;

THIRD PARTY CLAIMS ............... oS 48

10.1 Limitation Of Liability ................00000000.. 48

10.2 Liability Under Third Party Arrange-

SEED. cnithcdechincivedatindstecanindiovitbaltiitislieinnenitigns 48

ARTICLE 11—FORCE MAJEURE .............................. 49

11.1 Force Majeure Conditions and Effect... 49

ok Ri kt SESINIESERRER acs arcte 49

Re Se OD eo ee 50

11.4 #Notice of Force Majeure Conditions ........... 50

ISIE ie ae Pare 50

it PR BIER TIRE Rye oa RP eR eel So 51

ARTICLE

13.1

13.2

13.3

ARTICLE

14.1

14.2

14.3

14.4

ARTICLE

15.1

15.2

15.3

15.4

15.5

15.6

15.7

15.8

15.9

15.10

15.11

15.12

15.13

15.14

15.15

15.16

15.17

l4a

TABLE OF CONTENTS—Continued

12—INDEPENDENT CONTRACTOR........

13—TERM; TERMINATION . |...

Term of Agreement; Renewal ......................

Tramattiomal Buppent q..........ccnccccecessccceeee+-s-

Existing Agreements .................................--

14—GROUNDS FOR TERMINATION

AND REMEDIBES ..................................

Discontinuance by [Customer] -....................

Discontinuance by [Vendor] ......... ictal

Partial Discontinuance by [Customer] ........

Performance Pending Outcome of Dis-

IIE caniceciinniscspinteenaneinnatniimssinnnianteieinvdions

15—MISCELLANEOUS ..................--..------=--.

Advertising or Publicity .............................

Successors and Assigns ................................

Dispute Resolution —.........-....0.....000...-..-....

ee icciiartecensatiatintiies nasiniatinlnniiniienenitnnpeeiaiod

Modification, Amendment, Supplement or

—* ee ee

;

Attachment PS

Attachment ND

Attachment RC

Attachment TO

Attachment NM

Attachment DRP

Attachment AC

Attachment BI

Attachment SL

Attachment OC

15a

ATTACHMENTS

Performance Specifications

Form of Non-Disclosure Agreement for

parties’ subcontractors

Rates and Charges

[Form of Tariff Filing]

Network Management

[Customer’s] Contingency and Disaster

Recovery Plan

Authorization Codes

Billing Invoice Format

Form of Space License for [Vendor]

Use of [Customer] Real Property

Contracts between [Vendor] and

[Customer] for telecommunications

services, existing as of the Effective

Date

ARTICLE 1

1.1

1.2

ARTICLE 2

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

2.11

2.12

2.13

2.14

2.15

2.16

“217

2.18

2.19

ARTICLE 3

3.1

3.2

3.3

3.4

ARTICLE 4

4.1

16a

TABLE OF CONTENTS

SAMPLE #3

I i i a Fe

I a ae

Other Definitional Provisions ................

PROVISION OF [VENDOR] SERV-

Agreement to Provide —..2..0002000000000.......

IUD si cctincectntlicenjeindevinnscapibsictmsielaceninncic

Minimal Annual Commitment ..............

Orders for and Changes to the Serv-

TE ccitetisincnuiinisinigsniniepdiascndiin ciaadenbiipabaibindcinnin

Modifications to [Vendor’s] Network "the

I vi cicisiisitinnd ina niensidestidibidiniabinnzddin

Local Access Providers and Foreign Tele-

phone Administrations —...................

Ongoing Cooperation ...............0.000000000.....

Response and Repair Time .......................

Billing and Accounting ~......00000000000000.....

SRE SER OB Sey OE A 9 aS Raa ot

Network Management and Reports .......

IID iedsestniidaienccninstitincinnsiisaibiobiagamnecibaisalte

Procurement .................. Pea eras re ahaa Te

NII SI ata cansctecenietnsittaiatine

Prevention of Unauthorized Use ............

Acceptance Testing ~................--2200...--2222----

PCED scat peetinebicnintecinsneastinanabbionbininiinies

Adequate Personnel ........0....000

Network Personnel ........... 00.0...

NS CEIEED sectcentgrstnnsssiccintmshinnivensaniaionns

Key Network Personnel .......

SERVICE UPGRADES AND ADDI-

TIONAL SERVICES .....0. en...

Service Upgrades ........................-..-...-..---

17a

TABLE OF CONTENTS—Continued

4.2

4.3

4.4

4.5

ARTICLE 5

5.1

5.2

5.3

5.4

5.5

5.6

5.7

ARTICLE 6

6.1

6.2

6.3

6.4

6.5

ARTICLE 7

7.1

7.2

7.3

7.4

7.5

ARTICLE 8

8.1

8.2

New Technologies .000.00000.......:cccccccceeee-eeeeee

Additional Services .00000...000.00cccceceecceee meee

Obligations with Respect to Additional

Services '

Discontinued Services 0.000000...

CHARGES AND PAYMENTS ............

Rates and Charges 2000000000000... eee

Remedies for Certain Tariff Changes ...

Adjustments to Rates and Charges _......

Rates and Terms for Additional Serv-

UID nica peeiilea Dali eT

Credits for Delays and Interruptions ....

Invoices ...

Taxes ...... ° ws

CERTAIN RIGHTS AND OBLIGA-

TIONS OF [VENDOR] AND incest

MER]

Third Party Warranties ieistiseideelekteats cabal

Obligation to Maintain Insurance .........

Mechanics’ Liens 2.0000... ee eeen ee

Access and Security 2.000.000.0000.

[Customer] Liability Under [Vendor]

Third Party Arrangements

CONFIDENTIAL INFORMATION .....

Use and Protection of Confidential In-

IE cricrticsintieiicestntinirtcinsatitinnnsioitain

Employees; Others 0000000

Return or Destruction of Information...

Required Disclosure .........0.......0..

REPRESENTATIONS, WARRANTIES

AND COVENANTS .....

IN sotetisicitschciehrisiichhtmprisih sacincincilate secede

Compliance with Laws Relating to Tele-

RRR ieee eR Lali ae a SSSI

SEER FESS

SSSeaun & & ESEREE

& oe

18a

TABLE OF CONTENTS—Continued

8.3

8.4

8.5

8.6

8.7

8.8

8.9

8.10

8.11

8.12

8.13

8.14

8.15

8.16

ARTICLE 9

9.1

9.2

9.3

9.4

9.5

ARTICLE 10

10.1

10.2

ARTICLE 11

11.1

11.2

11.38

114

11.5

ARTICLE 12

Tariffs . A aN

Compliance with Other Laws ileal

Documentation ............-..-....--.c.-.0000.000-0ene0=0

Nature of Services ...............-.....<----s1---000«

Personnel Qualifications and Training...

Regulatory Reports ...................---

Non-Interference ..............-.-.....s++-sss---+00008

Authority and Good Stanaing .............

No Conflict ...................... ee es

No Infringement ...................<-----..--

Valid, Binding and Enforceable ..

No Defaults - ahead Bt a

Year 2000 Compliance . i a

Warranty and Liability ......................

INTELLECTUAL PROPERTY RIGHTS

AND INDEMNIFICATION; SOFT-

WARE LICENSE ............----.---..---<-0----++-+0+«

Software License .................<<<<<<---<<-----+00-"*

Indemnification ......................0-+---000

Notices DOES eee eee eee

Emjoined Use .....-.......2n--neenenceeneeneseenneneees

LIMITATION OF LIABILITY; THIRD

PARTY CLAIMS . iaisaciaaaiitieia

Limitation of Liability . sn ie EL PRED

Third Party Claims ............................--

FORCE MAJBURE. ........~...-.<-----------------«

Force Majeure Conditions and Effect ...

Duty to Mitigate —............-----....-.-----

Performance Times ..................—--------------

Substitute Services ....................---<---=-.+-++

hee

INDEPENDENT CONTRACTOR .........

FLIFIFSSER

SSS

ba |

19a

TABLE OF CONTENTS—Continued

ARTICLE 13

13.1

13.2

13.3

ARTICLE 14

14.1

14.2

14.8

14.4

14.5

14.6

14.7

ARTICLE 15

15.1

15.2

15.3

15.4

15.5

15.6

15.7

15.8

15.9

15.10

15.11

15.12

15.13

15.14

15.15

15.16

15.17

15.18

TERM; TERMINATION .................-.-..--

Term of Agreement; Renewals .............

Transitional Support .........................--....

Removal of Property ..............

GROUNDS FOR TERMINATION AND

I coo cccecenerieneteteneecininiemenenans

Bivemts of Datallt q....~.....<0cccc<s~--<:-00--+--00-

Termination by [Customer] ..................--.

Partial Discontinuance .......................-....-

Termination by [Vendor] ..

Notification of Threatened | “Non-Per-

TL ee

O66 6066 6666666 SSS SSE OSS S + CSS SOS EHSES SC SSSOSSSOSSSS SSS Se

MISCELLANBOUS. .......~.-.<0--+---<20:20--202000

Advertising or Publicity ...........................

Successors and Assigns .........................--.

DO Eee

Third Party Beneficiaries -.......................

Notices is ans cacti eeialiiteamenelastinniiantl

Headings of No Force or Effect -.........

Modification, Amendment, Supplement

Dispute Resolution ..................-..----------

Labor Harmony Obligation . ay

| ae

B88 2 S

3383333 228 & ASRBES

SAnanaeanan eH

Attachment AC

Attachment BI!

Attachment IP

Attachment IS

Attachment KP

Attachment NM

Attachment PS

Attachment ND

Attachment RC

20a

ATTACHMENTS

Acceptance Criteria

Billing Instructions

Implementation Plan

Installation Sites

Key Personne!

Network Management

Performance Specifications

Form of Non-Disclosure Agreement

for Third Parties

Rates and Charges

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.