In the Supreme Court of Florida
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IN THE SUPREME COURT OF FLORIDA CHARLES J. CRIST, JR., ) Attorney General, State of Florida, ) HAROLD McLEAN, Public Counsel, ) Counsel, State of Florida, and AARP, ) ) Consolidated Case Nos. Appellants, ) SC04-9, SC04-10, SC04-946 vs. ) ) LILA A. JABER, Chairman, et al., ) constituting the FLORIDA PUBLIC ) SERVICE COMMISSION, an agency of ) the State of Florida, BELLSOUTH ) TELECOMMUNICATIONS, INC., ) VERIZON FLORIDA, INC. and ) SPRINT-FLORIDA, INC., et al., ) ) Appellees. ) ____________________________________) ANSWER BRIEF OF AT&T OF THE SOUTHERN STATES, LLC, KNOLOGY OF FLORIDA, INC., AND MCI WORLDCOM COMMUNICATIONS, INC. Floyd R. Self George N. Meros, Jr. Florida Bar No.: 608025 Florida Bar No. 0263321 E. Gary Early Gray Robinson, P.A. Florida Bar No.: 325147 Post Office Box 11189 215 S. Monroe Street, Suite 701 Tallahassee, FL 32302-1189 Tallahassee, FL 32302 Counsel for Knology of Florida, Inc. Counsel for AT&T and MCI Tracy W. Hatch Donna C. McNulty Florida Bar No: 449441 Florida Bar No.: 894168 101 N. Monroe St., Suite 700 1203 Governors Square Blvd., Ste 201 Tallahassee, FL 32301 Tallahassee, FL 32301-2960 Counsel for AT&T Counsel for MCI TABLE OF CONTENTS Table of Citations……………………………………………………………... iii Statement of the Case and of the Facts………………………………………... 1 Summary of Argument………………………………………………………... 3 Standard of Review………………………………………………………….... 4 Argument I. THE COMMISSION DID NOT ERR IN CONCLUDING THAT THE ILEC PETITIONS “BENEFIT RESIDENTIAL CONSUMERS” WITHIN THE MEANING OF SECTION 364.164(1)(A), FLORIDA STATUTES ……………………..………………………..... 5 A. Statutory Construction ………………………………………..… 6 B. Evidentiary Support …………………………………………..... 14 II. THE COMMISSION DID NOT ERR IN CONCLUDING THAT THE ILEC PETITIONS “INDUCE ENHANCED MARKET ENTRY” WITHIN THE MEANING OF SECTION 364.164(1)(B), FLORIDA STATUTES ………………………………………….…… 19 A. The Commission Adequately Addressed U.S. Telecom ……..... 19 B. The Commission’s Order is Supported by Competent, Substantial Evidence …………………………………………… 22 III. THE COMMISSION DID NOT ERR IN ADDRESSING THE EXTENT TO WHICH SECTION 364.01(4)(A), FLORIDA STATUTES APPLIES TO RATE REBALANCING ............................ 26 Conclusion …………………………………………………………………… 29 Certificate of Font Compliance and Certificate of Service …......…………… 31 ii TABLE OF CITATIONS CASES AmeriSteel Corp. v. Clark, 691 So.2d 473 (Fla. 1997) ………………………... 12 Askew v. Schuster, 331 So.2d 297 (Fla. 1976) ……………………………….... 27 BellSouth Telecommunications, Inc. v. Johnson, 708 So.2d 594 (Fla. 1998) …. 12 Capers v. State, 678 So.2d 330 (Fla. 1996) ……………………………………. 8 Chiles v. Public Service Commission Nominating Council, 573 So.2d 829 (Fla. 1991) ………………………………………………. 6 Citizens of Florida v. Public Service Commission, 435 So.2d 784 (Fla.1983) .... 23 City Gas Co. of Florida v. Florida Public Service Commission, 501 So.2d 580 (Fla. 1987) …………………………………………... 23-24 Closet Maid v. Sykes, 763 So.2d 377 (Fla. 1st DCA 2000) ……………….…...... 8 Coleman v. Coleman, 629 So.2d 103 (Fla. 1994) ……………………………...... 8 DeGroot v. Sheffield, 95 So.2d 912 (Fla.1957) ………………………….……... 24 Florida Cable Television Association v. Deason, 635 So.2d 14 (Fla. 1994) …..... 5 Florida Interexchange Carriers Association v. Clark, 678 So.2d 1267 (Fla. 1996) ……………………………………………. 5,11 GTC, Inc. v. Garcia, 791 So.2d 452 (Fla. 2000) ……………………………. 21-22 Harloff v. City of Sarasota, 575 So.2d 1324 (Fla.2d DCA 1991) …………….... 11 Lamont v. State, 610 So.2d 435 (Fla. 1992) ……………………………...…... 9-10 iii Legal Environmental Assistance Foundation, Inc. v. Clark, 668 So.2d 982 (Fla. 1996) ……………………………………………........ 5 Level 3 Communications, LLC v. Jacobs, 841 So.2d 447 (Fla. 2003) …. 11-12, 23 Mayo Clinic Jacksonville v. Department of Professional Regulation, Board of Medicine, 625 So.2d 918 (Fla. 1st DCA 1993) ………………..... 9 McKendry v. State, 641 So.2d 45 (Fla. 1994) …………………………………... 27 Rhodes v. State, 704 So.2d 1080 (Fla. 1st DCA 1998) …………………….......… 8 Sabawi v. Carpentier, 767 So.2d 585 (Fla. 5th DCA 2000) ………………...… 1, 2 Silva v. Southwest Florida Blood Bank, Inc., 601 So.2d 1184 (Fla. 1992) …….... 9 Smith v. Crawford, 645 So.2d 513 (Fla. 1st DCA 1994) …………………… 12-13 Southwest Florida Water Management District v. Save the Manatee Club, Inc., 773 So.2d 594 (Fla. 1st DCA 2000) …………………….……. 9 Sprint-Florida, Inc. v. Jaber, ___ So.2d ___, 29 Fla. L. Weekly S487 (Fla. 2004) …………………………………….… 4 Stoletz v. State, 875 So.2d 572 (Fla. 2004) ……………………………………... 27 U.S. Telecom Association v. Federal Communications Commission, 359 F.3d 554 (D.C. Cir. 2004) ………………………………………. 19-20 Verizon Florida, Inc. v. Jaber, ___ So.2d ___, 29 Fla. L. Weekly S459, (Fla. 2004) ………………………………. 4-5, 24 Verizon Florida, Inc. v. Jacobs, 810 So.2d 906 (Fla. 2002) …………………….. 8 Williams v. Winn-Dixie Stores, Inc., 548 So.2d 829 (Fla. 1st DCA 1989) ………. 1 iv FLORIDA STATUTES Section 364.01, Florida Statutes …………………………………………….…. 26 Section 364.01(4)(a), Florida Statutes ……………………………….… 25, 27, 28 Section 364.01(4)(c), Florida Statutes ……………………………………….… 26 Section 364.163(2), Florida Statutes ................................................................... 10 Section 364.164, Florida Statutes ……………………………….. 3, 13, 14, 26, 27 Section 364.164(1), Florida Statutes ……………………………………… 6-7, 27 Section 364.164(1)(a), Florida Statutes …………………………………. 5, 10, 15 Section 364.164(1)(b), Florida Statutes ………………………………….…….. 22 RULES Rule 9.210(b)(3), Fla.R.App.P. ............................................................................ 1 Rule 9.210(c), Fla.R.App.P. ................................................................................. 2 LAWS OF FLORIDA Chapter 95-403, Laws of Florida ……………………………………….………. 21 OTHER AUTHORITIES Telecommunications Act of 1996 ………………………………………….…... 21 In the Matter of Unbundled Access to Network Elements, Order and Notice of Proposed Rulemaking, CC Docket No. 01-338 (August 20, 2004) ……………………….……... 20 v STATEMENT OF THE CASE AND FACTS Appellees, AT&T of the Southern States, LLC ("AT&T), Knology of Florida, Inc. (“Knology”), and MCI WORLDCOM Communications, Inc. (“MCI”) accept and adopt the Statement of the Case and Facts in the Answer Brief of the Florida Public Service Commission (“Commission”). In accepting and adopting the Commission’s statement, Appellees do not accept the “Statement of the Case,” such as it is, submitted on behalf of Appellant Charles J. Crist, Jr. There is no statement contained in the Amended Initial Brief that concisely describes the procedural posture of this case as required by Rule 9.210(b)(3), Fla.R.App.P. Rather, the section entitled “Statement of the Case and Facts” contains nothing more than argument and a one-sided view of the “facts.” The use of the statement of the case and facts as an extension of a party’s argument of the merits of the case is improper. See, e.g., Sabawi v. Carpentier, 767 So.2d 585, 586 (Fla. 5th DCA 2000); Williams v. Winn-Dixie Stores, Inc., 548 So.2d 829, 830 (Fla. 1st DCA 1989). Further, Appellees do not agree with the “Statement of the Facts” as presented in the Amended Initial Briefs of either Charles J. Crist, Jr., the Public Counsel or, by reference, the AARP. The voluminous pages of “facts” presented by the Appellants contain an entirely one-sided view of the record, are interspersed 1 with argument such as “the telephone companies . have not submitted evidence a reasonable mind would accept as proof . .” (Amended Initial Brief of Crist at 1), comment extensively on the quality and competence of the “pertinent evidence” as summarized by Attorney General Crist, and even presented the closing argument of Public Counsel as “facts.” (Amended Initial Brief of the Citizens, at 21-22). The courts have recognized that the purpose of a statement of the facts is to provide the court with a basic understanding of the nature of the controversy. Accordingly, “[t]he purpose of providing a statement of the case and of the facts is not to color the facts in one's favor . but to inform the appellate court of the case's procedural history and the pertinent record facts underlying the parties' dispute.” Sabawi, 767 So.2d at 586. The lack of objectivity and the complete one-sidedness of the Appellants’ presentation of the “facts” of this case prevent AT&T, Knology, and MCI from presenting a limited statement as to the “extent of the disagreement” as contemplated by Rule 9.210(c), Fla. R. App. P., and the Committee Notes accompanying the Rule. Therefore, Appellees AT&T, Knology, and MCI ask that the Court substitute the Commission’s Statement of the Case and Facts for purposes of this appeal. 2 SUMMARY OF THE ARGUMENT The Commission was charged with the responsibility of rebalancing telephone rates to implement the Florida Legislature’s instruction set forth in Section 364.164, Florida Statutes. In performing its legislative ratemaking function, the Commission heard and considered a large amount of testimonial and documentary evidence, applied the facts derived from the evidence as part of its fact-finding function, and applied the law to those facts. The Appellants have fixed their analysis of the rate making process on whether individual residential customers may have to bear increases in their flat- rate local service rates, at least in the short-term, to the exclusion of all other relevant factors. The legislature’s directive that rate rebalancing “remove current support for basic local telecommunications services” expressly contemplates that the previously subsidized rates will, of necessity, rise. Thus, the issue to be resolved in this case