No UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. RONAN TELEPHONE COMPANY and HOT SPRINGS TELEPHONE COMPANY,

Transcription

1 Case: /23/2012 ID: DktEntry: Page: 1 of 25 No UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT RONAN TELEPHONE COMPANY and HOT SPRINGS TELEPHONE COMPANY, v. Petitioners, FEDERAL COMMUNICATIONS COMMISSION and UNITED STATES OF AMERICA, Respondents, T-MOBILE USA, INC.; SPRINT CORPORATION; NEXTEL COMMUNICATIONS, INC.; and METROPCS COMMUNICATIONS, INC., On Petition for Review of an Order of the Federal Communications Commission Respondents-Intervenors. BRIEF OF AMICUS CURIAE CTIA THE WIRELESS ASSOCIATION IN SUPPORT OF RESPONDENTS MICHAEL ALTSCHUL SENIOR VICE PRESIDENT, GENERAL COUNSEL CTIA THE WIRELESS ASSOCIATION th Street, N.W., Suite 600 Washington, D.C (202) (202) (fax) SCOTT H. ANGSTREICH JOSHUA D. BRANSON KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C M Street, N.W., Suite 400 Washington, D.C (202) (202) (fax) July 23, 2012 Counsel for Amicus Curiae CTIA The Wireless Association

2 Case: /23/2012 ID: DktEntry: Page: 2 of 25 CORPORATE DISCLOSURE STATEMENT Pursuant to Federal Rule of Appellate Procedure 26.1, CTIA The Wireless Association submits the following corporate disclosure statement: CTIA is a Section 501(c)(6) not-for-profit corporation organized under the laws of the District of Columbia and represents the wireless communications industry. Members of CTIA include service providers, manufacturers, wireless data and Internet companies, and other industry participants. CTIA has not issued any shares or debt securities to the public, and CTIA has no parent companies, subsidiaries, or affiliates that have issued any shares or debt securities to the public.

3 Case: /23/2012 ID: DktEntry: Page: 3 of 25 TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT... i TABLE OF AUTHORITIES... iii STATEMENT OF INTEREST OF AMICUS CURIAE... 1 INTRODUCTION AND SUMMARY... 3 ARGUMENT... 4 I. THE T-MOBILE ORDER, LIKE SIMILAR COMMISSION ACTIONS TO REDUCE THE BURDENS IMPOSED ON WIRELESS CARRIERS, HAS PROMOTED INNOVATION AND LOWERED COSTS... 4 II. III. PETITIONERS ARGUMENTS THAT THE T-MOBILE ORDER CONFLICTS WITH THE COMMUNICATIONS ACT ARE MERITLESS PETITIONERS CLAIMS THAT THE T-MOBILE ORDER MANDATES BILL AND KEEP FAIL CONCLUSION CERTIFICATE OF COMPLIANCE ii

4 Case: /23/2012 ID: DktEntry: Page: 4 of 25 TABLE OF AUTHORITIES Page CASES Pacific Bell v. Pac-West Telecomm, Inc., 325 F.3d 1114 (9th Cir. 2003)... 5 US West Communications, Inc. v. Hamilton, 224 F.3d 1049 (9th Cir. 2000) Verizon Maryland Inc. v. Public Serv. Comm n, 535 U.S. 635 (2002)... 5 STATUTES, REGULATIONS, AND RULES Communications Act of 1934, as amended, 47 U.S.C. 151 et seq.: (b) (b)(5)... 3, 5, 11, (c) (f)(1)... 4, 12, (e)(1) (b)(7) (c) Telecommunications Act of 1996, Pub. L. No , 110 Stat , C.F.R (a)... 1 iii

5 Case: /23/2012 ID: DktEntry: Page: 5 of C.F.R (b)(2)... 6 Fed. R. App. P. 29(a)... 2 Fed. R. App. P. 29(c)(5)... 2 ADMINISTRATIVE DECISIONS 2011 ICC-USF Order: Report and Order and Further Notice of Proposed Rulemaking, Connect America Fund, 26 FCC Rcd (2011), petitions for review pending, In re FCC , Nos et al. (10th Cir.)...2, 4, 10, 12, 14, 15 CRC-TWC Order: Declaratory Ruling, Petition of CRC Communications of Maine, Inc. and Time Warner Cable Inc. for Preemption Pursuant to Section 253 of the Communications Act, 26 FCC Rcd 8259 (2011)... 4, 13, 14 ISP Remand Order: Order on Remand and Report and Order, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996; Intercarrier Compensation for ISP-Bound Traffic, 16 FCC Rcd 9151 (2001), remanded, WorldCom, Inc. v. FCC, 288 F.3d 429 (D.C. Cir. 2002)... 7, 9 Local Competition Order: First Report and Order, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, 11 FCC Rcd (1996)... 5, 6, 10 Memorandum Opinion and Order, Qwest Communications International Inc. Petition for Declaratory Ruling on the Scope of the Duty To File and Obtain Prior Approval of Negotiated Contractual Arrangements Under Section 252(a)(1), 17 FCC Rcd (2002) iv

6 Case: /23/2012 ID: DktEntry: Page: 6 of 25 OTHER MATERIALS Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates Based on Data from the National Health Interview Survey, July December 2006 (May 2007), wireless pdf... 9 Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates from the National Health Interview Survey, July December 2011 (June 2012), wireless pdf... 9 Comments of Verizon Wireless, Petition of T-Mobile USA, Inc., et. al. for Declaratory Ruling, CC Docket No (FCC filed Oct. 18, 2002), available at document/view?id= CTIA, Wireless Quick Facts, industry_info/index.cfm/aid/ , 10 FCC Encyclopedia, Broadband Personal Communications Service, available at (last visited July 19, 2012)... 6 Petition for Reconsideration and/or Clarification of the Independent Alliance on Inter-Carrier Compensation, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket Nos & (FCC filed June 14, 2001), available at 8 Petition of the Local Exchange Carrier Coalition for Reconsideration and Clarification, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket Nos & (FCC filed Sept. 30, 1996), available at document/view?id= v

7 Case: /23/2012 ID: DktEntry: Page: 7 of 25 Reply of the Local Exchange Carrier Coalition to Oppositions, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket Nos & (FCC filed Nov. 14, 1996), available at 8 Webster s Third New International Dictionary (2002) vi

8 Case: /23/2012 ID: DktEntry: Page: 8 of 25 STATEMENT OF INTEREST OF AMICUS CURIAE CTIA The Wireless Association has a strong interest in the question that this petition for review presents: whether the Federal Communications Commission ( Commission or FCC ) lawfully prohibited local telephone companies, known as local exchange carriers ( LECs ), from using tariffs to set termination charges for calls from wireless carriers 1 that originate and terminate within the same Major Trading Area ( MTA ) 2 known as intramta wireless traffic. See Declaratory Ruling and Report and Order, Developing a Unified Intercarrier Compensation Regime, 20 FCC Rcd 4855 (2005) ( T-Mobile Order ). 3 CTIA is an international nonprofit organization that represents the wireless communications industry. CTIA s members include wireless carriers and their 1 Wireless carriers are also known as commercial mobile radio service ( CMRS ) providers. 2 The MTAs are based on the Rand McNally 1992 Commercial Atlas & Marketing Guide. See 47 C.F.R (a). An MTA typically encompasses an area much larger than a local telephone territory, and includes broad swaths of one or more states. A map of the 51 MTAs is available at auctions/data/maps/mta.pdf. 3 The T-Mobile Order ( 9 (ER6)) prohibits LECs from imposing tariffs on non-access CMRS traffic, which it defines to include any wireless traffic not subject to the interstate or intrastate access charge regimes. Id. 1 n.6 (ER2). The T-Mobile Order thus precludes the use of tariffs for more than just intramta traffic. This brief focuses on intramta wireless traffic, which accounts for the majority of non-access wireless traffic; indeed, petitioners themselves challenge the Order s prohibition on tariffs for the termination of intramta traffic. Pet rs Br. 2.

9 Case: /23/2012 ID: DktEntry: Page: 9 of 25 suppliers, as well as manufacturers and providers of wireless data products and services. Many of CTIA s members exchange substantial amounts of intramta wireless traffic with LECs, and those members have significant interests in the rates governing that traffic. Given these interests, CTIA participated in the rulemaking proceeding that resulted in the T-Mobile Order that petitioners challenge. CTIA s members also have substantial interest in the question of intercarrier compensation for wireless calls more generally. On November 18, 2011, the Commission released an order establishing a new, prospective regime governing intercarrier compensation for a variety of traffic, including intramta wireless traffic. 4 CTIA s members participated actively in the Commission rulemaking, and many are parties to the consolidated petitions for review in the Tenth Circuit. 5 4 See Report and Order and Further Notice of Proposed Rulemaking, Connect America Fund, 26 FCC Rcd (2011) ( 2011 ICC-USF Order ), petitions for review pending, In re FCC , Nos et al. (10th Cir.). 5 Pursuant to Federal Rule of Appellate Procedure 29(a), amicus curiae states that a motion for leave is being filed concurrently with this brief. Pursuant to Federal Rule of Appellate Procedure 29(c)(5), amicus curiae states that no party s counsel authored this brief in whole or in part; no party or party s counsel contributed money that was intended to fund preparing or submitting this brief; and no person other than amicus curiae and its members contributed money that was intended to fund preparing or submitting this brief. 2

10 Case: /23/2012 ID: DktEntry: Page: 10 of 25 INTRODUCTION AND SUMMARY In the T-Mobile Order, the Commission held that local telephone companies could no longer unilaterally require wireless carriers to pay them tariffed rates for terminating intramta wireless traffic. The Commission s decision to insulate wireless traffic from the burdens that such tariffs imposed much like its other efforts to hold down intercarrier compensation rates for wireless calls has promoted innovation and driven down wireless rates, providing substantial benefits to consumers. Vacating the T-Mobile Order could threaten the wireless industry s remarkable growth and, in the process, risk significant costs for wireless telephone users. Petitioners challenges to the T-Mobile Order fail. As the Commission ably demonstrates (at 32-35, 41-43), the T-Mobile Order s prohibition on using tariffs for intramta wireless traffic reflects a reasonable interpretation of the Communications Act. CTIA files separately to emphasize the following points. The T-Mobile Order accords fully with 47 U.S.C. 251(b)(5). That provision requires telephone companies to reach reciprocal compensation arrangements for the exchange of local telephone calls. Given that tariffs are filed unilaterally and require payment in only one direction, the Commission s conclusion that tariffs are not suitable reciprocal compensation arrangements in the context of intramta wireless traffic is plainly reasonable. 3

11 Case: /23/2012 ID: DktEntry: Page: 11 of 25 Nor does the Commission s prohibition on using tariffs to set rates for intramta wireless traffic require rural incumbent LECs to forgo any benefits provided by the rural exemption in 47 U.S.C. 251(f)(1). As the Commission notes (at 39), in a different order it held that 251(f)(1) does not relieve rural incumbents from implementing their reciprocal compensation duties, nor does it exempt them from submitting to negotiation and, if necessary, arbitration before state public utility commissions to implement those duties. 6 Finally, petitioners critiques of bill-and-keep arrangements are irrelevant. The Commission did not mandate bill and keep for intramta wireless traffic until it adopted the 2011 ICC-USF Order, which is not before this Court. The T-Mobile Order instead gave incumbent LECs additional tools to enter contracts with wireless carriers setting the rate for the exchange of intramta wireless traffic. ARGUMENT I. THE T-MOBILE ORDER, LIKE SIMILAR COMMISSION ACTIONS TO REDUCE THE BURDENS IMPOSED ON WIRELESS CARRIERS, HAS PROMOTED INNOVATION AND LOWERED COSTS The T-Mobile Order is one of many orders in which the Commission has acted to reduce intercarrier compensation rates for wireless traffic and to ensure that local telephone companies apply fair and lawful terms and conditions to such 6 See Declaratory Ruling, Petition of CRC Communications of Maine, Inc. and Time Warner Cable Inc. for Preemption Pursuant to Section 253 of the Communications Act, 26 FCC Rcd 8259, (2011) ( CRC-TWC Order ). 4

12 Case: /23/2012 ID: DktEntry: Page: 12 of 25 traffic. See FCC Br. 16. These orders have promoted innovation and driven down wireless costs, contributing to widespread adoption of wireless services and the technological revolution of the last several years. A. Congress enacted the Telecommunications Act of 1996 ( 1996 Act ) to foster competition in local telephone markets. Verizon Maryland Inc. v. Public Serv. Comm n, 535 U.S. 635, 638 (2002). One of the duties Congress imposed requires all LECs to establish reciprocal compensation arrangements for the transport and termination of telecommunications. 47 U.S.C. 251(b)(5). 7 Reciprocal compensation agreements are a means by which telephone companies negotiate the terms under which they will terminate calls from each other s customers. Pacific Bell v. Pac-West Telecomm, Inc., 325 F.3d 1114, 1118 (9th Cir. 2003). In implementing the 1996 Act, the Commission initially concluded that rates set by these reciprocal compensation agreements and not the typically higher access charges set out in tariffs would govern the exchange of local traffic. See Local Competition Order In defining the local traffic 7 In implementing the 1996 Act, the Commission concluded that 251(b)(5) requires LECs, among other things, to enter into reciprocal compensation arrangements with all CMRS providers that is, wireless carriers. First Report and Order, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, 11 FCC Rcd 15499, 1008 (1996) ( Local Competition Order ) (subsequent history omitted). 5

13 Case: /23/2012 ID: DktEntry: Page: 13 of 25 protected from access charges, the Commission declined to subject wireless companies which typically serve broader geographic areas than traditional local telephone companies to the narrow calling areas that govern landline traffic. Indeed, for calls between two wireline customers, the Commission defined as local only calls that originate and terminate within a local service area, as determined by state public utility commissions. Id For calls involving at least one wireless customer, by contrast, the Commission designated as local any call originating and terminating within the same MTA a geographic area far larger than local service areas, and in many cases covering large parts of multiple states. See id. 1036; 47 C.F.R (b)(2). 8 As a result, calls involving at least one wireless customer will often legitimately be subject to less onerous compensation rates than if the same call was placed between two landline customers, because wireless carriers typically serve a much larger territory. Moreover, because the majority of wireless calls were (and still are) intramta, the Commission s initial decision significantly reduced the rates wireless carriers would pay for exchanging calls with local telephone companies. 8 The FCC uses MTAs to define the service area of many wireless licenses. See generally FCC Encyclopedia, Broadband Personal Communications Service, available at (last visited July 19, 2012). 6

14 Case: /23/2012 ID: DktEntry: Page: 14 of 25 In 2001, the Commission took further action that reduced the burdens facing wireless carriers. In an order designed primarily to reduce the rates that incumbent LECs paid when their customers accessed the Internet by using their local telephone lines (i.e., dial-up Internet), the Commission adopted what it called the mirroring rule. 9 This rule required an incumbent LEC that desired to reduce its payments for dial-up Internet traffic to charge lower rates when it received, among other things, intramta wireless traffic from other carriers. See ISP Remand Order 89. The Commission was aware that the mirroring rule by preventing incumbent LECs from charging other carriers inefficient and unfair rates that were higher than the rates they themselves paid would redound to the benefit of all competing carriers, including wireless companies. See id. As the Commission noted at the time, [m]ore calls are made from wireless phones to wireline phones than vice-versa, making LECs net recipients of reciprocal compensation from wireless carriers. Id. 89 n.176. The mirroring rule thus lowered the reciprocal compensation rates for most intramta wireless traffic to $ per minute or less. 9 See Order on Remand and Report and Order, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996; Intercarrier Compensation for ISP-Bound Traffic, 16 FCC Rcd 9151, (2001) ( ISP Remand Order ), remanded on other grounds, WorldCom, Inc. v. FCC, 288 F.3d 429 (D.C. Cir. 2002). 7

15 Case: /23/2012 ID: DktEntry: Page: 15 of 25 Rural incumbents that is, companies like petitioners predicted that both of these decisions would have dire consequences. For example, the Local Exchange Carrier Coalition a group of more than 100 rural incumbents claimed that the intramta rule would cause unreasonable discrimination against incumbent LECs 10 and would create[] an improper and artificial regulatory advantage for [wireless] providers. 11 Another coalition of more than 100 rural incumbents this time the Independent Alliance on Inter-Carrier Compensation made similar claims after the Commission adopted the mirroring rule. It asserted that the mirroring rule would result in disparate treatment and arbitrage opportunit[ies], while having a negative cost recovery impact on the affected LECs Petition of the Local Exchange Carrier Coalition for Reconsideration and Clarification at 16-17, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket Nos & (FCC filed Sept. 30, 1996), available at view?id= Reply of the Local Exchange Carrier Coalition to Oppositions at 10-11, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket Nos & (FCC filed Nov. 14, 1996), available at 12 Petition for Reconsideration and/or Clarification of the Independent Alliance on Inter-Carrier Compensation at 8, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket Nos & (FCC filed June 14, 2001), available at ecfs/document/view?id=

16 Case: /23/2012 ID: DktEntry: Page: 16 of 25 These predictions proved unfounded. The Commission maintained its reforms, and rural incumbent LECs and other carriers adjusted. The result has been an exponential and efficient growth in the provision of wireless services, including national pricing models and widely popular bucket-of-minute wireless plans. Wireless subscriptions now exceed 330 million, roughly triple the number of subscriptions at the time of the ISP Remand Order; wireless penetration has also nearly tripled in that time, and now stands at percent. 13 Indeed, by the end of 2011, more than 38 percent of all households had cut the cord completely and had only wireless phones, a roughly twelve-fold increase from the first half of Another 16 percent of households have both wireline and wireless phones, but use their wireless phones for all or almost all calls. 15 Thus, by the end of 2011, more than half of all households were using wireless phones exclusively or nearly so. Wireless customers make 2.29 trillion minutes of calls and send more than CTIA, Wireless Quick Facts, index.cfm/aid/ Compare Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates from the National Health Interview Survey, July December 2011 (June 2012), earlyrelease/wireless pdf (Tables 1 and 2) ( 2012 CDC Wireless Substitution Survey ), with Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates Based on Data from the National Health Interview Survey, July December 2006 (May 2007), data/nhis/earlyrelease/wireless pdf (Tables 1 and 2). 15 See 2012 CDC Wireless Substitution Survey at 4. 9

17 Case: /23/2012 ID: DktEntry: Page: 17 of 25 trillion text messages annually. 16 As a result of this exploding demand, wireless companies have added more than 150,000 direct carrier jobs since 1996, invested tens of billions of dollars in infrastructure, and forever changed the ways in which we communicate. 17 B. Like the Commission s decisions adopting the intramta and mirroring rules, the T-Mobile Order has contributed to the wireless industry s remarkable growth. As the Commission noted at the time, negotiated agreements between carriers are more consistent with the pro-competitive process and policies reflected in the 1996 Act. T-Mobile Order 14 (ER9). Indeed, prior to the T-Mobile Order, some LECs used tariffs to frustrate the Local Competition Order, imposing exorbitant tariffed rates on intramta wireless traffic (i.e., local traffic) that in some cases equaled the access-charge rates the Commission had explicitly declined to apply to intramta wireless traffic. 18 The T-Mobile Order addressed that concern by subjecting compensation rates for intramta wireless traffic to market discipline. See T-Mobile Order 14 (ER9-10); see also 2011 ICC-USF Order 964 (denying petitions for reconsideration of the T-Mobile Order and reaffirm[ing] the Commission s decision that good-faith negotiations generally 16 Wireless Quick Facts, supra note Id. 18 See, e.g., Comments of Verizon Wireless at 4-5, Petition of T-Mobile USA, Inc., et. al. for Declaratory Ruling, CC Docket No (FCC filed Oct. 18, 2002), available at 10

18 Case: /23/2012 ID: DktEntry: Page: 18 of 25 are preferable to tariffing as a means of implementing carriers compensation obligations ). In part because LECs can no longer force wireless carriers to pay sometimes onerous tariffed rates beyond what the market can bear, the cost of wireless services has fallen dramatically, and consumers have flocked to wireless services in droves. II. PETITIONERS ARGUMENTS THAT THE T-MOBILE ORDER CONFLICTS WITH THE COMMUNICATIONS ACT ARE MERITLESS A. As the Commission demonstrates (at 32-35), the T-Mobile Order is a lawful exercise of the agency s authority under 47 U.S.C. 201 and 332(c), and is consistent with the text of 251(b)(5). Petitioners assert (at 9-10) that the Order nonetheless conflicts with 251(b)(5), which obligates carriers to establish reciprocal compensation arrangements for the transport and termination of telecommunications. Contrary to petitioners claims, the presence of the word arrangements in that provision did not preclude the Commission from prohibiting the use of tariffs to set rates for the exchange of intramta wireless traffic. Among other things, petitioners ignore that, in 251(b)(5), arrangements is modified by the term reciprocal compensation. The word reciprocal conveys a congressional preference for bilateral negotiated agreements, not unilaterally imposed tariffs. See Webster s Third New International Dictionary 11

19 Case: /23/2012 ID: DktEntry: Page: 19 of (2002) ( reciprocal means corresponding to each other: being equivalent or complementary ). With respect to intramta wireless traffic, it was plainly reasonable for the Commission to conclude that a tariff which is filed unilaterally and which imposes payment obligations that run in only one direction (to the tariff filer) does not create a suitable reciprocal compensation arrangement[]. 19 As the Commission notes, its decision is also consistent with the 1996 Act s general preference for negotiated agreements. See FCC Br (citing authority). Indeed, in the 2011 ICC-USF Order, the Commission has now determined that 251(b)(5) should govern all traffic and that all carriers should transition away from tariffed rates to negotiated agreements. See 2011 ICC-USF Order 762. B. Petitioners fare no better when claiming (at 12) that the T-Mobile Order unilaterally terminated the rural exemption in 251(f)(1). Although unclear, petitioners appear to contend that 251(f)(1) exempts rural LECs from the duty in 252 to establish [the] terms and conditions on which they will fulfill their reciprocal compensation duties imposed by 251(b)(5) namely, that it immunizes rural LECs from ever negotiating and arbitrating interconnection 19 Nor can petitioners rely on Congress s reference to tariffs, contracts, or other arrangements in 259(b)(7) to interpret 251(b)(5). In addition to the reasons the Commission identifies (at 35-37), those sections simply use different terms. Section 259(b)(7) refers generally to other arrangements, while 251(b)(5) refers specifically to reciprocal compensation arrangements. 12

20 Case: /23/2012 ID: DktEntry: Page: 20 of 25 agreements before state public utility commissions. Pet rs Br Petitioners claim further that, by requiring rural LECs to enter such agreements in order to be eligible for compensation for terminating [wireless] provider traffic, the T-Mobile Order effectively subjected all rural LECs to [the] section 252 procedures for establishing interconnection agreements. Id. Petitioners argument fails because the Commission has squarely rejected its core premise. In the CRC-TWC Order, the Commission held that the section 252 arbitration process is available to enforce th[e] obligations in 251(b) against rural LECs, notwithstanding the rural exemption in 251(f)(1). CRC-TWC Order 18; see id Noting that the statutory text was ambiguous and that various courts had reached different conclusions on the matter, id. 18, the Commission determined that Congress did not intend to restrict the arbitration authority of state commissions to matters arising under section 251(c), id. 20. The Commission found further that rural carriers compliance with the duties in 251(b) advances the [1996] Act s competition policy goals, and that 20 Although the statute uses the term interconnection agreement, 47 U.S.C. 252(e)(1), the FCC has held that any agreement between an incumbent LEC and a wireless carrier (or another local telephone company) that implements any of the duties in 47 U.S.C. 251(b) or (c) qualifies as an interconnection agreement, even if the contract does not address the terms on which the two companies connect their respective networks. See Memorandum Opinion and Order, Qwest Communications International Inc. Petition for Declaratory Ruling on the Scope of the Duty To File and Obtain Prior Approval of Negotiated Contractual Arrangements Under Section 252(a)(1), 17 FCC Rcd 19337, 8 (2002). 13

21 Case: /23/2012 ID: DktEntry: Page: 21 of 25 immunizing rural carriers from submitting to the 252 arbitration process for creating interconnection agreements would foreclose an important avenue for ensuring such compliance. Id. 22. Petitioners, notably, say nothing about the CRC-TWC Order. III. PETITIONERS CLAIMS THAT THE T-MOBILE ORDER MANDATES BILL AND KEEP FAIL Petitioners argue (at 19) against the imposition of a bill and keep mechanism for the exchange of intramta wireless traffic. But the T-Mobile Order does not impose a bill-and-keep regime. See FCC Br. 56. Rather, the T-Mobile Order requires an incumbent LEC that wishes to be paid by a wireless carrier for terminating that carrier s intramta calls to enter into an agreement with that wireless carrier. See T-Mobile Order (ER9-11). The T-Mobile Order provides incumbent LECs with a new tool for entering into those agreements in order to obtain[] compensation from [wireless] providers the ability to compel wireless providers to participate in negotiations and, if necessary, an arbitration before a state public utility commission under 252. Id (ER10-11). CTIA members have entered into thousands of interconnection agreements with incumbent LECs of all sizes. Therefore, if an incumbent LEC has exchanged intramta wireless traffic on a bill-and-keep basis since the T-Mobile Order (and prior to the 2011 ICC-USF Order), that can be for one of only two reasons. First, the incumbent LEC might 14

22 Case: /23/2012 ID: DktEntry: Page: 22 of 25 enter an agreement with the wireless carrier that sets bill and keep as the compensation regime for intramta wireless traffic. Second, and in the alternative, neither the incumbent LEC nor the wireless carrier might find it in its interest to initiate negotiations to enter into such an agreement, leaving bill and keep as the governing framework by default. 21 In neither case can it be said that the Commission imposed the bill-and-keep regime on the incumbent LEC. Petitioners claims that the T-Mobile Order unlawfully mandated bill and keep, therefore, are not properly presented here. In contrast to the T-Mobile Order, the Commission s 2011 ICC-USF Order does mandate bill and keep as the default rule for intramta wireless traffic. See 2011 ICC-USF Order 988, 994. Petitioners do not challenge the 2011 ICC-USF Order here. Nor could they do so, as the Commission explains. See FCC Br Instead, the Tenth Circuit is the sole forum for addressing challenges to the validity of the 2011 ICC-USF Order, and this Court should not and cannot opine on the legality of that Order here. US West Communications, Inc. v. Hamilton, 224 F.3d 1049, 1054 (9th Cir. 2000) (internal quotation marks omitted); see id. at 1055 (holding that court was not at liberty to review order that was 21 For instance, if the intercarrier intramta wireless traffic exchanged between the two companies was balanced i.e., if both carriers originated and terminated roughly the same number of minutes of traffic a negotiated agreement might not benefit either carrier. 15

23 Case: /23/2012 ID: DktEntry: Page: 23 of 25 subject to consolidated review in another circuit). Accordingly, the merits of a bill-and-keep regime are not before this Court. CONCLUSION The petition for review should be denied. Respectfully submitted, MICHAEL ALTSCHUL SENIOR VICE PRESIDENT, GENERAL COUNSEL CTIA THE WIRELESS ASSOCIATION th Street, N.W., Suite 600 Washington, D.C (202) (202) (fax) /s/ Scott H. Angstreich SCOTT H. ANGSTREICH JOSHUA D. BRANSON KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C M Street, N.W., Suite 400 Washington, D.C (202) (202) (fax) July 23, 2012 Counsel for Amicus Curiae CTIA The Wireless Association 16

24 Case: /23/2012 ID: DktEntry: Page: 24 of 25 CERTIFICATE OF COMPLIANCE I hereby certify that this brief complies with the type-volume limitations of Fed. R. App. P. 29(d) and 32(a)(7)(B) because it contains 3,520 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). I further certify that this brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2007 (Times New Roman, 14 point). /s/ Scott H. Angstreich Scott H. Angstreich Counsel for Amicus Curiae CTIA The Wireless Association July 23, 2012

25 Case: /23/2012 ID: DktEntry: Page: 25 of 25 CERTIFICATE OF SERVICE I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system on July 23, I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. /s/ Scott H. Angstreich Scott H. Angstreich Counsel for Amicus Curiae CTIA The Wireless Association