ORDER NO. 99-492

ENTERED AUG 17 1999

This is an electronic copy and appendices and footnotes may not appear.

OF OREGON

DR 24

DISPOSITION: PETITION FOR DECLARATORY ORDER DENIED

On June 3, 1999, Advanced Telecom Group, Inc., AT&T Communications of the Pacific Northwest, Inc., Electric Lightwave, Inc., NEXTLINK Oregon, Inc., TCG Oregon, Inc., Frontier Local Services, Inc., and Advanced Telecommunications, Inc. (Petitioners) filed a petition with the Public Utility Commission of Oregon (Commission) for a declaratory order interpreting 47 CFR § 51.809. In their prayer for relief petitioners requested that the Commission (1) declare that the Federal Communication Commission’s (FCC’s) "pick and choose" rule applies to existing interconnection agreements, even if those agreements do not contain such a provision; and (2) establish an expedited procedure to enforce modification rights in existing interconnection agreements.

Background

The Telecommunications Act of 1996 (the Act) contains a provision which states as follows:

An incumbent LEC shall make available without unreasonable delay to any requesting telecommunications carrier any individual interconnection, service, or network element arrangement contained in any agreement to which it is a party that is approved by a state commission pursuant to section 252 of the Act, upon the same rates, terms, and conditions as those provided in the agreement.

47 USC § 252(i) (1996). The FCC promulgated a rule, 47 CFR § 51.809, which contained its interpretation of Section 252(i) of the Act. The FCC rule was stayed and then ultimately struck down by the Eighth Circuit Court of Appeals in Iowa Utilities Board v. Federal Communications Commission, 120 F3d 753 (8th Cir 1997). Subsequently, the United States Supreme Court reversed the Eighth Circuit and reinstated the FCC rule. AT&T Corp. v. Iowa Utilities Board, ___US___, 119 S Ct 721, 142 L Ed 2d 834 (1999). Since that time the Eighth Circuit has taken action on remand to reinstate the FCC’s rule.

Positions

The Staff of the Commission (Staff) filed a report on June 22, 1999. Staff recommended that the Commission decline the petition, and that the Commission not issue a declaratory ruling regarding the implementation of the FCC’s "pick and choose" rule. Staff also recommended that the Commission decline petitioners’ request to establish an expedited procedure. Staff explained that there are many sub-issues relating to the implementation of the FCC’s "pick and choose" rule, and gave several examples. Staff concluded that the issues surrounding the FCC rule are not ready for a generic declaration, and recommended that the Commission address the matter through its complaint procedures. Likewise, Staff suggested that the Commission’s existing procedures to resolve complaints are adequate, and that there is no need for the adoption of an expedited procedure.

GTE Northwest Incorporated (GTE) also filed a response to the petition on June 22, 1999. GTE asked the Commission, for a number of reasons, to dismiss or take no action on the petition.

Disposition

At its July 6, 1999, Public Meeting, the Commission adopted Staff’s recommendation to deny the petition for a declaratory order, although it did not necessarily agree with Staff’s underlying rationale. Petitioners seek two forms of relief: issuance of a declaratory order and establishment of an expedited procedure. With regard to petitioners’ first request, the Commission does not agree with Staff’s concerns. The prayer for relief was quite limited: petitioners sought a declaration that the FCC’s rule, 47 CFR § 51.809, applies with full force and effect to existing Commission-approved interconnection agreements, even if those agreements do not contain an express "Most Favored Nations" provision. The prayer for relief did not seek a declaration with regard to the other issues raised in Staff’s Report.

On the underlying merits of the petition, the Commission finds that it is unnecessary for the Commission to issue a declaratory ruling. At the Public Meeting, the Commission suggested the possibility of addressing the concerns raised in the petition through a letter reaffirming prior Commission arbitration decisions. After further consideration, the Commission concludes that it is unnecessary to issue either a declaratory ruling or a letter since the question has essentially been addressed by a federal court. In MCI Telecommunications Corp. v. GTE Northwest, Inc., Civil No. 97-1687-JE, Opinion and Order, (D. Oregon, March 17, 1999), Judge Jelderks extensively discussed the effect of the Supreme Court’s decision, including the factors considered in determining whether a statute or regulation will be applied prospectively or retroactively. See Id., slip op. at 4-16.

"When a federal court interprets a law—whether it be a statute, a regulation, the common law, or the Constitution itself—the court is not creating new law but merely declaring what the law has always meant, even if this interpretation had not previously been acknowledged or conflicts with an earlier interpretation." Id., slip op. at 7. The opinion went on to distinguish between substantive regulations, which create new legal obligations that have the force of law in their own right, and interpretive regulations, which interpret the law. Id., slip op. at 7, 9. With regard to the FCC’s "pick and choose" rule in particular, Judge Jelderks indicated that a challenge to the rule failed in light of the Supreme Court’s decision affirming the FCC rule, stating: "There are no retroactivity issues here, since this requirement is mandated by the Act." Id., slip op. at 57. In other words, the analysis used to determine retroactivity is unnecessary here, where the source of the obligation is the Act itself.

Because a federal court has already considered the applicability of the FCC’s "pick and choose" rule in light of the Supreme Court’s decision, it is unnecessary for the Commission to issue a declaratory ruling on this point.

With regard to petitioners’ second request, the Commission notes that a rulemaking is the proper venue for the establishment of Commission procedure, and that such a rulemaking is currently underway in Docket No. AR 359. While the proposed rule in that docket does not explicitly reference the modification of interconnection agreements, it does provide a procedure to address interconnection disputes. Petitioners will have an opportunity to participate in the rulemaking process and comment on the proposed rule.

ORDER

IT IS ORDERED that, for the reasons set forth above, the petition for declaratory order filed by Advanced Telecom Group, Inc., AT&T Communications of the Pacific Northwest, Inc., Electric Lightwave, Inc., NEXTLINK Oregon, Inc., TCG Oregon, Inc., Frontier Local Services, Inc., and Advanced Telecommunications, Inc., on June 3, 1999, is denied.

Made, entered, and effective ____________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements of OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070. A party may appeal this order to a court pursuant to ORS 756.580.