ENHANCED COMMUNICATIONS OF NORTHERN NEW ENGLAND, INC. v. PUBLIC UTILITIES COMMISSION еt al.
Docket: PUC-16-398
Supreme Judicial Court of Maine.
August 15, 2017
2017 ME 178
Argued: April 11, 2017
Jordan D. McColman, Esq. (orally), and Mitchell M. Tannenbaum, Esq., Public Utilities Commission, Augusta, for appellee Public Utilities Commission
Robin A. Casey, Esq., Enoch Kever PLLC, Harpswell, for appellee Time Warner Cable Information Systems, LLC
Elizabeth J. Wyman, Esq. (orally), and Robert A. Creamer, Esq., Office of the Public Advocate, Augusta, for appellee Office of the Public Advocate
Panel: SAUFLEY, C.J., and MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
HUMPHREY, J.
[¶ 1] Enhanced Communications of Northern New England, Inc., appeals from an order of the Public Utilities Commission granting in part and denying in part a petition for a certificate of public convenience and necessity to operate as a competitive local exchange carrier. See
I. BACKGROUND
[¶ 2] Enhanced is a Delaware corporation that sells communications services, including long distance telephone and data services, and is a wholly-owned direct subsidiary of FairPoint Communications, Inc. FairPoint is an incumbent local exchange carrier (ILEC).1 On June 23, 2015, Enhanced filed a petition with the Commission pursuant to
[¶ 3] On March 21, 2016, the Commission staff recommended that the Commission grant Enhanced‘s petition to the extent that Enhanced would be allоwed to operate as a CLEC in all Maine exchanges except for those in which FairPoint, or an affiliate or subsidiary, already provided service as an ILEC. On June 20, 2016, the Commission issued an order largely adopting the recommended decision, granting Enhanced‘s petition in part, but denying it to the extent that Enhanced sought to provide service as a CLEC in service areas where FairPoint, or an affiliate or subsidiary, already provided service аs an ILEC.
[¶ 4] The Commission found that Enhanced (1) satisfied the definition of a local exchange carrier because it will provide local exchange service in Maine, (2) possessed the financial and technical capabilities to provide local exchange service in the state, and (3) satisfied the definition of a CLEC because it is not an ILEC. The Commission noted, however, that whether the public convenience and necessity required thаt Enhanced provide service as a CLEC throughout Maine “present[ed] a complicated question” because an entity wholly-owned by an ILEC seeking to provide service in the same service territory as that ILEC was a matter of first impression.
[¶ 5] The Commission observed that if Enhanced provided service in the same service territories as FairPoint, it was not clear that a benefit would be realized in the form of increased competition. The Cоmmission articulated several concerns raised by the parties, including that, because of its corporate relationship with FairPoint, Enhanced could gain favorable access and use of common facilities and resources, customer data, pricing, prioritization of service calls, and other competitive advantages over other CLECs. The Commission found, according to Enhanced‘s representations at the conference, that Enhanced‘s petition to obtain CLEC authorization was not motivated by a desire to provide new or additional service to customers—“Enhanced identified only a single activity that its current lack of CLEC authorization prohibits: the ability to requisition local telephone numbering resources,” in particular “thousand-number blocks of consecutive telephone numbers.”3 The Commission acknowledged that “[a]ccess to numbering resourcеs by LECs is subject to [Federal Communication Commission] rules and the guidelines established by [the North American Numbering Plan Administrator], which are designed to preserve limited numbering resources,” but concluded, citing a longstanding Commission policy to use number resources efficiently to preserve the single 207 area code in Maine, that it was not in the public convenience and necessity to grant Enhanced‘s petition to operate throughout the entire state. Thе Commission therefore partially denied the petition insofar as Enhanced sought to operate in the same territory as FairPoint, and emphasized that the partial denial alleviated the competition concerns raised by parties in the informal technical conference. The Commission concluded by stating:
The Commission‘s partial dismissal of Enhanced‘s petition is without prejudice to file, in a separate Docket, another petition specifically requesting authority to operate within the service territories of the FairPoint ILECs. Any such petition should address the anti-competitive and numbering concerns raised by the Commission and the parties to this proceeding.
[¶ 6] Enhanced filed a petition to reconsider the decision on July 11, 2016. The Commission did not act upon the petition and thus it was denied by operation of law on August 1, 2016. See
II. DISCUSSION
A. Standard of Review
[¶ 7] Our review of a Commission decision is deferential and limited “to determining whether the agency‘s conclusions are unreasonable, unjust, or unlawful in light of the record.” Pine Tree Tel. & Tel. Co. v. Pub. Utils. Comm‘n, 634 A.2d 1302, 1304 (Me. 1993). “This court generally refuses to second-guess agencies on matters within their expertise.” Id. “In reviewing an agency‘s interpretation of its own rules, regulations, or procedures, we give considerable deference to the agency . . . .” Forest Ecology Network v. Land Use Regulation Comm‘n, 2012 ME 36, ¶ 28, 39 A.3d 74 (quotation marks omitted). When reviewing an agency‘s interpretation of its own regulation, we begin by “detеrmin[ing] de novo whether the [regulation] is reasonably susceptible of different interpretations and therefore ambiguous.” See Cent. Me. Power Co. v. Pub. Utils. Comm‘n, 2014 ME 56, ¶¶ 18-19, 90 A.3d 451 (quotation marks omitted). “[I]f the language is unambiguous, we interpret the [regulation] according to its plain language.” Arsenault v. Sec‘y of State, 2006 ME 111, ¶ 11, 905 A.2d 285.
B. Certificate of Public Convenience and Necessity
[¶ 8] A CLEC may not provide service in a municipality where another utility is furnishing or authorized to furnish service unless it obtains Commission approval pursuant to
Approval to provide any service shall not be issued unless the applicant has presented sufficient evidence for the Commission to make the following findings:
(1) The applicant has adequate financial ability and willingness to cover any customer advances and deposits; and to pay intrastate access charges and interconnection charges on all intrаstate telecommunications services;
(2) The applicant (other than a[n] interexchange carrier that is a reseller or [a] local exchange carrier that provides service solely through resale of local service purchased from a wholesale schedule of another LEC) has the technical ability to measure and record intrastate traffic information and billing amounts that may be necessary for the cаlculation of access and interconnection charges; and
(3) The applicant is willing and able to comply with State law and Public Utilities Commission rules, including, but not limited to, this Chapter.
[¶ 9] There is no dispute that Enhanced met all three criteria set forth in section 4(A)(1)-(3)—the Commission found that Enhanced had the financial and technical capability to provide service and did not find that Enhanced was unwilling or unable to comply with the law. The central issue prеsented in this appeal is whether the Commission could, after making those findings, nonetheless deny Enhanced‘s petition for a certificate of public convenience and necessity (CPCN) to provide service in the same service territory as FairPoint on public interest grounds because of concerns about number resources and anti-competitive behavior.
[¶ 10] The Commission reads section 4(A) to require not only that a utility meet the three сriteria specified in that provision, but also that the Commission determine that the petition is in the public necessity and convenience, which the Commission interprets as the public interest. Enhanced argues that an additional public interest requirement does not appear in the statutes or regulations, and that it is beyond the Commission‘s power to impose here absent rulemaking.
[¶ 11] Although section 4(A) does not list a “public interest” or “public benefit” factor among the three listed criteria, the unambiguous language of the regulation provides that, before granting a CPCN, the Commission must make a “declaration that the public convenience and necessity require an additional public utility.”
[¶ 12] Construing the plain language of
C. Whether the Commission Lawfully Denied Enhanced‘s Petition on Public Interest Grounds.
[¶ 13] Enhanced further argues that even assuming
[¶ 14] Before addressing the merits of Enhanced‘s arguments, we reiterate several relevant findings for context. According to the Commission, Enhanced‘s petition for a CPCN to operate as a CLEC in the same service territories as affiliated FairPoint ILECs presented an issue of first impression. For that reason, the Commission held an informal technical conference to gather further information and to sоlicit comments from interested parties. The Commission found, based on Enhanced‘s representations at the conference, that (1) Enhanced sought authorization as a CLEC in order to acquire local telephone numbering resources; (2) Enhanced did not intend to offer any service that is not already offered to customers in those service territories; and (3) there was no service that, without authorization for Enhanced to provide service as a CLEC, Enhanced or FairPoint would be unable to offer. The Commission concluded that the public necessity and convenience would not be furthered by granting Enhanced‘s petition to provide service as a CLEC solely for the purpose of acquiring blocks of sequential numbers.
[¶ 15] It is undisputed that Enhanced had the burden of proof to establish that it met all applicable criteria to obtain approval for a CPCN, and further, as the party seeking to vacate the agency‘s decision, that it has the burden of persuasion on appeal. See Kelley v. Me. Pub. Emps. Ret. Sys., 2009 ME 27, ¶ 16, 967 A.2d 676. “When an agency concludes that the party with the burden of proof failed to meet that burden, we will reverse that determination only if the record compels a contrary conclusion to the exclusion of any other inference.” Id. For the reasons set forth above, Enhanced‘s burden included establishing that the рublic interest required an additional utility. See
[¶ 16] Enhanced is correct that number resource conservation is a subject committed to federal regulatory control.5 The Commission‘s stated concerns about the depletion of numbers within the 207
[¶ 17] Contrary to Enhanced‘s contentions, the Commission did not contravene federal law. The federal Telecommunications Act (the TelAct) governs state regulatory power in the area of telecоmmunications service:
(a) In general. No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.
(b) State regulatory authority. Nothing in this section shall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254 [
47 USCS § 254 ], requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers.
[¶ 18] Although state commissions have limited power to prohibit entities from entering the market to provide telecommunications service, the power to impose requirements necessary to protect the public interest is explicitly conferred upon state commissions by section 253(b). See
[¶ 20] Lastly, we reject Enhanced‘s argument that a public interest criterion is a “rudderless” standard that is unreasonably difficult to understand. A petitioner has the burden of proof to establish that granting the CPCN is in the public convenience and necessity, i.е., has some benefit to the public and not merely its own business interest. See In re Chapman, 151 Me. 68, 71, 116 A.2d 130, 132 (1955) (“[T]he convenience and necessity, proof of which the statute requires, is the convenience and necessity of the public, as distinguished from that of any individual, or group of individuals.” (quoting In re Stanley, 133 Me. 91, 93, 174 A. 93, 94-95 (1934))). Such a standard is a lawful requirement that comports with the statute, regulation, and federal law. See Level 3 Commc‘ns of Va. v. State Corp. Comm‘n, 268 Va. 471, 604 S.E.2d 71, 75 (2004) (rejecting argument that a broad public interest standard gave the Commission “unfettered discretion” to deny a CPCN petition and concluding that such a broad standard did not amount to an unlawful barrier pursuant to
[¶ 21] The Commission, based on Enhanced‘s own representations about its motivations to seek a CPCN, concluded that granting the petition was not in the public convenience and necessity. Because the decision comported with the applicable regulation, federal law, and the evidеnce presented to the Commission, we affirm the Commission‘s order.
The entry is:
Order of the Public Utilities Commission affirmed.