Federal Communications Commission Record 10 FCC Red No

FCC 95-29 Federal Communications Commission Record 10 FCC Red No. 4

THE PACIFIC NORTHWEST BELL Before the TELEPHONE COMPANY, ^, File No. E-89-16 Federal Communications Commission THE BELL TELEPHONE COMPANY Washington, D.C. 20554 OF NEVADA, File No. E-89-17 THE PACIFIC TELEPHONE AND TELEGRAPH COMPANY, File No. E-89-18 In the Matter of SOUTH CENTRAL BELL TELEPHONE COMPANY, File No. E-89-19 LONG DISTANCE/USA, INC., SOUTHERN BELL TELEPHONE AND AMERICAN SHARECOM, INC., TELEGRAPH COMPANY, File No. E-89-20 MID-AMERICAN LONG DISTANCE COMPANY, NEW ENGLAND TELEPHONE AND TELEMARKETING INVESTMENTS, LTD., TELEGRAPH COMPANY, File No. E-89-21 NATIONAL TELECOM OF AUSTIN, and NEW YORK TELEPHONE TOTAL-TEL, USA, COMPANY, File No. E-89-22 Complainants, SOUTHWESTERN BELL E-89-23 v. TELEPHONE COMPANY, File No. CENTEL CORPORATION, File No. E-89-24 THE BELL TELEPHONE COMPANY CINCINNATI BELL, INC., File No. E-89-25 OF PENNSYLVANIA, File No. E-89-03 CONTEL CORPORATION, File No. E-89-26 THE CHESAPEAKE AND POTOMAC GTE CORPORATION, File No. E-89-28 TELEPHONE COMPANY, File No. E-89-04 HAWAIIAN TELEPHONE THE CHESAPEAKE AND POTOMAC COMPANY, File No. E-89-29 TELEPHONE COMPANY OF NATIONAL EXCHANGE CARRIER MARYLAND, File No. E-89-05 ASSOCIATION, INC., File No. E-89-30 THE CHESAPEAKE AND POTOMAC SOUTHERN NEW ENGLAND TELEPHONE COMPANY TELEPHONE COMPANY, OF VIRGINIA, File No. E-89-06 and File No. E-89-31 THE CHESAPEAKE AND POTOMAC UNITED TELEPHONE COMPANY TELECOMMUNICATIONS, INC., File No. E-89-32 OF WEST VIRGINIA, File No. E-89-07 Defendants. NEW JERSEY BELL TELEPHONE COMPANY. File No. E-89-08 MEMORANDUM OPINION AND ORDER DIAMOND STATE TELEPHONE COMPANY, File No. E-89-27 Adopted: January 26, 1995; Released: February 14, 1995 ILLINOIS BELL TELEPHONE COMPANY, File No. E-89-09 By the Commission: INDIANA BELL TELEPHONE COMPANY, File No. E-89-10 I. INTRODUCTION MICHIGAN BELL 1. The defendants listed above have asked for review of TELEPHONE COMPANY, File No. E-89-11 the Common Carrier Bureau©s determination that they im THE OHIO BELL properly assessed the higher of two carrier common line TELEPHONE COMPANY, File No. E-89-12 (CCL) charges on the originating end of calls using the WISCONSIN BELL, INC., File No. E-89-13 complainants© interstate 800 services.© The Bureau found that under section 69.105 of the Commission©s rules2 and THE MOUNTAIN STATES TELEPHONE the ReadyLine Orders2 the higher CCL charge should have AND TELEGRAPH COMPANY. File No. E-89-14 been assessed only once on each call. According to the NORTHWESTERN BELL TELEPHONE COMPANY. File No. E-89-15

1 See Long Distance/USA v. Bell Tel. Co. of Pa., 7 FCC Red some cases, be assessed on the originating end of a call. For 408 (Com. Car. Bur. 1942) (hereinafter Bureau Order). purposes of greater clarity, we will use the terms "lower" and 2 47 C.F.R. § 69.105 (section 69.207 during the period covered "higher." by these complaints). Section 69.105 describes to the lower CCL 3 AT&T Communications Revisions to Tariff F.C.C. No. 2 (800 charge as the "originating" charge, and the higher as the "ter ReadyLine Service), 2 FCC Red 78 (Com. Car. Bur. 1986) minating" charge, even though the "terminating" charge can, in (hereinafter ReadyLine Order), aff©d, 2 FCC Red 5939 (Com. Car. Bur. 1987) (hereinafter ReadyLine Clarification Order); (together ReadyLine Orders).

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BureatiT-the defendants4 had unlawfully assessed the higher terminating end, no CCL charge would be assessed on this CCL charge on the originating end of the complainants© "closed" end.9 To prevent a situation in which a carrier calls at the same time that the terminating LEC was also would pay only the lower, originating CCL charge, the assessing the higher CCL charge. The defendants now argue Commission required that calls with only one open end that the Bureau erred in finding them liable for CCL would be assessed the higher CCL charge on that open overcharges. For the reasons discussed below, we deny the end. 10 defendants© applications for review. 4. AT&T©s "800 ReadyLine" service posed another prob lem, however. Even though this service provided toll-free inw--(l calling, it differed from conventional 800 services II. BACKGROUND by ing two open ends. 11 Because a call using ReadyLine service appeared to the originating LEC to be a conven A. Carrier Common Line Charges and 800 Services tional 800 call, the LEC would assess the higher CCL 2. Carrier common line charges recover the portion of a charge on the open originating end, as apparently required local exchange carrier©s non-traffic sensitive costs of provid by section 69.105(b)(l)(iii). At the terminating end, that ing local switched access to interstate long distance carriers LEC assessed another higher CCL charge because the call that is not recovered through subscriber line charges.5 was terminating on an open end. Addressing this situation Originally, LECs recovered these costs through a uniform in the ReadyLine Clarification Order, the Bureau said that it per-minute CCL charge assessed at each end of a call. In is "unlawful for LECs to assess [higher] CCL charges at the CC Docket No. 86-1 proceeding, however, the Com both the originating and terminating ends on a single mission changed the CCL rate structureto deter uneco call." 12 The Bureau directed originating LECs to calculate nomic bypass at the originating end.6 Under the revised settlements of the overcharges in cooperation with the system, the CCL revenue requirement was to be recovered affected interexchange carriers (IXCs), using customer-pro vided lists of 800 calls for which billing adjustments were through a fixed rate at the terminating end and a varying due. 13 but lower rate at the originating end of a call.7 The origi nating and terminating rates have since been periodically adjusted.8 B. The Complainants© 800 Services 3. Calls using conventional 800 services presented a par 5. The complainants are interexchange carriers who pro ticular problem under the revised CCL rate structure. Be vide 800 services. A typical call using these services is cause 800 services normally use special access on the routed through a LECs exchange carrier common line

4 With the exception of the National Exchange Carrier Associ 26, 1986) (Second WATS Access Charge Order).. ation (NECA), all of the defendants provide local exchange 7 WATS Access Charge Order, 59 RR 2d at 1435, App. B at services either directly or through subsidiaries. Several of the para. 12. defendants that are not local exchange carriers (LECs) them In 1987. upon the recommendation of the Federal/State Joint selves -- Centel Corporation (Centel), Cincinnati Bell, Inc. (Cin Board, the Commission extended this approach to CCL charges cinnati Bell), Contel Corporation (Contel), GTE Corporation through November 30, 1988. MTS and WATS Market Structure, (GTE), and United Telecommunications, Inc. (United) -- claim Report and Order, 2 FCC Red 2953, 2954-55, 2957 (1987). The that it was not proper to name them as defendants. The Bureau Commission later postponed the expiration date for the bi addressed this issue and found that the LEC subsidiaries rather furcated system of CCL charges until March 31, 1989. MTS and than the parent entities should have been named as defendants. WATS Market Structure, Memorandum Opinion and Order on The Bureau concluded, however, that this error was harmless Reconsideration and Order Inviting Comments, 3 FCC Red because the allegations in the complaints were sufficient to 4543. 4549 (1988) (hereinafter MTS/WATS Reconsideration Or allow the parent entities to respond fully on behalf of their LEC der). Effective April 1, 1989, section 69.105 of our rules required subsidiaries, and it granted the complainants© request to name the LECs to set their originating CCL rates at no more than one the LEC subsidiaries as defendants. The Bureau also noted that cent ($0.01) per minute and to set their terminating CCL rates because the complainants intend to litigate the issue of damages to recover the remaining interstate CCL revenue requirement. in the district court, see para. 7, infra, the identities of the MTS and WATS Market Structure, Report and Order, 4 FCC appropriate LEC subsidiaries can be specified at that time. Bu Red 5048, 5051 (1988) (hereinafter Bifurcation Order). The origi reau Order, 1 FCC Red at 410 n.20. The parties have offered no nating and terminating CCL rates must be equal if the calcula arguments that would persuade us that the Bureau©s conclusion tions otherwise specified in section 69.105 of our rules would on this issue is in error. yield a terminating rate that is less than one cent. 5 The subscriber line charge is a flat per-line charge, billed to * Under section 69.105. the CCL charge is only to be assessed on the end user, that is designed to recover for the LECs a portion an "open" end of a call, which is an end that uses exchange of the costs of LEC plant ("local loops") that are allocated to the carrier common line plant to originate or terminate the call. A interstate jurisdiction. "closed" end does not use common line plant. A call can have 6 WATS-Related and Other Amendments of Part 69 of the no, one, or two open ends. See 47 C.F.R. § 69.105(a), (b)(l)(ii). Commission©s Rules. CC Docket No. 86-1 (hereinafter WATS 10 Section 69.105(b)(l)(iii) of our rules, 47 C.F.R. § Access Charge Rule Making): Notice of Proposed Rule Making, 69.105(b)(l)(iii), provides that "[a|ll open end minutes on calls FCC 86-1 (released Jan. 6, 1986) (WATS NPRM); Report and with one open end (e.g., an 800 or FX call) shall be treated as Order, FCC 86-115, 59 RR 2d 1418 (released Mar. 21, 1986) terminating minutes." (WATS Access Charge Order), reconsideration denied, FCC 11 ReadyLine service used its "customers© existing switched ac 86-577 (released Jan. 15, 1987) (Reconsideration Order), further cess local exchange lines at the terminating end rather than the reconsideration denied, 3 FCC Red 496 (1988) (Second Reconsi dedicated access lines used to terminate AT&T©s regular 800 deration Order); Supplemental Notice of Proposed Rule Making, service," thereby providing a way for customers to obtain 800 FCC 86-116 (released Mar. 25, 1986) (Supplemental WATS service without incurring the cost of installing dedicated lines. NPRM); Second Report and Order, FCC 86-377 (released Aug. See ReadyLine Order, 2 FCC Red at 78. 12 ReadyLine Clarification Order. 2 FCC Red at 5943. u Id. at 5942-43.

1635 FCC 95-29 Federal Communications Commission Record 10 FCC Red No. 4 plant to an 800 line provided by an intermediate IXC such 9. In its decision, the Bureau granted the complaints. as AT&T. It is then transferred from the 800 line to a First, the Bureau determined that a call using the com complainant©s facilities by another LEG. At that point, the plainants© 800 services is a single, end-to-end call, un complainant generally routes the call through a second affected by a complainant©s intermediate routing switch, LEG to the end user being called. If the called end user is not two calls as claimed by some defendants. 16 Next, the outside the local exchange area, however, the complainant Bureau found that the 800 services at issue here and routes the call over a private line to the called end user©s AT&T©s ReadyLine services, while not identical in every local exchange area and then through a LEC©s exchange way, share "such significant characteristics as two open carrier common line plant to the called end user. In both ends and the use of an 800 line for the first leg of the cases, the call will originate and terminate on an open end. call." 17 In light of that finding, the Bureau decided that the ReadyLine Orders are applicable in these proceedings. Ap C. The Complaints and the Bureau Order plying the ReadyLine conclusion that it is unlawful to 6. The complainants originally initiated an action in the assess the higher CCL charge at both the originating and U.S. District Court for the District of Columbia to pursue terminating ends of a single call, the Bureau concluded their claims regarding alleged CCL overcharges. The dis that the defendants were liable to the complainants for trict court referred the action to the Commission following CCL overcharges to the extent that the defendants acted as an agreement between the parties that the subject matter of originating local exchange carriers for calls using the com the suit is within the Commission©s jurisdiction. The court plainants© 800 services. Though the complainants had "administratively dismissed" the suit without prejudice14 sought refunds from the defendants as terminating carriers, and retained jurisdiction, noting that "either party may the Bureau noted that credit for the second higher CCL move to vacate the Order of Dismissal and reopen [the] charge in ReadyLine had come on the originating end. The case within 60 days after a final decision by the Federal Bureau said that in the instant proceedings, the "defen Communications Commission." 15 dants who were named as terminating local exchange car 7. Following riers are likely also to be originating carriers for at least the dismissal by the district court, the com some of the calls utilizing plainants filed an "Application in the Nature of a Formal the complainants© 800 Complaint" with the services." 19 All of the defendants have requested review of Commission. The complainants con the Bureau©s decision. tended that their 800 services are "ReadyLine-type" services because both 800 services have two open ends, and they claimed that the defendants had violated the ReadyLlne Orders by assessing a second higher CCL charge on the III. DISCUSSION terminating end of each 800 call. The complainants re quested only declaratory relief from the Commission and A. Whether the Complainants© Service Configuration is a reserved the issue of damages for their district court action, Single Call and is Otherwise Similar to AT&T©s ReadyLine which they intend to renew following completion of the Service instant proceedings. 10. Contentions of the parties. Several of the defendants20 8. Most defendants responded that they do in fact assess challenge the Bureau©s finding that the complainants© call higher CCL charges on the terminating end of the com configuration is a single call and is sufficiently similar to plainants© 800 calls but that they do so as required by law. ReadyLine calls to warrant the application of the The defendants denied levying any unlawful charges and ReadyLine Orders? 1 Bell Atlantic, US West, Nevada Bell, claim that refunds are not warranted. Most defendants also denied that the complainants© 800 services are at all similar to AT&T©s 800 ReadyLine service.

14 Long Distance/USA v. Southern Bell Tel. & Tel. Co.. CA No. Telephone Company, Michigan Bell Telephone Company, The 88-1477, Order of Dismissal (D.D.C. Sept. 22, 1988). Ohio Bell Telephone Company, and Wisconsin Bell, Inc. 15 Long Distance/USA v. Southern Bell Tel. & Tel. Co., CA No. BellSouth owns South Central Bell Telephone Company and 88-1477, Order (D.D.C. Sept. 24. 1988). Southern Bell Telephone and Telegraph Company. NYNEX 16 Bureau Order. 7 FCC Red at 412. owns New England Telephone and Telegraph Company and 17 Id. at 413. New York Telephone Company. Pacific Telesis owns The Pacific 18 Id. Telephone and Telegraph Company (Pacific Bell) and The Bell 1Q Id. Telephone Company of Nevada (Nevada Bell). At the time the 20 The issues and arguments raised by the defendants are, for complaint was filed, US West owned, as separate entities, the the most part, identical. For the sake of convenience, we will defendants Mountain States Telephone and Telegraph (Moun refer to the defendants© arguments as if they were part of the tain States), Northwestern Bell Telephone Company same pleading. To the extent that particular defendants raise (Northwestern Bell), and Pacific Northwest Bell Telephone separate or unique arguments, we will address them specifically. Company (Pacific Northwest). Effective January 1, 1991, We will cite pleadings by the defendants who are Bell operating Northwestern Bell, and Pacific Northwest merged into Moun companies (BOCs) according to the name of the regional BOC, tain States. On January 2, 1991, Mountain States© name was unless the pleadings were submitted separately for each individ changed to US West Communications, Inc. See Mountain States ual BOC. Bell Atlantic is a regional BOC that wholly owns The Telephone & Telegraph Co., 5 FCC Red 1982 (Com. Car. Bur. Bell Telephone Company of Pennsylvania, The Chesapeake and 1990). Potomac (C&P) Company, C&P of Maryland, C&P of Virginia. 21 The remaining defendants, who are not mentioned in this C&P of West Virginia. New Jersey Bell Telephone Company, paragraph, did not take issue with the Bureau©s finding that the and the Diamond State Telephone Company. Ameritech wholly configuration is a single call. owns defendants Illinois Bell Telephone Company, Indiana Bell

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Pacific Bell. Southwestern Bell,22 Cincinnati Bell, and of their services to ReadyLine service.28 The complainants GTE23 each argue that the Bureau improperly ignored contend that a strict application of the Commission©s Part important differences between the two services.24 These 69 rule definitions supports the Bureau©s conclusion that defendants generally maintain that the complainants© ser the complainants© call configuration is one call with two vice configuration is, unlike ReadyLine service, actually open ends.29 The complainants further maintain that the comprised of two calls and that two higher CCL charges defendants© analysis of their services is inconsistent with are therefore justified. According to the defendants who the access charges assessed on functionally similar resold analyzed the call configuration, the first call originates with services such as simple reseller MTS-like services.30 the calling party and terminates at a complainant©s inter 12. In their replies,31 Nevada Bell and Pacific Bell state mediate switch. At that point, the calling party initiates a that the complainants have failed to dispute their claim second call, which originates at a complainant©s switch and that, unlike ReadyLine, the complainants© services involve terminates at the called party©s line. Bell Atlantic, Nevada two interexchange carriers and that a second number must Bell, Pacific Bell, US West, Centel, Cincinnati Bell, GTE, be dialed when the call reaches a complainant©s intermedi and Southwestern Bell add that the Bureau invalidly based ate switch.32 They argue that the need for this second its conclusion that the configuration is one call on cases number shows that the configuration is actually two calls. that deal with "jurisdictional" rather than "billing" issues. In its reply, NYNEX reiterates that the complainants© ser NYNEX and Southern New England Telephone (SNET) vices possess at least three ends.33 Cincinnati Bell argues also argue that the complainants© services are not similar to that the complainants© interpretation of the Commission©s ReadyLine service. They contend, however, that while Part 69 rule definitions does not support the complainants© ReadyLine service possesses two ends, both of which are assertions that the configuration is one call.34 According to open, the complainants© services "possess at least three Cincinnati Bell, the definitions simply state where origina ends": an originating open end, a closed end at a complain tion ends and termination of a call begins for purposes of ant©s switch, and another open end at the terminating the rules. point.25 NYNEX asserts that the originating LEG should be 13. Decision. We agree with the Bureau that a caller compensated with the higher CCL charge "for the use of using the complainants© service configuration is making a the facilities used to originate the 800 call and to terminate single call.35 As the Bureau correctly noted, both court and the call at the complainants© switches," and that the termi Commission decisions have considered the end-to-end na nating LEC should also be compensated with the higher ture of the communications more significant than the fa CCL charge for the use of its facilities at that end.26 cilities used to complete suchP communications for 11. In their opposition to the applications for review,27 the complainants respond that the Bureau properly dis missed the defendants© arguments regarding the similarity

22 Centel merely adopts and incorporates by reference US 1992, the complainants filed a motion for leave to exceed page West©s Application for Review. Centel Application at 2. In addi limitation and for one-day extension of time. This motion was tion, Centel argues that the technical configuration employed to unopposed and is granted. On March 2, 1992, the complainants complete a call, and not whether the call conceptually has two filed a motion to file errata to their opposition in order to make open ends, is determinative of the access charges to be assessed. several corrections. That motion was also unopposed by the Id. at 2 n.3 (citing Leased Data Services, Mimeo No. 32441 defendants and is also granted. (Com. Car. Bur. June 12, 1980); Republic Telecom Emergency On February 27, 1992, Advanced Telecommunications Corpora Request©for Declaratory Ruling, Mimeo No. 1498 (Com. Car. tion (ATC) filed an opposition to the defendants© applications Bur. December 18, 1985)). for review in ail but the US West, Centel, and NYNEX proceed 23 GTE Service Corporation filed an application for review on ings. Ameritech, Pacific Bell, Nevada Bell, BellSouth, and behalf of defendants Contel, GTE, and Hawaiian Telephone Southwestern Bell filed motions to strike ATC©s opposition on Company (collectively "GTE defendants"). the basis that ATC is not a party to the above-captioned pro 24 Bell Atlantic Application at 2 n.4; US West Application at ceedings. We will not accept ATC©s opposition because the 8-13; Nevada Bell Application at 3-5; Pacific Bell Application at Commission©s rules do not contemplate such a filing by a 2-4; Southwestern Bell Application at 12-14; Cincinnati Bell nonparty to the proceedings. We therefore grant the defendants© Application at 15-18; GTE Application at 7. In addition, Nevada motions to strike and deny ATC©s motion to accept a late-filed Bell and the GTE defendants argue that they cannot be found pleading. liable to the complainants because some or all of the complain 8 Complainants© Opposition at 14-20. ants were not their customers. Nevada Bell Application at 2-3; M Id. at 15-18. GTE Application at 2. 30 Id. at 18-20. NECA contends that because it is not a common carrier, it 31 Southwestern Bell filed a motion to file its reply out of time cannot be held liable for CCL overcharges. NECA Application and Cincinnati filed a request to exceed the page limit for its at 1 n.2. We note that the Bureau found the defendants individ reply. Both of these motions were unopposed and are granted. ually liable only to the extent that they provided service to the On April 7, 1992, over 20 days after the defendants filed their complainants and that the exact amount of damages recoverable relies, the complainants filed both a motion for leave to file a from each defendant, if any, was not at issue in these proceed surreply and a consolidated surreply. Ameritech, BellSouth, ings. See Bureau Order, 1 FCC Red at 413 & n.65. As we have Southwestern Bell, and Cincinnati Bell all opposed the com stated in note 4, supra, NECA is the only defendant that did not plainants© motion. The Commission©s rules do not provide for provide local exchange services either directly or through sub the filing of a surreply, and we therefore deny the complain sidiaries. Hence, NECA cannot be held liable for CCL over ants© motion. charges. 32 Nevada Bell Reply at 4; Pacific Bell Reply at 3-4. 25 NYNEX Application at 6; see also SNET Application at 7. 33 NYNEX Reply at 3-4. 2* NYNEX Application at 6.6 34 Cincinnati Bell Reply at 3-4. 2 Prior to filing their consolidated opposition on February 28, 35 See Bureau Order, 1 FCC Red at 412.

1637 FCC 95-29 Federal Communications Commission Record 10 FCC Red No. 4 defining the nature of the communications.36 According to call©s journey ends, but at the telephone line of the called these precedents, we regulate an interstate wire commu party. Thus, to the caller, the complainants© services are nication under the Communications Act from its inception identical to ReadyLine, regardless of whether that caller to its completion. Such an interstate communication does must, as a minor variation, dial a second number at some not end at an intermediate switch. As the Bureau correctly point before the call is completed.39 noted, this view of our jurisdiction under the Act gives rise 16. As the Bureau noted, the complainants© services are to an assumption that the interstate communication itself not identical in every respect to ReadyLine service. None extends from the inception of a call to its completion, theless, we agree with its finding that significant char regardless of any intermediate facilities.37 Applying this acteristics, such as two open ends and the use of an 800 principle to the case before us, we conclude that the con line for the first portion of the call, exist in each. Because figuration is a single interstate communication that does any differences between the services are immaterial to the not become two communications because it passes through matter before us, the Bureau properly concluded that the intermediate switching facilities. While several defendants complainants© configuration is "virtually identical" to the attempt to distinguish the so-called "jurisdictional" nature ReadyLine configuration and that the ReadyLine Orders of a call from its status for "billing" purposes, they fail to provide the relevant analysis of this matter.40 provide a persuasive argument or any authority to support their contention that this distinction should have legal B. Whether Two Higher CCL Charges Were Assessed significance. 17. Contentions of the parties. Ameritech, BellSouth, US 14. NYNEX claims that the complainants© services have West, Southwestern Bell, and Cincinnati Bell argue that three ends, with a third end at the complainants© inter the Bureau improperly assumed,41 that the originating mediate switches, and that the complainants owe higher LECs assessed a higher CCL charge on the IXC providing CCL charges to the originating LEC "for the use of the the underlying 800 service and that the IXC passed this facilities to originate the 800 call and to terminate the call charge on to the complainants.42 Southwestern Bell further at the complainants© switches," and to the terminating LEC contends that the credit mechanism in place for refunding "for the additional use of LEC facilities in terminating the the higher CCL charge assessed on the originating end of call."38 Even if we were to find that a third, intermediate some 800 services refutes the Bureau©s assumption that two end did exist in this configuration, we disagree that the higher CCL charges were assessed on the complainants© existence of that end would alter the CCL rates that the services.43 In addition, some defendants argue that the IXCs complainants should pay to the originating and terminating providing the underlying 800 service should have been LECs. NYNEX relies on the premise that the originating joined as parties to this proceeding because those IXCs LEC is also providing facilities at the supposed intermedi were directly assessed the higher CCL charge on the origi ate end. Because the configuration described in the record nating end and passed that charge on to the does not show that the same LEC would be handling the complainants.44 In their opposition, the complainants call at these two points, we reject the NYNEX premise and respond that there is no reason to believe that the IXCs the argument based on it. would have claimed a credit for the assessment of the 15. In general, all of the defendants© arguments on this higher CCL charge on the originating end of the complain issue ignore or reject the fact that the complainants© ser ants© services and that to have claimed such a credit would vices convey a single communication from the caller to the have violated the Commission©s rules and policies.45 In its called party. Indeed, from the caller©s point of view, any reply, Ameritech contends that the IXCs providing intermediate switching during the call is transparent. The underlying 800 service should have claimed a credit for the record reflects that the user of the complainants© services higher CCL charge under the Commission©s rules and poli intends to make a single call terminating not at a com cies.46 Nevada Bell, Pacific Bell, and NYNEX reiterate that plainant©s intermediate switch, where the 800 leg of the

36 See National Ass©n of Regulatory Utility Comm©rs v. FCC. 42 Ameritech Application at 8; US West Application at 16: 746 F.2d 1492, 1498 (D.C. Cir. 1984) (hereinafter NARUC); BellSouth Application at 10; Southwestern Bell Application at United States v. AT&T, 57 F. Supp. 451, 454 (S.D.N.Y. 1944); 10-11; Cincinnati Bell at 9-10. Nevada Bell and Pacific Bell, New York Telephone Co.. 76 FCC 2d 349, 352 (1980). while acknowledging that the higher CCL charge is assessed on 37 Bureau Order, 7 FCC Red at 412. the originating end. state that "[w|hether or not the intermedi 38 NYNEX Application at 5-6 (citing MTS and WATS Market ate IXC passes this charge along to the complainants is unclear." Structure, Mimeo No. 1498, para. 24, 28 (released December 18, Nevada Bell Application at 6; Pacific Bell Application at 5. Bell 1985) (Commission found that a certain call configuration could Atlantic, Ameritech, US West, and GTE also appear to ac be described as having three ends)). knowledge that the higher CCL charge is assessed but challenge 311 From the caller©s perspective, the dialing of an 800 number the Bureau©s assumption that the CCLh))charges assessed followed by a second number would be similar to a caller using against the IXC providing the underlying 800 service are in a carrier©s 800 access code to. first, gain access to the carrier©s cluded in the IXC©s rates to the complainants. Bell Atlantic network and, then, specifying the called party©s line number. Application at 4; Ameritech Application at 8; US West Applica The similarity between such a service configuration and the tion at 17; GTE Application at 11. complainants© services is not at issue here, but we note that to a 43 Southwestern Bell Application at 10-11. caller, each would appear to be a single call. 44 E.g., Southwestern Bell Application at 11; US West Applica 40 Bureau Order, 7 FCC Red at 413. tion at 15-16; Cincinnati Bell Application at 8-9; NYNEX Ap 41 Ameritech asserts that referral to an administrative law judge plication at 7-8. (ALJ) is necessary to resolve these disputed assumptions. See 5 Complainants© Opposition at 26-27. Ameritech Application at 9. We disagree and find that the 46 Ameritech Reply at 3. record herein is adequate for us to be able to resolve the issues raised by the parties. The necessary facts are present in this record, and the issues were fully briefed by the parties.

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there is no evidence that the higher CCL charge was a of section 69.105 of our rules and should not have been component of the IXC©s rates for the 800 service portion of held liable if overcharges existed on the originating end.54 the call.4 © Southwestern Bell replies that because it has Several of the defendants also argue that the Bureau©s already issued credits for the higher CCL charge to the IXC finding of liability exceeded its delegated authority by providing 800 service, two higher CCL charges have not effecting an improper, retroactive change in the Commis been assessed.48 sion©s rules.55 Southwestern Bell and United claim that 18. Decision. As several of the defendants appear to they are being exposed to double liability because they acknowledge,49 the originating LECs did, in fact, assess the have already issued credits to the IXC for assessing the higher CCL charge on the originating end of the 800 higher CCL charge on the originating end of services sold portion of the call. Indeed, the configuration of the to the complainants.56 underlying 800 service induced that assessment. Viewed 20. Bell Atlantic, Ameritech, US West, Cincinnati Bell, independently of the remainder of the call configuration,50 GTE, SNET, and Southwestern Bell also contend that the the underlying 800 service originates on an open end and Bureau found, without support from the record, that the terminates on a closed end.51 Because the originating LEG defendants were likely to have been originating as well as would know only that the call is using an 800 service, it terminating carriers.57 Southwestern Bell, US West, would assume that the call has only one open end, as is the NYNEX, Cincinnati Bell, and GTE note that the Bureau case with most 800 calls, and that the higher CCL charge is granted relief that the complainants did not seek by finding therefore appropriate on the originating end.52 Consequent the originating LECs liable.58 US West asserts that regard ly, we conclude that the Bureau correctly found that the less of the: call configuration, no refund is owed to the originating LECs did assess the higher CCL charge. Fur complainants.59 Southwestern Bell, US West, and United ther, we find unpersuasive the defendants© suggestion that maintain that the complainants had no customer-carrier the IXC providing the 800 service may have chosen not to relationship with the originating LECs and could only look pass on the CCL charge to its customers, the complainants. to the IXCs providing 800 service for a refund based on They offer no plausible rationale for such a decision on the CCL overcharges on the originating end.60 IXC©s part. Moreover, the Commission has recognized that 21. In their opposition, the complainants maintain that a carrier common line charges are included in the rates for prior Commission ruling requires LECs to provide credits the services that an underlying carrier provides to so as to avoid imposing the higher CCL charge on both resellers.53 In addition, because we have found that the ends of a Ready Line-type service.61 The complainants con higher CCL charge was assessed on the IXCs providing 800 tend that the Bureau©s decision was not a retroactive rule service and that the IXCs included that charge in their 800 change because the Bureau was simply applying relevant rates, the participation of the IXCs providing 800 service is precedent.62 The complainants also claim that they did not not essential to these proceedings. seek relief from the defendants on the terminating end of their services only.63 The complainants further state that C. Liability for the CCL Overcharges they did have a customer-carrier relationship with at least 19. Contentions of the parties. All of the defendants argue some if not all of the defendants.64 In their replies, the in some manner that the Bureau improperly imposed li defendants generally reiterate their original arguments. ability on them, regardless of whether the complainants© 22. Decision. Aside from their "two-call" argument, configuration is one call or two. Nevada Bell, Pacific Bell. which we have discussed above, the defendants do not BellSouth, Bell Atlantic. Ameritech, US West. NYNEX, appear to challenge the Bureau©s conclusion that a single and GTE each claim that the Bureau erred because, as call with two open ends should not be assessed two higher terminating LECs. they imposed the higher CCL charge on the terminating end in accordance with the requirements

47 Nevada Bell Reply at 3; Pacific Bell Reply at 2; NYNEX plication at 6; GTE Application at 9-10. Reply at 3. 55 See, e.g., US West Application at 18-19; BellSouth Applica 48 Southwestern Bell Reply at 5. tion at 7-9; Cincinnati Bell Application at 7-8. 49 Bell Atlantic Application at 4; Ameritech Application at 8; 56 See, e.g., Southwestern Bell Application at 9-10; United US West Application at 17; Nevada Bell Application at 6; Pacific Application at 6. Several other defendants contend that originat Bell Application at 5; GTE Application at 11. ing LECs may now be exposed to double liability. BellSouth 50 This analysis does not imply that the two portions of the Application at 16; Cincinnati Bell Application at 12; NECA complainants© call configuration are separable for purposes of Application at 6-9. CCL assessment. 5 © Bell Atlantic Application at 3-4: Ameritech Application at 51 See infra para. 5. 14; US West Application at 17-18; Cincinnati Bell Application at 52 See 47 C.F.R. § 69.l05(b)(l)(iii) ("All open end minutes on 11; GTE Application at 10-1.1; SNET Application at 9; South calls with one open end (e.g., an 800 or FX call) shall be treated western Bell Application at 5. as terminating minutes."). 58 Southwestern Bell Application at 9: US West Application at 53 See WATS Access Charge Order, 59 RR 2d at 1432 (resellers 14-15; NYNEX Application at 7; Cincinnati Bell Application at should not have to make double contribution toward recovery 5-6; GTE Application at 11. of common line costs); WATS NPRM, FCC 86-1. para. 12 & n.29 59 See US West Application at 13. (reseller makes CCL contribution indirectly through rates for 60 Southwestern Bell Application at 8-9. 11; US West Applica the services it resells). tion at 15-16; United Application at 6. 54 Nevada Bell Application at 5-7 (denies that the complainants 61 Complainants© Opposition at 13-14, 22-23. were customers but states that higher charge was proper on 62 Id. at 13-14. terminating end): Pacific Bell Application at 4-6: BellSouth 63 Id. at 6-8. Application at 4; Bell Atlantic Application at 2-4; Ameritech 64 Id. at 10-13. Application at 3-4, 6; US West Application at 4; NYNEX Ap

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CCL charges.65 Indeed, when the Commission adopted the defendant©s 800 revenues or minutes and the total nation provisions governing CCL charges, it did not state or even wide figure, or a ratio between the number of lines in a imply that any call configuration would require or permit defendant©s territory and the total number of lines in the the assessment of two higher CCL charges.66 As we have U.S. This surrogate could be used to calculate the approxi already found, the originating LECs did assess the higher mate amount of originating traffic using the complainants© CCL charge on the originating end of 800 calls, and several services that each defendant handled, thus allowing a rea of the defendants have acknowledged that they assessed the sonable measure of the damages for which each defendant higher chargeon the terminating end.67 Therefore, given is responsible. that the complainants were unlawfully assessed a second 26. The defendants have suggested that the IXC providing higher CCL charge, we must now determine on whom to the underlying 800 service should bear liability to the place liability for the overcharges. complainants for the CCL overcharges or that only the 23. The Bureau determined that the defendants were IXC, not the complainants, can claim credit for these likely to have been originating carriers for 800 service calls overcharges on the originating end. We disagree with these and are liable for the CCL overcharges. The defendants analyses. The IXCs providing 800 service, who are not now challenge this determination, claiming that they acted parties here, should not bear liability to the complainants only as terminating carriers who lawfully assessed the high because they did not act unlawfully in merely passing er CCL charge. They suggest that any liability should be through the higher CCL charges that they paid on the borne by the originating LECs who actually provided origi originating end of the call configuration. Moreover, con nating access, or by the underlying 800 service provider, trary to certain defendants© claims that they may already who passed on the originating charge to the complainants. have issued credits to the underlying IXC on the originat Another theory is that only the underlying 800 service ing end, we note that such an IXC alone would not have provider, who actually paid the originating CCL charges, grounds to request credits for these charges. The 800 ser can claim credits. vice portion of the configuration, viewed independently of 24. We affirm the Bureau©s approach. First, we must the remainder of the single call, had an open originating clarify that the Bureau did not place liability for the over end and a closed terminating end. Hence, a higher CCL charges on the defendants in their role as terminating charge on the originating end of the 800 portion alone carriers.68 Instead, the Bureau found that the defendants would be proper. Because an underlying IXC could not were liable to the extent that they had acted as originating itself request credit for the originating CCL charges, it carriers. We agree with the Bureau that it is likely that the should not be held liable to the complainants. defendants, with territories covering most of the United States, acted as originating carriers for calls utilizing the complainants© 800 services. The Bureau©s approach, which IV. CONCLUSION adjusts the originating CCL charges to the lower rate, fol 27. For the reasons discussed above, we deny the defen lows the remedy ordered in ReadyLine. The result of the dants© requests for review of the Common Carrier Bureau©s Bureau©s approach is that the complainants would pay the decision in the above-captioned proceedings. We conclude lower CCL rate on the originating end and the higher rate that the defendants, in their roles as originating local ex on the terminating end. This scheme is explicitly con change carriers, unlawfully assessed the higher carrier com templated by section 69.105 of our rules for certain types mon line charge on the originating end of the of calls. As such, the Bureau did not effect a retroactive complainants© 800 services. To the extent that any of the change in the rules. defendants or their subsidiaries © did not act as originating 25. Unlike the situation in ReadyLine, however, the ac carriers, they are not liable to the complainants. The com tual originating LECs for specific calls are not identifiable plainants have stated an intention to pursue the issue of here. Because of the way these services are configured, the damages in their district court action, and we therefore do complainants do not receive the signalling information not reach that issue here.© 2 from the originating end necessary to identify that LEG. Without the ability to identify the originating LECs. the parties would have to develop a surrogate to apportion liability. We agree with the Bureau that surrogates can be an acceptable method by which to apportion damages.6^ For example, a reasonable surrogate might be developed by using LEC data that would indicate the ratio between a

65 Bureau, Order. 1 FCC Red at 413. 69 Although damages are not at issue in this proceeding, any h6 See Bifurcation Order, 4 FCC Red at 5051-53; 47 C.F.R. § later apportionment of damages would have to rely on a sur 69.105; see also WATS Access Charge Order. 59 RR 2d at 1432. rogate. 1444 (only one higher CCL charge specified for single calls), 70 Given our action herein, we dismiss as moot Cincinnati cited in ReadyLine Clarification Order, 2 FCC Red at 5942. Bell©s request for stay and motion to strike the complainants© 6 Pacific Bell Application at 5; BellSouth Application at 4; Bell opposition to the stay request. Atlantic Application at 3; US West Application at 4; NYNEX See n.4, supra.: Application at 6: Ameritech Application at 3-4, 6; GTE Applica 72 Because the complainants did not reserve the right to file tion at 9-10. supplemental complaints on the issue of damages, the Commis 68 We note that at this stage of the proceedings, the complain sion has before it no further issues to be decided in these ants are not arguing that the defendants should be held liable proceedings. only as terminating carriers for the overcharges. See Complain ants© Opposition at 6-8.

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V. ORDERING CLAUSES 28. ACCORDINGLY, IT IS ORDERED, pursuant to sections 4(i) and 208 of the Communications Act of 1934. as amended, 47 U.S.C. § 154(i). 208. that the applications for review filed by the above-captioned defendants ARE DENIED to the extent indicated in this Order. 29. IT IS FURTHER ORDERED that the complainants© Motion for Leave to Exceed Page Limitation and for One- Day Extension of Time filed on February 28, 1992, and the complainants© Motion to File Errata to Opposition filed on March 2, 1992, ARE GRANTED. 30. IT IS FURTHER ORDERED that the motions to strike Advanced Telecommunications Corporation©s oppo sition filed by Ameritech. Pacific Bell, Nevada Bell, BellSouth, and Southwestern Bell on March 10, 11, and 12, 1992, ARE GRANTED. 31. IT IS FURTHER ORDERED that the Advanced Telecommunications Corporation©s Motion to Accept Late- Filed Pleading filed on March 24, 1992, IS DENIED. 32. IT IS FURTHER ORDERED that the complainants© Motion for Leave to File Surreply Based on Newly-Raised Points in Respondents© Replies filed on April 7, 1992, IS DENIED. 33. IT IS FURTHER ORDERED that the Cincinnati Bell©s Request for Stay filed on February 12, 1992, and Motion to Strike filed on March 12. 1992, ARE DIS MISSED. 34. IT IS FURTHER ORDERED that Southwestern Bell©s Motion to File Reply Out of Time filed on March 10, 1992, IS GRANTED. 35. IT IS FURTHER ORDERED that Cincinnati Bell©s Motion for Leave to Exceed Page Limit filed on March 12. 1992, IS GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton Acting Secretary

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