BELLSOUTH TELECOMMUNICATIONS, INC., dba AT&T Kеntucky, Plaintiff-Appellee/Cross-Appellant, v. KENTUCKY PUBLIC SERVICE COMMISSION; DAVID L. ARMSTRONG, in his official capacity as Chairman of the Public Service Commission; JAMES W. GARDNER, in his official capacity as Vice Chairman of the Public Service Commission; CHARLIE BORDERS, in his official capacity as Commissioner of the Public Service Commission, Defendants-Appellants/Cross-Appellees.
Nos. 10-5310/5311
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
Argued: October 6, 2011. Decided and Filed: January 24, 2012
12a0019p.06
Before: KEITH, SUTTON and McKEAGUE, Circuit Judges.
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206. Appeal from the United States District Court for the Eastern District of Kentucky at Frankfort. No. 08-00007—Danny C. Reeves, District Judge.
COUNSEL
OPINION
SUTTON, Circuit Judge. This case arises from efforts of the Kentucky Public Service Commission to enforce several provisions of the
I.
“The
Unlike
Soon after passage of the 1996 Act, the FCC required incumbent LECs to lease out, under
In response to these regulatory developments, some competitive LECs in Kentucky asked the state commission to require AT&T to continue to provide them with the newly de-listed elements. The
The state commission appeals three of the district court’s conclusions: (1) that the commission may not require the continued unbundling of facilities and services the FCC has de-listed; (2) that FCC regulations do not require AT&T to рrovide to competitive LECs a piece of equipment known as a line splitter; and (3) that FCC regulations do not require AT&T to provide unbundled access to certain high-speed fiber-optic loops in new service areas. AT&T cross-appeals the district court’s determination that it must commingle—package together—unbundled network elements it provides under
II.
A.
May the state commission require the unbundling of fаcilities and services that the FCC has determined no longer need to be unbundled under
Section 271. As a Bell operating company, AT&T must comply with the requirements of
The commission persists thаt it merely has imposed “service standards under [a] performance plan[ ],” Br. at 36, and that the FCC has said that performance plans, while not required, facilitate “monitoring and enforcement.” Georgia–Louisiana Order, 17 FCC Rcd. 9018, 9181–82 ¶ 291 (2002). None of this, however, permits a state commission to “parlay its limited role” in making recommendations to the FCC in a performance plan into an attempt to regulate the terms of access to
Nor do the Act’s saving clauses,
B.
Do the FCC regulations require AT&T to provide competitive LECs with a line splitter? No.
Line splitting allows one competitive LEC to provide narrowband voice service over the low-frequency portion of a copper loop while a second competitive LEC provides digital subscriber line (DSL) service over the high-frequency portion of the loop. See
Both sides agree that
(ii) Line splitting. An incumbent LEC shall provide a requesting telecommunications carrier that obtains an unbundled copper loop from the incumbent LEC with the ability to engage in line splitting arrangements with another competitive LEC using a splitter collocated at the central office where the loop terminates into a distribution frame or its equivalent. . . .
(v) Control of the loop and splitter functionality. In situatiоns where a requesting telecommunications carrier is obtaining access to the high frequency portion of a copper loop either through a line sharing or line splitting arrangement, the incumbent LEC may maintain control over the loop and splitter equipment and functions, and shall provide to the requesting telecommunications carrier loop and splitter functionality that is compatible with any transmission technology that the requesting telecommunications carrier seeks to deploy using the high frequency portion of the loop . . . .
The key insight is a textual one. Nowhere does the regulation require incumbent LECs to provide line splitters. Subsection (ii) requires incumbent LECs to provide “the ability to engage in line splitting arrangements,” not to provide the splitters themselves. And subsection (v) mandates that in certain cirсumstances incumbents provide “loop and splitter functionality” that is “compatible with any transmission technology that the [competitive LEC] seeks to deploy,” but it stops short of directing them to provide the equipment.
We are not the only ones to read the regulation this way. The FCC has “never exercised its legislative rulemaking authority . . . to require incumbent LECs to provide access to the splitter, and incumbent LECs therеfore have no current obligation to make the splitter available.” Texas Order, 15 FCC Rcd. 18354, 18516 ¶ 327 (2000). It instead “require[s] incumbent LECs to permit competing carriers to engage in line splitting where a competing carrier . . . provides its own splitter to be collocated in the central office.” TRO, 18 FCC Rcd. at 17130 ¶ 251. The word “collocated” confirms the point. Collocation means that a competitive LEC “[p]lace[s] its own equipment . . . upon an incumbent LEC’s premises,”
The commission stakes its response on the claim that a splitter is a network element that AT&T must provide in unbundled form under
C.
Do the FCC regulations require AT&T to provide unbundled access to high-speed fiber-optic loops in previously unserved areas (often referred to as “greenfields”)? No.
This issue turns on the meaning of three provisions of
New builds. An incumbent LEC is not required to provide nondiscriminatory access to a fiber-to-the-home loop or a fiber-to-the-curb loop on an unbundled
basis when the incumbent LEC deploys such a loop to an end user’s customer premises that previously has not been served by any loop facility.
[A]n incumbent LEC shall provide a requesting telecommunications carrier with nondiscriminatory access to a DS1 loop on an unbundled basis to any building not serviced by a wire center with at least 60,000 business lines and at least four fibеr-based collocators. . . .
[A]n incumbent LEC shall provide a requesting telecommunications carrier with nondiscriminatory access to a DS3 loop on an unbundled basis to any building not served by a wire center with at least 38,000 business lines and at least four fiber-based collocators.
A few definitions are in order. A fiber-to-home loop connects directly to a business or residence, while a fiber-to-curb loop cоnnects to a distribution site within 500 feet of a residence or business. See
The rationale for these regulations is basic. Incumbent LECs generally must unbundle DS1 and DS3 loops because otherwise competitive LECs would be impaired in their ability to provide service. See TRO, 18 FCC Rcd. at 17170–71 ¶ 320, 17173–74 ¶ 325. At the same time, incumbent LECs generally need not unbundle loops in greenfields because they have no built-in historical advantage over competitive LECs in providing service in these areas. See id. at 17143 ¶ 275.
The question is what law applies to DS1 and DS3 loops located in greenfield areas. AT&T contends that subsection (a)(3)(ii) frees it of any obligation to provide access to greenfield fiber-to-home and fiber-to-curb loops, regardless of the speed of the loops. The commission contends that subsections (a)(4)(i) and (a)(5)(i) obligate AT&T to provide access to all DS1 and DS3 loops, regardless of whether they are located in greenfield areas or not.
The text of the regulation does not resolve this tension. It is true, as AT&T argues, that “a more specific [regulatory] provision takes precedence over a more general one.” First Am. Title Co. v. DeVaughn, 480 F.3d 438, 450 (6th Cir. 2007); see AT&T Br. at 29. But neither one of these provisions counts as the more specific formulation. Subsection (a)(3)(ii) regulates greenfield areas but makes no mention of loop speed; subsections (a)(4)(i) and (a)(5)(i) regulate DS1 and DS3 loops but make no mention of greenfield status. If there were a regulation that said, “Incumbent LECs need not provide access in greenfield areas, even for DS1 and DS3 loops,” or “Incumbent LECs must provide access to all DS1 and DS3 loops, even in greenfields,” that kind of specific regulation would take precedence. But we have no such provision here.
Happily for us, the Triennial Review Order clarifies the picture. The FCC determined that “DS1 loops will be available to requesting carriers, without limitation, regardless of the technology used to provide such loops . . . and rеgardless of the customer for which the requesting carrier will serve unless otherwise specifically indicated. See supra Part VI.A.4.a.(v) (discussing FTTH).” 18 FCC Rcd. at 17173 n.956 (emphasis added). The cross-reference adds: “Incumbent LECs do not have to offer unbundled access to newly deployed or ‘greenfield’ fiber loops.” Id. at 17142 ¶ 273. That provides strong evidence that the FCC intended the DS1/DS3 regulations to yield to its conclusion that
D.
Must incumbent LECs, upon request, “commingle”—package together—unbundled network elements рrovided under
Another FCC regulation,
(e) Except as provided in § 51.318, an incumbent LEC shall permit a requesting telecommunications carrier to commingle an unbundled network element or a combination of unbundled network elements with wholesale services obtained from an incumbent LEC.
(f) Upon request, an incumbent LEC shall perform the functions necessary to commingle an unbundled network element or a combination of unbundled network elements with оne or more facilities or services that a requesting telecommunications carrier has obtained at wholesale from an incumbent LEC.
Under these provisions, incumbent LECs must “permit,” and “perform the functions necessary” to facilitate, the commingling of unbundled network elements (i.e., those provided under
The term “wholesale” is a critical one. It refers to “[t]he sale of goods or commodities usu[ally] to a retailer for resale, and not to the ultimate consumer.” Black’s Law Dictionary (9th ed. 2009). That definition covers
We agree: the regulation obligates AT&T to commingle
AT&T counters in two ways. Regardless of what the federal regulations require, it says that the commission lacks the authority to enforce them because the FCC has exclusive enforcement power under
AT&T adds that
First, AT&T cites a footnote in the TRO in which the FCC “decline[d] to require [Bell companies], pursuant to section 271, to combine network elements that no longer are required to be unbundled under section 251.” 18 FCC Rcd. at 17386 n.1990; see Br. at 50–51; Reply Br. at 11–12. But, as the Eleventh Circuit recognized, “[t]his footnote addresses combinations of section-271 elements with other section-271 elements, not the commingling of section-251 elements with section-271 elements.” Nuvox, 530 F.3d at 1334. The footnote does not say that incumbent LECs need not combine
Second, AT&T notes that throughout the TRO, the FCC indicated that the commingling rule applied to tariffed services. See Br. at 46 & n.38, 56; Reply Br. at 20. But nothing in that order or anywhere else indicates that the FCC intended the commingling rule to apply only to tariffed services. The FCC says only that wholesale services “includ[e]” tariffed services, TRO, 18 FCC Rcd. at 17343 ¶ 581; see also id. at 16990 ¶ 7; id. at 17342 ¶ 579, signaling that the examples are “illustrative rather than exhaustive.” Samantar v. Yousuf, 560 U.S. ___, 130 S. Ct. 2278, 2287 (2010); see also Nuvox, 530 F.3d at 1334. Elsewhere in the TRO, the FCC suggested that “wholesale services” include services obtained under “interconnection agreements [and] other сontracts,” not just tariffs. 18 FCC Rcd. at 17345 n. 1794.
Third, AT&T places great weight on the FCC’s decision to delete a phrase from the TRO that would have made it explicit that the commingling requirement applies to
Fourth, AT&T cites a line from the Omaha Order that, it argues, referred to an incumbent LEC’s obligation to commingle
Fifth, AT&T argues that a required commingling of
III.
For these reasons, we affirm.