Federal Communications Commission FCC 18-63
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Connect America Fund
Developing a Unified Intercarrier Compensation 
Regime
Smart City Telecommunications LLC Petition for 
Waiver of Section 51.917 of the
Commission’s Rules
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WC Docket No. 10-90
CC Docket No. 01-92
ORDER ON RECONSIDERATION
Adopted:  May 17, 2018 Released:  May 18, 2018
By the Commission:
I. INTRODUCTION
1. In this Order, we address the Petition for Reconsideration filed by Smart City 
Telecommunications LLC (Smart City) of the Commission’s order denying its request for waiver of our 
rules governing base period revenue (BPR) amounts used to calculate Eligible Recovery for rate-of-return 
incumbent local exchange carriers (LECs).
1
  Specifically, Smart City seeks reconsideration of its waiver 
request to include in its Fiscal Year 2011 (FY 2011) BPR amounts received after the March 31, 2012 cut-
off from a “settlement of unpaid switched access charges.”
2
  Upon review of the record, we find that 
Smart City has failed to present any arguments warranting reconsideration.
3
  Accordingly, we deny Smart 
City’s petition.  
II. BACKGROUND
2. In the 2011 USF/ICC Transformation Order, the Commission reformed the intercarrier 
compensation (ICC) system to provide more predictability to regulated carriers, adopting a transition path 
to a bill-and-keep methodology.
4
  The Commission adopted a recovery mechanism to partially mitigate 
revenue reductions LECs would experience as a result of these ICC reform measures.
5
  The 
1
  Petition for Reconsideration of Smart City Telecom, WC Docket No. 10-90, CC Docket No. 01-92 (filed Nov. 21, 
2016) (Petition); see Connect America Fund et al., WC Docket No. 10-90 et al., Order, 31 FCC Rcd 12021, 12028-29, 
paras. 1, 20-21 (2016) (Waiver Denial Order).
2
 Petition at 1; see Amended Petition of Smart City Telecommunications LLC, WC Docket No. 10-90, CC Docket No. 
01-92, at 4 (filed Apr. 29, 2013) (Smart City Apr. 29, 2013 Waiver Request); Waiver Denial Order, 31 FCC Rcd at 
12025, para. 11.
3
 See 47 CFR § 1.106; 47 U.S.C. § 405(a). 
4
 See Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed 
Rulemaking, 26 FCC Rcd 17663, 17904, 17932, 18026-28, paras. 740, 798, 970-71 (2011) (USF/ICC 
Transformation Order), aff’d sub nom., In re: FCC 11-161, 753 F.3d 1015 (10th Cir. 2014); see also 47 CFR § 
51.713 (bill-and-keep arrangements).
5
 See USF/ICC Transformation Order, 26 FCC Rcd at 17956-87, paras. 847-904.
Federal Communications Commission FCC 18-63
2
Commission’s recovery mechanism recognizes carrier reliance on ICC revenues, while limiting the 
burdens recovery might impose on end-user customers and universal service contributors.
6
  
3. For rate-of-return incumbent LECs, the recovery mechanism begins with calculating a 
company-specific BPR.  The BPR is the sum of certain ICC intrastate switched access revenues and net 
reciprocal compensation revenues received by March 31, 2012, for services provided during FY 2011,
7
 
and the projected revenue requirement for interstate switched access services provided during the 2011-12 
tariff period.
8
  The BPR was reduced by five percent initially and is being reduced by an additional five 
percent in each year of the transition.
9
  The amount a rate-of-return incumbent LEC is entitled to recover 
in each year of the transition (Eligible Recovery) is equal to the adjusted BPR for the year in question 
less, for each relevant year of the ICC transition, the sum of: (1) projected intrastate switched access 
revenue; (2) projected interstate switched access revenue; and (3) projected net reciprocal compensation 
revenue.
10
  Rate-of-return incumbent LECs are then able to recover some or all of their Eligible Recovery 
from end user charges and, to the extent these charges are insufficient, carriers may recover the remainder 
from Connect America Fund (CAF) ICC support.
11
 
4. A rate-of-return incumbent LEC’s BPR was included as part of the 2012 tariff filings, the 
first year of the transition, and is used as part of the ICC recovery mechanism calculation for each year of 
the transition.
12
  Thus, the BPR is a critical input in calculating Eligible Recovery; any inaccuracies in the 
BPR calculation carry forward in future recovery mechanism payments.  The BPR, in turn, has 
repercussions on the rates a rate-of-return incumbent LEC charges end users and on the amount of CAF 
ICC support the carrier receives.  
5. In the USF/ICC Transformation Order, the Commission adopted rules designed to ensure 
that rate-of-return incumbent LECs’ BPR calculations captured revenues for FY 2011 ICC services 
subject to the ICC rate transition, balanced by stringent standards to prevent parties from taking advantage 
of the recovery mechanism by inflating their BPR.
13
  To capture FY 2011 revenues for a rate-of-return 
LEC’s BPR, the Commission required revenues to be collected by March 31, 2012, pursuant to section 
51.917(b)(7).
14
  
6. In adopting March 31, 2012 as the cut-off date by which revenues had to be collected to 
be included in a carrier’s BPR calculation, the Commission provided for carriers to “request a waiver of 
our rules defining the [BPR] to account for revenues billed for terminating switched access service or 
6
 See id. at 17957, 17985-86, paras. 849, 903.
7
 For the purposes of the recovery mechanism, FY 2011 is defined as October 1, 2010 to September 30, 2011.  See 
47 CFR § 51.903(e).
8
 See id. § 51.917(b)(7), (c).  The 2011-12 tariff period was July 1, 2011 through June 30, 2012.  See id. § 51.917(c).
9
 See id. § 51.917(b)(3).  Following the initial reduction, the BPR for each year is reduced by five percent of its 
value for the immediately preceding year.
10
 Id. § 51.917(d).  The demand projections that are part of these projected revenue calculations are “trued-up” after 
two years.  See id. § 51.917(d)(1)(iii)(D).
11
 USF/ICC Transformation Order, 26 FCC Rcd at 17987-96, paras. 905-23; 47 CFR § 51.917(e). 
12
 See 47 CFR § 51.917(d).
13
 See generally USF/ICC Transformation Order, 26 FCC Rcd at 17977-86, paras. 891-904 (describing the recovery 
mechanism for rate-of-return LECs).
14
 47 CFR § 51.917(b)(7); USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 & n.1745.
Federal Communications Commission FCC 18-63
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reciprocal compensation provided in FY 2011 but recovered after the March 31, 2012 cut-off as the result 
of the decision of a court or regulatory agency of competent jurisdiction.”
15
  
7. On March 27, 2013, Smart City filed a petition seeking a waiver of the Eligible Recovery 
rules to include in its BPR the revenue it received as a result of a settlement agreement it reached with 
Verizon Business (Verizon), amounts which were collected after the March 31, 2012 cut-off.
16
  In its 
waiver request, Smart City alleged that Verizon disputed amounts for traffic terminated by Smart City, 
“asserting a portion of the billed minutes were [voice-over-Internet protocol (VoIP)] traffic and therefore 
not subject to tariffed intrastate access rates for switched access service.”
17
  As support, Smart City 
submitted a table purporting to show the “disputed amounts billed and received.”
18
  Smart City also 
sought “[t]o the extent necessary. . .waiver of the provision that waivers of this nature are a result of the 
‘decision of a court or regulatory agency of competent jurisdiction.’”
19
  Because Smart City could not 
produce a decision of a state court or regulatory agency finding in favor of Smart City during the 
pendency of the waiver request, Commission staff requested that Smart City provide “details behind the 
traffic information underlying the switched access billing disputes” described in Smart City’s initial 
waiver request.
20
  Smart City failed to provide evidence in support of its claim, but instead claimed that it 
twice requested call detail records for the relevant period from Verizon, but that Verizon failed to respond 
to either request.
21
  At no point prior to release of the Waiver Denial Order did Smart City request that the 
Commission ask Verizon for copies of the call detail records.
22
 
8. In the Waiver Denial Order, the Commission found that Smart City did not present 
evidence of special circumstances that would warrant waiver of the Eligible Recovery rules and denied 
the waiver request.
23
  The Commission reasoned that Smart City’s waiver request involved a “factual 
dispute over whether the type of traffic at issue, VoIP traffic, was compensable and, if so, what 
compensation applied;” because Smart City failed to produce a court or commission order establishing 
Verizon’s liability for the settlement, it had not established that the amount at issue is the amount on 
15
 USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 n.1745 (citing 47 CFR § 1.3); id. (“The 
adjusted [BPR] will not include settlements regarding charges after the March 31, 2012 cut-off, and any carrier 
requesting such modification to its [BPR] shall, in addition to otherwise satisfying the waiver criteria, have the 
burden of demonstrating that the revenues are not already included in its [BPR], including providing a certification 
to the Commission to that effect.  Any request for such a waiver also should include a copy of the decision requiring 
payment of the disputed intercarrier compensation.  Any such waiver would be subject to the Commission’s 
traditional ‘good cause’ waiver standard. . . .”); see 47 CFR § 1.3.  
16
 Petition of Smart City Telecommunications LLC d/b/a Smart City Telecom for Limited Waiver of 47 C.F.R. 
51.917(b), WC Docket No. 10-90 et al. (filed Mar. 27, 2013) (Smart City Mar. 27, 2013 Waiver Request).  Smart 
City amended its petition for waiver on April 29, 2013.  See Smart City Apr. 29, 2013 Waiver Request.  
17
 Smart City Apr. 29, 2013 Waiver Request at 3.  
18
 Id. at 4 & Exh. I.
19
 Id. at 5 n.9 (citing USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 n.1745).
20
 Letter from to John Kykendall, Vice President, JSI on behalf of Smart City, to Marlene H. Dortch, Secretary, 
FCC, WC Docket No. 10-90 et al., at 1 (filed Apr. 21, 2015) (Smart City Apr. 21, 2015 Letter). 
21
 Petition at 2; Smart City Apr. 21, 2015 Letter at 1; id., Attach. (attaching email correspondence with Verizon); see 
also Wavier Denial Order, 31 FCC Rcd at 12029, para. 20. 
22
 See Smart City Apr. 29, 2013 Waiver Request; Smart City Apr. 21, 2015 Letter; Smart City Mar. 27, 2013 Waiver 
Request.  
23
 See Waiver Denial Order, 31 FCC Rcd at 12028-29, para. 20. 
Federal Communications Commission FCC 18-63
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which Smart City should have reasonably relied.
24
  The Commission emphasized that a decision by an 
agency or court protects against parties gaming the system.
25
  
9. On November 21, 2016, Smart City filed a petition for reconsideration of the Waiver 
Denial Order.  First, Smart City takes issue with the Commission’s characterization of Smart City’s 
dispute with Verizon as a factual dispute.
26
  Then it argues that reconsideration is warranted because the 
Commission should have made a factual inquiry into the traffic at issue which would have resolved the 
dispute.
27
  Specifically, Smart City argues that denial of its waiver request was “arbitrary and capricious” 
because the Commission could “confirm[] that the disputed traffic actually was not VoIP” by asking 
Verizon directly to produce call detail records for the traffic billed.
28
  Third, Smart City argues that the 
“Commission’s refusal to consider a settlement agreement in the absence of a court or commission order 
is irrational and unsound public policy” and is “arbitrary and capricious, because it would penalize Smart 
City for resolving this dispute promptly and at minimal cost to its ratepayers” rather than through a fully 
litigated resolution.
29
  No oppositions to Smart City’s petition for reconsideration were filed.
30
III. LEGAL STANDARDS
10. Generally, the Commission’s rules may be waived for good cause shown.
31
  The 
Commission may exercise its discretion to waive a rule where the particular facts make strict compliance 
inconsistent with the public interest.
32
  In addition, the Commission may take into account considerations 
of hardship, equity, or more effective implementation of overall policy on an individual basis.
33
  Waiver 
of the Commission’s rules is appropriate if both special circumstances warrant a deviation from the 
general rule, and such deviation will serve the public interest.
34
  In the USF/ICC Transformation Order, 
the Commission described one particular factual situation that could support “good cause” for waiver of 
the March 31, 2012 cut-off, namely, the result of the decision of a court or regulatory agency of 
competent jurisdiction.
35
  The Commission indicated that any such waiver request should include a copy 
24
 Id. at 12029, para. 20. 
25
 Id. at 12029, para. 21.
26
 See Petition at 2-3.
27
 See id. at 5-6; see also Smart City Apr. 29, 2013 Waiver Request at 5. 
28
 Petition at 2-3. 
29
 Id. at 3-6. 
30
 See 47 CFR § 1.106(g); Petition for Reconsideration of Action in Rulemaking Proceeding, 81 Fed. Reg. 94296 
(Dec. 23, 2016); Petition for Reconsideration of Action in Rulemaking Proceeding, WC Docket No. 10-90, CC 
Docket No. 01-92, Public Notice, Report No. 3062 (Dec. 13, 2016), https://apps.fcc.gov/edocs_public/attachmatch/
DOC-342553A1.pdf. 
31
 47 CFR § 1.3.  
32
 Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular).  
33
 WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969); Northeast Cellular, 897 F.2d at 1166.  
34
 Northeast Cellular, 897 F.2d at 1166
35
 See USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 n.1745; see also Waiver Denial Order, 31 
FCC Rcd at 12027, para. 15. The Commission did not intend footnote 1745 of the USF/ICC Transformation Order 
to modify or limit the general availability of waivers under the good cause standard.  The Commission retains the 
ability to grant a waiver of its rules where the waiver standard is met and a grant does not undermine the policies 
underlying the Commission’s rules.  See Waiver Denial Order, 31 FCC Rcd at 12027, para. 15 (citing USF/ICC 
Transformation Order, 26 FCC Rcd at 17982, para. 898 n.1745). 
Federal Communications Commission FCC 18-63
5
of the decision requiring payment of the disputed intercarrier compensation.
36
  The Commission also 
specified that it would apply the Commission’s traditional waiver standard to any such request.
37
11. The Commission may act on petitions requesting reconsideration of an order granting or 
denying a request for waiver of the Commission’s rules.
38
  Generally, petitions for reconsideration that do 
not warrant consideration by the Commission include those that “[r]ely on arguments that have been 
considered and rejected by the Commission within the same proceeding”
39
 and those that “rely on facts or 
arguments not previously presented to the Commission.”
40
  The Commission may consider facts or 
arguments not previously presented if they: (1) “relate to events which have occurred or circumstances 
which have changed since the last opportunity to present such matters to the Commission;” or (2) were 
“unknown to petitioner until after. . .[their]. . .last opportunity to present them to the Commission, 
and…could not through the exercise of ordinary diligence have learned of the facts or arguments in 
question prior to such opportunity;”
41
 or (3) “consideration of the facts or arguments relied on is required 
in the public interest.”
42
   
IV. DISCUSSION
12. We find Smart City’s arguments on reconsideration to be procedurally and substantively 
flawed.  First, we reject Smart City’s assertion that in the Waiver Denial Order the Commission erred by 
conflating a factual dispute “over how much, if any, billed traffic was VoIP” and a separate legal dispute 
“over what, if any, compensation was payable for VoIP traffic.”
43
  Regardless of whether Smart City’s 
dispute with Verizon included a legal component, it indisputably involved fundamental questions of fact 
—the amount and nature of the traffic at issue.
44
  Smart City failure to present evidence sufficient for the 
Commission to answer those questions meant that the Commission did not have occasion to reach any 
related legal questions.
45
  
13. Second, we reject Smart City’s new argument on reconsideration that the Commission 
should have confirmed the facts underlying its dispute with Verizon by requesting call detail records 
directly from Verizon and that the failure to do so justifies reconsideration.
46
  As the applicant seeking 
waiver of the Eligible Recovery rules, Smart City had the burden to plead specific facts and 
36
 See USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 n.1745. 
37
 Id.
38
 47 CFR §§ 1.106 (petitions for reconsideration in non-rulemaking proceedings); 1.106(p) (listing examples of 
petitions for reconsideration of a Commission action that plainly do not warrant consideration by the Commission); 
see, e.g., Connect America Fund et al.; Rural Broadband Experiments, WC Docket Nos. 10-90, 14-259, 
Memorandum Opinion and Order and Order on Reconsideration, 31 FCC Rcd 10091, 10091, 10097-98, paras. 1, 15-
16 (2016) (considering and denying three challenges to a Wireline Competition Bureau order to deny certain 
requests for waiver of the Commission’s rules).   
39
 47 CFR § 1.106(p)(3); see Application of Razorcake/Gorskey Press, Inc. For a New LPFM Station at Pasadena, 
California, File No. BNPL-20131114AXZ, Order on Reconsideration, 32 FCC Rcd 6593, 6594, paras. 3 (MB 2017) 
(Razorcake Order).
40
 47 CFR § 1.106(p)(2); see Razorcake Order, 32 FCC Rcd at 6594, para. 3.
41
 47 CFR §§ 1.106(c)(1); 1.106(b)(2).
42
 47 CFR § 1.106(c)(2). 
43
 Petition at 2 (citing Waiver Denial Order, 31 FCC Rcd at 12029, para. 20).
44
 See Petition at 1-2; Smart City Apr. 29, 2013 Waiver Request at 2-3. 
45
 See Waiver Denial Order, 31 FCC Rcd at 12028-29, paras. 20-21. 
46
 See Petition at 2-3; Smart City Apr. 29, 2013 Waiver Request; see also Northeast Cellular, 897 F.2d at 1166; 
Tucson Radio, Inc. v. FCC, 452 F.2d 1380, 1382 (D.C. Cir. 1971) (Tucson Radio). 
Federal Communications Commission FCC 18-63
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circumstances that would justify its request for a waiver of our rules.
47
  Moreover, our rules disfavor 
consideration of new arguments on reconsideration which have not previously been presented to the 
Commission.
48
  Smart City fails to offer any explanation of why we should do so here.  
14. Smart City’s argument that the Commission was better situated than Smart City to get 
factual evidence from Verizon, call detail records, is also untimely.
49
  That argument does not “relate to 
events which have occurred or circumstances which have changed since the last opportunity to present 
such matters to the Commission” and Smart City fails to explain why it could not “through the exercise of 
ordinary diligence” have learned of this argument prior to such opportunity.
50
  When Smart City filed its 
waiver request, it was aware that its request rested on its own unsupported assertion that its settlement 
with Verizon accurately represented the amount Smart City would have been able to include in its BPR, 
had it received that revenue before March 31, 2012.  Indeed, prior to filing its waiver request, Smart City 
requested call detail records from Verizon without success.
51
  If Smart City believed that under these 
circumstances the Commission should have asked Verizon to produce the call detail records to 
demonstrate how much Verizon owed Smart City, it should have made that request, along with supporting 
legal arguments, as part of its initial waiver request.
52
   
15. We also find that the public interest does not require us to now seek the call detail records 
from Verizon.
53
  Directing Verizon to produce call detail records pertaining to legacy ICC may not 
provide all the information necessary to validate the amounts Smart City seeks to add to its BPR via its 
waiver request consistent with intrastate tariffs and state law.
54
  It could instead entangle Commission 
staff in protracted negotiations with both companies about what information and documentation are 
necessary to validate relevant recovery amounts, years after the underlying dispute occurred. 
16. Additionally, Smart City has offered no alternative, verifiable support that would lead us 
to conclude that it reasonably relied on receiving the revenue amounts at issue.  When the Eligible 
Recovery rules were adopted, there were numerous disputes and widespread uncertainty over the 
identification and treatment of VoIP traffic for purposes of ICC.
55
  Against this backdrop, the 
Commission limited the transitional Eligible Recovery calculation to specific types of revenues actually 
collected by March 31, 2012, in an effort to reflect carriers’ reasonable reliance on such revenues during 
the prior ICC regime.
56
  Because carriers could not reasonably rely on uncollected revenues, amounts in 
47
 See Tucson Radio, 452 F.2d at 1382 (“The burden is on the applicant seeking waiver of these rules to plead 
specific facts and circumstances which would make the general rule inapplicable.”); Northeast Cellular, 897 F.2d at 
1166.
48
 See 47 CFR §§ 1.106(p)(2); 1.106(c); 1.106(b)(2)(i)-(ii).  
49
 See Petition at 3.  This Order does not address whether the Commission would have granted Smart City’s request 
to seek evidence from Verizon, had Smart City made a timely request for the Commission to do so.  
50
 See 47 CFR §§ 1.106(p)(2); 1.106(c); 1.106(b)(2)(i)-(ii).    
51
 Smart City Apr. 21, 2015 Letter at 1; Waiver Denial Order, 31 FCC Rcd at 12028-29, para. 20.
52
 See 47 CFR § 1.106(b)-(c).  This Order does not address whether the Commission could or would grant a carrier’s 
request for another carrier to produce call detail records or other documentation to resolve a traffic billing dispute.  
See 47 U.S.C. § 218 (Commission authority to request information from regulated entities); 47 U.S.C. § 220(c) 
(same).  
53
 See 47 CFR § 1.106(c)(2).
54
 See e.g., USF/ICC Transformation Order, 26 FCC Rcd at 18019, para. 960 (“telephone numbers and other call 
detail information do not always reliably establish the geographic end-points of a call”); id. at 17982, para. 898 & 
n.1745; see also Waiver Denial Order, 31 FCC Rcd at 12029, para. 21.
55
 See id. at 18002-30, paras. 933-76.
56
 See Connect America Fund; Developing a Unified Intercarrier Compensation Regime; Petitions for Waiver of 
Section 51.917 of the Commission’s Rules, WC Docket No. 10-90, CC Docket No. 01-92, Order, 32 FCC Rcd 5456, 
(continued….)
Federal Communications Commission FCC 18-63
7
dispute were excluded from Eligible Recovery calculations.
57
  The Commission however anticipated that 
carriers might be able to validate their reliance on legacy ICC from the relevant period as the result of the 
decision of a state court or regulatory agency finding that a carrier should have received certain revenue 
before March 31, 2012.
58
  Smart City concedes, as it did in its original waiver request, that it has neither 
the decision of a court or regulatory agency verifying the settlement amount as funds to which Smart City 
was properly entitled.
59
  Nor did Smart City provide the Commission with alternative independent 
verification to justify its reliance on the disputed ICC.  A state court or commission decision was one 
factual situation that could validate Smart City’s reliance on the disputed ICC but was not the exclusive 
method.  For example, the Commission granted waiver relief to a carrier to include unbilled ICC 
settlement amounts in its BPR that were verified by staff at a state public utility commission consistent 
with applicable tariffs and state law.
60
17. We also reject Smart City’s argument that the Commission refusal to consider a 
settlement agreement in the absence of a court or commission order is irrational or unsound public 
policy.
61
  In fact, in a recent matter involving an ICC dispute that was not resolved before the March 31, 
2012 cut-off, the Commission granted a waiver of the rules at issue here absent a court or commission 
order where the petitioner provided independent verification that the settlement amounts were intrastate 
switched access revenue consistent with applicable tariffs and state law.
62
  Smart City’s waiver request 
was flawed not because it entered a settlement agreement but because it did not independently verify the 
settlement amounts consistent with the applicable tariff and state law.
63
  
18. Settlement agreements are contractual, bargained for exchanges between parties that do 
not carry the same weight as a decision by a court or commission of competent jurisdiction.
64
  As Smart 
City’s Petition underscores, a variety of considerations factor into settlement agreements including the 
costs of protracted negotiations and litigation, what parties are able to prove through discovery, 
bargaining strategy, and the parties’ separate assessments of the risk of litigation.
65
  The settlement 
between Verizon and Smart City establishes what the two parties agreed to but does not and cannot verify 
the amount of money Smart City was entitled to recover from Verizon for the disputed traffic.  Indeed, 
(Continued from previous page)  
5457, para. 2 (2017) (West Kentucky Waiver Order); Connect America Fund; Developing a Unified Intercarrier 
Compensation Regime; Petitions for Waiver of Section 51.917 of the Commission’s Rules, WC Docket No. 10-90, 
CC Docket No. 01-92, Order, 29 FCC Rcd 9958, 9964, para. 18 (2014) (Halo Order); USF/ICC Transformation 
Order, 26 FCC Rcd at 17962-63, 17982, paras. 858, 898 & n.1745; see 47 CFR § 51.917(b)(7)(ii).
57
 See USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 & n.1745.  
58
 Id.
59
 See Petition at 3 (noting “the absence of a court or commission order”); Smart City Apr. 29, 2013 Waiver Request 
at 5 (“the outstanding intrastate access revenue was billed and collected after March 31 , 2012, and it was not 
recovered as a result of a court or regulatory agency decision”); see also id. at 5 n.9 (seeking “waiver of the 
provision that waivers of this nature are a result of ‘the decision of a court or regulatory agency of competent 
jurisdiction’”) (citing USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 & n.1745).
60
 See West Kentucky Waiver Order, 32 FCC Rcd at 5459-60, paras. 11-12; Letter from Talina R. Matthews, 
Executive Director, Kentucky Public Service Commission, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 
10-90 (filed Oct. 6, 2016).  
61
 Petition at 3-5. 
62
 See West Kentucky Waiver Order, 32 FCC Rcd at 5459-60, paras. 11-13.
63
 See id.
64
 See Duk Hea Oh v. Nat'l Capital Revitalization Corp., 7 A.3d 997, 1013 (D.C. Cir. 2010); T Street Dev., LLC v. 
Dereje & Dereje, 586 F.3d 6, 11 (D.C. Cir. 2009).
65
 See Petition at 4. 
Federal Communications Commission FCC 18-63
8
Smart City does not claim that the parties reached agreement on how much Smart City was entitled to 
receive and Smart City acknowledges that it received only a portion of the disputed amount in settlement 
of its claims.
66
  As such, Smart City’s settlement did not establish, as a factual and legal matter, that the 
disputed traffic at issue was subject to intrastate switched access charges pursuant to intrastate tariffs and 
state law in effect at that time and, thus, appropriate to include in the BPR calculation.
67
  
19. We also reject Smart City’s suggestion that the Waiver Denial Order conflicts with 
public policy favoring amicable settlement of disputes.
68
  The case law cited by Smart City in support of 
this proposition is inapposite to the situation at hand.
69
  Those cases stand for the straight-forward 
proposition that public policy favors amicable settlements, and therefore courts should enforce such 
settlements.
70
  The Commission’s Waiver Denial Order does nothing to undermine the enforceability or 
validity of the settlement agreement Smart City entered with Verizon or other similar settlement 
agreements.  The Commission did not suggest that Smart City “should have rejected what it considered a 
reasonable settlement offer.”
71
  Instead, the Commission simply rejected Smart City’s settlement 
agreement as providing sufficient evidence of Smart City’s appropriate reliance on legacy ICC from the 
settlement.  And, for the reasons provided above, we reject Smart City’s belated assertion that the 
Commission could have inquired into the circumstances of the settlement to determine the underlying 
facts to prevent gaming by the parties.
72
      
20. Finally, we are not persuaded by Smart City’s argument that the approach the 
Commission took in the Waiver Denial Order discourages amicable settlement of disputes going 
forward.
73
  Doubtless, there are circumstances under which settlement agreements should be treated no 
differently than court orders.  This is not one of those circumstances.  It is in the public interest for BPR 
amounts to be as accurate as possible and to reflect only amounts reasonably relied upon.
74
  A decision by 
a state court or agency is the most effective way to verify the accuracy of disputed amounts consistent 
with state law and intrastate tariffs and carriers’ reliance on such amounts.  Settlement amounts, without 
verification of consistency with applicable tariffs and state law, provide no assurances of accuracy and 
therefore do not demonstrate reasonable reliance.  Moreover, our rules limiting BPR amounts to those 
collected by the March 31, 2012 deadline affect only pre-existing ICC disputes.
75
  Thus, this limitation 
would not apply to, or discourage, future ICC settlements under the new regime adopted in the USF/ICC 
Transformation Order.
76
  
66
 Id. at 1-2. 
67
 See West Kentucky Waiver Order, 32 FCC Rcd at 5460, para. 13. 
68
 Petition at 4. 
69
 See id. (citing In re Phenylpropanolamine (PPA) Products, 460 F.3d 1217, 1227 (9th Cir. 2006) (PPA Products); 
Aro Corp. v. Allied Witan Co., 531 F. 2d 1368, 1372 (6th Cir. 1976) (Aro Corp.); D.H. Overmyer Co. v. Loflin, 440 
F. 2d 1213, 1215 (5th Cir. 1971) (D.H. Overmyer)). 
70
 See PPA Products, 460 F.3d at 1227; Aro Corp., 531 F. 2d at 1372; D.H. Overmyer Co., 440 F. 2d at 1215.
71
 Petition at 4. 
72
 Id. at 5.
73
 Petition at 4-5.  
74
 USF/ICC Transformation Order, 26 FCC Rcd at 17982, para. 898 n.1745; see Halo Order, 29 FCC Rcd at 9961, 
para. 7 (“[A]ccurate BPR calculations are critical to the successful operation of the recovery mechanism.”).
75
 See 47 CFR § 51.917(b)(7).
76
 As an alternative and independent basis for rejecting Smart City’s argument that the “Commission’s refusal to 
consider a settlement agreement in the absence of a court or commission order is irrational and unsound public 
policy,” we find that Smart City failed to meet the procedural requirements for consideration of new arguments 
made in a petition for reconsideration.  See 47 CFR § 1.106; Petition at 3-5.  Smart City offers no explanation as to 
(continued….)
Federal Communications Commission FCC 18-63
9
V. CONCLUSION
21. In conclusion, Smart City failed to present sufficient reason warranting reconsideration of 
the Waiver Denial Order.
77
  Excluding disputed ICC amounts without a court or commission order, or 
other evidentiary support serves the public interest because it limits BPR amounts to those that a carrier 
had a reasonable expectation of recovering.  In so doing, we avoid the risk that Smart City’s BPR is 
inflated as the result of unverified ICC revenues which would be a burden on ratepayers and CAF ICC 
support.  Accordingly, we deny Smart City’s petition for reconsideration because, as discussed above, it 
relies on facts and arguments known to Smart City at the time of its petition for waiver, and 
reconsideration of those facts and arguments is not required by the public interest. 
VI. ORDERING CLAUSES
22. ACCORDINGLY, IT IS ORDERED, that, pursuant to sections 1, 4(i) and (j), 201-202, 
251, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i) and (j), 201-202, 
251, and 254, and sections 1.3 and 1.106 of the Commission’s rules, 47 CFR §§ 1.3, 1.106 the petition for 
reconsideration of Smart City Telecommunications LLC d/b/a Smart City Telecom filed on November 21, 
2016 is DENIED.
23. IT IS FURTHER ORDERED that pursuant to section 1.103 of the Commission’s rules, 
47 CFR § 1.103, this Order SHALL BE EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
(Continued from previous page)  
why it was previously unable to present this argument to the Commission, nor does it offer any basis on which we 
can find that consideration of this new argument is required in the public interest.  See id. § 1.106(b)(2), (c), (p)(2).
77
 See 47 CFR § 1.106; 47 U.S.C. § 405(a).