*Pages 1--5 from Microsoft Word - 11920.doc* Federal Communications Commission FCC 01- 285 Before the Federal Communications Commission Washington, D. C. 20554 In the Matters of AT& T Corp., Complainant, v. Business Telecom, Inc., Defendant. Sprint Communications Company, L. P., Complainant, v. Business Telecom, Inc., Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) EB- 01- MD- 001 EB- 01- MD- 002 ORDER Adopted: September 27, 2001 Released: October 1, 2001 By the Commission: I. INTRODUCTION 1. In this Order, we deny the Joint Motion to Change [the] Ex Parte Status of [this] Proceeding (“ Motion”) filed by non- parties The Association for Local Telecommunications Services, Intermedia Communications, Inc., Mpower Communications, Inc., NuVox Communications, Inc., and Winstar Communications, Inc. (collectively, “Petitioners”). As explained below, the public interest does not support changing the ex parte status of this adjudicatory proceeding from “restricted” to “permit- but-disclose”. In particular, Petitioners have not shown that the public interest would benefit from the exclusion of the three parties to these formal complaint proceedings from any meetings that Petitioners may wish to have with Commission decision- making personnel. We emphasize, however, that Petitioners are (and always have been) free to schedule meetings with Commission decision- making personnel to discuss the BTI Order, as long as the three parties to these formal complaint proceedings have notice of and reasonable opportunity to participate in such meetings. II. BACKGROUND 2. In the BTI Order, the Commission partially granted formal complaints filed by AT& T Corp. (“ AT& T”) and Sprint Communications Company, L. P. (“ Sprint”) against Business Telecom, Inc. 1 Federal Communications Commission FCC 01- 285 2 (“ BTI”), a CLEC, pursuant to section 208 of the Communications Act of 1934, as amended (“ Act”) 1 and a primary jurisdiction referral from the United States District Court for the Eastern District of Virginia. 2 The Commission held, inter alia, that BTI’s access rates during the relevant period were unjustly and unreasonably high, in violation of section 201( b) of the Act. 3 Moreover, in order to permit the court to calculate the damages caused by BTI’s violation of section 201( b), the Commission determined what access rates would have been just and reasonable during the relevant period. 4 3. None of the parties filed petitions for reconsideration of the BTI Order. Instead, each of them filed a petition for review of the BTI Order in the United States Court of Appeals for the District of Columbia Circuit. 5 4. None of the Petitioners is a party to these formal complaint proceedings, which the Commission adjudicated in the BTI Order. Nevertheless, on June 29, 2001, Petitioners submitted to the Commission Secretary a Joint Petition for Reconsideration of the BTI Order. 6 Five weeks later, on August 3, 2001, Petitioners filed the instant motion seeking alteration of the ex parte status of these complaint proceedings from “restricted” to “permit- but- disclose.” 7 Petitioners assert that the public interest requires such a change, because “[ t] he BTI Order necessarily has wide ramifications for the entire competitive telecommunications industry”, 8 and “as long as the proceeding remains restricted, no party [or non- party] may schedule meetings with Commissioners and staff to explain first hand how the [BTI Order] affects it and the entire industry.” 9 AT& T and Sprint oppose the Motion, arguing, inter alia, that changing the ex parte status of this proceeding could prejudice their rights. 10 BTI has taken no position on the Motion. 1 47 U. S. C. § 208. 2 Advamtel LLC, et al. v. AT& T Corp., 105 F. Supp. 2d 507 (E. D. Va. 2000); Advamtel LLC, et al. v. Sprint Communications Company, L. P., 105 F. Supp. 2d 476 (E. D. Va. 2000). 3 47 U. S. C. § 201( b). See BTI Order at ¶¶ 17- 50. 4 See BTI Order at ¶¶ 53- 59. 5 AT& T Corp. v. FCC, No. 01- 1261 (D. C. Cir.). 6 Joint Petition for Reconsideration, File Nos. EB- 01- MD- 001, 002 (filed June 29, 2001). 7 Petitioners waited 35 days (five weeks) to file their motion, which in itself suggests the lack of need to change the ex parte status of these proceedings. 8 Motion at 3. See id. at 6- 7. 9 Motion at 4. See id. at 8- 9. 10 Opposition of AT& T Corp. to Joint Motion To Change Ex Parte Status of Proceeding, File Nos. EB- 01- MD- 001, 002 (filed Aug. 9, 2001) at 4 (stating that “such ex parte presentations could only taint the record in this case”); Opposition of Sprint to Joint Motion, File Nos. EB- 01- MD- 001, 002 (filed Aug. 10, 2001) at 2 (noting that “[ a] ll three parties to this proceeding have elected to seek judicial review of the [BTI] Order in the U. S. Court of Appeals for the District of Columbia Circuit”). 2 Federal Communications Commission FCC 01- 285 3 III. DISCUSSION 5. Under the Commission’s rules, a “presentation” is a “communication directed to the merits or outcome of a proceeding….” 11 An “ex parte presentation” is “[ a] ny presentation which: (1) if written, is not served on the parties to the proceeding; or (2) if oral, is made without advance notice to the parties and without opportunity for them to be present.” 12 In a “permit- but- disclose” proceeding, a person may make an ex parte presentation to Commission decision- making personnel, as long as the person promptly places in the public record the substance of the presentation. 13 In a “restricted” proceeding, by contrast, no one may make an ex parte presentation to Commission decision- making personnel (with certain exceptions not applicable here). 14 6. Proceedings in which the Commission adjudicates formal complaints brought against common carriers pursuant to section 208 of the Communications Act of 1934, as amended (“ Act”), 15 are “restricted.” 16 Accordingly, these complaint proceedings in which the Commission released the BTI Order are restricted. 17 This means that no person may make to any Commission decision- making personnel any communication directed to the merits or outcome of the BTI Order, unless the communication, if written, is served on the parties to the proceeding, or unless the communication, if oral, is made with advance notice to the parties and with opportunity for them to be present. 18 The Commission makes its formal complaint proceedings “restricted” to ensure, inter alia, that it conducts its adjudications in a manner that preserves 11 47 C. F. R. § 1.1202( a). 12 47 C. F. R. § 1.1202( b). 13 47 C. F. R. §§ 1.1202( c), 1.1206. 14 47 C. F. R. §§ 1.1208, 1.1204. 15 47 U. S. C. § 208. 16 47 C. F. R. §§ 1.1208, 1.1206, 1.1204. 17 See, e. g., Letter from Alexander P. Starr, Chief, Market Disputes Resolution Division, Enforcement Bureau, to James F. Bendernagel, Counsel for AT& T, Jonathan E. Canis, Counsel for BTI, and Cheryl A. Tritt, Counsel for Sprint, File Nos. EB- 01- MD- 001, 002 (Jan. 18, 2001). 18 47 C. F. R. §§ 1.1202, 1.1208. See, e. g., Letter from Anthony J. DeLaurentis, Attorney, Market Disputes Resolution Division, Enforcement Bureau, to James F. Bendernagel, Counsel for AT& T, Russell M. Blau, Counsel for BTI, Cheryl Tritt, Counsel for Sprint, and Jonathan E. Canis, Counsel for Informal Complaint Defendants, File Nos. EB- 01- MD- 001, 002; EB- 01- MDIC- 0002- 0016 (June 12, 2001); Letter from Anthony J. DeLaurentis, Attorney, Market Disputes Resolution Division, Enforcement Bureau, to James F. Bendernagel, Counsel for AT& T, Russell M. Blau, Counsel for BTI, Cheryl Tritt, Counsel for Sprint, Richard Juhnke, Counsel for Sprint, Jonathan E. Canis, Counsel for Informal Complaint Defendants, and Richard Metzger, Counsel for Focal Communications, File Nos. EB- 01- MD- 001, 002; EB- 01- MDIC- 0002- 0016 (July 30, 2001); Letter from Anthony J. DeLaurentis, Attorney, Market Disputes Resolution Division, Enforcement Bureau, to James F. Bendernagel, Counsel for AT& T, Russell M. Blau, Counsel for BTI, Cheryl Tritt, Counsel for Sprint, Richard Juhnke, Counsel for Sprint, Jonathan E. Canis, Counsel for Informal Complaint Defendants, and Richard Metzger, Counsel for Focal Communications, File Nos. EB- 01- MD- 001, 002; EB- 01- MDIC- 0002- 0016 (Aug. 3, 2001). 3 Federal Communications Commission FCC 01- 285 4 fairness and the appearance of fairness to the parties. 19 However, “[ w] here the public interest so requires in a particular proceeding, the Commission and its staff retain the discretion to modify the applicable ex parte rules….” 20 Petitioners bear the burden of demonstrating that the standard is met by the preponderance of the evidence. 7. Petitioners have failed to meet the burden of demonstrating that the public interest requires modification of the applicable rules from “restricted” to “permit- but- disclose.” First, Petitioners have not shown that they cannot fully present their position within the parameters of a restricted proceeding. Contrary to Petitioners’ assertion otherwise, Petitioners may schedule meetings with Commission decision-making personnel to discuss their concerns about the BTI Order. They simply must ensure that all of the parties to these proceedings have fair notice of and reasonable opportunity to attend such meetings. Given the relatively small number of parties involved (i. e., three), such scheduling should not be unduly difficult. 8. Second, as AT& T and Sprint point out, Petitioners have not shown how the public interest would benefit by excluding the parties – the two plaintiffs and the defendant – from meetings with Commission decision- makers. We note that all of the parties have petitioned for review of the BTI Order in the D. C. Circuit. While they are litigating the BTI Order in court, and absent any persuasive countervailing public interest basis for making this matter a “permit- but- disclose” proceeding, we believe the parties should continue to have advance notice of and the opportunity to participate in any communications at the Commission about the BTI Order. 9. Petitioners rely on four decisions in proceedings in which the applicable ex parte rules were switched from restricted to permit- but- disclose. 21 Two of those decisions did not involve formal complaint adjudications under section 208 of the Act. 22 The other two of those decisions did involve formal complaints, but the complaints closely related to pending non- complaint proceedings governed by the permit- but- disclose rules. 23 That is not the situation here. 24 Moreover, all four of those decisions pre- date 19 In the Matter of Amendment of 47 C. F. R. § 1.1200 Et Seq. Concerning Ex Parte Presentations In Commission Proceedings, Report and Order, 12 FCC Rcd 7348, 7351- 52 at ¶ 11 (1997). 20 47 C. F. R. § 1.1200( a). See id. at § 1.1208, Note 2. 21 Motion at 5 n. 5, 8 (citing “Permit But Disclose” Ex Parte Status Accorded to Proceeding Involving Applications Filed by Airtouch Communications, Inc. and Vodafone Group, P. L. C. for Consent to Transfer Control of Airtouch Communications, Inc. to Vodafone Group. P. L. C., Public Notice, DA 99- 304, 1999 WL 317594 (Com. Car. Bur. rel. May 20, 1999) (“ Airtouch Applications”); Ex Parte Procedures Established for Formal Complaint filed by MCI Telecommunications Corp. and MCIMetro Access Transmission Services, Inc., Against Bell Atlantic Corp., File No. E- 98- 12, Public Notice, DA 98- 89, 13 FCC Rcd 887 (Wireless Tel. Bur. rel. Jan. 16, 1998) (“ MCI v. Bell Atlantic”); Beehive Telephone, Inc, et al. v. The Bell Operating Companies, Memorandum Opinion and Order, 12 FCC Rcd 17930 (1997) (“ Beehive v. Bell Operating Companies”); Commission Applies “Permit But Disclose” Ex Parte Rules to Reconsideration of United Artists Cable of Baltimore, Public Notice, DA 95- 1366, 10 FCC Rcd 13743 (Cab. Serv. Bur. rel. June 19, 1995) (“ United Artists”). 22 See Airtouch Applications, supra; United Artists, supra. 23 See MCI v. Bell Atlantic, supra; Beehive v. Bell Operating Companies, 12 FCC Rcd at 17931- 36. 24 Although these formal complaint proceedings arise from the same court litigation as a pending, permit-but- disclose declaratory ruling proceeding, see AT& T and Sprint File Petitions for Declaratory Ruling on CLEC (continued….) 4 Federal Communications Commission FCC 01- 285 5 the creation of the Enforcement Bureau, which the Commission designed, inter alia, to enhance the fairness, objectivity, and transparency of its adjudicatory processes. Consistent with that design, since the Enforcement Bureau began, every formal complaint proceeding has remained restricted for ex parte purposes. Thus, the authorities cited by Petitioners do not indicate that the public interest requires changing the applicable ex parte rules in this case. Accordingly, Petitioners’ Motion is denied. IV. ORDERING CLAUSE 10. Accordingly, IT IS ORDERED, pursuant to sections 4( i), 4( j), and 208 of the Communications Act of 1934, as amended, 47 U. S. C. §§ 154( i), 154( j), 208, and sections 1.727 and 1.1200- 1.1216 of the Commission’s rules, 47 C. F. R. §§ 1.727, 1.1200- 1.1216, that Petitioners’ Joint Motion to Change [the] Ex Parte Status of [this] Proceeding IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary (Continued from previous page) Access Charge Issues, CCB/ CPD File No. 01- 02, Public Notice, DA- 01- 301, 2001 WL 92220 (Com. Car. Bur. rel. Feb. 5, 2001), the declaratory ruling petitions do not address the contested subject here, i. e., the reasonableness of past CLEC access rates. Thus, Petitioners correctly do not contend that the pendency of the declaratory ruling petitions pertains to the propriety of changing the ex parte status of these formal complaint proceedings. 5