Paging appeal underscores interconnection challenges

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WASHINGTON-A federal appeals court panel signaled it was prepared to send back to the Federal Communications Commission an interconnection decision with far-reaching implications for the wireless industry, but the agency could use a legal defeat to revise its policy in such a way that satisfies the court while increasing costs for paging and mobile-phone carriers that connect to local Bell telephone facilities.

Mountain Communications Inc., a small Colorado paging firm, argues the FCC allowed Qwest Communications Inc. to overcharge it for interconnection and in doing so departed from policy established in a ruling three years ago.

“The rule says thou shall not charge under any circumstances. The rule is straight forward,” Mountain Communications lawyer Benjamin Aron told a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit last Tuesday.

Allied Paging Association, Arch Wireless Inc., AT&T Wireless Services Inc., Sprint Spectrum, T-Mobile USA and Western Wireless Corp., concerned consequences of the case could extend beyond a single paging carrier, backed Mountain’s legal challenge.

“To the extent the FCC has excepted the Mountain architecture from the cost apportionment regime created by prior law, and the ILECs (incumbent local exchange carriers) succeed in their attempts to broadly construe the Mountain Order, all wireless carriers could face disruption to their networks and increases in their costs of doing business,” the carriers said in an intervenor brief.

Stewart Block, an FCC lawyer, said the Mountain ruling was not inconsistent with a 2000 decision in which the agency said, among other things, that U S West Communications Inc. could not impose charges for facilities used to deliver traffic originating on its network to TSR Wireless L.L.C., a paging carrier. Qwest is the former U S West.

But the three judges appeared not to buy Block’s argument.

“Under any circumstances wouldn’t we have to remand this case?” asked Judge Laurence Silberman.

Judge David Sentelle agreed. “Why shouldn’t we send this back to the commission to explain why you’re doing what you say you’re doing.”

Block said the FCC was working on a rule-making to refine interconnection guidelines and accused the wireless industry of hyperbole.

“We are suggesting the end of the world is not coming,” said Block.

“We never thought it was,” replied Sentelle, whose lighthearted retort was in sharp contrast to his angry rebuke of Block for talking over Judge Merrick Garland earlier in the argument.

“My basic point here,” said Block, “is that there was toll suppression.” That is FCC terminology for accusing Mountain Communications of illegally avoiding toll charges owed to Qwest.

Last Tuesday’s oral argument not only focused on the FCC’s reciprocal-compensation scheme but also brought to light the fertile ground for conflict that still exists in interconnection as a result of differing service areas, network configurations, regulations and other elements that so distinguish competitive wireless carriers from landline monopolies.

As such, it appears wireless-wireline interconnection policy is still evolving, with uncertain financial ramifications for mobile-phone and paging operators.

While all signs point to a remand, one expert who attended the oral argument warned that such an outcome could end up being a Pyrrhic victory for industry.

“If my reading of the court is correct, the proceedings on remand will ultimately determine the outcome and importance of this case,” said Kenneth Hardman, a communications attorney who has represented the wireless industry on interconnection matters for more than 25 years and currently serves as counsel to the American Association of Paging Carriers.

“The FCC would have the option of affirming its Mountain Communications decision and overruling TSR Wireless,” said Hardman. Or, he added, the FCC could decide to modify the Mountain Communications decision to conform to the TSR Wireless ruling.

Elsewhere, lawyers for California Metro Mobile Communications last Thursday argued the FCC erred in reclaiming a radio channel from its license because the frequency was not properly coordinated at the time the permit was issued.

On Nov. 14 the D.C. Circuit sided with the FCC in rejecting challenges of Ranger Cellular and Miller Communications to the agency’s award of four rural mobile-phone licenses.

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