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Qwest v. Colorado PUC & CBeyond

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Released: June 30, 2011
AMICUS BRIEF FOR THE FEDERAL COMMUNICATIONS COMMISSION
IN SUPPORT OF PLAINTIFF-APPELLANT/CROSS-APPELLEE URGING
AFFIRMANCE IN PART AND REVERSAL IN PART
IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

NOS. 10-1187 & 10-1212

QWEST CORPORATION, A COLORADO CORPORATION,
PLAINTIFF-APPELLANT/CROSS-APPELLEE,
V.
THE COLORADO PUBLIC UTILITIES COMMISSION, ET AL.,
DEFENDANTS-APPELLEES/CROSS-APPELLANTS,
AND
CBEYOND COMMUNICATIONS, LLC
DEFENDANT-INTERVENOR-APPELLEE/CROSS-APPELLANT.

ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF COLORADO



AUSTIN C. SCHLICK
GENERAL COUNSEL

PETER KARANJIA
DEPUTY GENERAL COUNSEL

RICHARD K. WELCH
ACTING ASSOCIATE GENERAL COUNSEL

LAUREL R. BERGOLD
COUNSEL

FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740


TABLE OF CONTENTS

STATEMENT OF INTEREST .........................................................................2
STATEMENT OF ISSUES PRESENTED FOR REVIEW .............................2
STATEMENT OF THE CASE .........................................................................3
1.
Statutory Background........................................................................3
2.
The FCC’s Unbundling Rules...........................................................5
3.
This Proceeding...............................................................................10
ARGUMENT ..................................................................................................13
I.
STANDARD OF REVIEW ..........................................................13
II. THE BUSINESS LINE COUNT UNDER SECTION 51.5
INCLUDES UNE LOOPS THAT SERVE RESIDENTIAL,
WELL AS BUSINESS, CUSTOMERS........................................15
III. THE BUSINESS LINE COUNT UNDER SECTION 51.5
INCLUDES UNE LOOPS THAT ARE NOT
CONNECTED TO A SWITCH. ...................................................21
CONCLUSION ...............................................................................................24

TABLE OF AUTHORITIES

CASES


AT&T Commc’ns of Calif., Inc. v. Pac-West
Telecomm. Inc., No. 08-17030, 2011 WL
2450986 (9th Cir., June 21, 2011)...............................................................14
AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366
(1999) ..................................................................................................... 3, 14
Atlas Tel. Co. v. Okla. Corp. Comm’n, 400 F.3d
1256 (10th Cir. 2005) ........................................................................... 16, 21
Auer v. Robbins, 519 U.S. 452 (1999) ............................................................13
Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438
(2000) ................................................................................................... 16, 21
Chase Bank, N.A. v. McCoy, 131 S. Ct. 871 (2011) .......................................13
Cohens v. State of Va., 19 U.S. 264 (1821).............................................. 15, 21
Commonwealth of Pa. v. ICC, 535 F.2d 91 (D.C.
Cir. 1976).....................................................................................................20
Copar Pumice Co., Inc. v. Tidwell, 603 F.3d 780
(10th Cir. 2010) ...........................................................................................13
GEICO v. Fetisoff, 958 F.2d 1137 (D.C. Cir. 1992) .......................................15
Gonzales v. Oregon, 546 U.S. 243 (2006) ......................................................14
Lockheed Martin Corp. v. Retail Holdings, N.V.,
639 F.3d 63 (2d Cir. 2011) ..........................................................................15
Logix Comm’ns v. PUC of Texas, 521 F.3d 361 (5th
Cir.), cert. denied, 129 S.Ct. 223 (2008).......................................................7
Michigan Bell Tel. Co. v. Lark, No. 06-11982, 2007
WL 2868633 (E.D. Mich. 2007) .................................................................19
PLIVA, Inc. v. Mensing, No. 09-993 (U.S., Jun. 23,
2011), 2011 WL 2472790 ...........................................................................13
Qwest Corp. v. Pub. Util. Comm’n of Colo., 479
F.3d 1184 (10th Cir. 2007)............................................................................3
Qwest Corp. v. Scott, 380 F.3d 367 (8th Cir. 2004)........................................23
ii

Talk America v. Mich. Bell Tel. Co., No. 10-313
(U.S., Jun. 9, 2011), 2011 WL 222429 .........................................................4
Verizon Commc’ns Inc. v. FCC, 535 U.S. 467
(2002) ........................................................................................................3, 5
Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535
U.S. 635 (2002) .............................................................................................3

ADMINISTRATIVE DECISIONS


In re Qwest Communications International, Inc. for
Authorization to Provide In-region, InterLATA
Services in Minnesota
, Memorandum Opinion
and Order, 18 FCC Rcd 13323 (2003) ........................................................15
In the Matter of Automated Reporting Requirements
for Certain Class A and Tier 1 Telephone
Companies (Parts 31, 43, 67, and 69 of the
FCC’s Rules)
, Report and Order, 2 FCC Rcd
5770 (1987), recon. granted in part, 3 FCC Rcd
6375 (1988) ...................................................................................................8
In the Matter of the Joint Competitive Local
Exchange Carriers’ Request Regarding the
Status of Impairment in Qwest Corporation’s
Wire Centers and the Applicability of the Federal
Communications Commission’s Triennial Review
Remand Orders
, Commission Order Opening a
Docket and Allowing Response, 2006 WL
1211152 (Colo. PUC, Feb. 22, 2006)..........................................................10
Local Telephone Competition and Broadband
Reporting, Report and Order, 19 FCC Rcd 22340
(2004) ..........................................................................................................17
Unbundled Access to Network Elements, Order on
Remand, 20 FCC Rcd 2533 (2004), aff’d, Covad
Commc’ns Co. v. FCC,
450 F.3d 528, (D.C. Cir.
2006)............................................................... 5, 6, 7, 8, 9, 17, 19, 20, 21, 23

iii

STATUTES AND REGULATIONS


Telecommunications Act of 1996, Pub. L. No. 104-
104, 110 Stat. 56 (1996) ............................................................................2, 3
47 U.S.C. §151, et seq. ......................................................................................2
47 U.S.C. § 153(35) ..........................................................................................4
47 U.S.C. § 251(c)(3) ....................................................................................2, 4
47 U.S.C.§ 251(d)(2).....................................................................................2, 4
47 U.S.C. § 252(d)(1)........................................................................................5
47 U.S.C. § 252(e)(6) ......................................................................................12
47 C.F.R. § 51.5 ..................................... 2, 7, 10, 11, 12, 15, 16, 18, 22, 23, 24
47 C.F.R. § 51.505(b)........................................................................................5

OTHERS


FCC Report 43-08, Instructions (Dec. 2004),
http://transition.fcc.gov/wcb/armis/documents/20
04PDFs/4308c04.pdf ...................................................................................23
Local Telephone Competition: Status As Of June
30, 2010, 2011 WL 972603 (Ind. Anal. & Tech.
Div, WCB, FCC) (Mar. 2011).....................................................................11
Webster New Universal Unabridged Dictionary
(1996 Barnes & Noble Books) ....................................................................15


iv

IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

NOS. 10-1187 & 10-1212

QWEST CORPORATION, A COLORADO CORPORATION,
PLAINTIFF-APPELLANT/CROSS-APPELLEE,
V.
THE COLORADO PUBLIC UTILITIES
COMMISSION, ET AL.,
DEFENDANTS-APPELLEES/CROSS-APPELLANTS,
AND
CBEYOND COMMUNICATIONS, LLC
DEFENDANT-INTERVENOR-APPELLEE/CROSS-
APPELLANT.

ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF
COLORADO


AMICUS BRIEF FOR THE FEDERAL COMMUNICATIONS COMMISSION
IN SUPPORT OF PLAINTIFF-APPELLANT/CROSS-APPELLEE
URGING AFFIRMANCE IN PART AND REVERSAL IN PART.
___________

In response to the Order of this Court dated May 19, 2011, the Federal
Communications Commission (“FCC”) respectfully files this brief as amicus
curiae.

STATEMENT OF INTEREST

The FCC has primary responsibility for implementing and enforcing
the Communications Act of 1934, 47 U.S.C. §151, et seq., as amended by the
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).
The present dispute turns on the proper interpretation of an FCC regulation,
47 C.F.R. § 51.5, that implements provisions of the Communications Act, 47
U.S.C. §§ 251(c)(3) and 251(d)(2). The FCC has an interest in ensuring that
its regulation, which defines and prescribes a method for counting “business
lines,” is correctly interpreted.

STATEMENT OF ISSUES PRESENTED FOR REVIEW

In its Order dated May 19, 2011, the Court invited the FCC to file an
amicus brief addressing the following questions:
1. “Does the business line count in 47 C.F.R. § 51.5 include only UNE
[i.e., unbundled network element] loops that serve business customers?”
2. “Does the business line count in 47 C.F.R. § 51.5 include only UNE
loops that are connected to switches?”
As we explain below, the FCC interprets section 51.5 to require the
inclusion in the business line counts of all UNE loops, including UNE loops
that serve residential customers and those that are not connected to switches.
2

STATEMENT OF THE CASE

1. Statutory Background
For most of the last century, American consumers could purchase local
telephone service from only one source: their incumbent local exchange
carrier (“LEC”). Until the 1990s, regulators treated local telephone service as
if it were a natural monopoly. As a result, states typically granted an
exclusive franchise in each local service area to the incumbent LEC that
1
owned and operated the local telephone network.
2
In the Telecommunications Act of 1996, Congress fundamentally
altered this regulatory framework “to achieve the entirely new objective of
3
uprooting the monopolies.” The 1996 Act creates “a new
telecommunications regime designed to foster competition in local telephone
4
5
markets” by imposing “a host of duties” upon incumbent LECs. Foremost

1 See AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371 (1999).
2 Pub. L. No. 104-104, 110 Stat. 56 (“1996 Act”).
3 Verizon Commc’ns Inc. v. FCC, 535 U.S. 467, 488 (2002). See Qwest
Corp. v. Pub. Util. Comm’n of Colo., 479 F.3d 1184, 1186-87 (10th Cir.
2007).
4 Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635, 638 (2002).
5 AT&T, 525 U.S. at 371.
3

among these duties is the incumbent LEC’s obligation “to share its network
6
with competitors.”
Section 251(c)(3) of the Communications Act, as amended by the 1996
Act, requires an incumbent LEC to lease to its competitors on an “unbundled”
i.e., à la carte – basis those elements of its network specified by the FCC.
7
47 U.S.C. § 251(c)(3). This requirement “makes it easier for a competitor to
8
create its own network without having to build every element from scratch.”
When determining which non-proprietary network elements incumbent LECs

must offer to their competitors on an unbundled basis, the FCC must consider,
“at a minimum,” whether the incumbent LEC’s failure to provide access to
such elements would “impair” a competitor’s ability to provide service. 47
9
U.S.C. § 251(d)(2). Unbundled network elements (“UNEs”) that are offered

6 Id. (citing 47 U.S.C. § 251(c)(3)).
7 A “network element” is defined as “a facility or equipment used in the
provision of a telecommunications service.” 47 U.S.C. § 153(35).
8 Talk America v. Mich. Bell Tel. Co., No. 10-313, slip op. at 2 (U.S., Jun.
9, 2011), 2011 WL 222429.
9 The 1996 Act also directs the FCC to consider whether unbundled access
to proprietary network elements is “necessary.” 47 U.S.C. § 251(d)(2). This
case, however, does not concern the standard for unbundled access to
proprietary network elements.
4

pursuant to section 251(c)(3) must be made available at regulated, cost-based
10
rates. See 47 U.S.C. § 252(d)(1).
2. The FCC’s Unbundling Rules
In its Triennial Review Remand Order (“TRRO”), the FCC adopted
rules to implement the unbundling provisions of the Communications Act,
11
including section 251(d)(2)’s test for “impairment. The rules set out in the
TRRO impose unbundling obligations only in situations where competitive
LECs “genuinely are impaired without access to particular network elements
and where unbundling does not frustrate sustainable, facilities-based
12
competition.” The rules also “remove unbundling obligations over time as
carriers deploy their own networks and downstream local exchange markets
13
exhibit . . . robust competition.”
As relevant here, the FCC in the TRRO found a “correlation” between a
large number of “business lines” in an incumbent LEC’s “wire center” (i.e.,

10 The Supreme Court has upheld the FCC’s methodology for calculating
these cost-based rates as lawful and consistent with the statute. Verizon, 535
U.S. 467; see also 47 C.F.R. § 51.505(b) (specifying methodology).
11 Unbundled Access to Network Elements, Order on Remand, 20 FCC Rcd
2533 (2004) (“TRRO”), aff’d, Covad Commc’ns Co. v. FCC, 450 F.3d 528,
(D.C. Cir. 2006).
12 Id. at 2535 (¶ 2).
13 Id. at 2536 (¶ 3).
5

the place in the incumbent LEC’s network where “loops” and “transport
14
facilities” attach to the switch) and the existence of a “revenue opportunity”
sufficient to encourage competitive LECs to create their own facilities in the
15
areas served by that wire center. Simply stated, more total lines provide
greater opportunities for new entrants profitably to provide competitive
services over their own facilities. Based on that finding, the FCC used
business lines in the LEC’s wire center as a proxy for impairment. When the
number of business lines reaches a specified threshold, competitive LECs that
operate in the area served by the wire center are deemed to be economically
capable of deploying their own high-capacity loops and transport facilities
(i.e., they are no longer “impaired” without access to those UNEs at cost-

14 “[L]oops are the transmission facilities between [an incumbent LEC’s]
central office and the customer’s premises.” TRRO, 20 FCC Rcd at 2614-15.
(¶ 147). Transport facilities are “facilities dedicated to a particular
competitive carrier that the carrier uses for transmission between or among
incumbent LEC central offices and tandem offices, and to connect its local
network to the incumbent LEC’s network.” Id. at 2576 (¶ 67).
15 Id. at 2559 (¶ 43). The FCC also found a correlation between such
revenue opportunities and the number of “fiber collocators” (i.e.,
arrangements that allow a competitive LEC to interconnect its facilities with
those owned by an incumbent LEC). Id.
6

16
based rates). Thus, when the threshold number of business lines is reached,
the incumbent LEC (such as incumbent Qwest Corporation in this case) is no
longer required to offer high-capacity loops and transport to the competitive
LECs on an unbundled, cost-based basis.
The FCC’s unbundling rules also prescribe a method for calculating
whether the number of business lines in a wire center satisfies the numeric
threshold for non-impairment. Under the relevant FCC rule, 47 C.F.R.

§ 51.5, the number of business lines in a wire center is deemed to “equal the
sum of all incumbent LEC business switched access lines, plus the sum of all
UNE loops connected to that wire center, including UNE loops provisioned
in combination with other unbundled elements.”
The FCC chose this computational method for two reasons. First, the
method “fairly represents the business opportunities in a wire center,
including business opportunities already being captured by competing

16 Id. at 2588-95 (¶¶ 93, 105); see Logix Comm’ns v. PUC of Texas, 521
F.3d 361, 363-64 (5th Cir.), cert. denied, 129 S.Ct. 223 (2008). The FCC
similarly adopted specific thresholds for the number of fiber collocators,
which it also used as a proxy for impairment. For some UNEs, a LEC is
required to reach the numeric thresholds for both business lines and fiber
collocators in order to establish non-impairment. See TRRO, 20 FCC Rcd at
2536 (¶ 5).
7

carriers through the use of UNEs,” and thus provides an appropriate
17
approximation of the number of business lines in a particular wire center.
Second, the counting method is simple to administer and produces
easily verifiable results. The FCC explained that its approach uses “an
objective set of data that incumbent LECs already have created for other

regulatory purposes,” i.e., “an ARMIS filing required of incumbent LECs”
18
plus “UNE figures, which must also be reported.” By allowing LECs to
base their computations upon these “objective and readily available” data, the
FCC sought to avoid uncertainty and prevent disputes between the incumbent
LECs and their competitors that could result in “complex and lengthy
19
proceedings that are administratively wasteful.”
The FCC understood that basing a business line count solely upon
objective and readily available data would not always result in a precisely
accurate count of the actual number of business lines. For example, the
agency decided not to include in its line count methodology the number of

17 TRRO, 20 FCC Rcd at 2595 (¶ 105).
18 Id. The Automated Reporting Management Information System
(“ARMIS”) was initiated in 1987 to collect financial and operational data
from telecommunications carriers. See In the Matter of Automated Reporting
Requirements for Certain Class A and Tier 1 Telephone Companies (Parts
31, 43, 67, and 69 of the FCC’s Rules)
, Report and Order, 2 FCC Rcd 5770
(1987), recon. granted in part, 3 FCC Rcd 6375 (1988).
19 TRRO, 20 FCC Rcd at 2592, 2623 (¶¶ 99, 161).
8

business lines that competitive LECs serve using their own loops. Even
though that approach would have resulted in “more complete business lines
counts,” the FCC rejected it because such data are “extremely difficult to
20
obtain and verify.”
Concerns about administrability also guided the FCC’s decision to
evaluate impairment at the wire center level, rather than for smaller
geographic areas or even particular customer locations. The FCC recognized
that a wire center-based “test may in some cases be under-inclusive (denying
unbundling in specific buildings where competitive entry is not in fact
economic) or over-inclusive (requiring unbundling in specific buildings
21
where competitive entry is in fact economic).” But the alternative proposed
by appellee Cbeyond and other competitive LECs – a building-by building
22
evaluation – would be “impracticable and unadministrable.” As the agency
explained, that approach would require the “collection and analysis of
23
information that is not easily verifiable.” In short, the benefits of

20 Id. at 2595 (¶ 105).
21 Id. at 2619-20 (¶ 155).
22 Id. at 2619-20 (¶¶ 157, 158).
23 Id.
9

administrability and ease of verification outweighed any loss of precision
when calculating business lines as a proxy for economic impairment.
3. This Proceeding
In February 2006, at the request of several competitive LECs, the
Colorado Public Utilities Commission (“Colorado PUC”) initiated an
evidentiary hearing before an Administrative Law Judge (“ALJ”). The stated
purpose of the hearing was to “provid[e] insight into the development of a list
of non-impaired wire centers in Qwest Corporation’s serving territory and the
24
underlying data used to develop and update that list.” As relevant here, the
hearing addressed whether the business line count in 47 C.F.R. § 51.5
25
includes residential and/or non-switched UNE loops.
Qwest argued that the business line count includes both (1) all
residential UNE loops, except for residential UNE-Platform (“UNE-P”)

24 In the Matter of the Joint Competitive Local Exchange Carriers’ Request
Regarding the Status of Impairment in Qwest Corporation’s Wire Centers
and the Applicability of the Federal Communications Commission’s Triennial
Review Remand Orders
, Commission Order Opening a Docket and Allowing
Response, 2006 WL 1211152 at Order, ¶ 1 (Colo. PUC, Feb. 22, 2006). See
Aplt. App. at 9 (¶¶ 1-3 ) (Recommended Decision).
25 See Aplt. App. at 17-18 (¶¶ 66-80) (Recommended Decision).
10

26
loops and (2) non-switched lines. The competitive LECs maintained that
the business line count should exclude UNE loops that service residential
27
customers and UNE loops that are not connected to switches.
On February 19, 2008, the ALJ ruled in favor of the competitive
28
LECs. The ALJ construed 47 C.F.R. § 51.5 as excluding from the business
line calculation UNE loops that serve residential customers and UNE loops
29
not used to provide switched services. Qwest filed exceptions to the ALJ’s
rulings. On September 18, 2008, the Colorado PUC issued an order denying
30
those exceptions.

26 See id. at 15-16, 18 (¶¶ 54, 59, 66, 78) (Recommended Decision). UNE-P
loops are incumbent LEC loops that are provided with incumbent LEC
switching. Local Telephone Competition: Status As Of June 30, 2010, 2011
WL 972603, at Table 4 n.4 (Ind. Anal. & Tech. Div, WCB, FCC) (Mar.
2011). Qwest included UNE-P business lines (but not residential UNE-P
lines) in its wire center business line counts. See Aplt. App. at 15 (¶ 54)
(Recommended Decision). Because Qwest did not have readily available data
to disaggregate UNE-P loops into business and residential subcategories,
Qwest provided estimates of those subcategories by comparing the numbers
associated with UNE-P lines with the White Pages database. See id. at 16
(¶ 59) (Recommended Decision).
27 See id. at 18 (¶ 80) (Recommended Decision).
28 Id. at 17-18 (¶¶ 68-70) (Recommended Decision).
29 Id.
30 See id. at 76-77 (¶¶ 44-53) (Order on Exceptions).
11

On December 5, 2008, after the Colorado PUC denied a request for
31
rehearing, Qwest challenged the state agency’s order in federal district court
under 47 U.S.C. § 252(e)(6). Qwest argued that the Colorado PUC erred in
ruling that UNE loops used to serve residential customers and UNE loops that
are not used to provide switched services are excluded from the business line
count under 47 C.F.R. § 51.5. On January 28, 2010, the district court issued
32
an order granting partial relief to Qwest. Relying upon the phrase “all UNE
loops” in section 51.5, and the FCC’s explanation in the TRRO that the
business line count must be based upon readily available data, the district
court agreed with Qwest that the Colorado PUC erred in interpreting section
33
51.5 to exclude residential UNE loops from the business line count. The
district court, however, held that the Colorado PUC was correct in excluding
34
non-switched UNE loops from that count.
The parties filed cross-appeals from the district court’s judgment.

31 See id. at 81-83 (¶¶ 3-15) (Order on Application for Rehearing,
Reargument or Reconsideration).
32 Id. at 102 (District Court Order).
33 Id. at 105-06 (District Court Order at 4-5).
34 Id. at 105 (District Court Order at 4).
12

ARGUMENT

I.

STANDARD OF REVIEW

As the Supreme Court has recently confirmed, the courts owe
substantial deference to the FCC’s construction of its own regulations. Talk
America, supra, slip op. at 7-8; see Chase Bank, N.A. v. McCoy, 131 S. Ct.
871, 878-81 (2011). Indeed, the FCC’s construction of one of its own
regulations is controlling unless “‘plainly erroneous or inconsistent with the
regulation’” itself. Talk America, slip op. at 8 (quoting Chase Bank, 131 S.
Ct. at 881); see PLIVA, Inc. v. Mensing, No. 09-993, slip op. at 6 (U.S., Jun.
23, 2011), 2011 WL 2472790; Auer v. Robbins, 519 U.S. 452, 461 (1999);
Copar Pumice Co., Inc. v. Tidwell, 603 F.3d 780, 794 (10th Cir. 2010). The
Supreme Court also has made clear that this deference applies fully to an
agency interpretation set forth in an amicus curiae brief, unless there is
“‘reason to suspect that the interpretation does not reflect the agency’s fair
and considered judgment on the matter in question.’” Talk America, slip op.
at 8 (quoting Auer, 519 U.S. at 462).
These principles call for deference here. The FCC’s interpretation of
its rule 51.5 at the Court’s request reflects the agency’s “fair and considered
judgment on the matter in question,” Id. Cf. Talk America, slip op. at 12-13
(noting that the FCC’s interpretation of its rules was not a “post hoc
13

rationalization” advanced to support its own litigation position). It also
“reflect[s] the considerable experience and expertise the [agency] ha[s]
acquired over time with respect to the complexities” of the Communications
Act, Gonzales v. Oregon, 546 U.S. 243, 256 (2006), and the agency’s own
implementing regulations. As the Supreme Court has explained, the FCC
“stands in a better position” than the courts “to make the technical and policy
judgments necessary to administer the complex regulatory program at issue.”
Talk America, slip op. at 15 n.7; see also AT&T Commc’ns of Calif., Inc. v.
Pac-West Telecomm. Inc., No. 08-17030, 2011 WL 2450986, *16 (9th Cir.,
June 21, 2011) (deferring to interpretation of FCC rules set forth in FCC
amicus brief, and noting that “the FCC is best positioned to describe the reach
of its own orders.”). Moreover, Congress specifically entrusted the FCC with
the responsibility to administer section 251(c)(3). See AT&T, 525 U.S. 366.
Adherence to the FCC’s rule interpretation in this case thus will ensure that
the standard applied in deciding which network elements incumbent LECs
must make available to their competitors on an unbundled, cost-based basis is
the one established by the expert agency charged by Congress with making
that determination.
14

II.

THE BUSINESS LINE COUNT UNDER SECTION
51.5 INCLUDES UNE LOOPS THAT
SERVE RESIDENTIAL, WELL AS BUSINESS,
CUSTOMERS.

By its terms, FCC rule 51.5 specifies that “[t]he number of business
lines in a wire center shall equal [1] the sum of all incumbent LEC business
switched access lines, plus [2] the sum of all UNE loops connected to that
wire center.” 47 C.F.R. § 51.5 (emphasis added). As the courts have
recognized, “the word ‘all’ is ‘one of the least ambiguous [words] in the
English language.’” Lockheed Martin Corp. v. Retail Holdings, N.V., 639
F.3d 63, 70 (2d Cir. 2011) (quoting GEICO v. Fetisoff, 958 F.2d 1137, 1142
(D.C. Cir. 1992)) (brackets in original). The FCC’s use of “all” in section
51.5 to modify the phrase “UNE loops” signifies that the business line count
35
includes “the whole number of” UNE loops in the wire center “without
36
exception.” The FCC is well aware that UNE loops can be used to serve

35 See Webster New Universal Unabridged Dictionary 54 (1996 Barnes &
Noble Books) (defining “all” to mean “the whole number of”).
36 Cohens v. State of Va., 19 U.S. 264, 348 (1821) (“The term ‘all cases,’
means all, without exception.”) (emphasis in original).
15

37
residential customers as well as business customers. If the FCC had
intended to exclude the subset of UNE loops serving residential customers
from the business line count, it would not have specified the addition of “all
UNE loops” to that count.
This understanding of section 51.5 is further bolstered by the FCC’s
inclusion of the limiting term “business” to modify “switched access lines” in
the first part of the line count equation, while omitting that term in the next
part of the equation, which instead refers to “all UNE loops.” See 47 C.F.R.
§ 51.5 (“The number of business lines in a wire center shall equal the sum of
all incumbent LEC business switched access lines, plus the sum of all UNE
loops connected to that wire center . . . .”) (emphasis added). Where, as here,
“an agency includes a specific term or exception in one provision of a
regulation, but excludes it in another,” it is “presume[d] that the exclusion [is]
intentional.” Atlas Tel. Co. v. Okla. Corp. Comm’n, 400 F.3d 1256, 1265
(10th Cir. 2005); see also Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438,
452 (2000). The FCC’s presumptively intentional omission of the term
“business” to modify “all UNE loops” thus confirms the FCC’s intent to

37 See, e.g., In re Qwest Communications International, Inc. for
Authorization to Provide In-region, InterLATA Services in Minnesota,
Memorandum Opinion and Order, 18 FCC Rcd 13323, 13356 (¶ 61) (2003)
(describing a carrier’s provision of “telephone exchange service to residential
subscribers over its own facilities, UNE-Loops, and the UNE-Platform.”).
16

include “all” UNE loops in the business line count, including UNE loops used
to serve residential customers.
This interpretation also comports with the FCC’s description of its
counting method in the TRRO, the rulemaking order that adopted section
51.5. In that order, the FCC explained that the business line count uses “an
objective set of data that incumbent LECs already have created for other
38
regulatory purposes.” The FCC identified those data as “an ARMIS filing
required of incumbent LECs” plus “UNE figures, which must also be
39
reported.” Significantly, the FCC requires incumbent LECs to report on
FCC Form 477 – the FCC’s only source of complete data about incumbent
LECs’ provision of UNEs – the aggregate number of UNEs provided to other
carriers, including UNEs used to serve either residential or business

38 TRRO, 20 FCC Rcd at 2595 (¶ 105). See also id. at 2623 (¶ 161) (the
business line counts “rely on data . . . which are objective and readily
available”).
39 Id. at 2595 (¶ 105).
17

40
customers. Thus, the readily available data underlying the FCC’s line count
methodology cover both UNE loops that serve business customers and UNE
loops that serve residential customers.
Notwithstanding section 51.5’s express directive that the business line
count includes “all UNE loops,” the Colorado PUC and Cbeyond maintain
that UNE loops used to serve residential customers must be excluded because
section 51.5 generally defines a business line as “an incumbent LEC-owned
switched access line used to serve a business customer.” 47 C.F.R. § 51.5.
They are mistaken.
The relevant portion of section 51.5 consists of two discrete parts. The
first sentence under the heading “Business line” supplies a definition of that
term: “A business line is an incumbent LEC-owned switched access line
used to serve a business customer, whether by the incumbent LEC itself or by
a competitive LEC that leases the line from the incumbent LEC.” 47 C.F.R.

40 In the past, the FCC also had required incumbent LECs on Form 477 to
“estimate the types of customers unaffiliated carriers serve,” but it eliminated
that reporting requirement from Form 477 before the TRRO was adopted. See
Local Telephone Competition and Broadband Reporting
, Report and Order,
19 FCC Rcd 22340, 22351 (¶ 22) (2004) (“Local Telephone Order”). Thus,
by the time section 51.5 took effect, the incumbent LECs did not report
estimates of the number of UNE loops that serve only business customers.
Id. The version of Form 477 that was in effect at the time section 51.5 was
enacted can be found in Appendix D of the Local Telephone Order, 19 FCC
Rcd at 22376.
18

§ 51.5. By contrast, because the FCC’s rules use business line density as a
proxy for economic impairment (see pp 5-7, supra), the second and third
sentences of the rule prescribe a specific computational method for
determining the number of business lines in a wire center for purposes of
identifying wire centers where competitors are or are not impaired (and thus
do or do not have access to UNEs at cost-based rates.). The problem with the
rule construction advanced by Cbeyond and the Colorado PUC is that it
“confuses the definition of a business line with the procedure that is used for
41
counting it.”
The Colorado PUC and Cbeyond (Principal Br. at 29-30) further
contend that the business line count in section 51.5 cannot include UNE loops
serving residential customers because the FCC intended business line density
to identify wire centers in which there are large concentrations of businesses,
and not residential lines. But this argument again conflates the basic concept
of what is to be measured – business lines – with the specified computational
method.
Although the FCC’s proxy for economic impairment speaks in terms of
business lines, the FCC did not expect that its prescribed counting method

41 Michigan Bell Tel. Co. v. Lark, No. 06-11982, 2007 WL 2868633, at *9
(E.D. Mich. 2007) (subsequent history omitted).
19

would achieve a mathematically perfect count of the business lines in a wire
center. Instead, the FCC created a method of counting business lines that
uses readily available and objective data so as to minimize regulatory
burdens, avoid uncertainty, and prevent computational disputes between the
incumbent LECs and their competitors that could result in “complex and
42
lengthy” litigation.
As explained in the TRRO, the prescribed method undercounts some
business lines insofar as it excludes business lines served by competitive
43
LECs over their own loop facilities. On the other side of the ledger, the
counting method overcounts some business lines by allowing incumbent
LECs to use their readily available calculation “all UNE loops,” including
those used to serve residential customers. Nevertheless, in adopting section
51.5, the FCC made a deliberate policy choice to forgo absolute mathematical
precision in order to achieve an administratively workable counting system
that minimizes regulatory burdens and produces reasonably accurate, certain,
and verifiable results. Consistent with the “proverb [that] cautions that the
best should not be the enemy of the good,” the FCC, in prescribing a method
of counting business lines, “did not intend the infeasible perfect to oust the

42 TRRO, 20 FCC Rcd at 2592 2623 (¶¶ 99, 161).
43 Id. at 2595 (¶ 105).
20

feasible good.” Commonwealth of Pa. v. ICC, 535 F.2d 91, 96 (D.C. Cir.
1976).

III. THE BUSINESS LINE COUNT UNDER SECTION

51.5 INCLUDES UNE LOOPS THAT ARE NOT
CONNECTED TO A SWITCH.

For many of the same reasons that the unqualified phrase “all UNE
loops” in section 51.5 is properly understood as requiring the inclusion of
loops that serve residential customers in the business line count, that phrase
also encompasses UNE loops that are not connected to a switch. As
demonstrated above, the use of the word “all” directly before the words
“UNE loops” signifies that the business line counts include the whole number
of UNE loops in the wire center “without exception.” Cohens, 19 U.S. at
348. Because UNE loops not connected to a switch are a species of the
generic category “all UNE loops,” such loops must be included in the
business line count.
A comparison of the language used to define the element of the
business line count – “all incumbent LEC business switched access lines” –
and the following phrase, “all UNE loops,” – confirms the foregoing
interpretation. As noted above, when particular language is included in one
part of a rule and omitted in another part, the omission is presumed to be
intentional. Barnhart, 534 U.S. at 452; Atlas, 400 F.3d at 1265. The FCC’s
21

use of the limiting term “switched” in conjunction with “access lines”,
coupled with its omission of that term to modify “all UNE loops” in the very
same sentence, evidences the agency’s intent to include within the business
line count UNE loops that are not connected to switches, as well as those that
are connected to switches.
Moreover, the FCC explained in the TRRO that the business line count
uses reported UNE loop data. TRRO, 20 FCC Rcd at 2595 (¶ 105). As stated
in FCC Form 477, those data cover the aggregate UNE loop figures – not just
the subset of UNE loops that are connected to switches. See pp. 17-18,
supra. Given the FCC’s emphasis on administrability and ease of verification
when crafting its business line rule, this match between the explicit language
of the line-count rule, i.e., “all UNE loops” and the Form 477 reporting
requirements confirms that the line count rule was intended to cover both
switched and non-switched UNE loops.
22

Contrary to the conclusion of the district court and the appellees here,
44
the third sentence of the business line rule does not override the explicit
directive in the second sentence that the business line count shall include “all
UNE loops.” As indicated by its introductory clause (“[a]mong these
requirements”), the third sentence clarifies and elaborates on, and does not
supersede or replace the counting method specified in the second sentence.
In order to prevent an inconsistency with the requirement that “all UNE
loops” be included in the line count, the first and second subsections of the
third sentence are best read to relate solely to the first element of the business
45
line count – “all incumbent LEC business switched access lines.” Those
subsections make clear that the incumbent LEC’s business switched access
lines “(1) [s]hall include only those access lines connecting end-user
customers with incumbent LEC end-offices for switched services, [and]

44 That sentence provides: “Among these requirements, business line tallies:
(1) Shall include only those access lines connecting end-user customers with
incumbent LEC end-offices for switched services, (2) Shall not include non-
switched special access lines, [and] (3) Shall account for ISDN and other
digital access lines by counting each 64 kbps-equivalent as one line. For
example, a DS1 line corresponds to 24 64 kbps-equivalents, and therefore to
24 ‘business lines.’” 47 C.F.R. § 51.5.
45 See 47 C.F.R. § 51.5 (“The number of business lines in a wire center shall
equal [1] the sum of all incumbent LEC business switched access lines, plus
[2] the sum of fall UNE loops connected to that wire center . . . .”) (emphasis
added).
23

46
(2) [s]hall not include non-switched special access lines.” The two
subsections thus clarify that an incumbent LEC’s retail business switched
47
access lines – but not its retail business “special access lines” – are included
under the first part of the business line count methodology. The two
subsections do not override or alter the second part of the counting
methodology at issue in this case, which requires the inclusion of “the sum of
all UNE loops connected to [the relevant] wire center,” 47 C.F.R. § 51.5
(emphasis added).

CONCLUSION

The Court should affirm the district court’s order insofar as it construed
section 51.5 to include all UNE loops in the business line count, including
those used to serve residential customers. The Court should reverse the

46 Id. Subsection (1) of section 51.5 closely tracks the instructions for
ARMIS 43-08 for the reporting by incumbent LECs of “switched access lines
in service”: “Report in Table 11 only those lines connecting end-user
customers with their end-offices for switched services
.” FCC Report 43-08,
Instructions (Dec. 2004) at 17 (emphasis added),
http://transition.fcc.gov/wcb/armis/documents/2004PDFs/4308c04.pdf (last
visited on June 29, 2010). See TRRO, 20 FCC Rcd at 2595 (¶ 105) (“[B]y
basing our definition in an ARMIS filing required of incumbent LECs and
adding UNE figures, which must also be reported, we can be confident in the
accuracy of the thresholds, and a simplified ability to obtain the necessary
information.”)
47 “[A] ‘special access’ line . . . provides a direct connection from a home or
business to a long distance network through a dedicated line, rather than
through the switched public telephone network.” Qwest Corp. v. Scott, 380
F.3d 367, 369 (8th Cir. 2004).
24

district court’s order insofar as it interpreted section 51.5 to exclude UNE
loops providing non-switched services from the business line count.
Respectfully
submitted,

AUSTIN C. SCHLICK
GENERAL COUNSEL

PETER KARANJIA
DEPUTY GENERAL COUNSEL

RICHARD K. WELCH
ACTING ASSOCIATE GENERAL
COUNSEL

/s/ Laurel R. Bergold
LAUREL R. BERGOLD
COUNSEL

FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
June 30, 2011
25

IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT


QWEST CORPORATION, A COLORADO
CORPORATION,
PLAINTIFF-APPELLANT/CROSS-APPELLEE,
v.
THE COLORADO PUBLIC UTILITIES COMMISSION,
NOS. 10-1187 & 10-
ET AL.,
1212
DEFENDANTS-APPELLEES/CROSS-

APPELLANTS,
AND
CBEYOND COMMUNICATIONS, LLC
DEFENDANT-INTERVENOR-APPELLEE/CROSS-
APPELLANT.


CERTIFICATE OF COMPLIANCE

Pursuant to the requirements of Fed. R. App. P. 32(a)(7), I hereby
certify that the accompanying “Amicus Brief For The Federal
Communications Commission” in the captioned case contains 5,021 words.
/s/ Laurel R. Bergold
Laurel R. Bergold

Counsel

Federal Communications Commission
Washington, D.C. 20554
(202) 418-1747 (Telephone)
(202) 418-2819 (Fax)
June 30, 2011


10-1187

IN THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT


Qwest Corporation, Appellant

v.

Colorado Public Utilities Commission, et al., Appellees.


CERTIFICATE OF SERVICE



I, Laurel R. Bergold, hereby certify that on June 30, 2011, I electronically
filed the foregoing Amicus Brief for the Federal Communications
Commission in Support of Plaintiff-Appellant/Cross-Appellee Urging
Affirmance in Part and Reversal in Part with the Clerk of the Court for the
United States Court of Appeals for the Tenth Circuit by using the CM/ECF
system. Participants in the case who are registered CM/ECF users will be
served by the CM/ECF system.

Charles E. Watkins, III
John M. Devaney, Esq.
Cbeyond Communications LLC
Perkins Coie LLP
320 Interstate North Parkway
700 13th Street, N.W.
Suite 300
Suite 600
Atlanta, GA 30339
Washington, D.C. 20005
Counsel for Cbeyond
Counsel for Qwest Corporation
Communications LLC


Michael A. Sink
Mark A. Davidson
Perkins Coie
Holland & Hart LLP
1900 16th Street
555 17th Street
Suite 1400
Suite 3200
Denver, CO 80202
Denver, CO 80202
Counsel for Qwest Corporation
Counsel for Cbeyond
Communications LLC


David A. Beckett

Office of the Attorney General for

the State of Colorado

1525 Sherman Street

7th Floor

Denver, CO 80203
/s/ Laurel R. Bergold



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