# Opposition Brief — Qwest Corp. v. MCI WORLDCOM Network Services, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1738%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2000
- **Citation:** 531 U.S. 1001

## Text

(> Supreme Court, US.
No. 00-214 FILED
IN THE OCT 10 2009
SUPREME COURT OF THE UNITE STATES
: CLERK
QwEsT CORPORATION,
Petitioner,
v.

MCI TELECOMMUNICATIONS CORPORATION,
Respondents.

QWEST CORPORATION,
Petitioner,

Vv.

AT&T COMMUNICATIONS OF THE PACIFIC
NORTHWEST, INC., ef al.,
Respondents.

QWEST CORPORATION,
Petitioner,

Vv.

SPRINT COMMUNICATIONS Co. L.P., et al.,
Respondents.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit

BRIEF IN OPPOSITION

CHRISTINE O. GREGOIRE

Attorney General

SHANNON EILEEN SMITH*

Assistant Attorney General

WILLIAM BERGGREN COLLINS

Sr. Assistant Attorney General

P.O. Box 40128

Olympia, WA 98504-0128

(360) 664-1192

Counsel for Washington Utilities and
Transportation Commission

*Counsel of Record

big st ,

i
TABLE OF CONTENTS
Page
Ee I hice hates cence h creiea ci on tananehiciniobaneanempanens 1
ees ctapansedenast ae
A. The Requirement for Interconnection Between
Telecommunications Companies Under the
I Ha caice vicar adienicatiiecicantrd ails simnsiinmwinche 2
B. The FCC’s Local Competition Rules and the
Iowa Utilities Board Litigation Before the
EERE CCE BEE FIR Coc ecssccscnscepesccsseppeeresevoee 5
C. The FCC’s Collocation Rules and Proceedings
SE NE 5 A sa chs er iteicintcet ecient accecantes 7
DE Fe erases rniimatindiiapicninemitierninge 9
1. Negotiations Between the Parties and
Arbitration of Unresolved Issues Before
i citciapcictannies ss telitetaclasantcccodsitencumiene 9
2. Federal Court Review of the WUTC’s
Po | RSE LO 10
REASONS FOR DENYING THE PETITION.................. 11

I. The Court Should Not Grant the Petition Regarding
the Ninth Circuit’s Decision Affirming the
Combination Requirements in the Agreements............. 11

il

A. There Is No Conflict Among Circuit
Courts of Appeal Because the Ninth Circuit’s
Decision Affirming the Combination
Requirements Does Not Implicate the
KORO PN ici cakicsctistint titonnnsesivcsomanenibegp alongs

B. There Is No Conflict Among Circuit Courts
of Appeals In Their Interpretations of the
1996 Act As It Relates to Interconnection
Agreement Provisions That Require an
Incumbent to Combine Network Elements.............

C. In Any Event, State Law Permits the WUTC
to Impose a Requirement that US West
Combine Network Elements At the Request
OE Tine COED saci si psics thcncnnsnisein ietaretanicaapitlapeints

. The Court Should Deny the Petition As to

the Ninth Circuit’s Decision to Affirm the

Provisions in the Agreements That Permit

the Competitors to Collocate Remote Switching
Units on US West’s Premises ...............ssscccssccsssscseseeees

A. There Is No Conflict Among Circuit
Courts of Appeals Because the Ninth
Circuit’s Decision Affirming the
Collocation of Remote Switching Units
Does Not Implicate the Hobbs Act................::cs000

B. The Ninth Circuit’s Decision Regarding
the Collocation of Remote Switching Units
Does Not Conflict With the Decisions of This
Court or Other Circuit Courts of Appeals...............

ill

III. The Ninth Circuit Did Not Expand the Role of
State Commissions Under the 1996 Act, Nor
Did It Disable Federal Court Review of
Agreements Or Threaten The Primacy of
oe. id chnatnuraenagnntannesonqosptnniis 21

A. The WUTC Lawfully Exercised Its
Broad Responsibilities Under the 1996 Act
and The Ninth Circuit Properly Reviewed
and Affirmed the WUTC’s Decision..................+-+. 21

B. The Ninth Circuit Did Not Dismantle the
Federal Courts’ Jurisdiction to Review
Interconnection Agreements Or Unravel the
Primacy of Federal Law...............sscscssecersessensserees 24

CONICIIUSION wisisnssidas sivas scssiccosdivecccccsscecsesnescvecsnecnneescsncess 25

APPENDIX A: Open Meeting Memorandum
prepared by WUTC Staff, March 5, 1997...........seesee la

APPENDIX B: Excerpt from Transcript of
Open Meeting before WUTC to Consider
Approval of Interconnection Agreement
Between US West and AT&T, June 25, 1997 .............. 6a

iv
TABLE OF AUTHORITIES

Cases Page

AT&T Corp. v. Iowa Utils. Bd.,

Sed Shape SN CR aidenccensseaaspinsentarinesineuatippiieinie passim
Colby v. J.C. Penney Co., Inc.,

S11 F.2d LETS CRC, TIT) sesnsccrcnsececcossessoncseses 13
Electric Lightwave, Inc. v. Utilities & Transp.

Comm'n,

123 Wn.2d 530, 869 P.2d 1045 (1994)................. 4
English v. General Elec. Co.,

OG BSB, Fa lark iisccen su tncscsvertnechdincigeiniaian 16
Fox v. Acadia State Bank,

937 F.28 1566 Cl GAs, LGBT) aa cricsnnssesescsvescccscose 13
GTE Serv. Corp. v. FCC,

205 F336 416 GI, Cit. BOG) ccccncescassesssssecvsensssse 8,17
Iowa Utils. Bd. v. Federal Communications

Comm'n,

10D F Sek SLE Te. BIOS vs csrersereciccoviesarcsecgress 6

Iowa Utils. Bd. v. Federal Communications
Comm'n,
120 F.3d 753 (8th Cir. 1997), aff'd in
part and rev'd in part sub nom.
AT&T Corp. v. Iowa Utils. Bd.,
pn BOE RL... ROR EEA Re ener nee ery 6, 10, 14

Iowa Utils. Bd. v. FCC,
219 F356 THA CO Cie, ZOU) ..-nvexescessscesecarsosesneens 7,14

MCI Telecommunications Corp. v.
US West Communications, Inc.,
204 F.3d 1262 (9th Cir. 2000) ...........cccscesseereeeres passim

Southwestern Bell Tel. Co. v. Arkansas Pub.
Serv. Comm'n,
738 F.2d 901 (1984), vacated on other
grounds 476 U.S. 1167 (1986).......seseseeseesereees 14

Southwestern Bell Tel. Co. v. Waller Creek
Communications, Inc.,
Zt Bh GIS 5 Ce. FO) mivtrivciteseeciomp eee 15

US West Communications, Inc. v.
MFS Intelenet, Inc.,
193 F.3d 1112 (9th Cir. 1999), cert. denied
120 S. Ct. 2741 (2000), pet. for reh'g denied
69 U.S.L.W. 3156 (U.S. Aug. 28, 2000)

(No. GO 1GAT) ...0.cccscesersccnsscoessccerenvoveverovensscvovsaeness 12
Statutes and Regulations
47 CBR, & SUBS)... sceccccesessccvcsessvoensyesesonsesesevenes 5
47 C.F.R. 8 SUSUSD) vccvcssvecccvctinsncccesaveesossesbssssepeooenss 6, 10, 11
47 C.F.R. § 51.315(C)-(f) ......eececcsrccrcsrcereesceccscesrsoeeos passim
AFT CBR. §S1.31G ...cccc.csccccerccccssccccessnsvcesooscsecsossoess 8, 18

28 U.S.C. §§ 2341 ef S€q...........cccscrrecceccnorsesssssssosenees 1,11

Vi

Fe en Fee adie ted skarncteninieiauitennaceliseptennmanes 12

EE Toston WE BU EOE, iScsciciiccasersessasegesssanirsionnaians 1

BF Pee be arisen pihnseigeennsinensinenigvens 5

BT Ia Aine SAA hinicss svkgp pristhinianrozevaccanepeiaianibiinines 2

WF OIE Bt Oa iatiassceksneaesivassivstcinbagasonspeninaiiene 20

BF OB FTO voscnisinccekisetessdicbcasiseanins 19

GFT IIRS BG teieiieaiestbaibaue aes passim
OF Ra ees OF Me NI dina Shicaicsn ptscinsccihspicadeiinaniosecuibanitte passim
OE Sine BAPE EEIOED sivcivtssisrsiniesunsisvhelataamrigiaaatiaias 8, 11
BT DLA S28 COPE scbhnssisnbernnesorstigueitcnionsaivns 15, 21
FT ik FD och inieseonsoninisaiessecamenisnacinghnie 21,24
BF UIs: & RS snccsninsuidicincnis anieiaseatetibascnacioel 2,9
OF TF WD eiesnnazvivsisbjentensoveseecevqugiienasauanieainaiin 21

RT EER, © BRO iisnsciesisririncscanaeesinaaibeciapens 21

BF Te WE Desdsnsorsteinsnhnerecennapanpaonmeaiaiaiainibe 3, 9, 21
47 U.S.C. § 252(€)(2M(A) eensesnensene sasnbhhagid onesie 3,5

STU BK. F Za) hisivivvsieanissdandiie asbeoenaliie 3,5

Vii

WTS Ci 3, 15,
22, 24
ATUOBC 5 PEMNM i ce iki ese aS chica 4
ATUSC 3 25200NG) oe Ns oe ee
STORE 020 er es 6
Title 80 Wash. Rev. Code ....scssentnntntntstntntnee 3
Wash. Rev. Code § 80.36.300(5)..ssssssesssesseseenee 3,4
Wash. Rev. Code § 80.36.350..ccssssssssssssccsssssssssesssseee 3
Wash. Rev. Code § 80.36.610(1) .ccccscsssssssssssesssssessene3

Federal and State Agency Materials

In the Matter of Deployment of Wireline Services
Offering Advanced Telecommunications
Capability,

14 FCC Red 4761 (1999), aff'd in part and
rev'd in part and remanded GTE Serv. Corp.
v. FCC, 205 F.3d 416 (D.C. Cir. 2000) ................ 7

In the Matter of Implementation of the Local
Competition Provisions in the Telecommuni-
cations Act of 1996,
EL BOG ROG TS49D CIS IG) icin sis sn scsi inhctiewsseves 5,19

vill

In the Matter of the Petition for Arbitration
of an Interconnection Agreement Between
AT&T Communications of the Pacific
Northwest, Inc. and GTE Northwest
Incorporated Pursuant to 47 U.S.C.
Section 252,
Docket No. UT-960307, 1998 WL 223213
CWUTC Meares 16, PIG a iisissiis ic iccisnccsdiectieateces 16

WUTC v. US West Communications, Inc., et al.,
Consolidated Docket Nos. UT-941464,
-941465, -950146, -950265, 1995 WL 735315
CORTE Bes, Ba arserietehsctasditeinisttoensivecensesnial 4

Legislative Materials

— H.R. Conf. Rep. No. 104-458, 104th Cong.,
rR ka ne LRTI a l

Regulatory Flexibility Act,
Washington Laws of 1985, ch. 450 .........cccsssseeees a

INTRODUCTION

Qwest Corporation’ asks this Court to grant its
Petition for a Writ of Certiorari to review decisions of the
Ninth Circuit Court of Appeals, in which that court affirmed
decisions of the Washington Utilities and Transportation
Commission (“WUTC”) regarding US West’s obligation to
open its local telecommunications network to new
competitors under the Telecommunications Act of 1996, |
47 US.C. §§ 151 et seg. (“1996 Act”). See MCI
Telecommunications Corp. v. US West Communications,
Inc., 204 F.3d 1262 (9th Cir. 2000). US West argues that
there are conflicts between the Ninth Circuit and two circuit
courts of appeals exercising Hobbs Act” review of orders by
the Federal Communications Commission (“FCC”).
US West also argues that the Ninth Circuit misinterpreted
and misapplied the provision in the 1996 Act that authorizes
federal court review of state commission determinations,
47 U.S.C. § 252(e)(6).

This case is not about the Hobbs Act or the
Supremacy of federal law. Rather, this case involves the
WUTC’s | straightforward implementation of the pro-
competitive policies of the 1996 Act. The WUTC is

'US West Communications, Inc., has been renamed Qwest
Corporation as a result of a merger. Like the petitioner, the Commission
will use the name “US West” to be consistent with the name used below.

28 U.S.C. §§ 2341 et seq.

*The 1996 Act is designed to “provide for a pro-competitive, de-
regulatory national policy framework designed to accelerate rapidly

charged by the 1996 Act to effect the obligations of
incumbent companies, such as US West, to interconnect their
facilities with those of competitors in the local market. There
is neither conflict among the circuit courts of appeals nor
inconsistency between the decisions of the Ninth Circuit and
this Court. The Court should deny the Petition.

STATEMENT

A. The Requirement for Interconnection
Between Telecommunications Companies
Under the 1996 Act .

This case arose out of the procedure under the 1996
Act by which incumbent local exchange telecommunications
companies (“incumbent companies”), such as US West, are
required to enter into “interconnection agreements” with their
competitors. Through these agreements, competitors may
acquire access to elements of the incumbents’
telecommunications networks so they can compete with the
incumbents in the local telephone market. 47 U.S.C.
§ 251(c)(3). This case involves three such agreements
entered into between US West and competitors MCI
Telecommunications Corporation (“MCT”), AT&T Com-
munications of the Pacific Northwest, Inc. (“AT&T”), and
Sprint Communications Company, L.P. (“Sprint”),
respectively.

Interconnection agreements must contain the
particular terms and conditions necessary for the incumbents
to fulfill their statutory duties. Jd. § 251(c)(1). Congress
assigned to state public utility commissions, like the WUTC,
the primary role in implementing the interconnection
agreements. For example, although the incumbent company
and the competitors are required to negotiate interconnection
agreements in good faith, id., if the parties are unable to
resolve all issues through negotiation, a party to the

:

3

negotiation may request the state commission to arbitrate the
open issues. Jd. § 252(b)(1).4

In addition to their role as arbitrators under the 1996
Act, state commissions must approve aii interconnection
agreements regardless of whether the agreements are reached
through negotiation or arbitration. Id. § 252(e)(1). However,
the statutory criteria the state commission must apply in its
review of ah agreement differ depending on whether the
agreement, or portion of the agreement, was reached by
n¢gotiation or arbitration. If an agreement was negotiated, a
state commission may reject it, “‘or any portion thereof,” only
if the agreement or provision discriminates against a carrier
not a party to the agreement or if the agreement or provision
is not consistent with the public interest, convenience, or
necessity. Id. § 252(e)(2)(A). On the other hand, if the
agreement or provision was arbitrated, the state commission
has somewhat wider latitude. In that situation, the state
commission may reject the agreement or provision only if “it
finds that the agreement does not meet the requirements of
section 251 [of the 1996 Act], including the regulations
prescribed by the Commission [FCC] pursuant to section
251, or the standards set forth in subsection (d) of this
section.” Jd. § 252(e)(2)(B). The 1996 Act also preserved
the authority of a state commission to establish or enforce
“other requirements of State law in its review of an
agreement ... .” Id. § 252(e)(3).°

“The WUTC is authorized by the Washington state legislature to
take actions, conduct proceedings, and enter orders as permitted or
contemplated for state commissions under the 1996 Act. Wash. Rev.
Code § 80.36.610(1).

Flexibility Act, Washington Laws of 1985, ch. 450, p. 1976, codified at
several places in Title 80 Wash. Rev. Code, which authorized easy
registration of telecommunications companies seeking to operate in
Washington, and declared the state policy to Promote diversity of supply

The 1996 Act specifically preempted state court
review of a state commission action, id. § 252(e)(4), and
assigned the task of judicial of review of state commission
decisions to the United States District Court. Jd. § 252(e)(6)
(“[A]ny party aggrieved by such [state commission]
determination may bring an action in an appropriate Federal
district court to determine whether the agreement or
statement meets the requirements of section 251 and this
section.”’).

This case is the result of a challenge by US West to
the WUTC’s approval of the interconnection agreements
between US West and MCI, A&T, and Sprint, and the
subsequent review of that approval in the federal courts.
While US West’s initial challenges to the agreements were
broad-based, the issues presented to this Court involve the
relationship and status of certain FCC rules to the agreements
and the lower court decisions affirming the WUTC.

for telecommunications services. See Wash. Rev. Code §§ 80.36.300(5);
.350.

In 1994, the Washington Supreme Court removed a historical
barrier to local telephone competition by rejecting arguments that
exclusive franchise service areas in the telecommunications industry were
the law in Washington. Electric Lightwave, Inc. v. Utilities & Transp.
Comm'n, 123 Wn.2d 530, 869 P.2d 1045 (1994). The court recognized
that granting monopolies would run counter to the state policy promoting
competition. /d. at 538-39 (citing Wash. Rev. Code § 80.36.300(5)).

Foreshadowing the 1996 Act, in order to foster emerging local
competition, the WUTC entered an order: setting forth the terms and
conditions under which competitors for local exchange service will
interconnect their networks with incumbents. WUTC v. US West
Communications, Inc., et al., Consolidated Docket Nos. UT-941464,
-941465, -950146, -950265, 1995 WL 735315 (WUTC Oct. 31, 1995)
(petition for judicial review stayed, King County Superior Court, No.
96-2-08435-2SEA). In that order, the WUTC determined that the
transition to competitive markets would be accomplished largely through
access to unbundled network elements and resale of services. Jd. at *40-
41. Therefore, the WUTC exercises its role to effect the pro-competitive
policies, both under the 1996 Act and under pre-existing state law.

B. The FCC’s Local Competition Rules and
the Jowa Utilities Board Litigation Before
the Eighth Circuit and This Court

In approving an arbitrated agreement or provision, the
state commission must determine if it conforms with FCC
tules. 47 U.S.C. § 252(e)(2)(B).° Following the Passage of
the 1996 Act, the FCC promulgated regulations to implement
the local competition provisions of the Acct, including those
relating to interconnection and access to unbundled network
elements. See Jn the Matter of Implementation of the Local
Competition Provisions in the T, elecommunications Act of
1996, 11 FCC Red 15499 (1996) (“Local Competition
Order”). These regulations specified which tele-
communications “network elements” an incumbent must
make available to its competitors. A network element is a
facility or equipment used in the provision of a
telecommunications service. 47 U.S.C. § 153(29). For
example, a “switch” routes the call and is connected to the
local “loop,” which runs from a customer’s place of use to
the switch.’

In these rules, the FCC imposed at least three separate
provisioning requirements for unbundled network elements.
First, it required incumbents to provide unbundled network
elements in a manner that would allow competitors to

"However, with regard to agreements, or portions of agreements,
that are adopted by negotiation, the state commission need not apply the
FCC rules. Rather, in such Cases, the state commission may reject the
agreement, or portion thereof, only if it determines that it is not consistent
with the public interest or discriminates against a carrier not a party to the
agreement. 47 U.S.C. § 252(e)(2)(A).

"Simply speaking, a “switch” is “a mechanical, electrical or
electronic device which Opens or closes circuits, completes or breaks an
electrical path, or selects paths or circuits.” NEWTON’Ss TELECOM
DICTIONARY, 757 (15th ed. 1999). The “local loop” is the physical
connection from the customer’s premises the local exchange
company’s central office. /d. at 465.

combine the elements in order to provide a finished service,
47 C.F.R. § 51.315(a) (“finished service rule”). Second, it
prohibited incumbents from separating already-combined
network elements, unless otherwise requested by
competitors. Jd. § 51.315(b) (“no separation rule”). Finally,
the FCC required incumbents to combine network elements
at the request of competitors.
Id. § 51.315(c)-(f) (‘mandatory combination rule”). The
mandatory combination rule is a focal point of US West’s
Petition.

Numerous parties, including US West, petitioned for
judicial review of the Local Competition Order. These cases
were consolidated in the Eighth Circuit Court of Appeals.
The Eighth Circuit temporarily stayed the entire body of the
FCC’s rules, Jowa Utils. Bd. v. Federal Communications
Comm'n, 109 F.3d 418, 421 (8th Cir. 1996), and ultimately,
the Eighth Circuit stayed only selected rules but left the
finished service, no separation, and mandatory combination
rules intact. Jd. at 427 & n.8.°

In its review of the FCC’s rules, the Eighth Circuit
vacated the mandatory combination mule, 47 C.F.R. §
51.315(c)-(f). Jowa Utils. Bd. v. Federal Communications
Comm'n, 120 F.3d 753, 813 (8th Cir. 1997), aff'd in part and
rev'd in part sub nom. AT&T Corp. v. Iowa Utils. Bd., 525
U.S. 366 (1999). On rehearing, the Eighth Circuit also
vacated Rule 315(b), the no separation rule. Jd.

On January 25, 1999, this Court affirmed in part and
reversed in part the Eighth Circuit’s decision. AT&T Corp. v.
Iowa Utils. Bd., 525 U.S. 366 (1999). With respect to the
FCC’s no separation rule, the Supreme Court reversed the
Eighth Circuit’s decision that Rule 315(b) violates the Act
and reinstated that rule. AT&T Corp., 525 U.S. at 393-95.

*The Eighth Circuit stayed the FCC’s rules establishing pricing
guidelines for state commissions and the so-called “pick and choose”
rules implementing 47 U.S.C. § 252(i). Jowa Utils. Bd., 109 F.3d at 421.

The Court rejected the argument that the Act requires
competitors to combine network elements for themselves.
The Court remanded the case to the Eighth Circuit for
“proceedings consistent with” the opinion. Jd. at 397. This
Court did not rule on the mandatory combination provision in
AT&T Corporation.

On remand, the Eighth Circuit decided that the
mandatory combination rule violates the Act and vacated
Rules 315(c)-(f). Jowa Utils. Bd. vy. FCC, 219 F.3d 744, 758-
59 (8th Cir. 2000) (“Jowa Utils. Bd. IT’). Therefore, there is
no FCC requirement that incumbent companies must
combine network elements at the request of their
competitors.

. The FCC’s Collocation Rules and
Proceedings Before the D.C. Circuit

In addition to the requirements for interconnection
and access to unbundled network elements, the 1996 Act
requires incumbents to permit competitors to collocate
“equipment necessary for interconnection or access to
unbundled network elements” on the incumbents’ premises.
47 U.S.C. § 251(c\(6).° In its mules implementing the
collocation requirement, the FCC determined that

commission that physical collocation is not practical for technical reasons
or because of limited space. See 47 U.S.C. § 251(c)(6).

“necessary” equipment was equipment that is “used or
useful” for interconnection or access to unbundled network
elements. Jn the Matter of Deployment of Wireline Services
Offering Advanced Telecommunications Capability, 14 FCC
Red 4761, 4776-77, J 28 (1999) (“Collocation Order’).

Incumbent companies petitioned for review of the
Collocation Order in the United States Court of Appeals for
the District of Columbia Circuit. GTE Serv. Corp. v. FCC,
205 F.3d 416 (D.C. Cir. 2000). In its review of the
Collocation Order, the D.C. Circuit reversed the FCC’s
definition of “necessary” as “used and useful,” holding it was
overly broad for purposes of the collocation requirement set
forth in the 47 U.S.C. § 251(c)(6). Jd. at 422. The FCC’s
definition, the D.C. Circuit held, would require an incumbent
to collocate almost any piece of equipment owned by a
competitor. Jd. at 424.

The D.C. Circuit relied in part on this Court’s
decision to vacate the FCC’s definition of “necessary” for
purposes of access to unbundled network elements. Jd. at
423-24 (citing AT&T Corp., 525 U.S. at 389-90). In AT&T
Corporation, this Court determined that. the FCC, by
interpreting the word “necessary” in terms of any increase in
cost or degradation of service quality, gave competitors
essentially “blanket access” to the incumbents’ networks,
which was not what Congress had intended. AT&T Corp.,
525 U.S. at 389-90. Therefore, the Court vacated the FCC’s
unbundling rule, 47 C.F.R. § 51.319, and remanded the rule
for a more limited definition of “necessary” to be applied
when the FCC or state commissions decide which unbundled
network elements an incumbent must provide under
47 U.S.C. § 251(c)(3). Jd. at 390, 397; see also 47 U.S.C.
§ 251(d)(2).

D. Proceedings Below

1. Negotiations Between the Parties
and Arbitration of Unresolved
Issues Before the WUTC

MCI, AT&T, and Sprint each requested negotiations
with US West for interconnection under the 1996 Act. In no
case were the parties able to negotiate an entire agreement,
therefore, each competitor requested that the WUTC arbitrate
the unresolved issues pursuant to 47 U.S.C. § 252(b)(1).

To best fulfill its duty to arbitrate agreements under
the 1996 Act, the WUTC adopted “final offer” arbitration,
whereby the arbitrators resolved the disputed issues between
US West and its competitors by selecting between the
parties’ last proposals as to each unresolved issue, selecting
the proposal that was the most consistent with the
requirements of the 1996 Act, state law, and WUTC policy.
See, e.g., Pet. App. 118a. Under this approach, the parties
have the incentive to approach a middle ground. If neither
party to an agreement submitted a final offer that complied
with applicable law or policy, the arbitrator would resolve the
disputed issue in a manner to assure such compliance. Only
the disputed issues were before the arbitrators for decision.
Negotiated issues were not subject to arbitration, but were
subject to WUTC approval. 47 U.S.C. § 252(e)(1).

In each of the three agreements at issue, the WUTC
required US West to combine network elements for the
competitors.’ At the conclusion of their respective

" The interconnection agreement between US West and MCI
provides that “US West shall offer each Network Element individually
and in combination with any other Network Element or Network
Elements in order to permit [MCI] to provide Telecommunications
Services to its subscribers.” Pet. App. 28a n.3. The agreement between
US West and AT&T provides that “AT&T may purchase unbundled
network Elements individually or in Combinations without restrictions as
to how those elements may be rebundled” and that “AT&T may order and
US West shall provision unbundled network elements either individually

10

arbitrations, the companies had the opportunity to restate any
objections to the arbitrators’ decisions in oral argument
before the commissioners of the WUTC. See, e.g., Pet. App.
99a. The WUTC approved the agreements, but modified the
MCI and AT&T agreements to include a provision requiring
US West to allow MCI and AT&T to collocate remote
switching units'' on US West’s premises. Jd. at 89a-90a;
94a-9Sa.

ra Federal Court Review of the
WUTC’s Arbitration Decisions

Pursuant to 47 U.S.C. § 252 (e)(6), US West
challenged the WUTC’s decision approving the
interconnection agreement in the district court, and disputed
a whole host of provisions in the agreement. See Pet. App.
24a-86a. After the WUTC had issued its decisions approving
the agreements, but before the district court issued its orders,
the Eighth Circuit vacated the FCC’s mandatory combination

or in combination on a single order. Network Elements ordered as
combined shall be provisioned as combined.” /d. at 59a n.3. Finally, the
US West/Sprint agreement contains the following provision:

“US West agrees to perform and Sprint agrees to pay
for the TELRIC costs of the functions necessary to
combine requested elements in any technically feasible

’ manner either with other elements from US West’s
network, or with elements possessed or arranged for by
Sprint. However, US West need not combine network
elements in any manner requested if not technically
feasible, but must combine elements ordinarily
combined in its network in the manner they are
typically combined.” Jd. at 81a-82a n.3.

"ly remote switching unit, or module, is a small end office
switch that depends on a larger host switch for most of its features and
functions. The remote switching unit usually is located in another
building from the host switch.

11

tule and the no separation rule. See Jowa Utils. Bd., 120 F.3d
at 813; see also 47 C.F.R. § 51.315(b)-(f). Relying on the
Eighth Circuit’s decision, the district court overturned the
WUTC’s decisions approving the language in the agreements
that required US West to combine network elements. See
Pet. App. 27a-29a; 58a-60a; 81a-83a.

The district court affirmed the WUTC’s decisions
requiring US West to allow collocation of remote switching
units. The court held that the WUTC’s decision to require
such collocation was not arbitrary and capricious because
without it the MCI and AT&T would be at a technical and
economic disadvantage. See Pet. App. 33a-34a; 65a-66a.

All parties appealed the district court’s decisions to
the Ninth Circuit. US West appealed, among other issues,
the district court’s decisions regarding the collocation of
remote switching units. The WUTC and the competitors
appealed the district court’s decisions regarding the
combination of network elements. While these Cases were
pending before that court, this Court issued its opinion in
AT&T Corporation. In that decision, this Court overturned
_ the Eighth Circuit’s invalidation of 47 C.F.R. § 51.315(b).

AT&T Corp., 525 U.S. at 393-95. The Court also vacated the
FCC’s definition of “necessary” as that term is used in 47
U.S.C. § 251(d)(2). 525 U.S. at 387-92.

REASONS FOR DENYING THE PETITION

I. The Court Should Not Grant the Petition
Regarding the Ninth Circuit’s Decision Affirming
the Combination Requirements in the Agreements.

US West urges this Court to grant its Petition with
respect to the requirement that US West combine network
elements at the competitors’ request. US West alleges that
the Ninth Circuit improperly invaded the jurisdiction of the
Eighth Circuit to review the FCC’s network element rules,
thereby circumventing the policy behind the Hobbs Act,
28 U.S.C. §§ 2341 et seg. Pet. at 11-12. US West also

12

alleges there is a conflict between the circuits regarding the
obligations of incumbents to combine network elements at
the request of competitors. Jd. at 11-12. US West asks this
Court to grant its Petition even though the Court recently
denied US West’s Petition for Certiorari to review a similar
decision of the Ninth Circuit on nearly identical grounds. US
West Communications, Inc. v. MFS Intelenet, Inc., 193 F.3d
1112 (9th Cir. 1999), cert. denied 120 S. Ct. 2741 (2000),
pet. for reh'g denied 69 U.S.L.W. 3156 (U.S. Aug. 28, 2000)
(No. 99-1641).

A. There Is No Conflict Among Circuit Courts
of Appeal Because the Ninth Circuit’s
Decision Affirming the Combination
Requirements Does Not Implicate the
Hobbs Act.

Here, as in the MFS Intelenet case, the Hobbs Act is
not implicated at all. Contrary to the argument of US West,
the Ninth Circuit did not engage in judicial review of the
FCC’s mandatory combination rules set forth at 47 C.F.R.
§ 51.315(c)-(f}. | Under the Hobbs Act, only the Eighth
Circuit has jurisdiction “to enjoin, set aside, suspend . . . or to
determine the validity of’ that rule. 28 U.S.C. § 2342.
Consistent with the Hobbs Act, the Ninth Circuit did none of
those. In fact, the Ninth Circuit’s decision is premised on the
fact that Rules 315(c)-(f) are invalid. MCI
Telecommunications Corp., 204 F.3d at 1268; Pet. App. 9a.
The Eighth Circuit’s invalidation of Rules 315(c)-(f) simply
left no rule in place requiring incumbent carriers to combine
elements. Jd. Because there was no affirmative FCC
requirement that incumbents must combine elements for
competitors, the question before the Ninth Circuit became:
Did the 1996 Act, in the absence of such rule, prohibit state
commissions from requiring an incumbent to combine
network elements at the request of its competitors? The Ninth
Circuit held that it did not. Jd Because the FCC’s
combination rules were not before the Ninth Circuit for either

13

interpretation or enforcement, that court did not usurp the
Eighth Circuit’s authority to review the rules. Rather, the
Ninth Circuit interpreted the 1996 Act, as guided by this
Court’s decision in AT&T Corporation, and determined that
the combination provisions do not violate the Act. The
Eighth Circuit’s recent reaffirmation of its prior decision to
vacate Rules 315(c)-(f) does not affect the status quo.

US West’s argument boils down to nothing more than
its erroneous assertion that the Eighth Circuit, by virtue of its
review of the FCC rules, is the only court with jurisdiction to
interpret the 1996 Act. This argument is wrong for two
reasons,

First, the Ninth Circuit’s decision represents exactly
what Congress intended when it provided for federal court
review over state commission arbitration decisions, See
47 U.S.C. § 252(e)(6). Congress did not Structure the 1996
Act to provide for review of state commission decisions in a
single federal district court. Rather, Congress permitted
parties aggrieved by state commission determinations to
bring an action in the “appropriate” federal district court. Jd.
Therefore, Congress contemplated that several district courts
would review interconnection agreements to determine
whether the agreements meet the requirements of Sections
251 and 252 of the Act. Jd.

Second, while uniformity of federal law is an
important consideration, federal district courts are not bound
by the decisions issued by other district courts. See, e.g., Fox
v. Acadia State Bank, 937 F.2d 1566, 1570 (11th Cir. 1991)
(district court is not bound by another district court’s
decision, or even an opinion by another judge of the same
district); Colby v. J.C. Penney Co., Inc., 811 F.2d 1119, 1123
(7th Cir. 1987) (“[NJeither this court nor the district courts of
this circuit give the decisions of other courts of appeals
automatic deference; we recognize that, within reason, the
parties to cases before us are entitled to our independent _
judgment.”). Congress was well aware that district courts are

V4

not bound by the decisions of other district courts when it
provided for review of state commission decisions in the
several federal district courts.

It is undisputed that one of the policies behind the
Hobbs Act is to ensure that judicial review of federal agency
action is conducted by a single circuit court, rather than by
many district courts. See Southwestern Bell Tel. Co. v.
Arkansas Pub. Serv. Comm'n, 738 F.2d 901, 906-07 (1984),
vacated on other grounds
476 U.S. 1167 (1986). However, this policy of uniform
judicial review of federal rules does not mean that federal
courts must blindly adhere to a sister court’s interpretation of
federal statutes. The Hobbs Act does not require the Ninth
Circuit to defer automatically to the Eighth Circuit’s
interpretation of the 1996 Act. US West’s argument that the
Hobbs Act empowers the Eighth Circuit with exclusive
authority to interpret the 1996 Act is wrong, and does not
warrant review by this Court.

B. There Is No Conflict Among Circuit Courts
of Appeals In Their Interpretations of the
1996 Act As It Relates to Interconnection
Agreement Provisions That Require an
Incumbent to Combine Network Elements.

US West also argues that there is a conflict between
the decision of the Ninth Circuit and the Eighth Circuit
regarding an incumbent’s obligation to combine unbundled
network elements. Pet. at 11-14. However, no such conflict
exists. The Eighth Circuit, in reviewing the FCC’s rules,
held that the 1996 Act does not require an incumbent to
combine elements at the request of a competitor. Jowa Utils.
Bd. II, 219 F.3d at 759 (citing Jowa Utils. Bd., 120 F.3d at
813). The Ninth Circuit did not say that the 1996 Act
requires an incumbent to combine network elements. Rather,
the Ninth Circuit, in its review of interconnection
agreements, held that the 1996 Act does not prohibit a
- requirement that incumbents combine network elements at

15

the request of competitors. MCI Telecommunications Corp.,
204 F.3d at 1268; Pet. App. 9a.

The United States Court of Appeals for the Fifth
Circuit also has held that the 1996 Act does not prohibit the
inclusion in an interconnection agreement of a provision
requiring an incumbent to combine elements. Southwestern
Bell Tel. Co. v. Waller Creek Communications, Inc., 221 F.3d
812, 821 (Sth Cir. 2000). Following the Eighth Circuit’s
decision in Jowa Utilities Board I, the Fifth Circuit rejected
Southwestern Bell’s argument that the Eighth Circuit’s
decision made such a requirement “illegal” or “unlawful.”
Southwestern Bell, 221 F.3d at 820-21. The Fifth Circuit
held:

“[T]here is nothing ‘illegal’ about the
provision requiring [Southwestern Bell] to
combine network elements for [competitive
providers]. Nothing in the Telecommuni-
cations Act forbids such combinations. Even
if the Eighth Circuit’s decision on this issue is
correct - - which we do not decide today - - it
does not hold that such arrangements are
prohibited; it only holds that they are not
required by law.” Southwestern Bell, 221
F.3d at 821.

Thus, there is no conflict among the circuits regarding
whether a provision in an interconnection agreement
requiring US West to combine network elements at the
request of a competitive provider is prohibited by the 1996
Act. The Court should deny US West’s Petition.

c. In Any Event, State Law Permits the

WUTC to Impose a Requirement that
US West Combine Network Elements At
the Request of the Competitors.

The combination provisions also may be affirmed on
the ground that the provisions may be imposed as a matter of

16

state law. The 1996 Act contemplates that state commissions
may impose requirements that are a function of state law in
their review and approval of interconnection agreements.
See 47 U.S.C. §§ 251(d)(3); 252(e)(3). A state commission’s
decision to order an incumbent to combine network elements
for a competitor would not be preempted by the 1996 Act
because such a decision would not conflict with the pro-
competitive policies of the Act or any if its provisions. See
English v. General Elec. Co., 496 U.S. 72, 78-79 (1990). In
addition, by granting states the authority to apply and enforce
state law in their approval of agreements, Congress clearly
did not preempt the field of local telecommunications
regulation. /d. at 79.

The WUTC has imposed a combination requirement
on incumbent companies as a matter of state law in
arbitrating an interconnection agreement in other cases, as
well.'? The fact that state commissions may impose such a
requirement under state law is a basis for this Court to deny
the Petition.

Il. The Court Should Deny the Petition As to the
Ninth Circuit’s Decision to Affirm the Provisions
in the Agreements That Permit the Competitors to
Collocate Remote Switching Units on US West’s
Premises.

US West asks this Court to grant its Petition as to the
requirement that it permit competitors MCI and AT&T to
collocate remote switching units on its premises. US West
argues that the Ninth Circuit, by affirming this requirement,
circumvented the Hobbs Act authority of the D.C. Circuit,
created conflict among the circuit courts of appeals, and

"See, e.g., In the Matter of the Petition for Arbitration of an
Interconnection Agreement Between AT&T Communications of the
Pacific Northwest, Inc. and GTE Northwest Incorporated Pursuant to

47 U.S.C. Section 252, Docket No. UT-960307, 1998 WL 223213.

(WUTC March 16, 1998).

Ne

17

ignored this Court’s construction of the 1996 Act. However,
the Ninth Circuit’s decision to affirm the provisions is
consistent with the decisions of this Court and the purpose of
the 1996 Act.

A. There Is No Conflict Among Circuit Courts
of Appeals Because the Ninth Circuit’s
Decision Affirming the Collocation of
Remote Switching Units Does Not Implicate
the Hobbs Act.

US West argues that the Ninth Circuit erred by
applying the FCC’s definition of “necessary” -- a definition
that was vacated by the D.C. Circuit -- when it affirmed the
collocation provisions in the agreements. Pet. at 17; see also
GTE Serv. Corp. 205 F.3d at 422-424. This argument fails
for reasons similar to those set forth above concerning
US West’s claims regarding combination provisions,

As argued above, the Ninth Circuit is not bound by
the D.C. Circuit’s interpretation of the Act. Nor must the
Ninth Circuit defer to the D.C. Circuit because that court was
reviewing the FCC’s collocation rules pursuant to the Hobbs
Act. As was the case when the Eighth Circuit vacated the
FCC’s mandatory combination rules, the D.C. Circuit’s
decision to vacate the FCC’s definition of “necessary” simply
leaves no FCC definition of what equipment competitors may
collocate on incumbents’ premises.

In the absence of a binding FCC decision regarding
collocation, the Ninth Circuit properly reviewed the
collocation provisions of the arbitrated agreements to
determine whether they “meet the requirements of” the 1996
Act. See MCI Telecommunications Corp., 204 F.3d at 1268
(quoting 47 U.S.C. § 252(€)(6)); Pet. App. lla. The Ninth
Circuit considered the collocation provisions and determined
that such provisions do not violate the 1996 Act. Jd.

18

B. The Ninth Circuit’s Decision Regarding the
Collocation of Remote Switching Units

Does Not Conflict With the Decisions of -

This Court or Other Circuit Courts of
Appeals.

Contrary to the arguments of US West, the Ninth
Circuit’s decision to affirm the provisions in the agreements
that permit MCI and AT&T to collocate remote switching
units on US West’s premises does not ignore this Court’s
decision in AT&T Corporation vacating the FCC’s
interpretation of “necessary” as that word is used in 47
U.S.C. 251(c)(3). In that decision, this Court held that the
FCC failed to interpret the word “necessary” in a way that
would impose some limitations on the unbundled network
elements incumbents must provide to competitors. AT&T
Corp., 525 U.S. at 388-92. The Court further held that
Congress did not intend to require incumbents to provide
competitors with “blanket access” to their networks. Jd. at
390. Therefore, the Court vacated the FCC’s specific
unbundling requirements. /d. at 392. See also 47 C.F.R.
§ 51.319.

The collocation provisions affirmed by the Ninth

- Circuit do not provide competitors with carte blanche to

collocate any equipment on US West’s premises that they
believe will be useful to them: Rather, the agreement
provisions ordered by the WUTC allow the competitors to
collocate discrete pieces of equipment for the limited purpose
of effecting interconnection and access to unbundled network
elements. See discussion infra pp. 19-20. Therefore, the
Ninth Circuit’s decision does not result in an overly broad
definition of the word “necessary.” The concerns about
unbridled access to the incumbents’ networks that prompted
this Court and the D.C. Circuit to vacate the FCC’s rules
simply are not present in the collocation provision approved
by the Ninth Circuit.

19

The Act requires incumbents, like US West, to
provide for physical collocation of competitors’ equipment
that is necessary for interconnection or access to unbundled
network elements at the incumbents’ premises. 47 U.S.C.
§ 251(c)(6). The WUTC ordered US West to permit both
MCI and AT&T to collocate remote switching units on its
premises. Incumbents must provide interconnection" to their
competitors that is “at least equal in quality” to the
interconnection the incumbent provides. to itself or its
affiliates or subsidiaries. Jd. at § 251(c)(2)(C). By requiring
the collocation of remote switching units, the WUTC
properly implemented the “equal quality” interconnection
requirement of the 1996 Act.

US West incorrectly states that the WUTC allowed
competitors to collocate remote ‘switching units on its
premises because such equipment is “used” for collocation or
access to unbundled network elements. Pet. at 16-17.
Although the “useful” standard was in effect when it issued
its decisions, the WUTC’s reasons for requiring such
collocation extended beyond the “used and useful” definition.

At the conclusion of the arbitration proceedings, the
WUTC decided that US West must permit MCI and AT&T
to collocate remote switching units on US West’s premises.
The WUTC based its decision on the recommendation of its
staff that failure to allow for such collocation would result in
inferior quality interconnection for the competitors. See App.
at la-Sa.

In order to provide local service to their subscribers,
competitive local companies must interconnect their
networks with the incumbents’ networks. Because of their
ubiquitous networks, much of this interconnection must be

“Interconnection” is the physical linking of two networks for
the mutual exchange of traffic. Local Competition Order, 11 FCC Red at
15590, 4 176,

oy 20

done on the incumbents’ premises. If a competitor cannot
place remote switching units in the incumbent’s central
office, then the competitor must extend its loops to its own
central office. One option is to add copper cable between the
incumbent’s and competitor’s central offices, but this would
degrade the service quality. The other option would be to use
back-to-back electronic arrangements. However, this also
would degrade the quality of service to the customer. See id.
at 4a, 8a. The WUTC’s decision to require collocation of
remote switching units assures that MCI and AT&T will
receive interconnection that is at least equal in quality to the
interconnection US West provides to itself. This reasoning is
consistent with the requirements of 47 U.S.C. §§ 251(c)(2)
and (c)(6), as well as the pro-competitive policy of the 1996
Act. App. at 3a-4a.

The WUTC’s orders do not permit the competitors to
collocate remote switching units in order to perform
functions that are not necessary to achieve equal quality
interconnection or access to unbundled network elements.
See, e.g., Pet. App. 94a-95a. The WUTC also expressly
stated that the competitors would not be allowed to use the

remote switching units to avoid paying carrier access charges

to US West. /d. In fact, during a hearing before the WUTC
commissioners in the AT&T proceeding, counsel for
US West said the company would concur in the WUTC
staff's recommendation to require collocation of remote
switching units so long as AT&T would not use the
equipment to avoid paying access charges. App. at 10a. By
limiting the collocation of remote switching units to
functions necessary for interconnection or access to
unbundled network elements, the WUTC _ correctly
implemented the requirements of 47 U.S.C. §§ 251(c)(2) and
(c)(6). |

When a state commission includes a collocation

provision in an interconnection agreement that permits
competitors to obtain “equal quality” interconnection, that

21

provision “meets the requirements of’ 47 U.S.C. § 251(c)(6).
See 47 U.S.C. § 252(e)(6). Therefore, the Ninth Circuit
properly decided that the 1996 Act does not prohibit such a
provision, and this Court should decline to review that
decision.

III. The Ninth Circuit Did Not Expand the Role of
State Commissions Under the 1996 Act, Nor Did It
Disable Federal Court Review of Agreements Or
Threaten The Primacy of Federal Law.

In its petition, US West argues that the Ninth Circuit,
by affirming provisions of interconnection agreements
beeause they do not violate the 1996 Act, has surrendered
‘federal court review over state commission determinations,
and has otherwise upset the primacy of federal law. Pet. at
20-21. This argument has no merit.

A. The WUTC Lawfully Exercised Its Broad
Responsibilities Under the 1996 Act and
The Ninth Circuit Properly Reviewed and
Affirmed the WUTC’s Decisions.

Contrary to US West’s arguments, Congress created a
considerable role for state commissions in implementing the
local competition provisions of the 1996 Act. For example,
state commissions are authorized to arbitrate open issues that
parties to an interconnection agreement cannot successfully
negotiate. 47 U.S.C. § 252(b). With respect to these
disputed issues, state commissions must set the particular
terms, conditions, and prices in a way that meets the
requirements of the 1996 Act. Jd. §§ 252(c) and (d). All
interconnection agreements, whether they are reached
through arbitration, negotiation, or both, must be approved
by the state commission. /d. § 252(e)(1).

In addition, the 1996 Act contemplates that state
commissions may impose requirements that are a function of
State law in their review and_approval of interconnection
agreements. See 47 U.S.C. § 251(d)(3) (state commissions

22

may enforce state policies that establish access and
interconnection obligations of — telecommunications
companies that are consistent with the requirements of
Section 251 and do _ not substantially prevent the
implementation of Section 251 and the purposes of the Act);
47 U.S.C. § 252(e)(3) (state commissions may establish or
enforce state law requirements when __ reviewing
interconnection agreements). In passing the 1996 Act,
Congress did not assign to state commissions the token role
US West urges this Court to adopt. Rather, Congress
established a scheme under which state commissions would
have the primary role in implementing the interconnection
agreements in which the incumbents’ specific obligations are
embodiéd.

The 1996 Act requires US West to make unbundled
network elements available to competitors and also requires
US West to allow competitors to collocate on its premises
equipment necessary for interconnection or access to
unbundled network elements. 47 U.S.C. §§ 251(c)(3); (6).
Currently, there are no binding FCC rules requiring.
incumbents to combine network elements or to allow
collocation of remote switching units. Therefore, US West
argues that the WUTC, by imposing these requirements in
the agreements, has created “new regulatory obligations out -
of whole cloth,” and faults the Ninth Circuit for what it calls
a “hands off approach” in reviewing the agreement. Pet. at
22-23. This argument is not supported by the record or the
Ninth Circuit’s decision and should be rejected.

The combination provisions in the agreements are
consistent with the 1996 Act and with this Court’s decision in
AT&T Corporation. ‘At the time the WUTC imposed the
combination provision, incumbents were required by the
FCC to combine elements, see 47 C.F.R. § 51.315(c)-(f), but
the Eighth Circuit ultimately vacated the FCC requirement.
Therefore, the Ninth Circuit’s task was to decide whether, in
the absence of an FCC rule mandating combination, a

23

provision requiring US West to combine elements violates
the Act. MCI Telecommunications Corp., 204 F.3d at 1268;
Pet. App. 9a. The Ninth Circuit decided that such provisions
do not violate the Act based on this Court’s interpretation of
47 U.S.C. § 251(c)(3) in AT&T Corporation. Id. See AT&T
Corp., 525 U.S. at 394. The Ninth Circuit’s decision to
affirm the combination provisions in the interconnection
agreements hardly results in the creation of a federal
obligation “out of whole cloth.”

Likewise, US West’s argument that the WUTC
disregarded federal law by requiring US West to collocate
remote switching units fails. The WUTC imposed the
requirement in order to facilitate equal quality
interconnection for MCI and AT&T. The fact that the D.C.
Circuit vacated the FCC’s definition of “necessary” does not
change the nature of the WUTC’s collocation requirement.
The WUTC’s decision that collocation of remote switching
units is necessary for equal quality interconnection is based
on 47 U.S.C. § 251(c)(6) as well as on the pro-competitive
policy of the Act.

In providing for federal court review of state
commission determinations, Congress sought to ensure that
arbitrated provisions in interconnection agreements comply
with the 1996 Act. 47 U.S.C. § 252(e)(6). The very fact of
US West’s petition belies its claim that the Ninth Circuit has
disabled federal court review over agreements. The Ninth
Circuit reviewed the agreements and determined that they
meet the requirements of the 1996 Act, which is exactly what
Congress had envisioned.

In affirming the collocation provisions, the Ninth
Circuit was cognizant of the implications of the FCC’s overly
broad definition of “necessary.” MCI Telecommunications
Corp., 204 F.3d at 1269; Pet. App. 10a. However. the court
also recognized that, unlike the D.C. Circuit, it was not
reviewing a rule that could impose unfettered obligations on
incumbents. /d. Rather, the Ninth Circuit reviewed the

24

decision of a state commission to impose a very limited
collocation requirement on US West. Finding that the
provision does not violate the Act, the Ninth Circuit correctly
affirmed it. This Court should deny US West’s Petition.

B. The Ninth Circuit Did Not Dismantle the
Federal Courts’ Jurisdiction to Review
Interconnection Agreements Or Unravel
the Primacy of Federal Law.

The Ninth Circuit’s decisions to affirm the two
requirements at issue do not upset the primacy and
uniformity of federal law. US West complains that the
decisions will result in obligations that “vary from state to
state.” Pet. at 24. However, the 1996 Act does not
contemplate a single, national interconnection agreement to
which all incumbents and competitors must adhere. Instead,
the 1996 Act provides for the arbitration of issues by
individual state commissions. 47 U.S.C. § 252(b). The 1996
Act further authorizes state commissions to impose state law
obligations on parties to interconnection agreements. Jd. at
§ 252(e)(3). Review of interconnection agreements will be
undertaken by many federal district courts, which are not
bound by the decisions of other federal courts. See id.
§ 252(e)(6). In addition, when an agreement (or provision) is
reached entirely through negotiation, it need not meet the
requirements of the 1996 Act at all. In short, the 1996 Act
does not contemplate that interconnection agreements
necessarily will be uniform.

The Ninth Circuit reviewed the interconnection
agreements to determine whether they “meet the
requirements” of the 1996 Act. This is exactly what the 1996
Act requires. In its review, the Ninth Circuit did nothing to
upset the federal judiciary’s authority to review
interconnection agreements for consistency with federal
laws. The Ninth Circuit did not negate the primacy of federal
law. In sum, certiorari by this Court is unnecessary.

. 2

25

CONCLUSION
For the foregoing reasons, the WUTC requests that

this Court deny US West’s Petition for a Writ of Certiorari.

October 10, 2000

CHRISTINE O. GREGOIRE
Attorney General

SHANNON E. SMITH*

Assistant Attorney General
WILLIAM BERGGREN COLLINS
Sr. Assistant Attorney General

P.O. Box 40128 :
Olympia, WA 98504-0128

(360) 664-1192

*Counsel of Record

la

APPENDIX A

[Open Meeting Memorandum prepared by WUTC Staff,
March 5, 1997.]

Agenda: March 5, 1997
Item: 4A
Docket: UT-930309

Companies: AT&T Communications, Inc.
and US WEST Communications, Inc.

Staff: Jing Roth, Regulatory Consultant

Glenn Blackmon, Assistant Director -
Telecommunications

Dave Griffith, Telecommunications
Engineer

Larry Berg, Review Judge
‘Recommendation:

1. Grant in part and deny in part AT&T
Communications, Inc.’s request _ for
modification.

“4 Deny US WEST Communications Inc.’s
request for partial rejection and modification.

3. Reject the agreements as filed and order the
parties to refile in compliance with staff's
recommendations within 60 days.

2a
Discussion

On March 1, 1996, AT&T Communications of the Pacific
Northwest, Inc. (“AT&T”) requested negotiations with
US WEST Communications, Inc. (“USWC”) | for
interconnection under the terms of the Telecommunications
Act of 1996 (“the Act” or “1996 Act”). On July 25, 1996,
AT&T filed with the Commission and served on USWC a
request for arbitration pursuant to the 47 USC § 252(b)(1).
The Commission designated the petition as Docket No.
UT-960309 and appointed Simon J. ffitch to arbitrate the
disputed issues in this case. Hearings were held on October
21 and 22, 1996, evidence was considered, and on November
27, 1996, the arbitrator issued the Arbitrator’s Report and
Decision (“Report”) relating to this docket. On February 4,
1997, the Arbitrator issued a supplemental Report clarifying
the Report and Decision in regard to two issues: payphone
resale and customer transfer charges. David Griffith, Glenn

lackmon and Jing Roth of the commission’s
telecommunications section staff participated in the
arbitration hearings and advised the arbitrator in preparing
the Report.

Under the terms of the Commission’s /nterpretive and Policy
Statement Regarding Negotiation, Mediation, Arbitration,
and Approval of Agreements, under the Telecommunications
Act of 1996 (“Interpretive Statement”), issued in Docket
UT-960269, the companies submitted interconnection
agreements on February 11, 1997. Agreements containing
both arbitrated and negotiated provisions are subject to a 30
day deadline specified in the Act, which in this case is
March 13, 1997. The Commission may either approve or
reject the agreements, with written findings as to any
deficiencies.

AT&T’s R for ification

In its memorandum requesting approval, AT&T asks that the
Arbitrator’s Report and Decision be modified in two areas:
(a) avoided cost discount rate, and (2) collocation of remote

3a

switching units (“RSU”). It is worth noting that on
‘December 6, 1996, AT&T also filed a petition for partial
reconsideration of the same issues it has raised here. In the
supplemental order, the arbitrator reconsidered two of the
issues relating to payphone and customer transfer changes.
Staff believes that the arbitrator has correctly decided these
two issues in the supplemental order.

T f coll ipment — switching

During the arbitration, AT&T requested the ability to place
Remote Switching Units (“RSU”) in collocated space.
USWC stated that switching equipment is not required to be
collocated because it does not meet the “necessary”
requirement in the FCC’s First Order and Report, CC 96-98,
August 8, 1996 (“Order”). The arbitrator adopted USWC’s
position given that the record established that the RSU would
primarily be used for switching function rather than
interconnection.

Staff feels that arguments in favor of having RSUs collocated
in an ILECs central office extend beyond just the legal
interpretations of the FCC Order and the Act. First, the Act
clearly intends to promote competition, and seeks to do so by
encouraging collocation of carriers’ facilities at “technically
feasible” points, and in an efficient manner. In denying
collocation of RSUs, the Commission requires that CLECs
must accept some or all unbundled loop elements at the voice
frequency level in one of the ILEC’s central offices for
transport to an CLEC’s office for switching. The CLEC
would be compelled to find an adequate switching equipment
location near the C.O. This requirement puts the CLECs at a
competitive disadvantage from both a cost and technical
performance standpoint.

4a

Technical standards are based on having a specific set of
cable gauges (thickness of the copper) designed for each
office, depending on the distance the customers are located
from the central office. Thus loop lengths are specifically
designed to conform to the requirements associated with the
location of the central office and switch that they currently
serve. An unbundled loop will remain within the service
standards expected for local telephony as long as that loop
terminates on a switch located in the same central office.
Requiring CLECs to extend loops to another location will
degrade service for that customer to some extent. Whether a
customer notices this change will depend largely on what is
needed to extend the loop to another location, be it more
copper, additional loop electronics, etc., with the most
significant factor being the length of the new loop. In
addition, to the potential for noticeable service degradation,
each extension will have an associated cost, therefore,
making this service less competitive relative to the incumbent
LEC.

The only desirable technical solution is to allow a CLEC the
option to collocate a remote switching unit along with its
other collocatable equipment in the ILECs central office.
Allowance for collocation of RSUs in the incumbent’s
central oftices will at least give CLECs the opportunity to
avoid extending loops if it is not feasible for them to find a
adequate switching equipment location in the same area as an
incumbent’s central office. Limiting the option to RSUs,
means CLECs will have to maintain their large class 5
machines on their own premises. With the RSU alternative
CLECs may substitute switching devices in ILEC’s central
offices in place of extra, possibly inefficient, electronics
equipment needed for back to back arrangements. The use of
RSUs should also reduce the need for extensive back hauling
in the trunking network to reach the CLECs class 5 switch.
To the extent possible, CLECs are encouraged to use RSU
types that are capable of using direct trunking arrangements
to nearby switch locations of the incumbents in order to
lessen usage of the incumbent company’s interoffice trunking
network and local tandem switches for transporting calls.

Sa

Therefore, staff recommends that the arbitrator’s decision be
modified to allow collocation of AT&T’s RSUs in USWC’s
end offices. As part of this modification staff also stipulates
that contract language be modified such that AT&T will not
be permitted to collocate fully equipped switching equipment
(host class 5 switches), and may not use collocated RSUs to
avoid payment of access charges. AT&T and USWC are
encouraged to establish procedures, including an audit
mechanism, that will guarantee that AT&T is not using RSUs
for the purpose of bypassing access charges.

6a

APPENDIX B

[Excerpt from Transcript of June 25, 1997 Open Meeting
before WUTC to consider approval of interconnection
agreement between US West Communications, Inc. and
AT&T Communications of the Pacific Northwest, Inc. ]

1112

BEFORE THE WASHINGTON UTILITIES AND
TRANSPORTATION COMMISSION

In the Matter of the Petition for
Arbitration of an Interconnection
Agreement Between

DOCKET NO.
AT&T COMMUNICATIONS UT-960309
OF THE PACIFIC NORTHWEST, ) VOLUME VIII

INC., and U.S. WEST
COMMUNICATIONS, INC.

PAGES 1112-1171

Pursuant to 47 USC Section 252

Ne ee ee i ee ee ee ee”

A hearing in the above matter was held on June 25,
1997, at 1:30 p.m. at 1300 South Evergreen Park Drive

Southwest _ before The Washington Utilities and

Transportation Commission.

The parties were present as follows:

AT&T COMMUNICATIONS OF THE PACIFIC
NORTHWEST, by DAN WAGGONER, Attorney at Law,
1501 Fourth Avenue, Suite 2600, Seattle, Washington 98101.

7a

U.S. WEST COMMUNICATIONS, INC., by
LARRY BROTHERSON, 7800 East Orchard Road,
Suite 390, Englewood, Colorado 80111.

WASHINGTON UTILITIES AND
TRANSPORTATION COMMISSION STAFF, by JING
ROTH, GLENN BLACKMON, and JEFF GOLTZ,
1300 South Evergreen Park Drive Southwest, Olympia,
Washington 98504.

1114
(COLLOQUY)
PROCEEDINGS

CHAIRMAN NELSON: This is a continuation of
this morning’s open meeting, we will resume order. We are
here on the matter of the interconnection agreement between

AT&T and U.S. West. ...

MR. WAGGONER:

1121

So those are the areas we would like to ask you to modify the

contract and the arbitrator’s recommendation. Let me start

8a

with remote switching units, I think that can be relatively
quick because that’s an issue you have heard about quite a bit
before and which has been extensively addressed in the
Staff's earlier memo. We believe that remote switching units
properly are co-located in U.S. West premises subject to the
recommendations of Staff, that they be of limited size, and
that they not be employed to avoid carrier access charges.
The record in this case demonstrates that they increase
efficiency in the sense that they avoid unnecessary use of
trunking in some situations, and they also enhance the
reliability of the network because if you are able to co-locate

a remote switching unit, if the trunking between the
1122

remote switching unit and the main switching unit breaks
down, the remote switching unit can provide some limited

essentially intra-office type switching.

So it is both more efficient in the sense of avoiding

over-use of inter-office trunking and it also enhances

9a

reliability. And those are the two main points which I
believe have caused Staff to recommend, _ their
recommendation, and we are quite content with the
limitations contained in Staff's recommendation. So that’s

that issue.

1131

MR. BROTHERSON: I believe, as Mr.
Waggoner laid out, the procedure I’m going to respond at
this time to the issues he has raised, then bring up others
secondarily on our motion to reconsider. I would also second
Mr. Waggoner’s statement that we also have raised a lot of
detail in our brief, both sides have briefed these issues
heavily, so I thik while we want to touch on these
expediently for the hearing today, we would certainly
encourage that the additional argument set forth be taken into

consideration. Based on a lot of dispute around RSU has

dealt with it’s ability to bypass access and our concerns

10a

around that area based on AT&T’s representations today that
they concur with the Staff's, I think it was March Sth memo,
and the language in there about not being available for access
bypass. I think we too could concur with the Staffs

memorandum on that, so I don’t think that’s an issue.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1738%3A4. Public record. Not legal advice.