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7-2500-18018-2 P-5733/C-07-296 P-5733,6403/M-07-354 |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE PUBLIC UTILITIES
COMMISSION
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THIRD
PREHEARING ORDER |
Prehearing Conferences were held before Administrative Law Judge Richard C. Luis at 2:00 p.m. on July 13, 2007, and 2:30 p.m. on July 19, 2007 by telephone conference call.
Appearances:
Gregory Merz and Lesley Lehr, Attorneys at Law, Gray, Plant, Mooty, Mooty & Bennett, 80 South Eighth Street, Suite 500, Minneapolis, Minnesota 55402; Hank Kelley and Brett Freedson, Attorneys at Law, Kelley, Drye & Warren, LLP, 333 W. Wacker Drive, Chicago, Illinois 60606; and Greg L. Rogers and Bill Hunt, Attorneys at Law, Level 3 Communications, LLC, 1025 Eldorado Boulevard, Broomfield, Colorado 80021, appeared on behalf of Level 3 Communications, LLC (Level 3).
William E. Flynn, Attorney at Law, Lindquist & Vennum, PLLP, 80 South Eighth Street, Suite 4200, Minneapolis, Minnesota 55402, and John R. Harrington and Melissa Dickey, Attorneys at Law, Jenner & Block, LLP, 330 North Wabash, Suite 4700, Chicago, Illinois 60611, appeared on behalf of Neutral Tandem, Inc. (Neutral Tandem).
Julia Anderson, Assistant Attorney General, 1400
Jason Topp, Attorney at Law,
1. The July 13, 2007 Prehearing Conference was scheduled to address a dispute over whether Sara Baack, Vice-President of Level 3’s Wholesale Division, could be deposed for a further hour by Neutral Tandem in addition to her prior deposition. Neutral Tandem also sought to compel discovery of financial information from Level 3.[1] Qwest filed an Intervention Petition that subsequently was noticed for consideration in the July 13, 2007 Prehearing Conference.[2] The day before the prehearing conference, Level 3 filed a motion to compel more complete answers to discovery from Neutral Tandem.[3] Due to the timing of Level 3’s motion, consideration of the discovery issues was deferred to the July 19, 2007 prehearing conference.
Qwest’s Intervention Petition
2.
Qwest noted that it is one of the larger transit
traffic providers in
3. Level 3 filed an objection to Qwest’s Petition. The proximity of the hearing and the nature of the dispute between existing parties were cited by Level 3 as reasons to deny Qwest’s petition to intervene. No other objections were offered to Qwest’s petition.
4. No other party fully represents the interests of Qwest in this proceeding. While not directly binding on Qwest, any precedent set in the area of transit traffic compensation has the potential to affect Qwest’s interests in future proceedings. Qwest meets the standards for intervention in Commission proceedings.[4]
5. In recognition of the timing of its petition and noting that Qwest requested only a limited status, granting Qwest the status of a formal participant, as provided for in Minn. Rules 1400.6200, subp. 3A and 7829.0900, meets the needs of Qwest while allowing this proceeding to continue on its existing schedule. As a participant, Qwest has the right to file briefs and receive service of filings in accordance with the service list in this matter. Qwest may not sponsor witnesses or engage in examination of the witnesses at the evidentiary hearing. These limitations may be further adjusted, for cause, by motion to the Administrative Law Judge.
Neutral Tandem Discovery Issue –
Baack
5. In responding to an information request from the Department, the answers from Level 3 were emailed to the Department and copied to Neutral Tandem by U.S. Mail. Neutral Tandem received the information too late to make certain inquiries of Level 3’s officer, Sara Baack, in a scheduled deposition.[5] Neutral Tandem maintains that not emailing the information violates an informal agreement between counsel regarding discovery responses. Neutral Tandem requests that Sara Baack be made available for an additional hour of deposition to allow those inquiries.
6. Level 3 maintained that there was no obligation to email the information to Neutral Tandem when the information was provided by U.S. Mail and that there was no new information included in the response to support further deposing the witness. Neutral Tandem disagreed with that characterization of the information and cited examples of responses that warrant further clarification of the sort that may be obtained through in-person questioning.[6]
7. The information provided to the Department by Level 3 is sufficiently relevant to issues in dispute to support the conclusion that Neutral Tandem would have inquired of Ms. Baack regarding that information had it been delivered more promptly. Regardless of whether any informal agreement existed regarding delivery of answers to information requests, Neutral Tandem has demonstrated that a further hour of deposition is appropriate in response to the newly disclosed information.[7] The limitation in the scope of the deposition is that it is only one hour long. In light of Neutral Tandem’s earlier experience in deposing Ms. Baack, time spent making or responding to objections to questions is not included in calculating the hour. Neutral Tandem’s motion for that discovery is granted.
Level 3’s Motion
8. Level 3 brought its motion to compel due to Neutral Tandem’s purported refusals to: 1) provide information regarding the terms and conditions of its contractual relationships with its customers; 2) provide information regarding traffic volumes and network capacity; and 3) appropriately respond to Level 3's requests for admission. Neutral Tandem responded that “Level 3's Motion seeks perhaps the most sensitive trade secret information in Neutral Tandem's possession -- contracts with Neutral Tandem's customers.”[8] Level 3 maintained that this information was needed to “test” Neutral Tandem's contention in this proceeding that its tandem switch pricing was lower than that charged by Qwest.
9. Level 3 maintained that its discovery was relevant to address several issues in this matter, stating:
First, if it is determined that the public convenience requires the continued direct connection between Level 3 and Neutral Tandem, the Commission must then determine the reasonable terms and conditions of such interconnection, including reasonable compensation terms. The terms and conditions under which Neutral Tandem's customers have agreed to terminate traffic transited by Neutral Tandem (whether termination only or in combination with origination) bear on that determination.[9]
10. The fundamental structure of the contractual obligations of originating, switching, and terminating traffic has the originating carrier paying for switching and paying for terminating traffic. There is nothing in that current structure that affords the opportunity for the terminating carrier to seek compensation from the switching provider. There is no information being sought in regard to Neutral Tandem’s customers that is likely to lead to relevant information. Even if some argument could be made regarding relevance, the sensitive nature of the information outweighs whatever marginal benefit could be obtained through the disclosures requested. Level 3’s discovery motion regarding customer contracts is denied.
11. Neutral Tandem objected to Level 3's request that the number of minutes that Neutral Tandem sends to Level 3 and to Qwest on a per-day basis for a period of over a year be identified. Neutral Tandem maintains that it does not maintain that information in the ordinary course of business. Neutral Tandem has produced information to Level 3 showing the number of minutes that Neutral Tandem sends to Level 3 (or its Broadwing subsidiary) on a monthly basis so that Level 3 can bill the originating carriers.[10] Neutral Tandem asserted that the daily records sought would be "ridiculously detailed."[11]
12. Level 3 maintained that the traffic volumes per carrier are relevant to the time and effort that would be necessary to migrate any given carrier, determine that the direct connection is no longer required, and determining the amount of traffic on trunk lines. Level 3 asserts that this information is directly relevant to the issue of public convenience and the extent to which there is going to be any disruption and how that disruption might be mitigated.[12]
13. Since Neutral Tandem does not maintain the information asked for in the form requested and has already provided the information in the form that it does maintain, Level 3’s motion on this issue is denied. Mitigation is not at issue here, since the presence of disruption in telephone service would compel a denial of Level 3’s disconnection petition.
14. Regarding its responses to Level 3's requests for admission, Neutral Tandem maintained that the requests are seeking more legal opinions than factual admissions. The relevant rule in contested cases states:
A party may serve upon any other party a written request for the admission of relevant facts or opinions, or of the application of law to relevant facts or opinions, including the genuineness of any document. The request must be served at least 15 days prior to the hearing, and it shall be answered in writing by the party to whom the request is directed within ten days of receipt of the request. The written answer shall either admit or deny the truth of the matters contained in the request or shall make a specific objection thereto. Failure to make a written answer within ten days will result in the subject matter of the request being deemed admitted unless it can be shown that there was a justifiable excuse for failing to respond.[13]
15. Level 3’s requests for admission are within the scope of allowable discovery. Level 3’s motion to compel on this issue is granted.
Neutral Tandem’s Motion
16.
Neutral Tandem seeks to compel discovery of: 1)
the costs Level 3 claims it incurs to accept terminating traffic from Neutral
Tandem; 2) Level 3's purported rationale for terminating the parties' prior
contracts; and 3) Level 3's assertion that it is or will be providing tandem
transit services in
17. Level 3 maintains that “there's no way to answer these questions without doing a formal full blown cost study.”[16] Neutral Tandem clarified that the only answers being sought were to existing information and not attempting to compel Level 3 to perform any analysis regarding its costs.[17] With the clarification, the burden is not excessive and Neutral Tandem’s motion is granted.
18.
Level 3 maintained that its reasons for
terminating the parties' prior contracts and whether Level 3 is or will be
providing tandem transit services in
19. The statutory provisions at issue in this proceeding set objective standards for determining whether disconnection is appropriate. These standards do not rely on the subjective perceptions of the parties in arriving at a resolution of the issues here. Neither the reasons for seeking disconnection nor Level 3’s possible business plan are relevant to the outcome in this matter. For these reasons, Neutral Tandem’s motion to compel discovery in these two areas is denied.
Based on the files and proceedings in this matter, the Administrative Law Judge makes the following:
Qwest is admitted to this proceeding as a participant, with the right to file briefs and receive service of filings, but not to sponsor or examine witnesses.
Neutral Tandem’s motion for another hour of deposition of Sara Baack is GRANTED. Neutral Tandem’s motion to compel discovery of non-privileged cost data from the files of Ms. Baack and Mr. Choksi is GRANTED. In the event that Level 3 asserts privilege regarding any of the relevant documents, Level 3 shall prepare a privilege log. The remaining portions of Neutral Tandem’s motion, seeking to compel discovery regarding the reasons for contract termination and Level 3’s plans for possible entry into the tandem transit services business, are DENIED.
Level 3’s motion to compel discovery is DENIED, except for the portion of the motion seeking answers to Level 3’s requests for admission, which is GRANTED.
Dated this _27th_ day of July, 2007.
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/s/ Richard C. Luis |
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RICHARD C. LUIS |
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Administrative Law Judge |
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Reported: Janet Shaddix Elling, RPR
Shaddix and Associates
Transcripts Prepared
[4]
[5] There is some evidence indicating that the mailing was not made until the day before the scheduled deposition. Transcript, July 13, 2007, at 20.
[6] Transcript, July 13, 2007, at 23-25 and 36-37.
[7] The ALJ notes that Office of Administrative Hearings follows the Minnesota Supreme Court’s Professionalism Aspirations (http://www.oah.state.mn.us/prof-asp-order.html ). Under the Professionalism Aspirations, informal agreements between counsel as well as “all agreements implied by the circumstances or local customs” are to be complied with by counsel. Communicating responses to information requests by email is customarily performed in all utility matters between all persons on the service list for whom email addresses are provided.
[8] Neutral Tandem’s Opposition to Level 3’s Motion to Compel, at 1. (https://www.edockets.state.mn.us/EFiling/ShowFile.do?DocNumber=4730857).
[9] Level 3 Communications, LLC's Motion to Compel Neutral Tandem to Completely Answer Interrogatories, Document Requests, and Requests for Admission, at 4 (https://www.edockets.state.mn.us/EFiling/ShowFile.do?DocNumber=4727320 ).
[10] Transcript, July 19, 2007, at 60-61.
[11] Neutral Tandem’s Opposition to Level 3’s Motion to Compel, at 3.
[12] Transcript, July 19, 2007, at 59-60.
[13]
[14] Neutral Tandem's Motion to Compel Discovery, at 1 (https://www.edockets.state.mn.us/EFiling/ShowFile.do?DocNumber=4574459 ).
[15]
[16] Transcript, July 19, 2007, at 15.
[17]
[18]