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Attachment A |
12-2500-17084-2 P-442, 5798, 5340, 5826, 5025, 5643, 443, 5323, 5668, 4661/C-04-235 |
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE PUBLIC UTILITIES COMMISSION
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In the Matter of the Complaint of the Minnesota Department of Commerce for Commission Access Against AT&T Regarding Negotiated Contracts for Switched Access Services |
RECOMMENDATION ON MOTION FOR SUMMARY
DISPOSITION |
This matter came before Administrative Law Judge Steve M. Mihalchick on the Department of Commerce’s motion for summary disposition. Oral argument on the motion was heard on May 24, 2006, and the record closed on that day.
Linda S. Jensen, Assistant Attorney General, 445 Minnesota Street, Suite 1400, Saint Paul, MN 55101, appeared on behalf of the Department of Commerce (Department). Rebecca DeCook, Holland & Hart, LLP, 8390 East Crescent Parkway, Suite 400, Greenwood Village, CO 80111, appeared on behalf of AT&T. Lesley Lehr, Gray Plant Mooty, 500 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402-3796, appeared on behalf of Verizon Business Services, formerly MCI Inc. Joan C. Peterson, Corporate Counsel, 200 South Fifth Street, Room 2200, Minneapolis, MN 55402, appeared on behalf of Qwest.
Based on the memoranda and file herein, and for the reasons set forth in the accompanying Memorandum,
1. The Department’s Motion for Summary Disposition be GRANTED as to the following claims:
a. That AT&T knowingly and intentionally violated Minn. Stat. § 237.74 or a rule or order of the Commission adopted or issued under Minn. Stat. § 237.74, for which AT&T is subject to enforcement under Minn. Stat. § 237.74, subd. 11.
b. That AT&T violated Minn. Rules 7812.2210, subps. 2, 3, and 5, which require rates to be uniform and not unreasonably discriminatory, by offering, charging, and collecting for switched access services, rates that have not been tariffed or otherwise approved by the Commission.
c. That AT&T has refused to provide a service to an IXC in accordance with AT&T’s applicable tariffs, price lists, contracts, and Commission rules and orders, in violation of Minn. Stat. § 237.121, subd. (a)4 and Minnesota Rule 7812.2210, subp. 9.
d. That AT&T violated Minnesota Rule 7810.0500, subp. 1, by failing to have its rates on file with the Commission in accordance with the rules governing the filing of tariffs as prescribed by the Commission;
e. That the rates and terms that AT&T provides to MCI under the Second Unfiled Agreement are unreasonably discriminatory under Minn. Stat. § 237.74, subd. 2.
f. That AT&T’s rates, tolls, tariffs or price lists, charges, or schedules with respect to MCI are unreasonable and unjustly discriminatory; and the Commission may therefore require “termination of the discrimination,” as authorized under Minn. Stat. § 237.74, subd. 4(e).
g. That AT&T violated Minn. Stat. § 237.07, subd. 1, by providing to MCI under the Second Unfiled Agreement specific rates, charges and other terms regarding AT&T’s provision of intrastate switched access service, and by failing to file with the Department these specific rates, charges or terms offered by AT&T.
h. That AT&T engaged in discrimination by knowingly or willfully charging, demanding, collecting, and receiving the untariffed rates for intrastate switched access service under the terms of its unfiled Agreement with MCI, while offering, charging, demanding, collecting, or receiving tariffed rates for intrastate switched access service with regard to other IXCs under similar circumstances, in violation of Minn. Stat. § 237.09, subd. 1.
i. That AT&T engaged in discrimination by offering or providing to a customer intrastate switched access service on a separate, stand-alone basis, but not pursuant to tariff to all similarly situated persons in violation of Minn. Stat. § 237.09, subd. 2.
j. That AT&T knowingly and intentionally violated applicable provisions of Minn. Stat. Ch. 237, Commission orders, and rules of the Commission adopted under Minn. Stat. Ch. 237, and that AT&T is subject to enforcement as set forth in Minn. Stat. §§ 237.16, 237.461 and 237.462.
2. The foregoing Recommendations that summary disposition be granted shall be incorporated into the ALJ’s final Report.
3. This matter will proceed to hearing as scheduled on the issue of what remedial and enforcement action the Commission should take in response to AT&T’s knowing and intentional violations of applicable provisions of Minn. Stat. Chap. 237, Commission orders, and rules of the Commission adopted under Minn. Stat. Ch. 237.
4. The Department shall prefile its direct testimony by July 28, 2006.
Dated: June 26, 2006
/s/ Steve. M. Mihalchick
STEVE M. MIHALCHICK
Administrative Law Judge
On June 16, 2004, the Department filed a Verified Complaint and Request for Commission action in this docket. In the Verified Complaint, the Department alleged that AT&T and other carriers were engaging in illegal price discrimination and concealing the illegal practices from regulators by using unfiled pricing agreements. On July 7, 2005, the Commission approved a settlement with all the parties except AT&T. Thereafter, in October 2005, the Department filed an Amended Verified Complaint against AT&T in which the Department alleged that AT&T violated Minnesota statutes and rules in its provision of intrastate switched access services to MCI subsidiaries, including MCI Network Services. On November 16, 2005, AT&T filed its Answer denying that it had violated any statutes or rules in its provision of intrastate switched access services to MCI Network Services or its subsidiaries.
By order dated January 24, 2006, the Commission reviewed the Department’s Amended Verified Complaint and AT&T’s Answer and determined that it had jurisdiction over AT&T’s provision of intrastate telecommunications services under the Minnesota Telecommunications Act, Minnesota Statutes Chapter 237. In the January 24th Order, the Commission referred the matter to OAH for a contested case proceeding on the following issues:
The issues in this case are whether AT&T has violated Minnesota statutes and rules in its provision of intrastate switched access services to MCI subsidiaries and, if it has, what remedial action the Commission should take.
The parties shall address the above issues in the course of contested case proceedings. They may also raise and address other issues relevant to the Complaint.[1]
On February 27, 2006, Qwest Corporation filed a Petition to Intervene in this matter, and by Order dated March 16, 2006, the Administrative Law Judge admitted Qwest as a party. On March 20, 2006, Verizon (formerly MCI Inc.) was added as a non-party participant.
On March 31, 2006, the Department filed a Motion for Summary Disposition alleging that the undisputed facts demonstrate that AT&T violated numerous Minnesota statutes and rules in its provision of intrastate switched access services to MCI subsidiaries and did so knowingly and intentionally. On April 17, 2006, Qwest and MCI each filed replies to the Department’s Motion. On May 12, 2006, AT&T filed its Response to the Department’s Motion and to Qwest’s Reply.
Summary disposition is the administrative law equivalent of summary judgment. Summary disposition is appropriate where there is no genuine issue as to any material fact and one party is entitled to judgment as a matter of law.[2] The Office of Administrative Hearings has generally followed the summary judgment standards developed in the courts in considering motions for summary disposition of contested case matters.[3]
The moving party has the initial burden of showing the absence of a genuine issue concerning any material fact. A genuine issue is one that is not sham or frivolous. To successfully resist a motion for summary judgment, the nonmoving party must show that there are specific facts in dispute that have a bearing on the outcome of the case.[4] If reasonable minds could differ as to the import of the evidence, judgment as a matter of law should not be granted.[5]
AT&T is a telecommunications carrier that, since 1983, has been granted authority by the Commission to operate as an intrastate interexchange carrier (IXC) and, since 1996, as a competitive local exchange carrier (CLEC) providing local access services in Minnesota.
The Department initiated an investigation in this matter to determine whether AT&T has engaged in a practice of entering into unfiled agreements that violated Minnesota law and Commission rules and orders. On June 16, 2004, the Department filed a Complaint and Request for Commission Action regarding several unfiled agreements, pursuant to which several CLECs agreed to provide AT&T with switched access services at rates that were different from the CLECs’ tariffed rates.
In response to Department Information Requests (IRs), MCI Network Services disclosed two agreements it had with AT&T that AT&T had never filed or disclosed to the Department. Under the terms of the first unfiled agreement, AT&T agreed to purchase from MCI Worldcom Communications intrastate switched access services for its IXC operations at unique prices that were different from the tariffed rates of MCI Worldcom Communications. Under the terms of the second unfiled agreement, AT&T, in its CLEC capacity, agreed to sell intrastate switched access service at a unique price, other than AT&T’s tariffed rate, to various MCI Interexchange carrier subsidiaries operating in Minnesota. Neither of these agreements, nor the unique prices and terms offered in them, were filed with the Commission, Department, or with the Office of the Attorney General-Residential Utilities Division (OAG-RUD), or otherwise tariffed by AT&T.
In the instant complaint, the Department
alleges that AT&T’s second unfiled agreement with MCI violated
Minn. Stat. § 237.07;
Minn. Stat. § 237.09, subds. 1 and 2;
Minn. Stat. § 237.16;
Minn. Stat. § 237.461;
Minn. Stat. § 237.462;
Minn. Rule 7812.2210, subps. 2, 3, 5, and 9;
Minn. Rule 7810.0500, subp. 1.
The Department seeks monetary penalties under Minn. Stat. §§ 237.461, 237.462, and 237.74.
The main issue in this case is whether AT&T violated Minnesota laws and Commission rules by not filing its Agreement with MCI. AT&T argues that switched access service is not a local service, and it maintains that while it does have to file tariffs, it does not have to file contracts or agreements such as the one it had with MCI.
Minnesota Statutes Chapter 237 establishes standards for local service. The extent to which telecommunications carriers are subject to the provisions of Chapter 237 is set forth in Minn. Stat. § 237.035. Minn. Stat. § 237.035 provides as follows:
(a) Telecommunications carriers are subject to regulation under this chapter only to the extent required under paragraphs (b) to (e).
(b) Telecommunications carriers shall comply with sections 237.121 and 237.74.
(c) Telecommunications carriers shall comply with section 237.16, subdivisions 8 and 9.
(d) To the extent a telecommunications carrier offers local service, it shall obtain a certificate under section 237.16 for that local service.
(e) In addition, a telecommunications carrier's local service is subject to this chapter except that:
(1) a telecommunications carrier is not subject to rate-of-return or earnings investigations under section 237.075 or 237.081; and
(2) a telecommunications carrier is not subject to section 237.22.
The Department maintains that it and the Commission have always understood Minn. Stat. § 237.035(e) to mean that the telecommunications carriers’ local service should be regulated under 237 in the same manner as telephone companies’ local service is regulated under Chapter 237. According to the Department, AT&T, as a telecommunications carrier, is subject to all of the provisions of Chapter 237 that govern local service. The Department points out that the Commission’s January 24th Notice and Order for Hearing stated that AT&T’s local service is subject to Chapter 237 by virtue of 237.035(e).[6] Likewise, the Department maintains that the Commission has repeatedly held that the provisions of Chapter 237 that set the standards for local service of “telephone companies” also apply to telecommunications carriers’ local services.[7] Finally, the Department asserts that the Commission recently unequivocally stated that Minn. Stat. §§ 237.07 and 237.09 apply to the local service of telecommunications carriers under terms of Minn. Stat. § 237.035(e).[8]
AT&T, on the other hand, argues that CLECs are not broadly subject to all of the provisions of Chapter 237. AT&T points out that in 1995, the Legislature adopted new legislation designed to permit competition in the local services market by new local services providers or competitive local exchange providers (CLECs). The Legislature incorporated these new local services providers or CLECs into the definition of “telecommunications carriers” in Section 237.01, subdivision 6. The Legislature also adopted new provisions related to the local services market through the enactment of Minn. Stat. §§ 237.035, 237.26, and 237.74. According to AT&T, these three sections address the scope of regulation for “telecommunications carriers.” In addition, AT&T contends that Minn. Stat. § 237.035 provides that telecommunications carriers are subject only to the provisions Sections 237.121, 237.74, and 237.16, subd. 8 and 9. Thus, AT&T argues that it is not subject to Minn. Stat. §§ 237.07 and 237.09, provisions that govern “telephone companies” as opposed to “telecommunications carriers.”
Based upon this history, AT&T also maintains that CLEC operations are subject to the regulatory scheme set forth in the CLEC rules (7811 and 7812) but not the litany of “telephone utility” statutes that traditionally apply to LECs that the Department suggests should apply. In addition, AT&T points out that its CLEC certification order was issued prior to the Commission’s adoption of the CLEC Rules. In its certification order, the Commission stated specifically that AT&T’s authority, service offerings and terms and conditions of service will be subject to the Commission’s local competition rules that were under development. For all of these reasons, AT&T disputes the Department’s claim that the traditional “LEC” regulatory statutes apply to CLECs.
Finally, AT&T argues that to the extent that Minn. Stat. § 237.35(e) applies, it is limited to CLEC’s local service and does not apply to access service. AT&T contends that access service does not fall within the definition of local service. Access service is a service provided to interexchange carriers (IXCs) that permit IXCs to originate and terminate long distance services to their customers. It is not a service offered by CLECs to their retail customers and, AT&T asserts, it has no relationship to the local exchange services CLECs provide to their customers.
The Administrative Law Judge concludes that, pursuant to Minn. Stat. § 237.035(e), AT&T and its activity at issue in this docket are subject to the provisions of Chapter 237. Section 237.035(e) provides that “a telecommunications carrier’s local service is subject to this chapter …” and that “telecommunications carriers shall comply with section 237.16, subdivisions 8 and 9.” In addition, Minn. Stat. § 237.16, subd. 13, makes it clear that local service providers are subject to all of the provisions of Chapter 237 until the Commission completes the process of establishing local service rules.[9] Moreover, the Commission directly addressed this issue in AT&T’s Certificate of Authority application to provide local service, when it stated “Minn. Stat. § 237.035(e) provides that a telecommunications carrier’s local service will be subject to Minn. Stat. Ch. 237, with the exception of rate of return investigations and depreciation requirements.”[10]
The Administrative Law Judge is also not persuaded by AT&T’s argument that switched access is not a local service within the meaning of Minn. Rule 7812.2210 or Minn. Stat. § 237.035(e). Minnesota Rule 7812.0100, subp. 33, defines “local service” to mean “dial tone, access to the public switched network, and any related services provided in conjunction with dial tone and access, including services that may be required under part 7812.0600.”[11] Minn. Stat. §§ 237.761 and 237.773, and Minn. Rule 7810.0100, subp. 23, expressly provide that local exchange services include local switched access services. Minn. Stat. § 237.761, subds. 2(1) and 3(3), for example, enumerates rates that are regulated by the Commission and it states that “price-regulated services” include services that are: “essential for providing local telephone service and access to the local telephone network” including, specifically “switched network access service.”
In addition, Minn. Rule 7810.0100, subp. 23,
which applies to all carriers in
Based on these conclusions, each specific allegation contained in the Amended Complaint will be addressed below.
Under Minn. Stat. § 237.74, subd. 1, AT&T is required to file with the Department its tariff or price list for each service on or before the effective date of the tariff or price list, containing the rules, rates, and classifications used by it in its telephone business. It is undisputed that AT&T entered into two unfiled Agreements with MCI but did not file the terms with the Department as a unique price list or tariff term. Instead, AT&T filed and maintained a separate tariff under which AT&T provided less favorable terms to other carriers that did not reach a unique agreement with AT&T.
AT&T argues that Minn. Stat. § 237.74, subds. 2 and 3, permits telecommunications carriers to enter into contracts and the contracts may contain volume discounts and other customer-specific pricing. AT&T argues that nothing in Minn. Stat. § 237.74, subd. 1, requires that such contracts for special customer-specific pricing be filed with the Commission or in any way incorporated into a company’s tariff.
Minn. Stat. § 237.74, subd. 1, requires AT&T to file either a tariff or a price list for each service it provides. To read into this provision, as AT&T argues, an exception for stand-alone contracts would allow carriers to circumvent the rate filing requirement by entering into unfiled agreements and would render the tariffing obligations meaningless. Moreover, Minn. Rule 7812.2210, subp. 5, specifically requires a tariff filing for unique pricing. The Administrative Law Judge concludes that by not filing its unique MCI rates, AT&T violated Minn. Stat. § 237.74, subd. 1. The facts are not in dispute and the Administrative Law Judge recommends that the Department’s motion for summary disposition with respect to this allegation be GRANTED.
Under Minnesota Rule 7812.2210, subps. 2 and 3, AT&T is required to file with the Commission six copies of a comprehensive tariff that contains all the rules, rates, and classifications, including all amendments thereto, and also file one copy with the Department and one copy with the Office of the Attorney General-Residential Utilities Division (OAG-RUD). It is undisputed that AT&T entered into an unfiled Agreement with MCI but did not file the terms with the Department, OAG-RUD, or Commission as a unique price list or tariff term. Instead, AT&T filed and maintained a separate tariff under which AT&T provided less favorable terms to other carriers that did not reach a unique agreement with AT&T
As discussed above, AT&T argues that wholesale switched access services are not “local services” and therefore its Agreement with MCI is not subject to the requirements of Minnesota Rule 7812.2210, subp. 2 and 3, which mandates filing requirements for each “local service offering.”[12] Accordingly, AT&T contends that nothing in Rule 7812.2210 requires it to file its contracts for non-local services, such as the MCI access services Agreement at issue here.
The Administrative Law Judge has concluded that switched access services are local services, within the meaning of Minnesota Rule 7812.2210. Subparts 2 and 3 of that Rule require AT&T to file either a tariff or a price list for each service. By not filing its MCI rates, AT&T violated Minnesota Rule 7812.2210, subps. 2 and 3. The facts are not in dispute and the Administrative Law Judge recommends that the Department’s motion for summary disposition with respect to these allegations be GRANTED.
Pursuant to Minnesota Rule 7812.2210, subp. 9, and Minn. Stat. § 237.121(a)(4), AT&T may not refuse to provide a service, product, or facility to a telephone company or telecommunications carrier in accordance with its applicable tariffs, price lists, or contracts and with the Commission’s rules and orders. The Department contends that AT&T has refused to provide switch access service to MCI and other telecommunications carriers in accordance with the Commission’s rules and orders.
AT&T argues that Minn. Stat. § 237.121 clearly contemplates that a telecommunications carrier may provide service under a tariff or contract. AT&T maintains that it has provided MCI service in accordance with the terms of its Agreement, and it has provided service to other providers in accordance with its tariffs. Because it has provided service in accordance with its tariff and Agreements, AT&T maintains that the Department cannot establish that it violated Section 237.121 or Rule 7812.2210, subp. 9.
Again, the facts are not in dispute. AT&T failed to provide services in accordance with its applicable tariffs and with the Commission’s rules and orders. The Administrative Law Judge recommends that the Department’s motion for summary disposition with respect to these allegations be GRANTED.
Pursuant to Minnesota Rule 7810.0500, subp. 1, each telephone utility must have its tariff on file with the Commission in accordance with the rules governing the filing of tariffs as prescribed by the Commission. “Telephone utility” is defined to mean “any person, firm, partnership, cooperative organization, or corporation engaged in the furnishing of telecommunication service to the public under the jurisdiction of the commission.”[13] The Department maintains that AT&T meets the broad definition of a “telephone utility.” Because it did not have its comprehensive tariff or the terms of its Agreement with MCI on file with the Commission in accordance with the rules governing the filing of tariffs as prescribed by the Commission, the Department contends that AT&T has violated Minnesota Rule 7810.0500, subp. 1.
AT&T argues that Minnesota Rule 7810.0500 does not apply to it. According to AT&T, the Commission has been very clear that the rules governing CLECs are set forth in Minn. Rule 7812.2210. AT&T asserts that when the Commission adopted Minn. Rule 7812.2210, it stated in its Statement of Need and Reasonableness (SONAR) that the intent of this section was “to specify that the Commission would exercise its regulatory authority over CLECs only to the extent provided for in, or necessary to implement the requirements of, Chapter 7811 or 7812 as appropriate.”[14] Accordingly, AT&T contends that there is no legal basis for the assertion that Minn. Rule 7810.0500 applies. Moreover, AT&T maintains that, like Minn. Stat. § 237.74, nothing in Minnesota Rule 7810.0500 requires it to file contracts such as the ones it had with MCI.
Minnesota Rules Chapter 7812 references the applicability of Minnesota Rules Chapter 7810 to CLECs. For example, Minn. Rule 7812.0700, subp. 1, states that “local services provided by a local service provider (LSP) must meet the standards in … applicable commission orders and rules, including parts 7810.0100 to 7810.6100 or their successor parts.” The Administrative Law Judge concludes that Minn. Rule 7810.0500 does apply to AT&T, and that AT&T violated subpart 1, by failing to have its tariff on file with the Commission. The facts are not in dispute and the Administrative Law Judge recommends that the Department’s motion for summary disposition on this allegation be GRANTED.
The Department also argues that by offering preferential rates to MCI that it did not file with the Department, OAG-RUD, or the Commission, AT&T violated Minn. Stat. § 237.74, subd. 2, and Minnesota Rule 7812.2210, subp. 5. Both Minn. Stat. § 237.74, subd. 2, and Minnesota Rule 7812.2210, subp. 5, prohibit telecommunications carriers from offering services upon terms or rates that are “unreasonably discriminatory.” Although carriers are permitted to enter into volume discount contracts with customers and offer unique pricing terms under Minn. Stat. § 237.74, subds. 2 and 3, the Department argues that if the rates and terms are not filed as required under Minn. Stat. § 237.74, subd. 1, and Minnesota Rule 7812.2210, the rates and terms are unreasonably discriminatory. In other words, the Department maintains that in order for a carrier to reasonably discriminate, it must file its rates as required and meet the conditions set forth at Minnesota Rule 7812.2210, subp. 5, otherwise the rates and terms are per se unreasonably discriminatory.
AT&T argues that the Department has presented no evidence to establish that its Agreement with MCI is unreasonably discriminatory and that the price difference is not justified. According to AT&T, the Department has simply stated that there is a price difference between the rates AT&T charged MCI and the rates it filed, and therefore the rates in the Agreement are unreasonably discriminatory. AT&T points out that Minn. Stat. § 237.74, subds. 2 and 3, permit AT&T to enter into contracts and the contracts may contain volume discounts and other costumer unique pricing terms. AT&T contends that the fact that it did not file its terms with MCI is not enough to establish that its price differences are not justified. Instead, AT&T argues that the Department must establish that other “similarly situated” IXC customers qualified for the unique pricing or special term and did not get it, or that the Agreement with MCI did not fall within the category of contracts permitted under Minnesota law.
The Administrative Law Judge is persuaded that by offering unique pricing to MCI that it did not file as a tariff, AT&T engaged in unreasonable discrimination in violation of Minn. Stat. § 237.74, subd. 2, and Minnesota Rule 7812.2210, subp. 5. Minnesota Rule 7812.2210, subp. 5, permits CLECs, like AT&T, to offer telecommunications service within the State only if the rates are uniform and the terms and rates are not “unreasonably discriminatory.” Although the term “unreasonable discrimination” is not defined, the only exceptions permitted to the uniform rate requirement are listed at Minnesota Rule 7812.2210, subp. 5A. Thus, a CLEC’s ability to reasonably discriminate with respect to its rates and terms is limited to these six specific exceptions; anything else, is unreasonable discrimination. Moreover, Subpart 5A provides that a CLEC may only qualify for one of these exceptions if it first files its unique price offering with the Commission under Rule 7812.2210, subp. 2.[15]
Contrary to AT&T’s argument, the Department does not have to present evidence to establish that the rate in its Agreement with MCI is unreasonable or unjustified. AT&T’s Agreement with MCI does not meet the limited exceptions to the prohibition against discrimination allowed under subpart 5A. Because AT&T did not offer uniform rates and failed to file its unique price arrangement as a tariff, AT&T engaged in unreasonable discrimination in violation of Minn. Rule 7812.2210, subp. 5, and Minn. Stat. § 237.74, subd. 2, as a matter of law. There are no fact issues in dispute. The Administrative Law Judge recommends that the Department’s motion for summary disposition on this allegation be GRANTED.
Minn. Stat. § 237.07, subd. 1, requires every telephone company to file with the Department a specific rate, toll, or charge for every noncompetitive service, and a price list for every kind of service subject to emerging competition, used by it in the conduct of the telephone business, including switched access service. AT&T failed to file with the Department the unique rates that it used in its Agreements with MCI. As discussed above, AT&T argues that only specific provisions of Chapter 237 apply to it and that this provision is not one of them. The Administrative Law Judge, however, has concluded that CLECs are subject to all of the provisions of Chapter 237. Because the facts are not in dispute, the Administrative Law Judge further concludes that AT&T violated Minn. Stat. § 237.07, subd. 1, by failing to file its unique rates with the Department. The Administrative Law Judge recommends that the Department’s motion for summary disposition with respect to this allegation be GRANTED.
Minn. Stat. § 237.09, subd. 1, prohibits a carrier from knowingly and willfully demanding, collecting, or receiving from a carrier less compensation for intrastate switched access service than it does from any other carrier for local service under similar circumstances. Subdivision 2 prohibits companies from offering or providing intrastate switched access service to one carrier on a separate, stand-alone basis unless that service is offered pursuant to tariff to all similarly situated persons, including all telecommunications carriers and competitors.
The Department argues that AT&T’s actions in entering into an agreement with MCI, and charging MCI less for intrastate switched access service than it charged other carriers constitutes a violation of Minn. Stat. § 237.09, subd. 1. In addition, the Department contends that by offering and providing intrastate switched access service to MCI on a unique separate basis, not pursuant to tariff under which the rate was offered to all similarly situated carriers, AT&T violated Minn. Stat. § 237.09, subd. 2.
Finally, the Department argues that this illegal activity on the part of AT&T was knowing, intentional and willful within the meaning of Minn. Stat. §§ 237.74, 237.09, subd. 1, 237.16, 237.461, and 237.462. The Department asserts that AT&T purposefully filed a tariff regarding intrastate switched access service and purposefully executed a contract with MCI for the sale of intrastate switched access with terms that were different from the tariff. Such conduct amounts to AT&T knowingly and intentionally engaging in illegal activity.
AT&T contends that it did not engage in any intentional or knowing violations of Minnesota law and Commission rules. AT&T maintains that the Department has failed to show any active knowledge and intent on its part to do anything other than enter into an agreement to settle disputes that existed between it and MCI. According to AT&T, in order for a violation to be “knowing or intentional” the Department would have to show that AT&T knew the act it performed was wrongful.
The Administrative Law Judge concludes that the facts are not in dispute and that AT&T violated Minn. Stat. § 237.09 by purposefully entering into an agreement with MCI in which it charged MCI less for intrastate switched access service than it charged other carriers, and provided intrastate switched access service to MCI on a unique separate basis, not pursuant to tariff under which the rate was offered to all similarly situated carriers. The Administrative Law Judge also concludes that because AT&T purposefully engaged in this illegal conduct, its actions were knowing and intentional within the meaning of Minn. Stat. §§ 237.74, 237.09, subd. 1, 237.16, 237.461, and 237.462. Therefore, the Administrative Law Judge recommends that the Department’s motion for summary disposition with respect to these allegations be GRANTED.
However, the Department’s request that the Administrative Law Judge make conclusions with respect to the relief sought is denied. Generally, the issue of penalty is a factual matter that cannot be decided on summary disposition. Therefore, the issues of penalty and enforcement action will proceed to hearing.
S. M. M.
[1] Docket 04-235, “Notice and Order for Hearing,” January 24, 2006, at p. 2.
[2] Sauter v. Sauter, 70 N.W.2d 351, 353 (
[3] See
[4] Thiele v. Stich, 425 N.W.2d 580, 583 (
[5]
[6] ITMO of the Application of AT&T
Communications of the Midwest, Inc. for a Certificate of Authority to Provide
Local Services, Docket No. 96-211, Order Granting Certificate of Authority
With Conditions, July 15, 1996, p. 7.
(The Commission rejected AT&T’s argument that that approval of its
tariffs is not necessary, since AT&T is regulated as a telecommunications
carrier under
[7] ITMO of the Application of AT&T
Communications of the Midwest, Inc. for a Certificate of Authority to Provide
Local Services, Docket No. 96-211, Order Granting Certificate of Authority
With Conditions, July 15, 1996, p. 7.
(The Commission rejected AT&T’s argument that that approval of its
tariffs is not necessary, since AT&T is regulated as a telecommunications
carrier under
[8] In re the Complaint of PrairieWave
Telecommunications, Inc. Against AT&T Communications of the
[9] The section states: “Notwithstanding any provisions of section 237.035 and 237.74 to the contrary, before adopting the rules under subdivision 8, the local services provided by a telecommunications carrier are subject to this chapter in the same manner as those local services of a telephone company regulated under this chapter …”
[10] ITMO of the Application of AT&T Communications of the Midwest, Inc. for a Certificate of Authority to Provide Local Services, Docket No. 96-211, Order Granting Certificate of Authority With Conditions, July 15, 1996, p. 7.
[11]
[12]
[13]
[14] SONAR at p. 9.
[15]