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Illinois Bell Telephone Co. v. Hurley

January 28, 2008


The opinion of the court was delivered by: Judge Joan B. Gottschall


Plaintiff Illinois Bell Telephone Company has filed a motion for summary judgment and seeking final declaratory judgment and permanent injunctive relief on the subject of those issues left outstanding following the court's orders of September 28, 2006 and April 17, 2007. Defendants Commissioners of the Illinois Commerce Commission and Defendants-Intervenors Access One et al. have filed cross-motions for summary judgment in their favor. For the reasons set forth below, Illinois Bell Telephone Company's motion is granted and Defendants' Defendants-Intervenors' cross-motions for summary judgment are consequently denied. The court accordingly enters final declaratory judgment in favor of Illinois Bell Telephone Company and modifies its April 17, 2007 order granting injunctive relief to Illinois Bell Telephone Company as specified below.


Plaintiff Illinois Bell Telephone Company (currently known as "AT&T Illinois") brought this suit against the defendants in their official capacities as commissioners of the Illinois Commerce Commission (the "ICC"), challenging, inter alia, § 13-801 of the Illinois Public Utilities Act ("§ 13-801" and the "IPUA," respectively). 220 Ill. Comp. Stat. Ann. 5/13-801 (2006). After AT&T Illinois filed suit, a number of competing local exchange carriers ("the Competing Carriers") were granted leave to intervene.*fn1 AT&T Illinois claims that § 13-801, the ICC's implementing regulations, and certain ICC-imposed tariffs are preempted by, and in violation of, the Telecommunications Act of 1996 (the "Act"), 47 U.S.C. § 151 et seq. (2006), and the applicable Federal Communications Commission ("FCC") implementation regulations.

On September 28, 2006, the court granted partial summary judgment in favor of AT&T Illinois with respect to the majority of its claims (the "September 28th order"). See Ill. Bell Tel. Co. v. O'Connell-Diaz, No. 05 C 1149, 2006 WL 2796488, at *18 (N.D. Ill. Sept. 28, 2006). Specifically, the court held that a number of the requirements of § 13-801 were preempted by § 251 of the Act. Id. These included: (1) § 13-801's requirement that AT&T Illinois must unbundle certain network elements, including: (a) local circuit switching; (b) switching-related elements; (c) Ocn-level loops and dedicated transport; (d) dark fiber loops; (e) entrance facilities; (f) feeder subloops; (2) § 13-801's combination requirements compelling AT&T Illinois to provide competitors with pre- existing combinations of network elements; (3) § 13-801's requirements with respect to splitters, and; (4) the ICC's ruling regarding access termination. Id. The court granted summary judgment in favor of ICC and the Competing Carriers with respect to Illinois' collocation requirements (which compel AT&T Illinois to permit a competitor to locate and install its own equipment on AT&T Illinois' premises). Id. Finally, the court denied all parties' motions for summary judgment with respect to § 13-801's requirements that AT&T Illinois unbundle DS1 and DS3 loops and dedicated transport and dark fiber transport*fn2 , holding that it was unable to determine the extent to which Illinois requirements regarding the unbundling of those network elements were incompatible with federal regulations. Id. at 14.

Subsequent to the September 28th order, AT&T Illinois requested that the ICC lift its tariffs with respect to the portions of § 13-801 that the court had ruled were preempted by the Act. The ICC refused to do so; consequently, on April 17, 2007, the court granted AT&T Illinois' motion for injunctive relief (the "April 17th order") with respect to those portions of § 13-801 upon which the court had granted AT&T Illinois summary judgment in its September 28th order.*fn3 April 17th order at 7. The court also noted in its April 17th order that the ICC had issued an order (the "Wire Center Designation Order" or "WCDO") implementing the new unbundling rules set forth in the FCC's Triennial Review Remand Order ("TRRO") on December 6, 2006; this order became final as to AT&T Illinois on January 24, 2007. April 17th order at 4. According to the court, the WCDO clarified the ICC's position regarding the unresolved § 13-801 issues in this case, upon which the court had reserved judgment in the September 28th order, rendering the remaining issues ripe and ready for briefing and decision.*fn4 Id. Consequently, these remaining issues being fully briefed by the parties, the court now turns to their consideration.

II. Background

All parties concede that there are no material facts in dispute in this case and have made cross-motions for summary judgment. Having given a full exposition of the background history of the Act, as well as its subsequent interpretation and implementation by the FCC, in its September 28th order, the court sees no need to rehearse the extensive background of this case and will limit itself to a brief synopsis of the issues at hand.

Briefly, § 251 of the Act obliges local telecommunications carriers such as AT&T Illinois (known as "incumbent local exchange carriers" or "ILECS") to provide new market entrants ("competing local exchange carriers" or "CLECS") with access to certain portions of the ILEC's network infrastructure at just, reasonable, and nondiscriminatory rates. 47 U.S.C. § 251(c)(3). Moreover, such access was to be "unbundled," meaning that CLECs would be able to combine the ILEC's network elements in such a fashion so as to provide telecommunications service to their customers. Id. The purpose behind this section of the Act was to break the ILEC's prior statewide monopolies of telecommunications services; Congress realized that new competitors could not realistically be expected to duplicate the ILEC's existing telecommunications networks. See Indiana Bell Tel. Co., Inc. v. McCarty, 362 F.3d 378, 382 (7th Cir. 2004).

However, not all ILEC network elements need be unbundled for access by CLECs. Section 251(d) of the Act directs the FCC to consider, at a minimum, "whether -- (A) access to such network elements as are proprietary in nature is necessary; and (B) the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer."

47 U.S.C. § 251(d). This latter requirement is known as the "impairment requirement." Long and mighty were the efforts of the FCC to interpret and implement the impairment requirement. See Ill. Bell Tel. Co., 2006 WL 2796488 at *2-3. Finally, on February 4, 2005, the FCC issued the Triennial Review Remand Order. See Order on Remand, In the Matter of Unbundled Access to Network Elements,20 F.C.C.R. 2533 (2005) (hereinafter "TRRO"). In relevant part, the FCC stated that ILECS no longer have an obligation to provide CLECs with unbundled access to certain network elements. TRRO ¶ 199. The FCC found that removal of the unbundling requirement was justified because newer switching technologies were currently available and continued dependence on the ILEC's pre-existing infrastructure potentially inhibited the incentive to invest in newer technologies. Id. The TRRO was subsequently upheld by the D.C. Circuit in Covad Communications Co. v. F.C.C., 450 F.3d 528 (D.C. Cir. 2006).

Therefore, under the TRRO, the FCC has held that under certain conditions, CLECs are unimpaired and can deploy their own high capacity loop and transport facilities; consequently mandatory access to unbundled ILEC network elements is denied them. Id. ¶ 70 (transport); Id. ¶ 154 (loops). This applies particularly in high population or high traffic areas where there are greater opportunities to earn revenue that will offset the cost of deploying new systems. Id. ¶ 70 (transport); Id. ¶ 154 (loops). The TRRO, which embodies the FCC's latest implementation schema of the Act, analyzes impairment at the level of an ILEC's "wire center." A wire center is an ILEC switching office that terminates and aggregates loop facilities serving a given geographic region. TRRO ¶ 87 n. 251; ¶ 155. Specifically, the FCC employs straightforward numeric tests measuring two criteria: (1) the number of ILEC business lines in the wire center (which approximates the number of potential high-capacity consumers) and; (2) the number of "fiber-based collocators" (competing carriers that have obtained collocation space at the incumbent's switch location and then extended their fiber networks into that network). Id. ¶¶ 102, 167.

Unlike the FCC's TRRO implementation of the Act, § 13-801 of the IPUA has no impairment requirement. Therefore, ILECs are uniformly subject to § 13-801's unbundling requirement ...

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